Document:

Exhibit

Exhibit 10.54
UNITED NATURAL FOODS, INC.
2012 EQUITY INCENTIVE PLAN

PERFORMANCE-BASED VESTING RESTRICTED SHARE UNIT AWARD 
AGREEMENT

This Performance-Based Vesting Restricted Share Unit Award Agreement (this “Agreement”) effective as of __________ ___, 20__, between United Natural Foods, Inc. (the “Company”) and __________________ (the “Participant”), who is an employee of the Company, evidences a Performance Award denominated in Restricted Share Units to the Participant under the United Natural Foods, Inc. 2012 Equity Incentive Plan (as amended from time to time, the “Plan”).  Except in the preceding sentence and where the context otherwise requires, the term “Company” shall include the Company and all present and future Subsidiaries.  All capitalized terms that are used in this Agreement without definition shall have the meanings set forth in the Plan.
1.Definitions.  

		
	(a)
	Participant, solely for purposes of this Agreement, means the employee designated above. 

		
	(b)
	Performance Criteria means the performance targets related to one or more performance goals specified in Section 4 of this Agreement. 

		
	(c)
	Performance Period means the period beginning on ________ and ending on ________. 

		
	(d)
	Restricted Share Unit means a right to receive a payment in the form of any one Share of the Company’s common stock, par value $0.01 per share, following the successful attainment of the Performance Criteria to the satisfaction of the Committee. 

2.Grant of Restricted Share Units.  In consideration of services rendered and agreed to be rendered, the Company hereby grants to the Participant, subject to the terms and conditions set forth in this Agreement and in the Plan, [_______] Restricted Share Units (the “Target Amount”) (subject to adjustment under Section 4.2 of the Plan), provided that, to the extent that the Participant vests in greater than one hundred percent (100%) of the Restricted Share Units (as provided in Section 4 of this Agreement), additional Restricted Share Units will be paid to the Participant. The maximum number of Restricted Share Units that may be earned is subject to the limitation in Section 11.3 of the Plan.

3.Vesting.  

(a)To the extent that the Performance Criteria under Section 4 of this Agreement have been satisfied as of the last day of the Performance Period, the Participant shall vest in the number of Restricted Share Units awarded under this Agreement, as calculated in accordance with Section 4 (the “Earned Amount”), and the Participant’s rights to such vested number of Restricted Share Units shall become nonforfeitable as of the last day of the Performance Period, subject to Section 3(d) below.  Except as provided in Section 3(b) or (c) below, to the extent that such Performance Criteria have not been satisfied as of the last day of the Performance Period, any portion of the Restricted Share Units awarded under this Agreement that does not vest, as calculated in accordance with Section 4, shall be canceled immediately and shall not be payable to the Participant.  Prior to the issuance of any Shares in settlement of any Restricted Share Units, the Committee shall certify in writing (which may be set forth in the minutes of a meeting of the Committee) the extent to which the Performance Criteria and all other material terms of this Agreement have been met.

(b)In the event the Participant dies or terminates employment on account of a Disability before the end of the Performance Period, the Participant shall vest in that number of Restricted Share Units as is equal to the product of (i) the Earned Amount that the Participant would have earned had he not died or suffered a Disability and (ii) the quotient of (A) the number of days beginning with the first day of the Performance Period and ending on the date of the Participant’s death or the date the Participant’s employment is terminated as a result of Disability, as applicable, and (B) the total number of days in the full Performance Period (and, for the avoidance of doubt, no additional Restricted Share Units in which the Participant may have been entitled to vest in accordance with the Performance Criteria) and the Participant’s, or the Participant’s estate or beneficiaries in the event of Participant’s death, rights to such vested Restricted Share Units shall not become nonforfeitable until such time as the Shares issuable in settlement of such Restricted Stock Units would have been issued pursuant to Section 5 hereof had Participant not died or suffered a Disability.

(c)In the event this Award Agreement is assumed in connection with a Change in Control, the Committee shall make such adjustments to the Performance Criteria as  are necessary to equitably account for the Change in Control. In the event the Participant’s employment with or service to the Company or any of its Affiliates is terminated for any reason within twelve months after the Company obtains actual knowledge that a Change in Control has occurred, and before the Restricted Share Units have become vested under Section 3(a) or (b), the Participant shall vest in the Restricted Share Units having a value equal to the Target Amount granted under Section 2 of this Agreement (and, for the avoidance of doubt, no additional amount of Restricted Share Units in which the Participant may have been entitled to vest in accordance with the Performance Criteria) and the Participant’s rights to such vested amount of Restricted Share Units shall become nonforfeitable as of the date on which the Participant’s employment with or service to the Company is terminated.

(d)Except as provided in Section 3(b) or (c) above, if the Participant’s employment with the Company terminates for any reason prior to the expiration of the Performance Period, all then-unvested Restricted Share Units shall be canceled immediately and shall not be payable to the Participant.

4.Performance Criteria.  The Performance Criteria are set forth in Exhibit A to this Agreement.

5.Payment.  The Company shall issue to the Participant one Share for each Restricted Share Unit which has become vested with respect to the Performance Period pursuant to Section 3 of this Agreement. The number of Shares of Common Stock that shall be issued to the Participant in settlement of the Restricted Stock Units awarded hereunder shall be equal to the product of (A) the Target Amount and (B) the applicable percentage set forth on Exhibit A, which may result in a greater or lesser number of Shares being issued to the Participant than the Target Amount.  Such payment shall be made to the Participant (or the Participant’s assignee or beneficiary if permitted by the Plan or the Committee) no later than March 15th of the calendar year next following the calendar year in which the Performance Period ends and may be made as a book-entry confirmation or through the issuance of a certificate evidencing such Shares. 

6.Rights as a Stockholder.  The Participant shall have no rights as a stockholder with respect to any Shares which may be issued upon the vesting of the Restricted Share Units (including, without limitation, voting rights and any rights to receive dividends or non-cash distributions with respect to such Shares) unless and until the Shares have been issued to Participant. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued.

7.Withholding.  The Company’s obligation to make payment of vested Restricted Share Units shall be subject to the Participant’s satisfaction of any applicable federal, state, and foreign withholding obligations or withholding taxes (“Withholding Taxes”), including any employer minimum statutory withholding, and the Participant shall pay the amount of any such Withholding Taxes to the Company as set forth in this Section 7.  The Participant may satisfy his or her obligation to pay the Withholding Taxes by (i) making a cash payment to the Company in an amount equal to the Withholding Taxes; (ii) having the Company withhold Shares otherwise deliverable to the Participant pursuant to settlement of vested Restricted Share Units; or (iii) delivering to the Company shares of Common Stock already owned by the Participant; provided that in the case of (ii) or (iii) the amount of such Shares withheld or shares of Common Stock delivered (with the value of such Shares being based on the Fair Market Value of a Share of the Company’s Common Stock as of the payment date as determined by the Committee) shall not exceed the amount necessary to satisfy the Withholding Taxes.  The Participant acknowledges and agrees that the Company has the right to deduct from compensation or other amounts owing to the Participant an amount not to exceed the Withholding Taxes.

8.No Guarantee of Employment.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ of the Company, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Participant at any time for any reason whatsoever, with or without Cause.  

9.Amendment.  Subject to the restrictions contained in the Plan, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, this Agreement and the Restricted Share Units, prospectively or retroactively in time (and in accordance with Section 409A of the Code with regard to awards subject thereto); provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Participant or any holder or beneficiary of the Restricted Share Units shall not to that extent be effective without the consent of the 

Participant, holder or beneficiary; and provided further that no consent of the Participant or any holder or beneficiary shall be required for any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination to the extent necessary to conform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section 409A of the Code necessary to avoid tax penalties to the Participant.  The Committee is authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, this Agreement and the Restricted Share Units as set forth in the Plan.   

10.Determinations by the Committee.  Except as otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons.

11.Provisions of the Plan.  The Participant hereby acknowledges receipt of a copy of the Plan with this Agreement and agrees to be bound by all the terms and provisions of the Plan.  This Agreement is governed by the terms of the Plan, and in the case of any inconsistency between this Agreement and the terms of the Plan, the terms of the Plan shall govern. This Agreement, read together with the Plan, represents the entire understanding and agreement between the Company and the Participant, and shall supersede any prior agreement and understanding between the parties with respect to the matters contained herein.  This Agreement, and any payment of Shares in settlement of the Restricted Share Units, shall be subject to any policy of the Company regarding the recoupment or clawback of compensation as in effect at the date of this Agreement.

12.Nontransferability of Restricted Share Units.  Except as otherwise provided in the Plan, the Restricted Share Units and this Agreement shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share Units otherwise than as permitted by the Plan and this Agreement shall, at the election of the Company, be null and void. Transfer of the Restricted Share Units for value is not permitted under the Plan or this Agreement.  

13.Notices.  Any notice required or permitted to be given to the Participant under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail with postage and fees prepaid.  Any notice or communication required or permitted to be given to the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’s principal office.

14.Waiver.  The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

15.Section 409A.  

(a)    For the avoidance of doubt, the Restricted Share Units granted under this Agreement are intended to be exempt from or otherwise comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be either exempt from or in compliance therewith. In no event whatsoever shall the Company be liable for 

any additional tax, interest or penalty that may be imposed on the Participant by Code Section 409A or damages for failing to comply with Code Section 409A.

(b)    Notwithstanding any other payment schedule provided herein to the contrary, if the Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any payment due under this Agreement that is considered “deferred compensation” under Section 409A of the Code payable on account of a Participant’s “separation from service” shall not be made until the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such “separation from service” of the Participant, and (B) the date of Participant’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 15(b) shall be paid to the Participant in a lump sum in accordance with the Agreement.

(c)    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of “deferred compensation” (as such term is defined in Code Section 409A) upon or following a termination of employment unless such termination is also a “separation from service” from the Company within the meaning of Code Section 409A (and, more specifically, Treasury Regulation 1.409A-1(h)) and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

16.Governing Law.  The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles.

17.Successors.  This Agreement shall inure to the benefit of and be binding upon any successor to the Company and shall inure to the benefit of the Participant's legal representative.  All obligations imposed upon the Participant and all rights granted to the Company under this Agreement shall be binding upon the Participant's heirs, executors, administrator and successors.

18.Electronic Communication.  The Company may, in its sole discretion, decide to deliver any document related to current or future participation in the Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.
[signature page follows]

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has accepted and signed this Agreement, all on the day and year first mentioned above.
	
		
	UNITED NATURAL FOODS, INC.

	 
	 

	By:
	 

	Name:
	 

	Title:
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

                                
    

EXHIBIT A
PERFORMANCE CRITERIA
[To be determined.]exhibit_4-1.htm

EXHIBIT 4.1

 

1. Name of corporation:

	
Torchlight Energy Resources, Inc.

 

 

2. By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.

	
The Series B Convertible Preferred Stock, par value $.001 (“Series B Convertible Preferred Stock”), of Torchlight Energy Resources, Inc., a Nevada corporation (the “Corporation”), is hereby authorized and created, said series to consist of up to 40,000 shares. The voting powers, designations, preferences, limitations, restrictions and relative rights thereof will be as follows:

 

1. Conversion of Series B Convertible Preferred Stock into Common Stock

 

(a) Conversion and Conversion Price. Each share of Series B Convertible Preferred Stock will automatically convert, on the terms and conditions set forth in this Section 1 and without payment of additional consideration, into fully paid and non-assessable shares of the Corporation’s common stock, par value $.001 (“Common Stock”), on September 25, 2016 (the “Mandatory Conversion Date”) and may,

 

	3. Effective date of filing: (optional)	 
	 	(must not be later than 90 days after the certificate is filed)

 

4. Signature: (required)

 

 

X  /s/ John A. Brda 

Signature of Officer

 

Filing Fee: $175.00

 

IMPORTANT: Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

 

	This form must be accompanied by appropriate fees.	
Nevada Secretary of State Stock Designation

Revised: 1-5-15

  

  

  

at the election of the holder thereof, convert, on the terms and conditions set forth in this Section 1 and without payment of additional consideration, into Common Stock on any date prior to the Mandatory Conversion Date (the date of any conversion, including without limitation the Mandatory Conversion Date, “Conversion Date”).

 

The number of shares of Common Stock into which a holder’s Series B Convertible Preferred Stock is convertible is determined by multiplying the number of shares of Series B Convertible Preferred Stock to be converted by the Series B Convertible Preferred Stock’s Stated Value of $100.00 per share and dividing the result by the Conversion Price of $2.03.

 

(b)           Mechanics of Conversion. On or before the Conversion Date, the holder of any shares of Series B Convertible Preferred Stock must surrender to the Corporation during regular business hours at the offices of the Corporation or at such other place as may be designated by the Corporation, all certificates held by such holder, duly endorsed for transfer to the Corporation (if required by it). Upon receipt by the Corporation, the Corporation will issue and cause to be sent to the holder thereof or the holder’s designee, at the address designated by such holder, a certificate or certificates for the number of full shares of Common Stock to which the holder is entitled as a result of such conversion. The holder will be deemed to have become a stockholder of record of the number of shares of Common Stock into which the shares of Series B Convertible Preferred Stock have been converted on the Conversion Date.

 

(c)           Fractional Shares. If any conversion of the Series B Convertible Preferred Stock or any accrued dividends (as set forth in Section 3 hereof) would result in the issuance of a fractional share of Common Stock (aggregating all shares of Series B Convertible Preferred Stock and/or accrued dividends being converted pursuant to a conversion), such fractional shares shall be payable in cash based upon the closing sales price of the Common Stock on the principal trading market of the Corporation at such time (as determined in good faith by the Board of Directors) and the number of shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall be the next lower whole number of shares.

 

(d)           Reservation of Common Stock Issuable Upon Conversion. The Corporation shall at all times reserve for issuance and maintain available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Series B Convertible Preferred Stock, the number of shares of Common Stock deliverable upon the conversion of all Series B Convertible Preferred Stock on the Conversion Date. If at any time the number of authorized but unissued shares of Common Stock is not sufficient to effect the conversion of all shares of Series B Convertible Preferred Stock then outstanding, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Articles of Incorporation.

  

1

  

 

(e)           Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of Common Stock, without a corresponding subdivision of the Series B Convertible Preferred Stock, the Conversion Price of the Series B Convertible Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately adjusted. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, without a corresponding combination of the Series B Convertible Preferred Stock, the Conversion Price in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately adjusted.

 

(f)           Adjustments for Reclassification, Exchange and Substitution. If the Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, recapitalization, conversion or otherwise (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, each holder of such Series B Convertible Preferred Stock shall have the right thereafter to convert such shares of Series B Convertible Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon conversion of such Series B Convertible Preferred Stock immediately before that change would have been entitled to receive in such reorganization, reclassification, recapitalization, conversion or otherwise, all subject to further adjustment as provided herein with respect to such other shares.

 

(g)           Certificate of Adjustment. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 1, the Corporation at its expense will promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series B Convertible Preferred Stock a certificate signed by an officer of the Corporation setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of such holder’s Series B Convertible Preferred Stock.

 

(h)           Effect of Conversion. On the date of any conversion of shares of Series B Convertible Preferred Stock, all rights of any holder with respect to the shares of the Series B Convertible Preferred Stock so converted, including the rights, if any, to receive distributions of the Corporation’s assets (including, but not limited to, the Liquidation Rights) or notices from the Corporation, will terminate, except only for the rights of any such holder to receive certificates for the number of shares of Common Stock into which such shares of the Series B Convertible Preferred Stock have been converted, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion and to receive payment of any dividends declared but unpaid on the Series B Convertible Preferred Stock prior to such conversion.

  

2

  

 

(i)           Status of Shares Converted. Any shares of Series B Convertible Preferred Stock converted, or purchased or otherwise acquired by the Corporation, will be restored to the status of authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued, but not as shares of Series B Convertible Preferred Stock.

 

2.           Voting of Series B Convertible Preferred Stock

 

Each holder of shares of the Series B Convertible Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Series B Convertible Preferred Stock could be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except for matters set forth in Section 5 or as required by law), voting together with the Common Stock as a single class and shall be entitled to notice of any stockholders' meeting in accordance with the bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Series B Convertible Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held.

 

3.           Dividends on Series B Convertible Preferred Stock

 

The holders of Series B Convertible Preferred Stock shall be entitled to receive, out of funds legally available therefore, whether or not declared, dividends in an annual amount equal to twelve percent (12%) on the outstanding stated value of each share of Series B Convertible Preferred Stock owned by such holder. The initial stated value of each share of Series B Convertible Preferred Stock shall be $100 per share (the “Stated Value”). The dividends shall be calculated as of the last day of each quarter (the “Dividend Due Date”), and shall be payable quarterly in arrears (the “Dividend Payment”) with the first quarterly payment due for the quarter ending December 31, 2015, in each case as described in the immediately following sentence. All of the accrued Dividend Payments shall be paid in shares of Common Stock of the Corporation at the same time, in the same manner and at the same Conversion Price as set forth in Section 1 above; provided, however, that any holder of Series B Convertible Preferred Stock may elect, in his, her or its sole discretion, to receive any Dividend Payment in the form of a cash payment in the amount thereof, in lieu of such shares of Common Stock, by providing the Corporation with written notice of such election at least ten (10) days prior to the Dividend Due Date with respect to such Dividend Payment, in which case the Corporation shall make such cash payment to such holder of Series B Convertible Preferred Stock no later than five (5) days after the close of each quarter. The initial dividend shall accrue from the date of issuance of the Series B Convertible Preferred Stock and the first Dividend Due Date shall be December 31, 2015.

 

No dividend shall be declared or paid in cash or set apart for payment on any securities that are junior to the Series B Convertible Preferred Stock (“Junior Securities”) (other than a dividend payable solely in shares of Junior Securities) unless full cumulative dividends have been or contemporaneously are being paid or provided for on all outstanding Preferred Stock through the most recent Dividend Due Date.

 

 

 

  

3

  

 

4.           Liquidation Rights

 

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series B Convertible Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, but after the payment to the Series A Convertible Preferred Stockholders, by reason of their ownership thereof, an amount per share equal to the Stated Value of $100.00 per share, plus any accrued but unpaid dividends thereon, together with any other dividends declared but unpaid thereon. If upon any such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B Convertible Preferred Stock the full amount to which they shall be entitled under this Section 4, the holders of shares of Series B Convertible Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. For the purposes hereof, a liquidation, dissolution or winding up of the Corporation shall include (A) the acquisition of the Corporation by one or more other persons or entities by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) in which the holders of the Corporation’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than 50% of the outstanding voting power of the Corporation or other entity surviving such transaction or (B) a sale, lease or other disposition of all or substantially all of the assets of the Corporation.

 

5.           Protective Provisions.

 

So long as any shares of Series B Convertible Preferred Stock are outstanding, the Corporation shall not without first obtaining the approval (by written consent) of the holders of 66.67% of the then outstanding shares of Series B Convertible Preferred Stock, voting together as a class:

 

(a)           Increase or decrease (other than by conversion) the total number of authorized shares of Series B Convertible Preferred Stock;

 

(b)           Effect an exchange, reclassification, or cancellation of all or a part of the Series B Convertible Preferred Stock, but excluding a stock split or reverse stock split of the Corporation’s Common Stock, Series A Convertible Preferred Stock or Series B Convertible Preferred Stock;

 

(c)           Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series B Convertible Preferred Stock; or

 

 

  

4

  

 

(d)           Alter or change the rights, preferences or privileges of the shares of Series B Convertible Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation.

 

(e)           Issue any other equity security or enter into any agreements in the future giving preference superior to, or on parity with, the holders of Series B Preferred Stock (including but not limited to dividend distribution and liquidation rights) without the consent of the holders of Series B Convertible Preferred Stock.

 

(f)           Enter into any contracts in the future that would delay and/or prohibit timely payment of dividends to holders of Series B Convertible Preferred Stock.

 

PROVIDED, HOWEVER, that the Corporation may, by any means authorized by law and without any vote of the holders of shares of the Series B Convertible Preferred Stock, make technical, corrective, administrative or similar changes in this Statement of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of the Series B Convertible Preferred Stock. Subject to Section 5(e) above, the Corporation may also designate and issue additional series of preferred stock from time to time in the sole discretion of the Corporation’s Board of Directors, which such rights, privileges, preferences and limitations shall be determined by the Corporation’s Board of Directors in its sole discretion, and which designations and issuances shall not require the approval of the holders of the Series B Convertible Preferred Stock.

 

6.           Preemptive Rights.

 

Holders of Series B Convertible Preferred Stock shall not be entitled to any preemptive, subscription or similar rights in respect to any securities of the Corporation, except as specifically set forth herein or in any other document agreed to by the Corporation.

 

7.           Notices.

 

In addition to any other means of notice provided by law or in the Corporation's Bylaws, any notice required by the provisions of this Designation to be given to the holders of Series B Convertible Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holder's address appearing on the books of the Corporation.

 

8.           Miscellaneous.

 

 

  

5

  

 

(a)           If any Series B Convertible Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall, upon the request and at the expense of the holder, issue, in exchange and in substitution for and upon cancellation of the mutilated Series B Convertible Preferred Stock certificate, or in lieu of and substitution for the Series B Convertible Preferred Stock certificate lost, stolen or destroyed, a new Series B Convertible Preferred Stock certificate of like tenor and representing an equivalent amount of shares of the Series B Convertible Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Series B Convertible Preferred Stock certificate and indemnity, if requested, satisfactory to the Corporation and/or its transfer agent. The Corporation shall not be required to issue any physical certificates representing shares of the Series B Convertible Preferred Stock on or after any conversion date with respect to such shares of the Series B Convertible Preferred Stock. In place of the delivery of a replacement certificate following any such conversion date, upon delivery of the evidence and indemnity described above, the Corporation will deliver the shares of Common Stock.

 

(b)           The headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Designation.

 

(c)           Whenever possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

 

(d)           Except as may otherwise be required by law, the shares of the Series B Convertible Preferred Stock shall not have any powers, designations, preferences or other special rights, other than those specifically set forth in this Certificate of Designation.

 

(e)           If the Corporation is required, by terms of any indenture or security of the Corporation or the rules and regulations under the Securities Exchange Act of 1934, as amended, to furnish an annual report to any of its security holders, it will furnish such annual report to holders of shares of Series B Convertible Preferred Stock.

 

 

 

 

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