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435
Ericksen Ave. NE, Suite 250, Bainbridge Island, Washington 98110
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
To
the Stockholders of Banzai International, Inc.:
You
are cordially invited to attend a special stockholder meeting of Banzai International, Inc. (the
Company
or
BANZAI
)
to be held on February 28, 2025 at 8:00 a.m. PT, as a virtual electronic meeting using a Demio video webinar (the
Meeting
).
The Meeting will be held virtually via the Internet only with no physical in-person meeting excluding the Board of Directors (the
Board
).
Technology will be incorporated into the Meeting to increase efficiency and provide for stockholder participation. In addition to on-line
attendance, stockholders can hear all portions of the Meeting, submit written questions during the Meeting and listen to live responses
to stockholder questions.
To
attend the virtual meeting, go to the Demio link below:
https://my.demio.com/ref/sK4ESlg55HPisxfw
After
you register with your name and email address, so that we can log attendees, you will be taken into the waiting room until the Meeting
begins.
This
proxy statement (the
Proxy Statement
) is furnished in connection with the solicitation of proxies by the Board for
use at the Meeting and at all adjournments and postponements thereof. The Meeting will be held February 28, 2025 at 8:00 a.m.
PT, as a virtual electronic meeting using a Demio video webinar, to consider and vote upon the following proposals:
Proposal
1:
To
authorize, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of shares of our Class A common stock, par value
$0.0001 per share (the
Class A Common Stock
) including upon the exercise of pre-funded warrants, issuable as
a result of the Merger (the
Merger
) that occurred pursuant to that certain Agreement and Plan of Merger dated
as of December 10, 2024 (the
Merger Agreement
) by and among the Company, Banzai Reel Acquisition, Inc., a Delaware
corporation and wholly owned subsidiary of Banzai (
Merger Sub
), ClearDoc, Inc., a Delaware corporation doing
business as OpenReel (
OpenReel
), and stockholders of OpenReel (the
OR Stockholders
), in
an amount equal to or in excess of 20% of all of our Class A Common Stock and
Class B common stock,
par value US$0.0001 per share, of the Company (
Class B Common Stock
, together with Class A Common Stock, the
Common Stock
)
outstanding immediately prior to the Closing of the Merger (the
Merger Issuance
Proposal
).
Proposal
2:
To
authorize, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of shares of our common stock, including upon
the exercise of warrants, issuable pursuant to that certain securities purchase agreement dated as of September 24, 2024 (
Private
Warrants
) between the Company and one institutional investor (the
Purchase Agreement
), in an amount
equal to or in excess of 20% of all of our common stock outstanding on the date of the Purchase Agreement (the
Private
Financing Issuance Proposal
).
Proposal
3:
To
approve an amendment to our Second Amended and Restated Certificate of Incorporation (the
Restated Certificate of Incorporation
)
regarding stockholder action by written consent (the
Written Consent Proposal
).
Proposal
4:
To
approve the increase in the number of shares available for issuance under our 2023 Equity Incentive Plan (the
Plan
),
from 102,319 to 10,000,000 (the
Option Proposal
).
Proposal
5:
To
approve one or more adjournments of the Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient
votes at the time of the Meeting to approve Proposals 1, 2, 3 or 4 (the
Adjournment Proposal
).
THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSALS.
Holders
of record of the Companys Common Stock at the close of business on January 13, 2025 (the
Record Date
)
will be entitled to notice of, and to vote at, this Meeting and any adjournment or postponement thereof; provided, however that
the OR Stockholders may not vote on the Merger Issuance Proposal and that Private Warrant holders may not vote on the
Private Financing Issuance Proposal. Each share of Class A Common Stock entitles the holder thereof to one vote. Each share of Class
B Common Stock entitles the holder thereof to ten votes.
Your
vote is important, regardless of the number of shares you own. Due to the virtual nature of the Meeting, you are urged to vote in favor
of the proposals by so indicating on the enclosed Proxy and by signing and returning the enclosed Proxy as promptly as possible, before
11:59 p.m. EST on February 27, 2025 whether or not you plan to attend the Meeting virtually.
The enclosed Proxy is solicited
by the Board.
Any stockholder giving a Proxy may revoke it prior to the time it is voted by notifying the Secretary, in writing,
to that effect, by filing with him/her a later dated Proxy. You will not be able to vote at the Meeting; therefore, it is strongly recommended
that you complete the enclosed proxy card before 11:59 p.m. EST on February 27, 2025 to ensure that your shares will be represented
at this Meeting.
A
complete list of stockholders of record entitled to vote at this Meeting will be available for ten days before this Meeting at
the principal executive office of the Company for inspection by stockholders during ordinary business hours for any purpose germane
to this Meeting.
Whether
or not you plan to attend the Meeting, we urge you to read this notice carefully and to vote your shares. Your vote is very important.
If you are a registered stockholder, please vote your shares as soon as possible by completing, signing, dating and returning
the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in street name through a bank, broker
or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your
shares are represented and voted at the Meeting. If you sign, date and return your proxy card without indicating how you wish
to vote, your proxy will be voted FOR the Merger Issuance Proposal, the Private Financing Issuance Proposal, the Written Consent Proposal,
the Option Proposal and the Adjournment Proposal being considered at the Meeting.
I
want to thank all of our stockholders as we look forward to what we believe will be an exciting future for our business.
We
strongly encourage you to vote by proxy as described in the Proxy Statement so that your vote can be counted.
This
notice and the enclosed Proxy Statement are first being mailed to stockholders on or about February 17, 2025.
You
are urged to review carefully the information contained in the enclosed Proxy Statement prior to deciding how to vote your shares.
By
Order of the Board,
/s/
Joseph Davy
Joseph
Davy
Chief
Executive Officer
February
2,
2025
IF
YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED FOR EACH OF THE PROPOSALS.
Important
Notice Regarding the Availability of Proxy Materials
for the Meeting to Be Held at 8:00 a.m. PT, on
February 28, 2025
The
Notice of the Meeting and Proxy Statement are available at
www.proxyvote.com
.
2025
SPECIAL MEETING OF STOCKHOLDERS
to be held on February 28, 2025, at 8:00 a.m. PT
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS
Why
am I receiving this Proxy Statement?
This
notice provides some details about the proposals on which our Board would like you, as a stockholder, to vote at the Meeting, which will
take on February 28, 2025, at 8:00 a.m. PT via the Demio link below. The Company has decided to hold the Meeting as a virtual
electronic meeting using Demio video webinar. The Meeting will be held virtually via the Internet only
with no physical in-person
meeting
except the Board. In addition to on-line attendance, stockholders can hear all portions of the Meeting, submit written questions
during the Meeting and listen to live responses to stockholder questions.
To
attend the virtual Meeting via Demio, go to the link below:
https://my.demio.com/ref/sK4ESlg55HPisxfw
After
you register with your name and email address, so that we can log attendees, you will be taken into the waiting room until the Meeting
begins.
We
recommend you log in at least 15 minutes before the Meeting to ensure you are logged in when the Meeting starts.
Stockholders
are being asked to consider and vote upon proposals
to grant the Board authority to issue shares of Class A Common Stock in excess of 20% of the number of shares issued and outstanding
as of the closing of certain specified transactions pursuant to a certain agreement and plan of merger, to issue shares of
Class A Common Stock in excess of 20% of the number of shares issued and outstanding as of the date of a certain purchase agreement,
to amend the Restated Certificate of Incorporation to allow for stockholder approval via written consents, to increase the
number of shares issuable under the Companys Plan, and to approve one or more adjournments if necessary, to solicit additional
proxies in the event that there are not sufficient votes at the time of the Meeting to approve the other proposals presented at the Meeting,
all as further described herein.
This
Proxy Statement also gives you information on the proposal so that you can make an informed decision. You should read it carefully.
Your vote is important. You are encouraged to submit your proxy card as soon as possible after carefully reviewing this Proxy Statement.
In
this Proxy Statement, we refer to Banzai International, Inc. as the Company, we, us
or our.
Record Date and Voting Power
Our
Board fixed the close of business on January 13, 2025 as the record date (the
Record Date
) for the determination
of the outstanding shares of Common Stock entitled to notice of, and to vote on, the matters presented at this Meeting. As of the Record
Date, there were 6,314,123 shares of Class A Common Stock and 2,311,134 shares of Class B Common Stock outstanding. Each
share of Class A Common Stock entitles the holder thereof to one vote. Each share of Class B Common Stock entitles the holder thereof
to ten votes on the applicable proposals. In compliance with Nasdaq Listing Rules 5635, none of the OR Stockholders are allowed to cast
a vote on the Merger Issuance Proposal, and none of the Private Warrant holders are allowed to cast a vote on the Private Financing Proposal.
Accordingly, a total of 28,494,905 votes may be cast on the Merger Issuance Proposal, a total of 28,248,992 votes may be
cast on the Private Financing Proposal, and a total of 29,425,463 votes may be cast on the Written Consent Proposal, the Option
Proposal and the Adjournment Proposal at this Meeting.
On
December 10, 2024, in connection with the Merger Agreement, Joseph P. Davy, the Companys Chief Executive Officer, who holds approximately
78.5% of Banzais total voting power as of the Record Date, entered into a Voting and Support Agreement, with the Company
that obligates him to vote all the shares of Class B Common Stock beneficially owned by him in favor of the Merger Issuance Proposal.
A
quorum of stockholders is necessary to hold a valid meeting. The presence in person or by proxy of the holders of a majority of the voting
power of the then-outstanding shares of capital stock entitled to vote constitutes a quorum. Abstentions and broker non-votes
(i.e.
shares held by brokers on behalf of their customers, which may not be voted on certain matters because the brokers have not received
specific voting instructions from their customers with respect to such matters) will be counted solely for the purpose of determining
whether a quorum is present at the Meeting.
Abstentions
and broker non-votes will have no direct effect on the outcome of the proposals.
What
stockholder vote is required for the approval of each proposal at the Meeting?
The
following are the vote requirements for the approval of the proposals at the Meeting:
●
Merger
Issuance Proposal
: Assuming that a quorum is present, the affirmative vote of the majority of the voting power of the stock present
in person, by remote communication, if applicable, or represented by proxy at the Meeting and entitled to vote generally (
other
than the shares held by the OR Stockholders
) shall be the act of the stockholders.
●
Private
Financing Issuance Proposal:
Assuming that a quorum is present, the affirmative vote of the majority of the voting power of the
stock present in person, by remote communication, if applicable, or represented by proxy at the Meeting and entitled to vote generally
(
other than the shares held by the Private Warrant holders
) shall be the act of the stockholders.
●
Written
Consent Proposal
: Assuming that a quorum is present, the affirmative vote of the holders of at least 66 2/3% in voting power
of the stock of the Company entitled to vote thereon is required.
●
Option
Proposal:
Assuming that a quorum is present, the
affirmative vote of the majority of the
voting power of the stock present in person, by remote communication, if applicable, or represented by proxy at the Meeting and entitled
to vote generally shall be the act of the stockholders
●
Adjournment
Proposal
: Assuming that a quorum is present, the
affirmative vote of the holders of the
majority of the voting power of the stock present in person, by remote communication, if applicable, or represented by proxy at the
Meeting and entitled to vote generally shall be the act of the stockholders; provided, that in the absence of a quorum,
the
affirmative vote of the holders of the majority of the voting power of the stock represented
thereat is required to approve the Adjournment Proposal
.
How
does the Board recommend that I vote?
Our
Board unanimously recommends that stockholders vote FOR each of the proposals.
What
is the proxy card?
The
card enables you to appoint Joseph Davy as your representative at this Meeting. By completing and returning the proxy card, you are authorizing
these persons to vote your shares at this Meeting in accordance with your instructions on the proxy card. This way, your shares will
be voted whether or not you attend this Meeting. Even if you plan to attend this Meeting, it is strongly recommended to complete and
return your proxy card before 11:59 p.m. EST on February 27, 2025 in case your plans change. If a proposal comes up for vote at
this Meeting that is not on the proxy card, the proxies will vote your shares according to his best judgment.
What
is the difference between holding shares as a stockholder of record and as a beneficial owner?
Certain
of our stockholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share
certificates in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Stockholder
of Record/Registered Stockholders
If,
on the Record Date, your shares were registered directly in your name with our transfer agent, Continental Stock Transfer Trust
Company, you are a stockholder of record and we are sending these proxy materials directly to you. As the stockholder
of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us. Whether or not you
plan to attend the Meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted.
Beneficial
Owner
If,
on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are considered
the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you by your broker
or nominee who is considered the stockholder of record for purposes of voting at the Meeting. As the beneficial owner, you have
the right to direct your broker on how to vote your shares and to attend the Meeting. However, since you are not the stockholder
of record, you may not vote these shares in person unless you receive a valid proxy from your brokerage firm, bank or other nominee holder.
To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder. If you do not make this
request, you can still vote by using the voting instruction card enclosed with this Proxy Statement.
If
you were a stockholder of record of the common stock on the Record Date, you may vote in any of the methods described below. Each share
of Class A Common Stock entitles the holder thereof to one vote on the applicable proposals. Each share of Class B Common Stock entitles
the holder thereof to ten votes on the applicable proposals.
You
may vote in one of three ways:
●
Over
the Internet
If
your shares are registered in your name:
Vote your shares over the Internet by accessing the proxy online voting website at:
www.proxyvote.com
and following the on-screen instructions. You will need the control numbers that appear on your proxy card when you access the web
page.
If
your shares are held in the name of a broker, bank or other nominee:
Vote your shares over the Internet by following the voting instructions
that you receive from such broker, bank or other nominee.
●
By
Telephone
If
your shares are registered in your name:
Vote your shares over the telephone by accessing the telephone voting system toll-free at
1-800-690-6903 in the United States and from foreign countries using any touch-tone telephone and following the telephone voting instructions.
The telephone instructions will lead you through the voting process. You will need the Company number, account and control numbers that
appear on your proxy card.
●
By
Mail
Vote
by signing and dating the proxy card(s) and returning the card(s) in the prepaid envelope.
If
we receive your proxy card prior to this Meeting and if you mark your voting instructions on the proxy card, your shares will be voted:
i.
as
you instruct; and
ii.
according
to the best judgment of the appointed Proxy if a proposal comes up for a vote at this Meeting
that is not on the proxy card.
If
you return a signed card, but do
not
provide voting instructions, your shares will be voted:
●
FOR
the Merger Issuance Proposal;
●
FOR
the Private Financing Issuance Proposal;
●
FOR
the Written Consent Proposal;
●
FOR
the Option Proposal; and
●
FOR
the Adjournment Proposal.
According
to the best judgment of Mr. Davy if a proposal comes up for a vote at the Meeting that is not on the proxy card.
If
I plan on attending the Meeting, should I return my proxy card?
Yes.
Whether or not you plan to attend the Meeting, after carefully reading and considering the information contained in this Proxy Statement,
please complete and sign your proxy card. Then return the proxy card in the pre-addressed, postage-paid envelope provided herewith as
soon as possible, but prior to 11:59 p.m. EST on February 27, 2025, so your shares may be represented at the Meeting.
There
will not be any voting at the Meeting.
May
I change my mind after I return my proxy?
Yes.
You may revoke your proxy and change your vote at any time before the polls close at this Meeting. You may do this by:
●
sending
a written notice to the Secretary of the Company at the Companys executive offices
stating that you would like to revoke your proxy of a particular date; or
●
signing
another proxy card with a later date and returning it to the Secretary before the polls close
at this Meeting.
What
does it mean if I receive more than one proxy card?
You
may have multiple accounts at the transfer agent and/or with brokerage firms. Please sign and return all proxy cards to ensure that all
of your shares are voted.
What
happens if I do not indicate how to vote my proxy?
Signed
and dated proxies received by the Company without an indication of how the stockholder desires to vote on a proposal will be voted
in favor of each proposal presented to the stockholders.
Will
my shares be voted if I do not sign and return my proxy card?
If
you do not sign and return your proxy card, your shares will not be voted.
Is
my vote kept confidential?
Proxies,
ballots and voting tabulations identifying stockholders are kept confidential and will not be disclosed, except as may be necessary
to meet legal requirements.
Where
do I find the voting results of this Meeting?
We
will announce voting results at this Meeting and also file a Current Report on Form 8-K with the Securities and Exchange Commission (the
SEC
) reporting the voting results.
Where
Can I Get a Copy of the Proxy Materials?
Copies
of the proxy card, the Notice and this Proxy Statement are available on our Companys website at
https://ir.banzai.io/
.
The contents of that website are not a part of this Proxy Statement. If you want to receive a paper or email copy you must request one.
There is no charge to you for requesting a copy. Please make your request for a copy by contacting Joseph Davy by sending a letter
to the offices of the Company at 435 Ericksen Ave NE, Suite 250, Bainbridge Island, WA 98110.
Proxy
Solicitation Costs
The
cost of preparing, assembling, printing and mailing this Proxy Statement and the accompanying form of proxy, and the cost of soliciting
proxies relating to this Meeting, will be borne by the Company. If any additional solicitation of the holders of our outstanding shares
of Common Stock is deemed necessary, we (through our directors and officers) anticipate making such solicitation directly. The solicitation
of proxies by mail may be supplemented by telephone, telegram and personal solicitation by officers, directors and other employees of
the Company, but no additional compensation will be paid to such individuals.
No
Right of Appraisal
Under
Delaware law, the Companys stockholders are not entitled to appraisal rights in connection with any of the proposals to be acted
upon at the Meeting.
Principal
Offices
The
principal executive offices of our Company are located at 435 Ericksen Ave NE, Suite 250, Bainbridge Island, WA 98110. The Companys
telephone number at such address is 206-414-1777.
Who
can help answer my questions?
You
can contact Joseph Davy or by sending a letter to the offices of the Company at 435 Ericksen Ave NE, Suite 250,
Bainbridge Island, WA 98110 with any questions about proposals described in this Proxy Statement or how to execute your vote.
PROPOSAL
NO. 1 TO AUTHORIZE, FOR PURPOSES OF COMPLYING WITH NASDAQ LISTING RULE 5635(D), THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING
PRE-FUNDED WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF THAT CERTAIN MERGER AGREEMENT, DATED DECEMBER 10, 2024, IN AN AMOUNT EQUAL
TO OR IN EXCESS OF 20% OF ALL OF OUR COMMON STOCK OUTSTANDING IMMEDIATELY PRIOR TO THE ISSUANCE OF SUCH PRE-FUNDED WARRANTS (INCLUDING
UPON THE OPERATION OF ANTI-DILUTION PROVISIONS CONTAINED IN SUCH PRE-FUNDED WARRANTS) (THE
MERGER ISSUANCE PROPOSAL
)
Background
The
Merger
On
December 10, 2024, the Company, entered into the Merger Agreement with OpenReel, certain OR Stockholders, and the Merger Sub. Pursuant
to the Merger Agreement, Merger Sub merged with and into OpenReel (the
Merger
), and OpenReel is the
surviving entity (the
Surviving Entity
) and a direct and wholly owned subsidiary of Banzai.
The
Merger was consummated (the
Closing
)
on December 18, 2024 (the
Closing Date
).
At
the Closing, the Company issued to the OR Stockholders an aggregate 930,558 shares of Class A Common Stock and 11,769,501 pre-funded
warrants, each exercisable for one (1) share of Class A Common Stock at an exercise price of US$0.0001 (the
Pre-Funded Warrants
).
The shares of Class A Common Stock and Pre-Funded Warrants issued by Banzai to the OR Stockholders pursuant to the Merger Agreement were
issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the
Securities
Act
).
Each
Pre-Funded Warrant has an exercise price of $0.0001 per each share of Class A Common Stock issuable thereunder (such underlying
shares, the
Warrant Shares
). The terms of the Pre-Funded Warrants provide that Banzai shall not issue shares
of Class A Common Stock to any holder of a Pre-Funded Warrant upon the exercise thereof to the extent that after giving effect to such
issuance, such holder would beneficially own a number of shares of Common Stock in excess of 19.99% of the total outstanding shares of
Common Stock immediately prior to the Closing (the
Nasdaq Ownership Limitation
).
We are seeking approval
for Merger Issuance Proposal because, pursuant to the Merger Agreement and the Pre-Funded Warrants, the Pre-Funded Warrants are not
exercisable for the Warrant Shares until we receive the approval of our stockholders to remove the Nasdaq Ownership
Limitation.
Effect
of Issuance of Securities
The
potential issuance of Warrant Shares would result in an increase in the number of shares of Class A Common Stock outstanding, and our
stockholders would incur dilution of their percentage ownership to the extent that the OR Stockholders exercise their Pre-Funded
Warrants. The dilutive effect may be material to our current stockholders.
Proposal
to Approve the Class A Common Stock Issuance
Nasdaq
Listing Rule 5635(a) requires us to obtain stockholder approval prior to issuance of securities in connection with the acquisition of
the stock or assets of another company if the number of shares of common stock to be issued is or will be equal to or in excess of 20%
of the number of shares of common stock outstanding before the issuance of the stock or securities or 20% or more of the voting power
outstanding immediately prior to the issuance In the case of the Merger, the 20% threshold is determined based on the total shares of
our Class A Common Stock and Class B Common Stock outstanding immediately the Closing Date.
Immediately
prior to the Closing Date, we had 4,074,080 shares of Class A Common Stock and 2,311,134 shares of Class B Common Stock outstanding.
Therefore, the issuance of 930,558 shares of Class A Common Stock and potential issuance of 11,769,501 shares of our Class A Common Stock
upon exercise of Pre-Funded Warrants would have constituted approximately 198.90% of the total shares of Class A Common Stock and Class
B Common Stock outstanding prior to giving effect to the Merger. Therefore, we are seeking stockholder approval under Nasdaq Listing
Rule 5635(d) for the potential issuance by us of our Class A Common Stock in excess of 1,277,043 shares, which is 20% of the total shares
of Class A Common Stock and Class B Common Stock outstanding immediately prior to the Closing Date.
Potential
Consequences if the Merger Issuance Proposal is Not Approved
If
our stockholders do not approve this proposal, we will not be able to issue shares of Class A Common Stock in excess of the Nasdaq Ownership
Limitation to the Pre-Funded Warrant holders in connection with the Merger. As a result, we may be unable to issue sufficient shares
upon exercise of the Pre-Funded Warrants. Failure to have sufficient shares for issuance upon exercise of the Pre-Funded Warrants constitutes
a contractual default for which we could be subject to damages.
Interests
of Certain Persons
When
you consider our Boards recommendation to vote in favor of this proposal, you should be aware that our directors and executive
officers and existing stockholders may have interests that may be different from, or in addition to, the interests of other of our stockholders.
Further
Information
The
full terms of the Merger Agreement and the Pre-Funded Warrants are included in the form of such document, which were filed
as Exhibits 2.1 and 10.2, respectively, to the Companys Current Report on Form 8-K, filed with the SEC on December 18,
2024, and are incorporated herein by reference. The discussion herein is qualified in its entirety by reference to the filed documents.
Vote
Required
The
Merger Issuance Proposal
will be approved if a majority
of the voting power of the stock present in person, by remote communication, if applicable, or represented by proxy at the Meeting,
and entitled to vote, other than the OR Stockholders, vote FOR the proposal.
Recommendation
of the Board
The
Board unanimously recommends that you vote all of your shares FOR the Merger Issuance Proposal as described in this Proposal
No. 1.
PROPOSAL
NO. 2 TO AUTHORIZE, FOR PURPOSES OF COMPLYING WITH NASDAQ LISTING RULE 5635(D), THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING
WARRANTS AND PRE-FUNDED WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED SEPTEMBER 24,
2024, IN AN AMOUNT EQUAL TO OR IN EXCESS OF 20% OF ALL OF OUR COMMON STOCK OUTSTANDING IMMEDIATELY PRIOR TO THE ISSUANCE OF SUCH WARRANTS
PRE-FUNDED WARRANTS (INCLUDING UPON THE OPERATION OF ANTI-DILUTION PROVISIONS CONTAINED IN SUCH PRE-FUNDED WARRANTS) (THE
PRIVATE
FINANCING ISSUANCE PROPOSAL
)
Background
On
September 24, 2024, the Company entered into a securities purchase agreement (the
Purchase Agreement
) with an institutional
investor (the
Investor
) for the issuance and sale in a private placement (the
Private Placement
)
of (i) pre-funded warrants (
HCW Pre-Funded Warrants
) to purchase up to 1,176,471 shares of the Companys Class
A Common Stock, at an exercise price of $0.001 per share, (ii) Series A warrants (the
Series A Warrants
) to purchase
up to 1,176,471 shares of Class A Common Stock, at an exercise price of $4.00 per share, and (iii) Series B warrants (the
Series
B Warrants
and together with the Series A Warrants, the
HCW Warrants
) to purchase up to 1,176,471 shares
of Class A Common Stock at an exercise price of $4.00 per share. The Series A Warrants are exercisable immediately upon issuance
and have a term of exercise equal to five years from the date of issuance. The Series B Warrants are exercisable immediately upon issuance
and have a term of exercise equal to eighteen (18) months from the date of issuance. The combined purchase price per HCW Pre-Funded Warrant
and accompanying HCW Warrants was $4.249. The Private Placement closed on September 26, 2024.
A
holder of the HCW Pre-Funded Warrants and the HCW Warrants may not exercise any portion of such holders HCW Pre-Funded Warrants
or HCW Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election
of the holder, 9.99%) of the Companys outstanding shares of Class A Common Stock immediately after exercise, except that
upon at least 61 days prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation
to up to 9.99% of the number of shares of Class A Common Stock outstanding immediately after giving effect to the exercise. In
the event of certain fundamental transactions, holders of the HCW Warrants will have the right to receive the Black Scholes Value of
their HCW Warrants calculated pursuant to a formula set forth in the HCW Warrants, payable either in cash or in the same type or form
of consideration that is being offered and being paid to the holders of Common Stock.
In
connection with the Private Placement, the Company entered into a registration rights agreement (the
Registration Rights Agreement
),
dated as of September 24, 2024, with the investor, pursuant to which the Company agreed to prepare and file a registration statement
with the SEC registering the resale of the shares of Class A Common Stock underlying the HCW Pre-Funded Warrants and the HCW Warrants
no later than ten (10) days after the date of the Registration Rights Agreement (the
Registration Statement
), and
to use its best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no
later than forty-five (45) days following the date of the Registration Rights Agreement (or seventy-five (75) days following the date
of the Registration Rights Agreement in the event of a full review by the SEC). The Registration Statement was filed and
the SEC declared it effective on November 6, 2024.
The
net proceeds to the Company from the Private Placement were approximately $4.4 million, after deducting placement agent fees and estimated
offering expenses payable by the Company. The Company used the net proceeds received from the Private Placement to pay off in full its
outstanding credit facility with Yorkville Advisors and for general corporate purposes and working capital.
H.C.
Wainwright Co., LLC (
Wainwright
) acted as the Companys exclusive placement agent in connection with
the Private Placement, pursuant to that certain engagement letter, dated as of September 12, 2024, as amended, between the Company and
Wainwright (the
Engagement Letter
). Pursuant to the Engagement Letter, the Company paid Wainwright (i) a total cash
fee equal to 7.5% of the aggregate gross proceeds of the Private Placement (inclusive of the gross proceeds to be received from the exercise
of any HCW Warrants), (ii) a management fee of 1.0% of the aggregate gross proceeds of the Private Placement(inclusive of the gross proceeds
to be received from the exercise of any HCW Warrants), and (iii) a non-accountable expense allowance of $50,000. In addition, the Company
issued to Wainwright or its designees warrants (the
Placement Agent Warrants
) to purchase up to an aggregate of
88,235 shares of Class A Common Stock at an exercise price equal to $5.3125 per share and, if any HCW Warrants are exercised for
cash will be obligated to issue to Wainwright additional Placement Agent Warrants equal to 7.5% of the total HCW Warrants exercised,
if any. The Placement Agent Warrants have substantially the same terms as the HCW Warrants, are exercisable immediately upon issuance
and have a term of exercise equal to five (5) years from the date of issuance.
Pursuant
to the Purchase Agreement, the Company agreed not to issue any shares of Class A Common Stock or Common Stock equivalents or to
file any other registration statement with the SEC (in each case, subject to certain exceptions) until sixty (60) days after the effective
date of the Registration Statement (the
Protective Provisions
). The Company has also agreed not to effect any Variable
Rate Transaction (as defined in the Purchase Agreement) until one (1) year after the effective date of the Registration Statement (subject
to certain exceptions).
Since
the Merger Agreement signed on December 10, 2024 requires the Company to issues shares to the OR Stockholders and file a registration
statement to register those shares, the Investor agreed to waive the Protective Provisions (the
Waiver
). In consideration
for the Waiver, the Company agreed to reduce the exercise price of the HCW Warrants from $4.00 to $2.50 per share (the
Reduced
Exercise Price
).
As
stated above in the Merger Issuance Proposal, Nasdaq Listing Rule 5635(d) requires us to obtain stockholder approval prior to
a transaction, other than a public offering, involving the sale, issuance or potential issuance by the Company of Common Stock (or securities
convertible into or exercisable for Common Stock), which equals 20% or more of the Common Stock or 20% or more of the voting power outstanding
immediately prior to the issuance (the
Exchange Cap
) at a price that is less than the lower of (the
Minimum
Price
): (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding
agreement in connection with such transaction; or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on
Nasdaq.com) for the five trading days immediately preceding the signing of such binding agreement.
Additionally,
Nasdaq may deem the Reduced Exercise Price as a new transaction and since it occurred within six months of the Purchase Agreement, Nasdaq
may aggregate the two transactions together.
If
all of the HCW Warrants are exercised, the Company will have to issue an aggregate of 2,441,177 shares of Class A Common
Stock. Since the Company has no control over when the HCW Warrants will be exercised and therefore they can be exercised at any time,
the 20% threshold must be determined as of the date of the Waiver. As of the date of the Waiver, the number of share issuable upon exercise
of the HCW Warrants is equal to 23.23% of then outstanding shares of Class A Common Stock and Class B Common Stock;
adding in the 1,176,471 shares issuable upon exercise of the HCW Pre-Funded Warrants, the total shares issuable represents 34.43%
of our then outstanding shares of Class A Common Stock and Class B Common Stock. Since the Reduced Exercise Price is
also less than the Minimum Price, we must obtain stockholder approval to issue the shares of Class A Common Stock upon
exercise of the HCW Warrants.
Following
the exercise of any of the HCW Warrants, there would be an increase in the number of shares of our Common Stock outstanding, and, as
a result, our current stockholders will own a smaller percentage of our then-outstanding shares of Common Stock. Additionally, the issuance
or resale of our Common Stock issued to the holder upon exercise of the HCW Warrants could cause the market price of our common stock
to decline.
Company
management believes that the Merger with OpenReel is in the best interest of the Company and its stockholders. To proceed with
the Merger and avoid a default of the Purchase Agreement, Management agreed to the Waiver, which requires that we now seek stockholder
approval of the Private Financing Issuance Proposal.
When
you consider our Boards recommendation to vote in favor of this proposal, you should be aware that our directors and executive
officers and existing stockholders may have interests that may be different from, or in addition to, the interests of other of our stockholders.
Potential
Consequences if this Proposal is Not Approved
The
Board is not seeking the approval of our stockholders to authorize our entry into or consummate the Merger or the Purchase Agreement.
We are only asking for approval to issue the shares of Class A Common Stock upon issuance of the HCW Warrants that exceed 20%
of our then issued and outstanding shares of Class A Common Stock and Class B Common Stock.
The
failure of our stockholders to approve this Proposal will mean that we will be in default of the Waiver, which could result in lawsuits
against the Company.
Pursuant
to the Reduced Exercise Price, the HCW Warrants have an exercise price of $2.50 per share. Accordingly, we would realize an aggregate
of up to approximately $5.9 million in gross proceeds if the HCW Warrants are exercised in full based on such value. If the HCW
Warrants cannot be exercised, we will not receive any such proceeds, which could adversely impact our ability to fund our operations.
There is no assurance that any of the HCW Warrants will be exercised.
No
Appraisal Rights
Appraisal
or dissenter rights are statutory rights under the laws of Delaware that enable stockholders who object to certain extraordinary transactions
to demand that the corporation pay such stockholders the fair value of their shares instead of receiving the consideration offered to
stockholders in connection with the extraordinary transaction. However, appraisal or dissenter rights are not available in all circumstances.
Appraisal rights are not available to our stockholders in connection with the Private Financing Issuance Proposal.
Further
Information
The
foregoing descriptions of terms and conditions of the Purchase Agreement, the HCW Pre-Funded Warrants, the HCW Warrants, the Placement
Agent Warrants, and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by the full text
of the form of such agreements, the form of which are filed with the SEC as exhibits to our Current Report on Form 8-K filed on September
27, 2024, and are incorporated herein by reference. The discussion herein is qualified in its entirety by reference to the filed documents.
Vote
Required
The
proposal to grant the Board authority to issue the shares subject to the Private Financing Issuance Proposal requires the affirmative
vote of the majority of the voting power of the stock present in person, by remote communication, if applicable, or represented by proxy
at the meeting and entitled to vote generally, other than the Private Warrant holders. Abstentions and broker non-votes will have no
effect on the result of the vote.
Recommendation
of the Board
The
Board unanimously recommends that you vote all of your shares FOR the Private Financing Issuance Proposal described in
this Proposal No. 2.
PROPOSAL
NO. 3 - AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION TO CREATE A RIGHT OF STOCKHOLDERS TO TAKE ACTION BY WRITTEN CONSENT
Background
Our
Board is submitting for stockholder approval a proposal to amend our Restated Certificate of Incorporation to allow stockholders to act
by written consent (the
Written Consent Amendment
). Our Restated Certificate of Incorporation currently prohibits
stockholders from acting by written consent in lieu of a special meeting. Our Board has determined it is in the best interests of the
Company and our stockholders to amend our Restated Certificate of Incorporation to reflect the Written Consent Amendment, insofar as
it can provide a more efficient (and less costly for the Company) means to vote on permitted matters. If Proposal 3 is approved, future
actions approved by the holders of outstanding shares of the relevant class or series 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
will not require the Company to expend the time and resources required to hold a special meeting of stockholders.
Effective
Time
If
Proposal 3 is approved by stockholders and the Written Consent Amendment is implemented at the direction of the Board, the effective
date of the Written Consent Amendment will be the date and time that the Written Consent Amendment is filed with the Delaware Secretary
of State or such later time as is specified therein. Such filing may occur as soon as the day of the Meeting or at any time prior to
the one-year anniversary of stockholder approval of the Written Consent Amendment. The exact timing of the Written Consent Amendment
will be determined by our Board based on its evaluation as to when such action will be the most advantageous to the Company and its stockholders.
The
Written Consent Amendment will substantially be the same as follows:
Any
action required or permitted to be taken by the stockholders of the Corporation must be effective at a duly called annual meeting or
at a special meeting of stockholders of the Corporation, unless such action requiring or permitting stockholder approval is approved
by a majority of the directors, in which case such action may be authorized or taken by the written consent of the holders of outstanding
shares of voting stock having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting
of stockholders at which all shares entitled to vote thereon were present and voted, provided all other requirements of applicable law
and this Certificate of Incorporation have been satisfied.
A
copy of the form of Articles of Amendment of the Restated Certificate of Incorporation is attached hereto as
Annex C
.
The
Board reserves the right to withdraw Proposal 3 and, if such proposal is withdrawn, all references in the Companys proxy materials
to voting for Proposal 3 should be disregarded. In addition, effectuation of the Written Consent Amendment may be delayed or abandoned
without further action by the stockholders at any time prior to effectiveness of the Written Consent Amendment with the Delaware Secretary
of State, notwithstanding stockholder adoption and approval thereof, if the Board, in its sole discretion, determines that it is in the
best interests of the Company and its stockholders to delay or abandon the Written Consent Amendment. If the Written Consent Amendment
has not been filed with the Delaware Secretary of State on or before the one-year anniversary of stockholder approval thereof, the Board
will be deemed to have abandoned the Written Consent Amendment.
Bylaws
The
majority of our directors approved amending our Second Amended and Restated Bylaws (the Bylaws) to remove any provisions
prohibiting our stockholders from taking action via written consent, as required by the Bylaws. Therefore, if Proposal 3 is approved,
we will also amend our Bylaws to delete any provisions prohibiting our stockholders from taking action via written consent. Most notably,
we will remove Section 3.13, Action Without Meeting from the Bylaws.
Appraisal
Rights
Under
Delaware law, our stockholders are not entitled to dissenters rights or appraisal rights with respect to the Written Consent Amendment
and we will not independently provide our stockholders with any such rights.
Interest
of Certain Persons in Matters to be Acted Upon
No
officer or director has any substantial interest, direct or indirect, by security holdings or otherwise, in the Written Consent Amendment
that is not shared by all of our other stockholders. If this Proposal is approved, our CEO will have the ability to act by written
consent too, since he is a shareholder.
Vote
Required
Adoption
of Proposal 3 requires an affirmative vote of the holders of at least 66 2/3% in voting power of the stock of the Company entitled to
vote thereon. You may vote FOR, AGAINST, or ABSTAIN from voting concerning Proposal 3. Approval
of Proposal 3 is not conditioned upon approval of any other proposal.
Recommendation
of the Board
THE
BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR
PROPOSAL 3.
PROPOSAL
NO. 4 - APPROVAL OF INCREASE IN SHARES AVAILABLE UNDER THE STOCK OPTION PLAN
Background
Our
Board recommends that the number of shares available under the Companys 2023 Equity Incentive Plan (the
Plan
),
be increased from 102,319 (as of January 1, 2025) to 10,000,000 shares. A copy of the Plan was filed with our Registration on Form
S-8, filed with the SEC on March 25, 2024. The Board determined that 102,319 shares, even with the automatic increase in shares permitted
under the Plan, is insufficient to effect the objectives of the Plan, including offering sufficient options under the Plan to attract
and retain employees. The proposed increase represents approximately 33% of the current outstanding and issued shares of the Companys
Common Stock. Accordingly, if this proposal is approved by our stockholders, the aggregate maximum number of shares of Common Stock that
may be issued pursuant to the exercise of Incentive Stock Options (as defined in the Plan) will be increased to 5,000,000 shares.
The
Board believes that stock-based incentive awards can play an important role in the success of the Company by encouraging and enabling
the employees, officers, non-employee directors and consultants of the Company and its subsidiaries upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. The
Board believes that providing such persons with a direct stake in the Company assures a closer identification of the interests of such
individuals with those of the Company and its stockholders, thereby stimulating their efforts on the Companys behalf and strengthening
their desire to remain with the Company. The Option Amendment is designed to enhance the flexibility to grant equity awards to our officers,
employees, non-employee directors and consultants at levels determined to be appropriate by the Board and the Compensation Committee
to motivate, attract and retain the services of such individuals and align their financial interests with those of our stockholders.
A copy of the Plan, as proposed to be amended by Option Amendment, is attached as Annex B to this Proxy Statement and is
incorporated herein by reference.
Key
Aspects of The Plan
The
following sets forth key aspects of the Plan. The following summary does not purport to be complete and is qualified in its entirety
by reference to the terms of our Plan, which is attached to this Proxy Statement as Annex B.
●
The
Plan is administered by a committee composed entirely of independent directors, or the Plan Administrator.
●
The
right to purchase Common Stock pursuant to any option grant award, in the discretion of the Plan Administrator, may be fully and
immediately vested upon issuance or may vest in one or more installments over the participants period of service or upon attainment
of specified performance objectives.
●
The
exercise price per share subject to any option award, and the price per share of any stock issued pursuant to the Stock Issuance
Program set forth in the Plan may not be less than 100% of the Fair Market Value per share of Common Stock on the option grant date.
If the recipient is a 10% stockholder, then the exercise price per share or the price per share of any stock issued may not
be less than 110% of the Fair Market Value per share of Common Stock on the option grant date or stock issuance date under the Plan.
Types
of Awards.
The Plan provides for the grant of options to purchase shares and for the outright issuance of shares of Common
Stock. Options granted may be ISOs as defined under Section 422(b) of the Internal Revenue Code (the Code). Options
which do not qualify as ISOs and are referred to as non-statutory options (together with ISOs, Options) may also be
granted under the Plan. Individuals who receive Options are referred to as Optionees.
Eligibility.
Our employees, consultants, independent contractors, and nonemployee directors are eligible to receive Options and awards of shares
of Common Stock under the Plan. Based on the Boards current grant guidelines, the number of employees, including our named executive
officers, currently eligible to participate in the Plan is approximately 29, and there are currently 4 nonemployee directors.
Shares
Subject to the Plan.
The aggregate number of shares that may be issued under the Plan, if this proposal is approved by our stockholders,
will be 10,000,000 subject to adjustment based on the occurrence of certain corporate events and such aggregate number of shares
of Common Stock will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2024 and ending
on (and including) January 1, 2033, in an amount equal to five percent (5%) of the total number of shares of the fully diluted common
stock determined as of the day prior to such increase;
provided
,
however
, that the Board may act prior to January 1st of
a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. The aggregate maximum number
of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is 5,000,000 shares.
As
of the close of business on December 27, 2024, of this aggregate amount, approximately 102,319 shares had been issued
or reserved for issuance under the Plan. As of the close of business on December 27, 2024, approximately 22,928 Options
remained available for grant under the Plan. Shares deliverable under the Plan may consist of either Treasury Shares or originally issued
shares. If an Option granted under the Plan expires or terminates without having been exercised in full, the shares subject to such Option
will be available again for grant under the Plan.
Term
of the Plan.
The Plan will terminate no later than December 14, 2033.
Administration.
The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees. It
also has the authority to select individuals to whom awards will be granted, to determine the terms and conditions of awards and to
determine the number of shares issuable upon exercise of each Option; it can also accelerate the exercise date of outstanding
Options.
Exercise
Price.
Except for Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of
the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise
or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption
of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with
the provisions of Sections 409A and, if applicable, 424(a) of the Code. A Ten Percent Stockholder may not be granted an Incentive Stock
Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and
(ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
Method
of Exercise.
Options will be exercisable in such manner as determined by the Board or Committee, as applicable, which may
include by cashless exercise.
Limits
on Exercisability.
No Option will be exercisable after the expiration of ten years from the date an Option is
granted.
Transferability.
Options and SARs may not be transferred to third-party financial institutions for value. The Board may impose such additional limitations
on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, in general, Options
are not transferable by the Optionee except by will or by the laws of descent and distribution, and, during the lifetime of the Optionee,
Options may be exercised only by the Optionee. However, the Plan permits the transfer of non-statutory options to certain family members
in connection with a domestic relations order.
Termination
of Employment.
Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participants Continuous Service is terminated for Cause, the Participants Options
and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited
from exercising any portion (including any vested portion) of such Awards on and after such termination of Continuous Service and the
Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited
Award, or any consideration in respect of the forfeited Award. If a Participants Continuous Service terminates for any reason
other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within a specified time period,
ranging from 3 18 months following the date of termination, or, if applicable, such other period of time provided in the Award
Agreement or other written agreement between a Participant and the Company or an Affiliate.
Withholding.
The Companys obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the
issuance or vesting of any shares issued under the Plan shall be subject to the satisfaction of all applicable federal, state and
local income and employment tax withholding requirements.
Adjustments.
Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporations receipt of
consideration, appropriate adjustments shall be made to: (i) the maximum number and/or class of securities issuable under the Plan;
and (ii) the number and/or class of securities and the exercise price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder.
Corporate
Transactions.
In the event of a corporate transaction (including a change-in-control transaction), as defined
in the Plan, the vesting of any outstanding Options will be accelerated to a date prior to the effective time of such corporate action
and such awards will terminate if not exercised prior to such time.
Amendment
or Termination.
The Plan may be amended or modified by our Board in all respects at any time, (aside from those amendments requiring
stockholder approval), provided that no such amendment or modification shall adversely affect the rights and obligations with
respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the recipient of shares
consents to such amendment or modification.
Federal
Income Taxation
The
following discussion is a summary of the material U.S. federal income tax consequences of Options granted under the Plan.
Non-Statutory
Options.
The grant of a non-statutory Option will not be a taxable event. The Optionee generally will recognize ordinary income
upon exercise of the non-statutory Option, in an amount equal to the excess of the fair market value of the shares received at the time
of exercise (including option shares withheld by us to satisfy tax withholding obligations) over the exercise price of the non-statutory
Option, and we will be allowed a deduction in this amount.
Upon
disposition of the shares received upon exercise, the Optionee will recognize long-term or short-term capital gain or loss, depending
upon the length of time he or she held such shares. The amount of long-term or short-term capital gain or loss recognized by the Optionee
upon disposition of the shares will be an amount equal to the difference between the amount realized on the disposition and the Optionees
basis in the shares (which basis is ordinarily the fair market value of the shares on the date the Option was exercised).
Special
tax rules may apply if an Optionee uses previously owned shares to pay the exercise price of an Option.
Incentive
Stock Options.
Neither the grant nor the exercise of an ISO will be a taxable event, except that the alternative minimum tax
may apply at the time of exercise. The Optionee will recognize long-term capital gain or loss on a disposition of shares acquired upon
exercise of an ISO provided the Optionee does not dispose of such shares within two years from the date the ISO was granted and within
one year after the shares were transferred to the Optionee. For purposes of determining such gain or loss, the Optionees basis
in such shares will, in general, be the exercise price of such Option. If the Optionee satisfies both of the holding periods described
above, then we will not be allowed a deduction by reason of the exercise of the ISO.
If
the Optionee disposes of the shares acquired upon exercise before satisfying the holding period requirements discussed above (a disqualifying
disposition), his or her gain recognized on the disqualifying disposition will be taxed as ordinary income to the extent of the
difference between the fair market value of the shares on the date of exercise and exercise price of such Option, and we will be entitled
to a deduction in this amount. The gain (if any) in excess of the amount recognized as ordinary income on a disqualifying disposition
will be long-term or short-term capital gain, depending upon the length of time the recipient held the shares.
New
Plan Benefits
SEC
rules require us to disclose any amounts that we currently are able to determine will be allocated to our Named Executive Officers, directors
and other employees following approval of the Amendment to the Plan. Presently, no grants under the additional shares to be added to
the Plan have been made.
Vote
Required
The
affirmative vote of a majority of the total votes cast on the proposal is required.
Recommendation
of the Board
The
Board recommends a vote FOR the approval of the increase in the number of shares available for issuance under the Plan
to 10,000,000.
EXECUTIVE
AND DIRECTOR COMPENSATION
Executive
Officer Compensation
Our
named executive officers for the fiscal year ended December 31, 2024, consisting of our principal executive officer, principal
financial officer and the next two most highly compensated executive officers, were:
Joseph
P. Davy, our Chief Executive Officer;
Mark
Musburger, our Chief Financial Officer(1);
Simon
Baumer, our Chief Technology Officer; and
Ashley
Levesque, our Vice President of Marketing(2).
(1)
On
May 29, 2024, Ashley Levesque resigned from her position as Vice President of Marketing.
(2)
On
June 5, 2024, Mark Musburger resigned from his position as Chief Financial Officer.
2024
Summary Compensation Table
The
following table presents the compensation paid or awarded to our named executive officers with respect to the fiscal years ended December
31, 2024 and, to the extent required by SEC disclosure rules, December 31, 2023.
Name and Principal Position
Year
Salary
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)(3)
Total
($)
Joseph P. Davy
2024
$
300,000
$
500,000
(7)
$
-
$
18,216
$
318,216
Chief Executive Officer
2023
237,500
$
-
$
-
$
18,216
$
318,216
Mark Musburger(4)
2024
99,000
43,950
(7)
-
$
125,000-
1,349,105
Chief Financial Officer
2023
216,000
1,133,105
(1)
-
-
1,349,105
Simon Baumer
2024
250,000
43,950
(7)
-
-
539,559
Chief Technology Officer
2023
250,000
289,559
(1)
-
-
539,559
Ashley Levesque(5)
2024
75,000
43,950
(7)
-
4,830
812,890
Vice President of Marketing
2023
180,000
621,296
(1)
-
11,594
812,890
Alvin Yip (6)
2024
124,583
50,600
(7)
-
$125,000-
1,349,105
Interim Chief Financial Officer
(1)
The
amounts disclosed represent the (i) aggregate grant date fair value of the stock options granted to our named executive officers
during the fiscal year ended December 31, 2023 under the 2016 Plan Equity Incentive Plan (the 2016 Plan) (Mr. Musburger,
$1,104,209; Mr. Baumer $262,289; Ms. Levesque, $595,294) and (ii) the incremental cost under Financial Accounting Standards Board
Accounting Standards Codification Topic 718, Compensation-Stock Compensation (ASC Topic 718) associated with a reduction
in the exercise price of certain outstanding options that occurred in December 2023 (Mr. Musburger, $28,896; Mr. Baumer, $27,270;
Ms. Levesque, $26,002), each computed in accordance ASC Topic 718. The assumptions used in calculating the grant date fair value
of the stock options are set forth in Note 19 to our audited consolidated financial statements included in the registration statement
of which this prospectus forms a part. This amount does not reflect the actual economic value that may be realized by the named executive
officer.
(2)
The
amounts disclosed represent the aggregate grant date fair value of the stock options granted to our named executive officers during
the fiscal year ended December 31, 2022 under the 2016 Plan computed in accordance with ASC Topic 718. The assumptions used in calculating
the grant date fair value of the stock options are set forth in Note 19 to our audited consolidated financial statements included
elsewhere in the registration statement of which this prospectus forms a part. This amount does not reflect the actual economic value
that may be realized by the named executive officer.
(3)
Consists
of Company contributions to the Companys 401(k) plan
(4)
On
June 5, 2024, Mark Musburger resigned from his position as Chief Financial Officer.
(5)
On
May 29, 2024, Ashley Levesque resigned from her position as Vice President of Marketing.
(6)
On June 14,2024, Alvin Yip was appointed as the company
interim Chief Financial Officer.
(7)
The amount disclosed represents compensations fair value
issued in forms of RSU on grant date.
Narrative
Disclosure to Summary Compensation Table
Non-Equity
Incentive Plan Compensation
In
addition to base salaries, our named executive officers are eligible to receive annual performance-based cash bonuses, which are designed
to provide appropriate incentives to our employees to achieve defined performance goals. None of our named executive officers received
or will receive annual performance-based cash bonuses with respect to the fiscal years ended December 31, 2024 or December 31,
2023.
Equity
Grants
To
further align the interests of our executive officers with the interests of our stockholders and to further focus our executive officers
on our long-term performance, Legacy Banzai historically granted equity compensation in the form of stock options. Stock options allow
the holder to exercise the stock option and receive shares upon exercise, with the exercise price determined based on the fair market
value of a share of common stock at the time of grant.
The
stock options granted to our named executive officers vested or will vest in a 25% increment on the one-year anniversary of the vesting
commencement date and thereafter 1/48th of the total shares underlying the option award vests in 36 equal monthly installments, subject
to the named executive officers continued service at each vesting date.
During
2023, Ms. Levesque received option grants with respect to 115,000 shares with an original exercise price of $7.36 per share. On December
6, 2023, the Board approved a repricing of the 2023 option awards granted to Ms. Levesque, reducing the exercise price to $5.15 per share,
which, upon the closing of the Business Combination, then increased to $8.38 and at the same time the original option grants reduced
to 70,685 shares. The exercise price further increased to $419.00 and at the same time the original grants reduced to 1,414 shares upon
completion of the reversed stock split
During
2023, Mr. Baumer received option grants with respect to 50,000 shares with an original exercise price of $7.36 per share. On December
6, 2023, the Board approved a repricing of the 2023 option awards granted to Mr. Baumer, reducing the exercise price to $5.15 per share,
which, upon the closing of the Business Combination, then increased to $8.38 and at the same time the original option grants reduced
to 30,732 shares. The exercise price further increased to $419.00 and at the same time the original grants reduced to 615 shares upon
completion of the reversed stock split
During
2023, Mr. Musburger received option grants with respect to 150,000 shares with an original exercise price of $7.36 per share. On December
6, 2023, the Board approved a repricing of the 2023 option awards granted to Mr. Musburger, reducing the exercise price to $5.15 per
share, which, upon the closing of the Business Combination, then increased to $8.38 and at the same time the original option grants reduced
to 92,196 shares. The exercise price further increased to $419.00 and at the same time the original grants reduced to 1,844 shares upon
completion of the reversed stock split.
During
December 2024, Mr. Joseph Davy received 304,878 shares of RSU grants as for the compensation Bonus of $500,000.00
During
December 2024, Mr. Alvin Yip received 32,895 shares of RSU grants as for the compensation Bonus of $50,000.00
2025
Compensation Update
In
December 2024, the Board approved increasing certain executives salaries as set forth in the table below, to
take effect January 1
st
2025.
The
following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2024.
Option Awards (1)
Name
Grant Date
Vesting Commencement Date
Number of Securities Underlying
Unexercised Options Exercisable (#)
Number of Securities Underlying
Unexercised Options Unexercisable (#) (2)
Option Exercise Price Per Share
($)
Option Expiration Date
Joseph P. Davy
-
-
-
-
-
-
Mark Musburger(3)
12/3/2023
10/1/2023
267-
653
$
419.00
12/2/2033
12/3/2023
12/9/2022
369
368
$
419.00
3/1/2033
12/3/2023
12/9/2022
553
553
$
419.00
3/1/2033
Simon Baumer
Simon Baumer
12/3/2023
12/9/2022
308
307
$
419.00
3/1/2033
2/16/2022
1/31/2022
448
167
$
138.50
2/15/2032
7/14/2021
7/1/2021
525
89
$
141.00
7/14/2031
Ashley Levesque(4)
12/3/2023
6/1/2022
884
530
$
419.00
3/1/2033
2/16/2022
1/31/2022
36
33
$
138.50
2/15/2032
7/14/2021
2/21/2021
40
3
$
141.00
7/14/2031
7/14/2021
7/1/2021
78
23
$
141.00
7/14/2031
Alvin
Yip
12/3/2023
09/19/2023
77
169
$
419.00
12/2/2033
05/14/2024
05/15/2014
15
171
$
14.65
05/14/2034
(1)
Each
of the equity awards was granted under the 2016 Plan.
(2)
25%
of the total shares underlying the option award vest on the one-year anniversary of the vesting commencement date, thereafter 1/48th
of the total shares underlying the option award vest in 36 equal monthly installments, subject to the named executive officers
continued service at each vesting date.
(3)
On
June 5, 2024, Mark Musburger resigned from his position as Chief Financial Officer.
(4)
On
May 29, 2024, Ashley Levesque resigned from her position as Vice President of Marketing
Additional
Narrative Disclosure
401(k)
Plan
We
maintain a 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible
employees are able to defer eligible compensation up to certain Code limits, which are updated annually. We make employer contributions
under the 401(k) plan and also have the ability to make employer profit sharing contributions to the 401(k) plan. The 401(k) plan is
intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the
Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings
on those amounts are not generally taxable to the employees until withdrawn or distributed from the 401(k) plan.
The
Board reviews director compensation periodically to ensure that director compensation remains competitive such that the Company is able
to recruit and retain qualified directors. In December 2024, the 4 non-employee directors received compensation of $371,507.00 in the
form of RSUs equivalent to 30,049 shares of Banzais Class A Common Stock. While none of the non-employee directors received compensation
during the fiscal years ended December 31, 2023 or December 31, 2022 for services rendered to the Company, in December 2023, the Company
adopted a board of directors compensation program that is designed to align compensation with the Companys business objectives
and the creation of stockholder value, while enabling the Company to attract, retain, incentivize, and reward directors who contribute
to the long-term success of the Company. Under that program, our non-employee directors are eligible to receive the following:
●
Annual
base retainer of $100,000, to be paid as determined by the compensation committee;
●
Committee
Chair Retainers: Audit Committee, $10,000; Compensation Committee, $5,000; and Nominating and Corporate Governance Committee, $5,000.
●
Committee
Member Retainers: Audit Committee, $5,000; Compensation Committee, $2,500; and Nominating and Corporate Governance Committee, $2,500
Our
non-employee directors are also reimbursed for their reasonable out-of-pocket travel expenses to cover in-person attendance at and participation
in Board and committee meetings.
Disclosure
of Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information.
Rule
10b5-1 Sales Plans
Our
directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy
or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established
by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer
may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may
buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject
to compliance with the terms of our insider trading policy. The sale of any shares under such a plan will be subject to the Lock-Up Agreements,
to the extent that the selling director or executive officer is a party thereto.
Emerging
Growth Company Status
We
are an emerging growth company, as defined in the JOBS Act. As an emerging growth company, we are exempt from certain requirements
related to executive compensation, including the requirements to hold a nonbinding advisory vote on executive compensation and to provide
information relating to the ratio of total compensation of our chief executive officer to the median of the annual total compensation
of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank
Wall Street Reform and Consumer Protection Act.
Stockholders
are being asked to approve a proposal that will
give the Board the authority to adjourn the Meeting one or more times if necessary to solicit additional proxies if there
are not sufficient votes to approve the proposals at the time of the Meeting, or any adjournment or postponement thereof. If this
proposal is approved, the Meeting could be adjourned to any date. Any determination of whether it is necessary to adjourn the
Meeting (or any adjournment or postponement thereof) to solicit additional proxies will be made solely by the Company consistent
with the terms of the merger agreement.
If
the Meeting is adjourned, stockholders who have already submitted their proxies will be able to revoke them at any time
prior to their use. If you sign and return a proxy and do not indicate how you wish to vote on any proposal, or if you indicate that
you wish to vote in favor of the proposals, but do not indicate a choice on the adjournment proposal, your shares will be voted in favor
of the adjournment proposal. But if you indicate that you wish to vote against the proposals, your shares will only be voted in favor
of the adjournment proposal if you indicate that you wish to vote in favor of that proposal.
Vote
Required
Assuming
that a quorum is present, the
affirmative vote of the holders of the majority of the voting power
of the stock present in person, by remote communication, if applicable, or represented by proxy at the Meeting and entitled to vote generally
shall be the act of the stockholders; provided, that in the absence of a quorum,
the
affirmative
vote of the holders of the majority of the voting power of the stock represented thereat is required to approve the Adjournment Proposal
.
Recommendation
of the Board
The
Board unanimously recommends a vote FOR approval of the adjournment proposal.
OTHER
MATTERS
Our
Board knows of no other matter to be presented at the Meeting. If any additional matter should properly come before the Meeting, it is
the intention of the persons named in the enclosed proxy to vote such proxy in accordance with their judgment on any such matters.
Electronic
Delivery of Future Stockholder Communications
Registered
stockholders can further save the Company expense by consenting to receive all future proxy statements, forms of proxy and annual
reports electronically via e-mail or the Internet. To sign up for electronic delivery, please access the website
www.proxyvote.com
when transmitting your voting instructions and, when prompted, indicate that you agree to receive or access stockholder communications
electronically in future years. Your choice will remain in effect unless and until you revoke it.
To
revoke your decision to receive or access stockholder communications electronically, access the website
www.proxyvote.com
,
enter your current PIN, select Cancel my Enrollment and click on the Submit button. After submitting your entry, the Cancel
Enrollment Confirmation screen will be displayed. This screen will show your current Enrollment Number. To confirm your enrollment cancellation,
click on the Submit button. Otherwise, click on the Back button to return to the Enrollment Maintenance screen. After submitting your
entry, the Cancel Enrollment Complete screen will be displayed. This screen will indicate that your enrollment has been cancelled. You
may be asked to complete a brief survey to help us understand why you opted out of electronic delivery. You will be sent an e-mail message
confirming the cancellation of your enrollment. No further electronic communications will be conducted for your account and your Enrollment
Number will be marked as Inactive. You may at any time reactivate your enrollment. You will be responsible for any fees
or charges that you would typically pay for access to the Internet.
Deadline
for Submission of Stockholder Proposals for the Meeting
For
any proposal to be considered for inclusion in our Proxy Statement and form of proxy for submission to the stockholders
at our Meeting, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Exchange Act. Such proposals
must be received by the Company at its offices 435 Ericksen Ave NE, Suite 250, Bainbridge Island, WA 98110, Attention: Chief Executive
Officer, no later than January 10, 2025.
If
we are not notified of a stockholder proposal a reasonable time prior to the time we send our Proxy Statement for our Meeting,
then our Board will have discretionary authority to vote on the stockholder proposal, even though the stockholder proposal
is not discussed in the Proxy Statement. In order to curtail any controversy as to the date on which a stockholder proposal
was received by us, it is suggested that stockholder proposals be submitted by certified mail, return receipt requested, and be
addressed to Banzai International, Inc., 435 Ericksen Ave NE, Suite 250, Bainbridge Island, WA 98110 Attention: Chief Executive Officer.
Notwithstanding, the foregoing shall not effectuate any rights of stockholders to request inclusion of proposals in our Proxy
Statement pursuant to Rule 14a-8 under the Exchange Act nor grant any stockholder a right to have any nominee included in
our Proxy Statement.
Proxy
Solicitation
The
solicitation of proxies is made on behalf of the Board and we will bear the cost of soliciting proxies. Proxies may be solicited through
the mail and through telephonic or telegraphic communications to, or by meetings with, stockholders or their representatives by
our directors, officers and other employees who will receive no additional compensation therefor. We may also retain a proxy solicitation
firm to assist us in obtaining proxies by mail, facsimile or email from record and beneficial holders of shares for the Meeting. If we
retain a proxy solicitation firm, we expect to pay such firm reasonable and customary compensation for its services, including out-of-pocket
expenses.
We
request persons such as brokers, nominees and fiduciaries holding stock in their names for others, or holding stock for others who have
the right to give voting instructions, to forward proxy material to their principals and to request authority for the execution of the
proxy. We will reimburse such persons for their reasonable expenses.
Delivery
of Proxy Materials to Households
Only
one copy of this Proxy Statement is being delivered to multiple registered stockholders who share an address unless we
have received contrary instructions from one or more of the stockholders. A separate form of proxy and a separate notice of the
Meeting are being included for each account at the shared address. Registered stockholders who share an address and would like
to receive a separate copy of this Proxy Statement, or have questions regarding the householding process, may contact the Companys
transfer agent: Continental Stock Transfer Trust Company, by calling (212) 509-4000, or by forwarding a written request
addressed to Continental Stock Transfer Trust Company, 1 State St 30th floor, New York, NY 10004. Promptly upon request,
a separate copy of this Proxy Statement will be sent. By contacting Continental Stock Transfer Trust Company, registered
stockholders sharing an address can also (i) notify the Company that the registered stockholders wish to receive separate
annual reports or quarterly reports to stockholders, Proxy Statements and/or Notices of Internet Availability of Proxy Materials,
as applicable, in the future or (ii) request delivery of a single copy of annual reports or quarterly reports to stockholders
and Proxy Statements in the future if registered stockholders at the shared address are receiving multiple copies.
Many
brokers, brokerage firms, broker/dealers, banks and other holders of record have also instituted householding (delivery
of one copy of materials to multiple stockholders who share an address). If your family has one or more street name
accounts under which you beneficially own shares of our Common Stock, you may have received householding information from your broker,
brokerage firm, broker/dealer, bank or other nominee in the past. Please contact the holder of record directly if you have questions,
require additional copies of this Proxy Statement or wish to revoke your decision to household and thereby receive multiple copies.
You should also contact the holder of record if you wish to institute householding.
Where
You Can Find Additional Information
The
Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, Proxy Statements
and other information with the SEC. Such reports, Proxy Statements and other information are available on the SECs
website at
www.sec.gov
. Stockholders who have questions in regard to any aspect of the matters discussed in this Proxy
Statement should contact Joesph Davy, our Chief Executive Officer, at ir@banzai.io.
NOTICE
OF THE SPECIAL MEETING OF STOCKHOLDERS
To Be Held at 8 a.m. PT on February 28, 2025
(Record Date January 13, 2025)
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Joseph Davy, as proxy of the undersigned, with full power to appoint his substitute, and hereby authorizes
him to represent and to vote all the shares of stock of Banzai International, Inc. which the undersigned is entitled to vote, as specified
below on this card, at the special meeting of stockholders of Banzai International, Inc. (the
Meeting
) to
be held which will take on February 28, 2025 at 8 a.m. PT, via the Demio link below:
https://my.demio.com/ref/sK4ESlg55HPisxfw
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS FOR EACH OF THE PROPOSALS.
This proxy
authorizes the above designated proxy to vote in his discretion on such other business as may properly come before the meeting or any
adjournments or postponements thereof to the extent authorized by Rule 14a-4(c) promulgated under the Securities Exchange Act of 1934,
as amended.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR
PROPOSALS 1, 2, 3, 4 AND 5.
PLEASE SIGN, DATE AND RETURN PROMPTLY,
BEFORE 11:59 P.M. EST ON FEBRUARY 27, 2025
, IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
PROPOSAL
1:
To approve of the issuance of shares of our common stock underlying pre-funded warrants in an amount equal to or in excess of
20% of our common stock outstanding immediately prior to the issuance of such pre-funded warrants (including upon the operation of anti-dilution
provisions contained in such pre-funded warrants) (the
Merger Issuance Proposal
).
PROPOSAL
2:
To approve of the issuance of shares of our common stock underlying warrants and pre-funded warrants in an amount equal to or
in excess of 20% of our common stock outstanding immediately prior to the issuance of such warrants and pre-funded warrants (including
upon the operation of anti-dilution provisions contained in such pre-funded warrants) (the
Private Financing Issuance Proposal
).
Fo
r
Against
Abstain
O
O
O
PROPOSAL
3:
To approve the amendment of the Restated Certificate of Incorporation regarding stockholder action by written consent (the
Written
Consent Proposal
).
Fo
r
Against
Abstain
O
O
O
PROPOSAL
4:
To approve the increase in the number of shares available for issuance under our 2023 Equity Incentive Plan (the
Plan
),
from 102,319 to 10,000,000 (the
Option Proposal
).
Fo
r
Against
Abstain
O
O
O
PROPOSAL
5:
To consider and approve the adjournment of the Meeting to a later date, if necessary (the
Adjournment Proposal
).
Fo
r
Against
Abstain
O
O
O
Please
indicate if you intend to attend this meeting☐YES☐NO
Signature
of Stockholder:
Date:
Name
shares held in (Please print):
Account
Number (if any):
No.
of Shares Entitled to Vote:
Stock
Certificate Number(s):
Note:
Please
sign exactly as your name or names appear in the Companys stock transfer books. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such.
If
the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such.
If
the signer is a partnership, please sign in partnership name by authorized person.
Please
provide any change of address information in the spaces below in order that we may update our records:
ADOPTED
BY THE BOARD OF DIRECTORS: November 13, 2023
APPROVED
BY THE STOCKHOLDERS: December 13, 2023
AMENDED
ON: [ ]
1.
GENERAL.
(a)
Plan Purpose.
The Company, by means of the Plan, seeks to secure, and retain the services of Employees, Directors and Consultants,
to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means
by which such persons may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Awards.
(b)
Available Awards.
The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options;
(iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(c)
Adoption Date; Effective Date.
The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective
Date.
2.
SHARES
SUBJECT TO THE PLAN.
(a)
Share Reserve.
Subject to adjustment in accordance with Section 2(c) and any adjustments as necessary to implement any Capitalization
Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 10,000,000 shares
of Common Stock. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments, such aggregate number
of shares of Common Stock will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2024
and ending on (and including) January 1, 2033, in an amount equal to five percent (5%) of the total number of shares of the Fully Diluted
Common Stock determined as of the day prior to such increase;
provided
,
however
, that the Board may act prior to January
1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock.
(b)
Aggregate Incentive Stock Option Limit.
Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments as
necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant
to the exercise of Incentive Stock Options is 5,000,000 shares.
(c)
Share Reserve Operation.
(i)
Limit Applies to Common Stock Issued Pursuant to Awards.
For clarity, the Share Reserve is a limit on the number of shares of Common
Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at
all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards.
Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed
Company Manual Section 303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the
number of shares available for issuance under the Plan.
(ii)
Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve.
The following actions do not result in an
issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance
under the Plan: (1) the expiration or termination of any portion of an Award without the shares covered by such portion of the Award
having been issued; (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock);
(3) the withholding of shares that would otherwise be issued by the Company to satisfy the exercise, strike or purchase price of an Award;
or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection
with an Award.
(iii)
Reversion of Previously Issued Shares of Common Stock to Share Reserve.
The following shares of Common Stock previously issued pursuant
to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available
for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency
or condition required for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise, strike
or purchase price of an Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection
with an Award.
3.
ELIGIBILITY
AND LIMITATIONS.
(a)
Eligible Award Recipients.
Subject to the terms of the Plan, Employees, Directors, and Consultants are eligible to receive Awards.
(b)
Specific Award Limitations.
(i)
Limitations on Incentive Stock Option Recipients.
Incentive Stock Options may be granted only to Employees of the Company or a parent
corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
(ii)
Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market Value (determined at the time of grant)
of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Option holder during any calendar
year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise
does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to
the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).
(iii)
Limitations on Incentive Stock Options Granted to Ten Percent Stockholders.
A Ten Percent Stockholder may not be granted an Incentive
Stock Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option
and (ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv)
Limitations on Nonstatutory Stock Options and SARs.
Nonstatutory Stock Options and SARs may not be granted to Employees, Directors,
and Consultants unless the stock underlying such Awards is treated as service recipient stock under Section 409A or unless
such Awards otherwise comply with the requirements of Section 409A.
(c)
Aggregate Incentive Stock Option Limit
. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the
exercise of Incentive Stock Options is the number of shares specified in Section 2(b).
(d)
Compensation Limit for Certain Directors.
The aggregate value of all compensation granted or paid, as applicable, to any Director
who is not also an employee of the Company, or a parent or subsidiary of the Company, for service as a Director, with respect to any
period commencing on the date of the Companys Annual Meeting of Stockholders for a particular year and ending on the day immediately
prior to the date of the Companys Annual Meeting of Stockholders for the next subsequent year (the
Annual Period
),
including Awards granted and cash fees paid by the Company to such Director, will not exceed (i) $1,000,000 in total value, or (ii) in
the event such Director is first appointed or elected to the Board during such Annual Period, $1,500,000 in total value, in each case
calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes.
The limitations in this Section 3(d) shall apply commencing with the Annual Period that begins on the Companys first Annual Meeting
of Stockholders following the Effective Date. Notwithstanding the foregoing, the limitations in this Section 3(d) shall not apply to
distributions of previously deferred compensation under a deferred compensation plan maintained by the Company or compensation received
by the director in his or her capacity as an executive officer or employee of, or consultant to, the Company.
Each
Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive
Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated or if an Option
designated as an Incentive Stock Option fails to qualify as an Incentive Stock Option, then such Option will be a Nonstatutory Stock
Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated
in shares of Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however,
that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement
or otherwise) to the substance of each of the following provisions:
(a)
Term.
Subject to Section 3(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten
years from the date of grant of such Award or such shorter period specified in the Award Agreement.
(b)
Exercise or Strike Price.
Subject to Section 3(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option
or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option
or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if
such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate
Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c)
Exercise Procedure and Payment of Exercise Price for Options.
In order to exercise an Option, the Participant must provide notice
of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the
Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict
the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment.
The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more
of the following methods of payment to the extent set forth in the Option Agreement:
(i)
by cash or check, bank draft or money order payable to the Company;
(ii)
pursuant to a cashless exercise program developed under Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant
free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not
exceed the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of
the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery
would not violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed
or accompanied by an executed assignment separate from certificate, and (5) such shares have been held by the Participant for any minimum
period necessary to avoid adverse accounting treatment as a result of such delivery;
(iv)
if the Option is a Nonstatutory Stock Option, by a net exercise arrangement pursuant to which the Company will reduce
the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date
of exercise that does not exceed the aggregate exercise price, provided that (1) such shares used to pay the exercise price will not
be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant
in cash or other permitted form of payment; or
(v)
in any other form of consideration approved by the Board and permissible under Applicable Law.
(d)
Exercise Procedure and Payment of Appreciation Distribution for SARs.
In order to exercise any SAR, the Participant must provide
notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant
upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date
of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised
under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of
Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified
in the SAR Agreement.
(e)
Transferability.
Options and SARs may not be transferred to third-party financial institutions for value. The Board may impose such
additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board,
the following restrictions on the transferability of Options and SARs will apply, provided that, except as explicitly provided herein,
neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option,
such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
(i)
Restrictions on Transfer.
An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and
will be exercisable during the lifetime of the Participant only by the Participant;
provided
,
however
, that the Board may
permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participants
request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section
671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee
enter into a transfer and other agreements required by the Company.
(ii)
Domestic Relations Orders.
Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable
to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to
a domestic relations order.
(f)
Vesting.
The Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined
by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or
an Affiliate, vesting of Options and SARs will cease upon termination of the Participants Continuous Service.
(g)
Termination of Continuous Service for Cause.
Except as explicitly otherwise provided in the Award Agreement or other written agreement
between a Participant and the Company or an Affiliate, if a Participants Continuous Service is terminated for Cause, the Participants
Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be
prohibited from exercising any portion (including any vested portion) of such Awards on and after such termination of Continuous Service
and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the
forfeited Award, or any consideration in respect of the forfeited Award.
(h)
Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause.
Subject to Section 4(i),
if a Participants Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option
or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time provided in the
Award Agreement or other written agreement between a Participant and the Company or an Affiliate:
(i)
three months following the date of such termination if such termination is a termination without Cause (other than any termination
due to the Participants Disability or death);
(ii)
12 months following the date of such termination if such termination is due to the Participants Disability;
(iii)
18 months following the date of such termination if such termination is due to the Participants death; or
(iv)
18 months following the date of the Participants death if such death occurs following the date of such termination but during
the period such Award is otherwise exercisable (as provided in (i) or (ii) above);
provided
,
however
, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination
Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will
terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock subject
to the terminated Award, or any consideration in respect of the terminated Award.
(i)
Restrictions on Exercise; Extension of Exercisability.
A Participant may not exercise an Option or SAR at any time that the issuance
of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other
written agreement between a Participant and the Company or an Affiliate, if a Participants Continuous Service terminates for any
reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the
exercise of the Participants Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such
exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate
the Companys Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar
month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the
last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period,
generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be
exercised after the expiration of its maximum term (as set forth in Section 4(a)).
(j)
Non-Exempt Employees
. No Option or SAR, whether or not vested, granted to an Employee who is a non- exempt employee for purposes
of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months
following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity
Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event
of (i) such Participants death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted,
(iii) a Change in Control, or (iv) such Participants retirement (as such term may be defined in the Award Agreement or another
applicable agreement or, in the absence of any such definition, in accordance with the Companys then current employment policies
and guidelines). This Section 4(j) is intended to operate so that any income derived by a non-exempt employee in connection with the
exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for
compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the
exercise, vesting or issuance of any shares under any other Award will be exempt from the employees regular rate of pay, the provisions
of this Section 4(j) will apply to all Awards and are hereby incorporated by reference into such Award Agreements.
(k)
Whole Shares
. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
5.
AWARDS
OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS.
(a)
Restricted Stock Awards and RSU Awards.
Each Restricted Stock Award and RSU Award will have such terms and conditions as determined
by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation
of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(i)
Form of Award.
(1)
Restricted Stock Awards: To the extent consistent with the Companys Bylaws, at the Boards election, shares of Common
Stock subject to a Restricted Stock Award may be (i) held in book entry form subject to the Companys instructions until such shares
become vested or any other restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner
as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting, dividend, and other rights as a
stockholder of the Company with respect to any shares subject to a Restricted Stock Award.
(2)
RSU Awards: An RSU Award represents a Participants right to be issued on a future date the number of shares of Common Stock
that is equal to the number of restricted stock units subject to the RSU Award. As a holder of an RSU Award, a Participant is an unsecured
creditor of the Company with respect to the Companys unfunded obligation, if any, to issue shares of Common Stock in settlement
of such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or
be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other
person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless
and until shares are actually issued in settlement of a vested RSU Award).
(ii)
Consideration.
(1)
Restricted Stock Awards: A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order
payable to the Company, (B) past or future services to the Company or an Affiliate, or (C) any other form of consideration as the Board
may determine and permissible under Applicable Law.
(2)
RSU Awards: Unless otherwise determined by the Board at the time of grant, an RSU Award will be granted in consideration for the
Participants services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the
Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock
pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in
a form other than the Participants services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in
settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under
Applicable Law.
(iii)
Vesting.
The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined
by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or
an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participants Continuous Service.
(iv)
Termination of Continuous Service.
Except as otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participants Continuous Service terminates for any reason, (i) the Company may receive through
a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted
Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and the Participant
will have no further right, title or interest in the Restricted Stock Award, the shares of Common Stock subject to the Restricted Stock
Award, or any consideration in respect of the Restricted Stock Award and (ii) any portion of his or her RSU Award that has not vested
will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares
of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
(v)
Dividends and Dividend Equivalents.
Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any
shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement,
with any dividends or dividend equivalents subject to the same terms and conditions of the underlying Restricted Stock Award or RSU Award
to which they relate.
(vi)
Settlement of RSU Awards
. An RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof)
or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board
may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(b)
Performance Awards
. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved
during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance
Goals have been attained will be determined by the Board.
(c)
Other Awards
. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the
appreciation in value thereof may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions
of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to
whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof)
to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
6.
ADJUSTMENTS
UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.
(a)
Capitalization Adjustments
. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust:
(i) the class(es) and maximum number of shares of Common Stock subject to the Plan, (ii) the class(es) and maximum number of shares that
may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 2(b), and (iii) the class(es) and number of securities
and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments,
and its determination shall be final, binding, and conclusive. Notwithstanding the foregoing, no fractional shares, or rights for fractional
shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate
equivalent benefit, if any, for any fractional shares or rights to fractional shares that might be created by the adjustments referred
to in the preceding provisions of this Section 6(a).
(b)
Dissolution or Liquidation
. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of
the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture
condition or the Companys right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation,
and the shares of Common Stock subject to the Companys repurchase rights or subject to a forfeiture condition may be repurchased
or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service; provided, however,
that the Board may determine to cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or
forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but
contingent on its completion.
(c)
Corporate Transaction.
The following provisions will apply to Awards in the event of a Corporate Transaction except as set forth
in Section 11 unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or
any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
(i)
Awards May Be Assumed.
In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving
or acquiring corporations parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute
similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to
the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company
in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successors
parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent)
may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose
to assume or continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will
be set by the Board.
(ii)
Awards Held by Current Participants.
In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation
(or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards,
then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service
has not terminated prior to the effective time of the Corporate Transaction (referred to as the
Current Participants
),
the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will
be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the
Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior
to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the
effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards
will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will
accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending
on the level of performance, unless otherwise provided in the Award Agreement, the vesting of such Performance Awards will accelerate
at 100% of the target level upon the occurrence of the Corporate Transaction in which the Awards are not assumed in accordance with Section
6(c)(i). With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection
(ii) and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of
the Corporate Transaction or such later date as required to comply with Section 409A of the Code.
(iii)
Awards Held by Persons other than Current Participants.
In the event of a Corporate Transaction in which the surviving corporation
or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for
such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by persons
other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate
Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not
terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv)
Payment for Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior
to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not
exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time,
to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including,
at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection
with such exercise. For the avoidance of doubt, if the exercise price to be payable by a holder with respect to an Option or SAR exceeds
the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board,
any unvested portion of such Award), such Option or SAR may be cancelled without any consideration.
(d)
Appointment of Stockholder Representative.
As a condition to the receipt of an Award under this Plan, a Participant will be deemed
to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company,
including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participants
behalf with respect to any escrow, indemnities and any contingent consideration.
(e)
No Restriction on Right to Undertake Transactions
. The grant of any Award under the Plan and the issuance of shares pursuant to any
Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger
or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
7.
ADMINISTRATION.
(a)
Administration by Board.
The Board will administer the Plan unless and until the Board delegates administration of the Plan to a
Committee or Committees, as provided in subsection (c) below.
(b)
Powers of Board.
The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i)
To determine from time to time: (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award
will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need
not be identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment
pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each
such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole
or in part by reference to, or otherwise based on, the Common Stock, including the amount of cash payment or other property that may
be earned and the timing of payment;
(ii)
To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any defect, omission, ambiguity or inconsistency in the Plan or
in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective;
(iii)
To settle all controversies regarding the Plan and Awards granted under it;
(iv)
To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest,
notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it
will vest;
(v)
To determine whether, when and to what extent an Award has become vested and/or exercisable and whether any performance-based vesting
conditions have been satisfied;
(vi)
To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation
of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price
of the Common Stock including any Corporate Transaction, for reasons of administrative convenience;
(vii)
To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations
under any Award granted while the Plan is in effect except with the written consent of the affected Participant;
(viii)
To amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval will be required
for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment
of the Plan will not be Materially Impaired by any amendment of the Plan unless the affected Participant consents in writing;
(ix)
To submit any amendment to the Plan for stockholder approval, to the extent required by Applicable
Law;
(x)
To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not
limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to
any specified limits in the Plan that are not subject to Board discretion; provided however, that, a Participants rights under
any Award will not be Materially Impaired by any such amendment unless the affected Participant consents in writing;
(xi)
To impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by
a Participant of any shares of Common Stock issued pursuant to an Award, including restrictions under a Trading Policy and restrictions
as to the use of a specified brokerage firm for such resales;
(xii)
Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests
of the Company and that are not in conflict with the provisions of the Plan or Awards;
(xiii)
To adopt, amend and rescind such rules and procedures and sub-plans as are necessary or appropriate, as may be determined by the
Board, to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees,
Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary
for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign
jurisdiction); and
(xiv)
To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such
action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding
Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under
the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C)
other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted
accounting principles.
(c)
Delegation to Committee.
(i)
General.
The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of
the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, and to the extent permitted
by Applicable Law, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate
to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board or the Plan Administrator will thereafter be to the Committee or subcommittee, as applicable), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each
Committee may retain the authority to concurrently administer the Plan with Committee or subcommittee to which it has delegated its authority
hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority
to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously
delegated. The Plan Administrator shall comply with rules and regulations applicable to it, including the rules of any exchange on which
shares of Common Stock are traded, and shall have the authority and be responsible for such functions as have been assigned to it.
(ii)
Rule 16b-3 Compliance.
To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that
is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two
or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act, and thereafter any action establishing or modifying
the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption
to remain available.
(d)
Effect of Boards Decision.
All determinations, interpretations and constructions made by the Board or any Committee in good
faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
(e)
Delegation to an Officer.
The Board or any Committee may delegate to one or more Officers the authority to do one or both of the
following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by Applicable
Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares
of Common Stock to be subject to such Awards granted to such Employees; provided, however, that the resolutions or charter adopted by
the Board or any Committee evidencing such delegation will specify the total number of shares of Common Stock that may be subject to
the Awards granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted
on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in
the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee
may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine
the Fair Market Value.
(a)
Withholding Authorization.
As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll
and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required
to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution withholding obligations of the Company
or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly,
a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue
shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
(b)
Satisfaction of Withholding Obligation.
To the extent permitted by the terms of an Award Agreement, the Company may, in its sole
discretion, satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award
by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
(iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant;
(v) by allowing a Participant to effectuate a cashless exercise pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board, or (vi) by such other method as may be set forth in the Award Agreement.
(c)
No Obligation to Notify or Minimize Taxes; No Liability to Claims.
Except as required by Applicable Law the Company has no duty or
obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no
duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in
which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder
of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an
Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or
any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation
and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors
regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each
Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is
at least equal to the fair market value of the Common Stock on the date of grant as determined by the Internal Revenue
Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting
an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors,
Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise price or strike price is less than
the fair market value of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
(d)
Withholding Indemnification.
As a condition to accepting an Award under the Plan, in the event that the amount of the Companys
and/or its Affiliates withholding obligation in connection with such Award was greater than the amount actually withheld by the
Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure
by the Company and/or its Affiliates to withhold the proper amount.
9.
MISCELLANEOUS.
(a)
Source of Shares.
The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including
shares repurchased by the Company on the open market or otherwise.
(b)
Use of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general
funds of the Company.
(c)
Corporate Action Constituting Grant of Awards.
Corporate action constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument,
certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that
the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving the grant contain terms
(e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant
documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the
Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(d)
Stockholder Rights.
No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of,
or the issuance of shares of Common Stock under, the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common
Stock subject to such Award is reflected in the records of the Company.
(e)
No Employment or Other Service Rights.
Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in
connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an
Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate
at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment
of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultants
agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate,
and any applicable provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated,
as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with
any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions,
future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under
the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f)
Change in Time Commitment
. In the event a Participants regular level of time commitment in the performance of his or her services
for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company
and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after
the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a
corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become
payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting
or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to
any portion of the Award that is so reduced or extended.
(g)
Execution of Additional Documents.
As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional
documents or instruments necessary or desirable, as determined in the Plan Administrators sole discretion, to carry out the purposes
or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrators
request.
(h)
Electronic Delivery and Participation
. Any reference herein or in an Award Agreement to a written agreement or document
will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or
posted on the Companys intranet (or other shared electronic medium controlled by the Company to which the Participant has access).
By accepting any Award, the Participant consents to receive documents by electronic delivery and to participate in the Plan through any
on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator.
The form of delivery of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by
the Company.
(i)
Clawback/Recovery
. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the
Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Companys
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable
Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition,
the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or
appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash
or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a
Participants right to voluntarily terminate employment upon a resignation for good reason, or for a constructive
termination or any similar term under any plan of or agreement with the Company.
(j)
Securities Law Compliance.
A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered
under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of
the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such
shares if the Company determines that such receipt would not be in material compliance with Applicable Law.
(k)
Transfer or Assignment of Awards; Issued Shares.
Except as expressly provided in the Plan or the form of Award Agreement, Awards
granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued,
or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares is free to assign,
hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with
the provisions herein, the terms of the Trading Policy and Applicable Law.
(l)
Effect on Other Employee Benefit Plans.
The value of any Award granted under the Plan, as determined upon grant, vesting or settlement,
shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participants benefits
under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company
expressly reserves its rights to amend, modify, or terminate any of the Companys or any Affiliates employee benefit plans.
(m)
Deferrals.
To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Common
Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also
establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements
of Section 409A.
(n)
Section 409A.
Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to
the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent
not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt
from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary
to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary
for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in
this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if
a Participant holding an Award that constitutes deferred compensation under Section 409A is a specified employee
for purposes of Section 409A, no distribution or payment of any amount that is due because of a separation from service
(as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six
months and one day following the date of such Participants separation from service or, if earlier, the date of the
Participants death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts
so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original
schedule.
(o)
Choice of Law.
This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of
any law other than the law of the State of Delaware.
10.
COVENANTS
OF THE COMPANY.
(a)
Compliance with Law.
The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary,
having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon
exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities
Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable
cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems
necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability
for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and until such authority is obtained. A Participant
is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance
would be in violation of any Applicable Law.
If
all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid.
Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible,
be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while
remaining lawful and valid.
12.
TERMINATION
OF THE PLAN.
The
Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier
of: (i) the Adoption Date, or (ii) the date the Plan is approved by the Companys stockholders. No Awards may be granted under
the Plan while the Plan is suspended or after it is terminated.
13.
DEFINITIONS.
As
used in the Plan, the following definitions apply to the capitalized terms indicated below:
(a)
Acquiring Entity
means the surviving or acquiring corporation (or its parent company) in connection with
a Corporate Transaction.
(b)
Adoption Date
means the date the Plan is first approved by the Board or Compensation Committee.
(c)
Affiliate
means, at the time of determination, any parent or subsidiary of
the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at
which parent or subsidiary status is determined within the foregoing definition.
(d)
Applicable Law
means any applicable securities, federal, state, foreign, material local or municipal
or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation,
judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under
the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq
Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
(e)
Award
means any right to receive Common Stock, cash or other property granted under the Plan (including
an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award or any Other
Award).
(f)
Award Agreement
means a written or electronic agreement between the Company and a Participant evidencing
the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written
summary of the general terms and conditions applicable to the Award and which is provided, including through electronic means, to a Participant
along with the Grant Notice.
(g)
Board
means the Board of Directors of the Company (or its designee). Any decision or determination made
by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision
or determination shall be final and binding on all Participants.
(h)
Capitalization Adjustment
means any change that is made in, or other events that occur with respect to,
the Common Stock subject to the Plan or subject to any Award after the date the Plan is adopted by the Board without the receipt of consideration
by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property
other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the
conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(i)
Cause
has the meaning ascribed to such term in any written agreement between a Participant and the Company
defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the
following events: (i) the Participants dishonest statements or acts with respect to the Company or any Affiliate of the Company,
or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Participants
commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Participants
failure to perform the Participants assigned duties and responsibilities to the reasonable satisfaction of the Company which failure
continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; (iv) the Participants
gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the Participants
material violation of any provision of any agreement(s) between the Participant and the Company relating to noncompetition, nonsolicitation,
nondisclosure and/or assignment of inventions. The determination that a termination of the Participants Continuous Service is
either for Cause or without Cause will be made by the Board with respect to Participants who are executive officers of the Company and
by the Companys Chief Executive Officer with respect to Participants who are not executive officers of the Company. Any determination
by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards
held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for
any other purpose.
(j)
Change in Control
or
Change of Control
means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Companys then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the
Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person that acquires the Companys securities in a transaction or series of related transactions the
primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the
level of Ownership held by any Exchange Act Person (the
Subject Person
) exceeds the designated percentage
threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing
the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result
of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be
deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto
do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting
power of the Acquiring Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting
power of the parent of the Acquiring Entity in such merger, consolidation or similar transaction, in each case in substantially the same
proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii)
there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which
are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such sale, lease, license or other disposition; or
(iv)
individuals who, on the date the Plan is adopted by the Board, are members of the Board (the
Incumbent Board
)
cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election
(or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board
then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding
the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Change in Control (or
any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing
definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified
deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in clause (i), (ii),
(iii) or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the
Code.
(k)
Closing
has the meaning set forth in the Merger Agreement.
(l)
Code
means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance
thereunder.
(m)
Committee
means the Compensation Committee and any other committee of one or more Directors to whom authority
has been delegated by the Board or Compensation Committee in accordance with the Plan.
(n)
Common Stock
means the common stock of the Company.
(o)
Company
means Banzai International, Inc., a Delaware corporation.
(p)
Compensation Committee
means the Compensation Committee of the Board.
(q)
Consultant
means any person, including an advisor, who is (i) engaged by the Company or an Affiliate
to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors
of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will
not cause a Director to be considered a Consultant for purposes of the Plan. Notwithstanding the foregoing, a person is
treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either
the offer or the sale of the Companys securities to such person.
(r)
Continuous Service
means that the Participants service with the Company or an Affiliate, whether
as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service
to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participants service with the Company or an Affiliate, will
not terminate a Participants Continuous Service; provided, however, that if the Entity for which a Participant is rendering services
ceases to qualify as an Affiliate, as determined by the Board, such Participants Continuous Service will be considered to have
terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company
to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by
law, the Board or the chief executive officer of the Company, in that partys sole discretion, may determine whether Continuous
Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including
sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding
the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may
be provided in the Companys leave of absence policy, in the written terms of any leave of absence agreement or policy applicable
to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section
409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed,
in a manner that is consistent with the definition of separation from service as defined under Treasury Regulation Section
1.409A-1(h) (without regard to any alternative definition thereunder).
(s)
Corporate Transaction
means the consummation, in a single transaction or in a series of related transactions,
of any one or more of the following events:
(i)
a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets
of the Company and its Subsidiaries;
(ii)
a sale or other disposition of at least 50% of the outstanding securities of the Company;
(iii)
a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv)
a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common
Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
Notwithstanding
the foregoing or any other provision of this Plan, (A) the term Corporate Transaction shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Corporate Transaction
(or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the
foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Corporate Transaction
or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect
to any nonqualified deferred compensation that becomes payable on account of the Corporate Transaction, the transaction or event described
in clause (i), (ii), (iii) or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate
Section 409A of the Code.
(t)
Director
means a member of the Board.
(u)
determine
or
determined
means as determined by the Board or
the Committee (or its designee) in its sole discretion.
(v)
Disability
means, with respect to a Participant, such Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code,
and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(w)
Effective Date
means the effective date of this Plan, which is the date of the Closing, provided that
this Plan is approved by the Companys stockholders prior to such date.
(x)
Employee
means any person employed by the Company or an Affiliate. However, service solely as a Director,
or payment of a fee for such services, will not cause a Director to be considered an Employee for purposes of the Plan.
(y)
Employer
means the Company or the Affiliate of the Company that employs the Participant.
(z)
Entity
means a corporation, partnership, limited liability company or other entity.
(aa)
Exchange Act
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
(bb)
Exchange
Act Person
means any natural person, Entity or group (within the meaning of Section 13(d) or 14(d) of the
Exchange Act), except that Exchange Act Person will not include (i) the Company or any Subsidiary of the Company, (ii)
any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant
to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or group
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly,
of securities of the Company representing more than 50% of the combined voting power of the Companys then outstanding securities.
(cc)
Fair Market Value
means, as of any date, unless otherwise determined by the Board, the value of the Common
Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(i)
If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be
the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading
in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii)
If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing
selling price on the last preceding date for which such quotation exists.
(iii)
In the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined
by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(dd)
Fully
Diluted Common Stock
means the number of shares of Common Stock, determined as of the applicable time of measurement,
equal to the sum of (i) the total number of shares of Common Stock issued and outstanding and (ii) the total number of shares of Common
Stock subject to securities that are convertible into or exercisable for shares of Common Stock (whether vested or unvested).
(ee)
Governmental Body
means any: (a) nation, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or
regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or
bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and
any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority;
or (d) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory
Authority).
(ff)
Grant Notice
means the notice provided to a Participant that he or she has been granted an Award under
the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common
Stock subject to the Award or potential cash payment right (if any), the vesting schedule for the Award (if any) and other key terms
applicable to the Award.
(gg)
Incentive Stock Option
means an option granted pursuant to Section 4 of the Plan that is intended to
be, and qualifies as, an incentive stock option within the meaning of Section 422 of the Code.
(hh)
Materially
Impair
means any amendment to the terms of the Award that materially adversely affects the Participants rights
under the Award. A Participants rights under an Award will not be deemed to have been Materially Impaired by any such amendment
if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participants
rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participants rights
under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option or SAR that may be exercised,
(ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iii) to change the terms
of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive
Stock Option under Section 422 of the Code, including any action taken pursuant to Section 7(b)(xiv); (iv) to clarify the manner of exemption
from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable
Laws.
(ii)
Merger Agreement
means that certain Agreement and Plan of Merger and Reorganization by and among 7GC
Co. Holdings Inc., 7GC Merger Sub I, Inc., 7GC Merger Sub II, LLC and the Company, dated as of December 8, 2022.
(jj)
Non-Employee Director
means a Director who either (i) is not a current employee or officer of the Company
or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered
as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under
Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (
Regulation S-K
)), does not possess
an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in
a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a non-employee director for purposes of Rule 16b-3.
(kk)
Nonstatutory
Stock Option
means any option granted pursuant to Section 4 of the Plan that is not an Incentive Stock Option.
(ll)
Officer
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange
Act.
(mm)
Option
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock
granted pursuant to the Plan.
(nn)
Option
Agreement
means a written or electronic agreement between the Company and the Option holder evidencing the terms and conditions
of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of
the general terms and conditions applicable to the Option and which is provided, including through electronic means, to a Participant
along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan.
(oo)
Option holder
means a person to whom an Option is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Option.
(pp)
Other
Award
means an award valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation
in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the
time of grant) that is not an Incentive Stock Option, Nonstatutory Stock Option, SAR, Restricted Stock Award, RSU Award or Performance
Award.
(qq)
Other
Award Agreement
means a written or electronic agreement between the Company and a holder of an Other Award evidencing
the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(rr)
Own,
Owned,
Owner,
Ownership
means that a person or Entity will be deemed to Own, to have Owned, to be the Owner of, or
to have acquired Ownership of securities if such person or Entity, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with
respect to such securities.
(ss)
Participant
means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Award.
(tt)
Performance Award
means an Award that may vest or may be exercised or a cash award that may vest or become
earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the
terms and conditions of Section pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable
Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance
Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference
to, or otherwise based on, the Common Stock.
(uu)
Performance
Criteria
means the one or more criteria that the Board will select for purposes of establishing the Performance Goals
for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of,
or combination of, the following as determined by the Board: earnings (including earnings per share and net earnings); earnings before
interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on
equity or average stockholders equity; return on assets, investment, or capital employed; stock price; margin (including gross
margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or
revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working
capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance;
debt reduction; customer satisfaction; stockholders equity; capital expenditures; debt levels; operating profit or net operating
profit; workforce diversity; growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity;
corporate governance and compliance; intellectual property; personnel matters; progress of internal research; progress of partnered programs;
partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley
Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention;
number of users, including unique users; strategic partnerships or transactions (including in- licensing and out-licensing of intellectual
property); establishing relationships with respect to the marketing, distribution and sale of the Companys products; supply chain
achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals;
corporate development and planning goals; and other measures of performance selected by the Board or Committee whether or not listed
herein.
(vv)
Performance Goals
means, for a Performance Period, the one or more goals established by the Board for
the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one
or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one
or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award
Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance
Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals
for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects;
(3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments
to corporate tax rates; (5) to exclude the effects of items that are unusual in nature or occur infrequently
as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures;
(7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance
Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of Common Stock of the Company by
reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends;
(9) to exclude the effects of stock based compensation and the award of bonuses under the Companys bonus plans; (10) to exclude
costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting
principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally
accepted accounting principles. In addition, the Board may establish or provide for other adjustment items in the Award Agreement at
the time the Award is granted or in such other document setting forth the Performance Goals at the time the Performance Goals are established
and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of
the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement
or the written terms of a Performance Cash Award.
(ww)
Performance Period
means the period of time selected by the Board over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a Participants right to vesting or exercise of an Award.
Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(xx)
Plan
means this Banzai International, Inc. 2023 Equity Incentive Plan, as amended from time to time.
(yy)
Plan Administrator
means the person, persons, and/or third-party administrator designated by the Company
to administer the day-to-day operations of the Plan and the Companys other equity incentive programs.
(zz)
Post-Termination Exercise Period
means the period following termination of a Participants Continuous
Service within which an Option or SAR is exercisable, as specified in Section 4(h).
(aaa)
Restricted Stock Award
or
RSA
means an Award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 5(a).
(bbb)
Restricted Stock Award Agreement
means a written or electronic agreement between the Company and a holder
of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement
includes the Grant Notice for the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions
applicable to the Restricted Stock Award and which is provided, including by electronic means, to a Participant along with the Grant
Notice. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(ccc)
RSU Award
or
RSU
means an Award of restricted stock units representing the
right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(ddd)
RSU Award Agreement
means a written or electronic agreement between the Company and a holder of an RSU
Award evidencing the terms and conditions of an RSU Award. The RSU Award Agreement includes the Grant Notice for the RSU Award and the
agreement containing the written summary of the general terms and conditions applicable to the RSU Award and which is provided, including
by electronic means, to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions
of the Plan.
(eee)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.
(fff)
Rule 405
means Rule 405 promulgated under the Securities Act.
(ggg)
Section 409A
means Section 409A of the Code and the regulations and other guidance thereunder.
(hhh)
Section 409A Change in Control
means a change in the ownership or effective control of the Company, or
in the ownership of a substantial portion of the Companys assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury
Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(iii)
Securities Act
means the Securities Act of 1933, as amended.
(jjj)
Share
Reserve
means the number of shares available for issuance under the Plan as set forth in Section
2(a).
(kkk)
Stock Appreciation Right
or
SAR
means a right to receive the appreciation
on Common Stock that is granted pursuant to the terms and conditions of Section 4(b).
(lll)
SAR Agreement
means a written or electronic agreement between the Company and a holder of a SAR evidencing
the terms and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written
summary of the general terms and conditions applicable to the SAR and which is provided, including by electronic means, to a Participant
along with the Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan.
(mmm)
Subsidiary
means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding
capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company
or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50%.
(nnn)
Ten Percent Stockholder
means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(ooo)
Trading Policy
means the Companys policy permitting certain individuals to sell Company shares
only during certain window periods and/or otherwise restricts the ability of certain individuals to transfer or encumber
Company shares, as in effect from time to time.
CERTIFICATE
OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF BANZAI INTERNATIONAL, INC.
Banzai
International, Inc., a corporation organized and existing under the laws of the State of Delaware (the
Corporation
),
does hereby certify as follows:
ONE
:
That the name of the Corporation is Banzai International, Inc. The original Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on September 18, 2020, as amended and restated by the Amended and Restated Certificate
of Incorporation of this Corporation filed with the Secretary of State of the State of Delaware on December 22, 2022 (the
Amended
and Restated Certificate
).
TWO
:
That, at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted recommending and declaring advisable that
the Amended and Restated Certificate be amended and that such amendment be submitted to the stockholders of the Corporation for their
consideration, as follows:
RESOLVED
,
that Paragraph J of Article Five of the Amended and Restated Certificate be amended and restated in its entirety to read as follows:
No
action shall be taken by the stockholders of the Corporation except at an annual or special meeting of stockholders called in accordance
with the Bylaws, unless such action is authorized or taken by the written consent of the holders of outstanding shares of voting stock
having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting of stockholders at
which all shares entitled to vote thereon were present and voted, provided all other requirements of applicable law and this Certificate
of Incorporation have been satisfied. Advance notice of stockholder nominations for the election of directors and of business to be brought
by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
THREE
:
That at an annual meeting of stockholders of the Corporation held on [], 2025, the aforesaid amendment was duly adopted
by the stockholders of the Corporation.
FOUR
:
That this Certificate of Amendment was duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF
, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this []
day of [], 2025, and the foregoing facts stated herein are true and correct.
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