Effective as of August 13, 2020
1.1 Registered Office. The registered office of Ault Global Holdings, Inc. (the “Corporation”) shall be fixed in the Corporation’s certificate of incorporation, as the same may be amended and/or restated from time to time (as so amended and/or restated, the “Certificate”).
1.2 Other Offices. The Corporation’s Board of Directors (the “Board”) may at any time establish other offices at any place or places where the Corporation is qualified to do business.
2.1 Place of Meetings. Meetings of stockholders shall be held at any place within or outside the State of Delaware as designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the Corporation’s principal executive office.
2.2 Annual Meeting. The annual meeting of stockholders shall be held each year on a date and at a time designated by the Board. At the annual meeting, directors shall be elected and any other proper business may be transacted.
2.3 Special Meeting. Unless otherwise required by law or the Certificate, special meetings of the stockholders may be called at any time, for any purpose or purposes, only by (i) the Board, (ii) the Chairman of the Board or (iii) the chief executive officer of the Corporation.
If any person(s) other than the Board calls a special meeting, the request shall:
(a) be in writing;
(b) specify the general nature of the business proposed to be transacted; and
(c) be delivered personally or sent by registered mail or by facsimile transmission to the secretary of the Corporation.
Upon receipt of such a request, the Board shall determine the date, time and place of such special meeting, which must be scheduled to be held on a date that is within ninety (90) days of receipt by the secretary of the request therefor, and the secretary of the Corporation shall prepare a proper notice thereof. No business may be transacted at such special meeting other than the business specified in the notice to stockholders of such meeting.
2.4 Notice of Stockholders’ Meetings. All notices of meetings of stockholders shall be sent or otherwise given in accordance with either Section 2.5 or Section 8.1 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, except as otherwise required by applicable law. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Any previously scheduled meeting of stockholders may be postponed, and, unless the Certificate provides otherwise, any special meeting of the stockholders may be cancelled by resolution duly adopted by a majority of the Board members then in office upon public notice given prior to the date previously scheduled for such meeting of stockholders.
Whenever notice is required to be given, under the DGCL, the Certificate or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
Whenever notice is required to be given, under any provision of the DGCL, the Certificate or these bylaws, to any stockholder to whom (a) notice of two (2) consecutive annual meetings, or (b) all, and at least two (2) payments (if sent by first-class mail) of dividends or interest on securities during a twelve (12) month period, have been mailed addressed to such person at such person’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the Corporation a written notice setting forth such person’s then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL.
The exception in subsection (a) of the above paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
2.5 Manner of Giving Notice; Affidavit of Notice. Notice of any meeting of stockholders shall be given:
(a) if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Corporation’s records;
(b) if electronically transmitted, as provided in Section 8.1 of these bylaws; or
(c) otherwise, when delivered.
An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Notice may be waived in accordance with Section 7.13 of these bylaws.
2.6 Quorum. Unless otherwise provided in the Certificate or required by law, stockholders representing a majority of the voting power of the issued and outstanding capital stock of the Corporation, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such quorum is not present or represented at any meeting of the stockholders, then the chairman of the meeting, or the stockholders representing a majority of the voting power of the capital stock at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. The stockholders present at a duly called meeting at which quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
2.7 Adjourned Meeting; Notice. When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place if any thereof, and the means of remote communications if any by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting in accordance with the provisions of Section 2.4 and 2.5 of these bylaws.
2.8 Administration of the Meeting. Meetings of stockholders shall be presided over by the chairman of the Board or, in the absence thereof, by such person as the chairman of the Board shall appoint, or, in the absence thereof or in the event that the chairman shall fail to make such appointment, any officer of the Corporation elected by the Board. In the absence of the secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.
The Board shall, in advance of any meeting of stockholders, appoint one (1) or more inspector(s), who may include individual(s) who serve the Corporation in other capacities, including without limitation as officers, employees or agents, to act at the meeting of stockholders and make a written report thereof. The Board may designate one (1) or more persons as alternate inspector(s) to replace any inspector, who fails to act. If no inspector or alternate has been appointed or is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one (1) or more inspector(s) to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector(s) or alternate(s) shall have the duties prescribed pursuant to Section 231 of the DGCL or other applicable law.
The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including without limitation establishing an agenda of business of the meeting, rules or regulations to maintain order, restrictions on entry to the meeting after the time fixed for commencement thereof and the fixing of the date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting (and shall announce such at the meeting).
2.9 Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as otherwise provided in the provisions of Section 213 of the DGCL (relating to the fixing of a date for determination of stockholders of record) or these bylaws, each stockholder shall be entitled to that number of votes for each share of capital stock held by such stockholder as set forth in the Certificate.
In all matters, other than the election of directors and except as otherwise required by law, the Certificate or these bylaws, the affirmative vote of a majority of the voting power of the shares present or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
The stockholders of the Corporation shall not have the right to cumulate their votes for the election of directors of the Corporation.
2.10 Stockholder Action by Written Consent without a Meeting. Any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 2.10 to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided above in this Section 2.10.
Any action required or permitted to be taken by the stockholders of the Corporation (if the Corporation has more than one stockholder at such time) must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
2.11 Record Date for Stockholder Notice; Voting; Giving Consents. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.
If the Board does not fix a record date in accordance with these bylaws and applicable law:
(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation.
(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
2.12 Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law and filed with the secretary of the Corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A stockholder may also authorize another person or persons to act for him, her or it as proxy in the manner(s) provided under Section 212(c) of the DGCL or as otherwise provided under Delaware law. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
2.13 List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation’s principal place of business.
In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
2.14 Advance Notice of Stockholder Business. Only such business shall be conducted as shall have been properly brought before a meeting of the stockholders of the Corporation. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the meeting by or at the direction of the Board, or (c) a proper matter for stockholder action under the DGCL that has been properly brought before the meeting by a stockholder (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.14 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.14. For such business to be considered properly brought before the meeting by a stockholder such stockholder must, in addition to any other applicable requirements, have given timely notice in proper form of such stockholder’s intent to bring such business before such meeting. To be timely, such stockholder’s notice must be delivered to or mailed and received by the secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever occurs first.
To be in proper form, a stockholder’s notice to the secretary shall be in writing and shall set forth:
(a) the name and record address of the stockholder who intends to propose the business and the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder;
(b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice;
(c) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting;
(d) any material interest of the stockholder in such business; and
(e) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Notwithstanding the foregoing, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholder’s meeting, stockholders must provide notice as required by, and otherwise comply with the requirements of, the Exchange Act and the regulations promulgated thereunder.
No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.14. The chairman of the meeting may refuse to acknowledge the proposal of any business not made in compliance with the foregoing procedure.
2.15 Advance Notice Of Director Nominations. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate with respect to the right of holders of Preferred Stock of the Corporation to nominate and elect a specified number of directors. To be properly brought before an annual meeting of stockholders, or any special meeting of stockholders called for the purpose of electing directors, nominations for the election of director must be (a) specified in the notice of meeting (or any supplement thereto), (b) made by or at the direction of the Board (or any duly authorized committee thereof) or (c) made by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.15 and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 2.15.
In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the secretary of the Corporation. To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the Corporation, in the case of an annual meeting, in accordance with the provisions set forth in Section 2.14, and, in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder’s notice to the secretary must set forth:
(a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (v) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including without limitation such person’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and
(b) as to such stockholder giving notice, the information required to be provided pursuant to Section 2.14.
Subject to the rights of any holders of Preferred Stock of the Corporation, no person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.15. If the chairman of the meeting properly determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
3.1 Powers. Subject to the provisions of the DGCL and any limitations in the Certificate, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.
3.2 Number of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least five members. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.
3.3 Except as provided in Section 3.4 and Section 3.13 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the Certificate or these bylaws. The Certificate or these bylaws may prescribe other qualifications for directors. Each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.
All elections of directors shall be by written ballot, unless otherwise provided in the Certificate. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must be either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized.
3.4 Resignation and Vacancies. Any director may resign at any time upon written notice or by electronic transmission to the chairman of the Board, with a copy to the secretary of the Corporation.
Subject to the rights of the holders of any series of Preferred Stock of the Corporation then outstanding and unless the Board otherwise determines, newly created directorships resulting from any increase in the authorized number of directors, or any vacancies on the Board resulting from the death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law, be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director. When one or more directors resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.
3.5 Place of Meetings; Meetings by Telephone. The Board may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the Certificate or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
3.6 Regular Meetings. Regular meetings of the Board may be held with at least two (2) business days prior notice at such time and at such place as shall from time to time be determined by the Board.
3.7 Special Meetings; Notice. Special meetings of the Board for any purpose or purposes may be called at any time by (i) the Board of Directors of the Corporation, (ii) the Chairman of the Board of Directors of the Corporation, (iii) the Chief Executive Officer (or, in the absence of a Chief Executive Officer, the President) of the Corporation, or (iv) a holder, or group of holders, of Common Stock holding more than twenty percent (20%) of the total voting power of the outstanding shares of capital stock of the Corporation then entitled to vote. The person(s) authorized to call special meetings of the Board may fix the place and time of the meeting.
Notice of the time and place of special meetings shall be:
(a) delivered personally by hand, by courier or by telephone;
(b) sent by United States first-class mail, postage prepaid;
(c) sent by facsimile; or
(d) sent by electronic mail,
directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Corporation’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated either to the director or to a person at the office of the director who the person giving notice has reason to believe will promptly communicate such notice to the director. The notice need not specify the place of the meeting if the meeting is to be held at the Corporation’s principal executive office nor the purpose of the meeting.
3.8 Quorum. Except as otherwise required by law or the Certificate, at all meetings of the Board, a majority of the authorized number of directors (as determined pursuant to Section 3.2 of these bylaws) shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 3.11 of these bylaws. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the Certificate or these bylaws.
3.9 Waiver of Notice. Whenever notice is required to be given under any provisions of the DGCL, the Certificate or these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting solely for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate or these bylaws.
3.10 Board Action by Written Consent without a Meeting. Unless otherwise restricted by the Certificate or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
3.11 Adjourned Meeting; Notice. If a quorum is not present at any meeting of the Board, then a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
3.12 Fees and Compensation of Directors. Unless otherwise restricted by the Certificate or these bylaws, the Board shall have the authority to fix the compensation of directors.
3.13 Removal of Directors. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director or the entire Board may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of capital stock of the Corporation then entitled to vote in the election of directors.
3.14 Corporate Governance Compliance. Without otherwise limiting the powers of the Board set forth in Section 3.1 and provided that shares of capital stock of the Corporation are listed for trading on either the NASDAQ Stock Market (“NASDAQ”) or the New York Stock Exchange or the NYSE American (in either case, “NYSE”), the Corporation shall comply with the corporate governance rules and requirements of the NASDAQ or the NYSE, as applicable.
3.15 Director Attendance. All directors shall be required to annually attend at least seventy-five percent (75%) of all Board meetings, either in person or by telephone. Additionally, all directors shall be required to annually attend at least seventy-five (75%) of all meetings of each of the committees on which they serve, either in person or by telephone.
4.1 Committees of Directors. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise such lawfully delegable powers and duties as the Board may confer. Each committee will comply with all applicable provisions of: the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission, and the rules and requirements of NASDAQ or NYSE, as applicable, and will have the right to retain independent legal counsel and other advisers at the Corporation’s expense.
4.2 Committee Minutes. Each committee shall keep regular minutes of its meetings and report to the Board when required.
4.3 Meetings and Action of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(a) Section 3.5 (place of meetings and meetings by telephone);
(b) Section 3.6 (regular meetings);
(c) Section 3.7 (special meetings and notice);
(d) Section 3.8 (quorum);
(e) Section 3.9 (waiver of notice);
(f) Section 3.10 (action without a meeting); and
(g) Section 3.11 (adjournment and notice of adjournment),
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members.
Notwithstanding the foregoing:
(a) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
(b) special meetings of committees may also be called by resolution of the Board; and
(c) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
4.4 Audit Committee. The Board shall establish an Audit Committee whose principal purpose will be to oversee the Corporation’s and its subsidiaries’ accounting and financial reporting processes, internal systems of control, independent auditor relationships and audits of consolidated financial statements of the Corporation and its subsidiaries. The Audit Committee will also determine the appointment of the independent auditors of the Corporation and any change in such appointment and ensure the independence of the Corporation’s auditors. In addition, the Audit Committee will assume such other duties and responsibilities as the Board may confer upon the committee from time to time.
4.5 Corporate Governance and Nominating Committee. The Board shall establish a Corporate Governance and Nominating Committee whose principal duties will be to assist the Board by identifying individuals qualified to become Board members consistent with criteria approved by the Board, to recommend to the Board for its approval the slate of nominees to be proposed by the Board to the stockholders for election to the Board, to develop and recommend to the Board the governance principles applicable to the Corporation, as well as such other duties and responsibilities as the Board may confer upon the committee from time to time. In the event the Corporate Governance and Nominating Committee will not be recommending a then incumbent director for inclusion in the slate of nominees to be proposed by the Board to the stockholders for election to the Board, and provided such incumbent director has not notified the Committee that he or she will be resigning or that he or she does not intend to stand for re-election to the Board, then, in the case of an election to be held at an annual meeting of stockholders, the Committee will recommend the slate of nominees to the Board at least thirty (30) days prior to the latest date required by the provisions of Sections 2.14 and 2.15 of these bylaws for stockholders to submit nominations for directors at such annual meeting, or in the case of an election to be held at a special meeting of stockholders, at least ten (10) days prior to the latest date required by the provisions of Sections 2.14 and 2.15 of these bylaws for stockholders to submit nominations for directors at such special meeting.
4.6 Compensation Committee. The Board shall establish a Compensation Committee whose principal duties will be to review employee compensation policies and programs as well as the compensation of the chief executive officer and other executive officers of the Corporation, to recommend to the Board a compensation program for outside Board members, as well as such other duties and responsibilities as the Board may confer upon the committee from time to time.
4.7 Independence Standards for Independent Directors. For purposes of determining the independence of the Corporation’s independent directors, all such individuals shall meet the definition of “Independent Director” contained in Section 803(A)(2) of the NYSE American Company Guide. In addition, to qualify as “independent” the following criteria shall be applied by the Board, where he or she:
(a) is not, and in the past four (4) years has not been, employed by the Corporation or any of its subsidiaries or affiliates, or employed by any company that is a “Related Party,” as such term is defined herein;
(b) does not receive, and in the past four (4) years has not received, any remuneration as an advisor or consultant, excluding legal counsel, to the Corporation or any of its subsidiaries, executive officers or directors as qualified by Section 2(h) below;
(c) does not have, and in the past four (4) years has not had, any material business relationship or engaged in any material transaction with the Corporation or any of its subsidiaries other than his or her service as a director as qualified by Section 2(h) below;
(d) is not, and in the past four (4) years has not been, affiliated with or employed by any present or former independent auditor or financial advisor, of the Corporation or any of its subsidiaries or affiliates;
(e) is not, and in the past four (4) years has not been, a director, executive officer and/or consultant of any company for which any executive officer of the Corporation serves as a director, executive officer, employee and/or consultant;
(f) is not, and in the past four (4) years has not been, a member of a law firm that has been engaged by the Corporation commencing on March 30, 2019;
(g) is not a member of the immediate family of a person who is not independent pursuant to subsections (a)-(f), above, and;
(h) a director is deemed to have received remuneration (other than remuneration as a director, including remuneration provided to a non-executive Chairman of the Board, Committee Chairman, or Lead Director), directly or indirectly, if remuneration, other than de minimis remuneration, was paid by the Corporation, its subsidiaries, or affiliates, to any entity in which the director has a beneficial ownership interest of ten percent (10%) or more or voting control of five percent (5%) or more of such entity, or to an entity by which the director is employed or self-employed other than as a director. Remuneration is deemed de minimis remuneration if such remuneration is $120,000 or less in any calendar year.
(i) In addition to the requirements of Section 2(a) through 2(h) above, each of the three (3) members of the Corporate Governance and Nominating Committee will have the same independence requirement as audit committee members pursuant to Section 803(B)(2) of the NYSE American rules, applicable listing requirements and Rule 10A-3 under the Securities Exchange Act of 1934, provided, however, that the members of the Corporate Governance and Nominating Committee need not meet the requirements of Section 803B(2)(iii).
For purposes hereof, a “Related Party” shall be defined as:
(a) a related party according to the definitions as set forth in SEC Item 404 of Regulation S-K, 17 C.F.R. §229.404 and the Instructions thereto;
(b) any entity where:
(i) an officer, director, or consultant of the Company serves as an officer, director, or consultant of the entity;
(ii) An officer, director, or consultant of the Company has a 10% or greater beneficial ownership interest in the entity, either individually or through his/her interest in another entity; or
(iii) an officer, director, or consultant of the Company exercises voting control of the entity through ownership of securities in that entity either individually or through his/her interest in another entity; and
(c) Avalanche International Corp. (d/b/a MTIX International, Inc.), Alzamend Neuro, Inc., Ault & Company, Philou Ventures, LLC and any of their respective subsidiaries, affiliates and successors in interest.
5.1 Officers. The officers of the Corporation shall be a chief executive officer and a secretary. The Corporation may also have, at the discretion of the Board, a chairman of the Board, an executive chairman of the Board, one or more presidents, a chief financial officer, a treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws.
Any number of offices may be held by the same person, provided, however, that, except as provided in Section 5.6 below, the chairman of the Board shall not hold any other office of the Corporation.
5.2 Appointment of Officers. The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. A failure to elect officers shall not dissolve or otherwise affect the Corporation.
5.3 Subordinate Officers. The Board may appoint, or empower the chief executive officer of the Corporation, to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
5.4 Removal and Resignation of Officers. Any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer appointed by the Board, by any officer upon whom such power of removal has been conferred by the Board.
Any officer may resign at any time by giving written notice to the Corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.
5.5 Vacancies in Offices. Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 5.2.
5.6 Chairman of the Board. The chairman of the Board shall be a member of the Board and, if present, preside at meetings of the Board and exercise and perform such other powers and duties as may from time to time be assigned to him or her by the Board or as may be prescribed by these bylaws.
The chairman shall be an Outside Director (as defined in the Certificate) and shall not hold any other office of the Corporation unless the appointment of the chairman is approved by two-thirds of the members of the Board then in office, provided, however, that if there is no chief executive officer or president of the Corporation as a result of the death, resignation or removal of such officer, then the chairman of the Board may also serve in an interim capacity as the chief executive officer of the Corporation until the Board shall appoint a new chief executive officer and, while serving in such interim capacity, shall have the powers and duties prescribed in Section 5.7 of these bylaws.
5.7 Chief Executive Officer. Subject to the control of the Board and any supervisory powers the Board may give to the chairman of the Board, the chief executive officer shall have general supervision, direction, and control of the business and affairs of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. The chief executive officer shall, together with any president or presidents of the Corporation, also perform all duties incidental to this office that may be required by law and all such other duties as are properly required of this office by the Board of Directors. The chief executive officer shall serve as chairman of and preside at all meetings of the stockholders. In the absence of the chairman of the Board, the chief executive officer shall preside at all meetings of the Board.
5.8 Presidents. Subject to the control of the Board and any supervisory powers the Board may give to the chairman of the Board, any president or presidents of the Corporation shall, together with the chief executive officer, have general supervision, direction, and control of the business and affairs of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. A president shall have such other powers and perform such other duties as from time to time may be prescribed for him or her by the Board, these bylaws, the chief executive officer, or the chairman of the Board.
5.9 Vice Presidents. In the absence or disability of any president, the vice presidents, if any, in order of their rank as fixed by the Board or, if not ranked, a vice president designated by the Board, shall perform all the duties of a president. When acting as a president, the appropriate vice president shall have all the powers of, and be subject to all the restrictions upon, that president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board, these bylaws, the chairman of the Board, the chief executive officer or, in the absence of a chief executive officer, any president.
5.10 Secretary. The secretary shall keep or cause to be kept, at the principal executive office of the Corporation or such other place as the Board may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show:
(a) the time and place of each meeting;
(b) whether regular or special (and, if special, how authorized and the notice given);
(c) the names of those present at directors’ meetings or committee meetings;
(d) the number of shares present or represented at stockholders’ meetings; and
(e) the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, as determined by resolution of the Board, a share register, or a duplicate share register showing:
(a) the names of all stockholders and their addresses;
(b) the number and classes of shares held by each;
(c) the number and date of certificates evidencing such shares; and
(d) the number and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board required to be given by law or by these bylaws. The secretary shall keep the seal of the Corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board or by these bylaws.
5.11 Chief Financial Officer. The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as the Board may designate. The chief financial officer shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, any president and directors, whenever they request it, an account of all his or her transactions as chief financial officer and of the financial condition of the Corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.
The chief financial officer may be the treasurer of the Corporation.
5.12 Treasurer. The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director.
The treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as the Board may designate. The treasurer shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, any president and the directors, whenever they request it, an account of all his or her transactions as treasurer and of the financial condition of the Corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.
5.13 Assistant Secretary. The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the Board (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of the secretary’s inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.
5.14 Assistant Treasurer. The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the Board (or if there be no such determination, then in the order of their election), shall, in the absence of the chief financial officer or treasurer or in the event of the chief financial officer’s or treasurer’s inability or refusal to act, perform the duties and exercise the powers of the chief financial officer or treasurer, as applicable, and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.
5.15 Representation of Shares of Other Corporations. The chairman of the Board, the chief executive officer, any president, any vice president, the treasurer, the secretary or assistant secretary of this Corporation, or any other person authorized by the Board, the chief executive officer, a president or a vice president, is authorized to vote, represent, and exercise on behalf of this Corporation all rights incident to any and all shares or other equity interests of any other Corporation or entity standing in the name of this Corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
5.16 Authority and Duties of Officers. In addition to the foregoing authority and duties, all officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be designated from time to time by the Board.
6.1 Maintenance and Inspection of Records. The Corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws, as may be amended to date, minute books, accounting books and other records.
Any such records maintained by the Corporation may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to the provisions of the DGCL. When records are kept in such manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper form accurately portrays the record.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.
6.2 Inspection by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.
7.1 Checks; Drafts; Evidences of Indebtedness. From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the Corporation, and only the persons so authorized shall sign or endorse those instruments.
7.2 Execution of Corporate Contracts and Instruments. Except as otherwise provided in these bylaws, the Board, or any officers of the Corporation authorized thereby, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances.
7.3 Stock Certificates; Partly Paid Shares. The shares of the Corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by the chairman or vice-chairman of the Board, or any president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.
The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, and upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
7.4 Special Designation on Certificates. If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
7.5 Lost Certificates. Except as provided in this Section 7.6, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
7.6 Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a Corporation and a natural person.
7.7 Dividends. The Board, subject to any restrictions contained in either (i) the DGCL, or (ii) the Certificate, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock. The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
7.8 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.
7.9 Seal. The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
7.10 Transfer of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 7.5 of these bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefore. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.
7.11 Stock Transfer Agreements. The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the DGCL.
7.12 Registered Stockholders. The Corporation:
(a) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;
(b) shall be entitled to hold liable for calls and assessments on partly paid shares the person registered on its books as the owner of shares; and
(c) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
7.13 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting solely for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate or these bylaws.
7.14 Charitable Foundation. The establishment by the Corporation of a charitable foundation will require Board approval, as will contributions by the Corporation to the foundation and disbursements by the foundation. The Board may delegate authority over the foundation to one or more persons who are not directors of the Corporation with the approval of two-thirds of the members of the Board.
7.15 Forum Selection. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the Certificate or the bylaws of the Corporation or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. In any legal action raising the subject matter of this clause, any person or legal entity who purchases or otherwise acquires or holds any interest in the capital stock of the Corporation will be deemed to have notice of and to have expressly consented to the personal jurisdiction of the Court of Chancery in the State of Delaware and the United States District Court for the District of Delaware, and to have expressly consented to all other provisions of this clause.
8.1 Notice by Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the Certificate or these bylaws, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if:
(a) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent; and
(b) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice.
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Any notice given pursuant to the preceding paragraph shall be deemed given:
(a) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(b) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
(c) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(d) if by any other form of electronic transmission, when directed to the stockholder.
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
8.2 Definition Of Electronic Transmission. An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
8.3 Inapplicability. Notice by a form of electronic transmission shall not apply to Section 164 (failure to pay for stock; remedies), Section 296 (adjudication of claims; appeal), Section 311 (revocation of voluntary dissolution), Section 312 (renewal, revival, extension and restoration of certificate of in Corporation) or Section 324 (attachment of shares of stock) of the DGCL.
9.1 Power to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation. Subject to Section 9.3 of this Article IX, the Corporation shall indemnify, to the fullest extent permitted by the DGCL, as now or hereafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person (or the legal representative of such person) is or was a director or officer of the Corporation or any predecessor of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director or officer, employee or agent of another Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
9.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 9.3 of this Article IX, the Corporation shall indemnify, to the fullest extent permitted by the DGCL, as now or hereafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person (or the legal representative of such person) is or was a director or officer of the Corporation or any predecessor of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
9.3 Authorization of Indemnification. Any indemnification under this Article IX (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 9.1 or Section 9.2 of this Article IX, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders (but only if a majority of the directors who are not parties to such action, suit or proceeding, if they constitute a quorum of the board of directors, presents the issue of entitlement to indemnification to the stockholders for their determination). Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
9.4 Good Faith Defined. For purposes of any determination under Section 9.3 of this Article IX, to the fullest extent permitted by applicable law, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 9.4 shall mean any other Corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 9.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 9.1 or 9.2 of this Article IX, as the case may be.
9.5 Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 9.3 of this Article IX, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery in the State of Delaware for indemnification to the extent otherwise permissible under Sections 9.1 and 9.2 of this Article IX. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 9.1 or 9.2 of this Article IX, as the case may be. Neither a contrary determination in the specific case under Section 9.3 of this Article IX nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 9.5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
9.6 Expenses Payable in Advance. To the fullest extent not prohibited by the DGCL, or by any other applicable law, expenses incurred by a person who is or was a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding; provided, however, that if the DGCL requires, an advance of expenses incurred by any person in his or her capacity as a director or officer (and not in any other capacity) shall be made only upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article IX.
9.7 Non-Exclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by or granted pursuant to this Article IX shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate, any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 9.1 and 9.2 of this Article IX shall be made to the fullest extent permitted by law. The provisions of this Article IX shall not be deemed to preclude the indemnification of any person who is not specified in Section 9.1 or 9.2 of this Article IX but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL, or by any other applicable law.
9.8 Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was a director, officer, employee or agent of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article IX.
9.9 Certain Definitions. For purposes of this Article IX, references to the “ Corporation” shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent Corporation, or is or was a director or officer of such constituent Corporation serving at the request of such constituent Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving Corporation as such person would have with respect to such constituent Corporation if its separate existence had continued. For purposes of this Article IX, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article IX.
9.10 Survival of Indemnification and Advancement of Expenses. The rights to indemnification and advancement of expenses conferred by this Article IX shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors, administrators and other personal and legal representatives of such a person.
9.11 Limitation On Indemnification. Notwithstanding anything contained in this Article IX to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 9.5 hereof), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the board of directors of the Corporation.
9.12 Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the board of directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article IX to directors and officers of the Corporation.
9.13 Effect of Amendment or Repeal. Neither any amendment or repeal of any Section of this Article IX, nor the adoption of any provision of the Certificate or the bylaws inconsistent with this Article IX, shall adversely affect any right or protection of any director, officer, employee or other agent established pursuant to this Article IX existing at the time of such amendment, repeal or adoption of an inconsistent provision, including without limitation by eliminating or reducing the effect of this Article IX, for or in respect of any act, omission or other matter occurring, or any action or proceeding accruing or arising (or that, but for this Article IX, would accrue or arise), prior to such amendment, repeal or adoption of an inconsistent provision.
The bylaws of the Corporation may be adopted, amended or repealed by a majority of the voting power of the stockholders entitled to vote; provided, however, that the Corporation may, in its Certificate, also confer the power to adopt, amend or repeal bylaws upon the Board. The fact that such power has been so conferred upon the Board shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.
The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Chief Executive Officer of Ault Global Holdings, Inc., a Delaware Corporation, and that the foregoing bylaws, comprising nineteen (19) pages, were adopted as the Corporation’s bylaws by its board of directors on August 13, 2020.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th day of August, 2020.
/s/ Milton C. Ault, III
Milton C. Ault, III
Chief Executive Officer
Ault Global Holdings, Inc., a Delaware corporation (the “Company”), strives to apply high ethical, moral and legal principles in every aspect of its business conduct. This Amended and Restated Code of Business Conduct and Ethics (this “Code”) is a guide for all Company personnel consisting of officers, employees and directors.
This Code applies to all Company personnel, and is addressed to each employee and director individually. It sets forth broad ethical principles that the Company has established for the conduct of its business, and outlines certain key legal requirements of which all Company personnel must be aware and with which all Company personnel must comply. This Code is not intended to cover every issue that may arise, and in the course of performing their duties and responsibilities for the Company, all personnel should act with these principles in mind and should use good judgment and common sense at all times.
This Code is designed to deter wrongdoing and promote the following:
Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.
Company personnel who violate the standards contained in this Code will be subject to disciplinary action, possibly including termination of employment.
1. DEFINITION OF TERMS USED
CONFLICTS OF INTEREST
A “conflict of interest” exists when an individual’s private interest (or the interest of a member of his or her family) interferes with or appears to interfere with the interests of the Company. A conflict of interest can arise when the individual (or a member of his or her family) acts or has interests that may make it difficult for him or her to objectively and effectively perform his or her work for the Company. Conflicts of interest also can arise when the individual, or a member of his or her family, receives improper personal benefits because of his or her position in the Company.
Unless approved by the Board, neither you nor any member of your immediate family can acquire a financial interest in, or accept employment with, an entity doing business with the Company if the interest or employment could conflict with your duties to the Company and the performance of such duties. For example, it is usually a conflict of interest for Company personnel to work simultaneously for a competitor, customer or supplier. Also, you cannot work for a competitor as an employee, consultant or board member.
Loans by the Company to, or guarantees by the Company of obligations of, employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of obligations of, any director or executive officer or their family members are expressly prohibited.
In addition, you and your immediate family members cannot accept material gifts or favors that could create the appearance that your business judgment could be affected by the receipt of such gifts or favors. You and members of your immediate family, however, can accept gifts of nominal value from existing sources, prospective sources or persons, firms or companies with whom the Company does or might do business.
The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. You cannot offer gifts or favors to any employee, or a member of the employee’s immediate family, of a competitor, supplier or customer if the gifts or favors might place the recipient under any obligation to you or to the Company.
Conflicts of interest are prohibited as a matter of Company policy. You are required to bring any conflict of interest or potential conflict of interest to the attention of your immediate supervisor, the Compliance Officer or other appropriate person as described in Section 17. Conflicts of interest may not always be apparent, so if you have a question regarding whether a particular situation is a conflict of interest, you should consult with your immediate supervisor or contact the Compliance Officer. Executive officers or members of the Board should consult with the Chair or another member of the Audit Committee of the Board, which consists entirely of outside, independent directors.
3. CORPORATE OPPORTUNITIES
All directors, officers and employees owe a duty to the Company to advance its interests when the opportunity arises. Directors, officers and employees are prohibited from taking for themselves personally (or for the benefit of friends or family members) opportunities that are discovered through the use of Company assets, property, information or position. Directors, officers and employees may not use Company assets, property, information or position for personal gain (including gain of friends or family members). In addition, no director, officer or employee may compete with the Company.
4. NON-DISCLOSURE OF INFORMATION
5. FAIR DEALING
The Company seeks to outperform its competition fairly and honestly through superior performance and not through unethical or illegal business practices. Company personnel must deal fairly with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. Company personnel cannot steal proprietary information, possess trade secret information obtained without the owner’s consent, or induce such disclosures by past or present employees of other companies. You may not take unfair advantage of anyone through manipulation, concealment, abuse of confidential information, misrepresentation of material facts or any other intentional unfair practice. The knowing or deliberate falsification of any documents or data in connection with service to the Company will be the basis for immediate discharge and may subject the violator to civil and/or criminal penalties.
6. PROTECTION AND PROPER USE OF COMPANY ASSETS
Company personnel must endeavor to protect the Company’s assets and property and ensure their efficient use. Theft, carelessness, and waste have a direct adverse impact on the Company’s profitability and are prohibited. All payments with Company funds require approval by an authorized officer who has knowledge of the purpose of the payment, adequate substantiation of the identity of the payee and written contracts establishing the payment obligation. Company personnel must report any suspected incident of fraud or theft immediately for investigation. Moreover, Company personnel must use all assets and property of the Company only for legitimate business purposes.
The obligation of Company personnel to protect the Company’s assets extends to the Company’s intellectual property. Intellectual property includes trade secrets, patents, patent applications, trademarks, and copyrights, as well as business, marketing and service plans, clinical studies, regulatory dossiers, formulations, designs, databases, records, salary information and any non-public financial data and reports. Unauthorized use or distribution of this information violates Company policy and may subject the violator to civil and/or criminal penalties.
7. COMPLIANCE AND LAWS, RULES AND REGULATIONS
Employees, officers and directors should comply, both in letter and spirit, with all applicable laws, rules and regulations in the cities, states and countries in which the Company operates. Although not all employees, officers and directors are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Company personnel should contact the Compliance Officer with any questions as to the applicability of any law, rule or regulation or the appropriate manner of compliance therewith. The Compliance Officer will be responsible for conferring with legal counsel and resolving the issue.
8. INSIDER TRADING
Securities laws and regulations prohibit the misuse of material non-public (“inside”) information when purchasing, selling or recommending securities.
Inside information obtained by any Insider from any source must be kept strictly confidential. All inside information should be kept secure and access to files and computer files containing such information should be restricted. Insiders shall not use, act upon, or disclose to any third party including, without limitation, any Family Member, any material inside information, except as may be necessary for the Company’s legitimate business purposes to the extent approved, in advance, by the Compliance Officer. Questions and requests for assistance regarding inside information should be promptly directed to the Compliance Officer.
Information is generally considered “material” if (a) there is a substantial likelihood that a reasonable investor would find the information important in determining whether to trade in a security, or (b) the information, if made public, would likely affect the market price of a company’s securities. Inside information typically includes, but is not limited to, knowledge of pending Company business transactions, corporate finance activity, mergers or acquisitions, unannounced earnings and financial results and other significant developments affecting the Company.
Insiders and Family Members are prohibited from insider trading (buying or selling securities when in possession of material, nonpublic information) or tipping (passing such information on to someone who may buy or sell securities).
This prohibition on insider trading applies to Company securities and also to the securities of Business Associates if such person learns material, nonpublic information about them as a result of his or her position with the Company.
Information is generally considered “nonpublic” unless it has been adequately disclosed to the public, which means that the information must be publicly disclosed and adequate time must have passed for the securities markets to absorb the information. A delay of two business days is usually considered a sufficient period for routine information to be absorbed by the market. A longer period may be necessary for particularly significant or complex matters.
If an Insider leaves the Company, he or she must maintain the confidentiality of all inside information until it has been adequately disclosed to the public. If there is any question as to whether information regarding the Company or any Business Associate is material or has been adequately disclosed to the public, the Compliance Officer must be contacted.
9. DISCLOSURE
The Company’s periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules. Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel.
Each Insider who is involved in the Company’s disclosure process must:
10. COMPLIANCE WITH INTERNAL CONTROLS AND DISCLOSURE CONTROLS
Each Insider is encouraged to bring to the attention of the Compliance Officer any changes that the Insider believes may improve the Company’s system of internal controls.
11. DISCRIMINATION AND HARASSMENT
The Company requires strict adherence to its policies and applicable laws regarding equal employment opportunities and discrimination in the workplace. The Company will not tolerate illegal discrimination or harassment. Relationship with colleagues and business relationships with competitors, suppliers and customers always must be conducted free of any discrimination, including based on race, color, creed, religion, age, sex, sexual preference, national origin, marital status, veteran status, handicap or disability.
12. HEALTH AND SAFETY
The Company strives to provide all Company personnel with a safe and healthful work environment. You share responsibility for maintaining a safe and healthy workplace by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or condition.
The Company will not tolerate violence or threatening behavior in the workplace. In addition, Company personnel are required to report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The Company will not tolerate the use of illegal drugs in the workplace.
13. RECORD-KEEPING
The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. You must document and record accurately all of your business expenses. If you are unsure whether a particular expense is legitimate, you should ask the Company’s Chief Financial Officer. Executive officers or members of the Board should confer with a member of the Audit Committee. Rules and guidelines regarding business expenses are available from the Company’s account department.
All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets cannot be maintained unless permitted by applicable laws or regulations.
If the existence of a subpoena or impending government investigation becomes known to an Insider, he or she must immediately contact the Compliance Officer. Insiders must retain all records and documents that may be responsive to a subpoena or pertain to an investigation. Any questions regarding whether a record or document pertains to an investigation or may be responsive to a subpoena should be directed to the Compliance Officer before the record or document is disposed of. Insiders shall strictly adhere to the directions of the Compliance Officer in handling such records or documents.
Company personnel must avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies in business records and communications. This prohibition applies equally to e-mail, internal memos and formal reports.
14. PAYMENTS TO GOVERNMENT PERSONNEL OR CANDIDATES FOR OFFICE
The United States Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political parties or candidates to obtain or retain business. Making payments to government officials of any country is illegal.
Kickbacks, bribes, rebates or other illegal consideration are prohibited, and must never be given or accepted by any Company personnel. All Company personnel dealing with government agencies must be aware of, and comply with, any agency rules limiting or prohibiting gifts or other favors.
The Company cannot contribute, directly or indirectly, to any political campaign or party. Company personnel cannot use expense accounts to pay for any personal political contributions or seek any other form of reimbursement from the Company for such contributions. Of course, you are free to engage in political activity with your own resources on your own time.
15. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS
Any waiver of this Code for executive officers or directors requires the approval of the Board and must be disclosed promptly as required by applicable law, rules or regulations, including the SEC and the NYSE American, LLC.
16. CONDITIONS OF EMPLOYMENT OR SERVICE
All Insiders shall conduct themselves at all times in the best interests of the Company. Compliance with this Code shall be a condition of employment and of continued employment with the Company, and conduct not in accordance with this Code shall constitute grounds for disciplinary action, including termination of employment.
This Code is not an employment contract nor is it intended to be an all exclusive policy statement on the part of the Company. The Company reserves the right to provide the final interpretation of the policies it contains and to revise those policies as deemed necessary or appropriate.
17. COMPLIANCE, REPORTING AND ENFORCEMENT
If you are concerned about a possible ethical or illegal situation or any violation of this Code or are not sure whether specific conduct meets applicable Company standards, you should discuss the situation with your immediate supervisor or contact the Compliance Officer. Executive officers or members of the Company’s board of directors should discuss the situation with a member of the Audit Committee.
Company personnel must report violations of laws, rules, and regulations of this Code to immediate supervisors, the Company’s chief financial officer, or the chairman of the Audit Committee. Executive officers or members of the Board must report such matters to a member of the Audit Committee.
After receiving a report of an alleged prohibited action, the Audit Committee or the Compliance Officer must promptly take all appropriate actions necessary to investigate. All directors, officers and employees are expected to cooperate in any internal investigation of misconduct.
The Company prohibits retaliation for reports of ethical misconduct made by Company personnel in good faith. If a situation requires that the identity of the person reporting any such misconduct not be disclosed, the Company will protect his or his anonymity, to the extent legally possible.
18. AMENDMENTS
This Code may only be amended by the Board. The Company must report promptly any amendments pertaining to executive officers or senior financial officers as required by applicable laws, rules or regulations.
January 19, 2021
In order to take an active role in the prevention of insider trading violations by its officers, directors, employees and other related individuals, Ault Global Holdings, Inc. (the “Company”) has adopted the policies and procedures described in this Memorandum.
The Company has adopted the Insider Trading Policy attached as Exhibit A (the “Policy”), which prohibits trading based on material, non public information regarding the Company (“Inside Information”). The Policy covers officers, directors and all other employees of, or consultants to, the Company or its subsidiaries, as well as family members of such persons, and others, in each case where such persons have or may have access to Inside Information. The Policy (and/or a summary thereof) is to be delivered to all new directors, officers, employees and consultants on the commencement of their relationships with the Company, and is to be circulated to all employees at least annually.
a) The Company has determined that those persons listed on Exhibit B are the directors and officers who are subject to the reporting and penalty provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (“Section 16 Individuals”). Exhibit B may be amended by the Company from time to time.
b) The Company has determined that those persons listed on Exhibit C, together with the Section 16 Individuals listed on Exhibit B, are subject to the preclearance requirement described in Section IV.A. below, in that the Company believes such persons have, or are likely to have, access to Inside Information on a more frequent basis than other employees. Exhibit C may be amended from time to time. Under special circumstances, certain persons not listed on Exhibit C may come to have access to Inside Information for a period of time. During such period, such persons should also be subject to the preclearance procedure described in Section IV.A. below.
The Company has appointed the General Counsel of the Company (or his or her successor in office) as the Company’s Insider Trading Compliance Officer.
The duties of the Insider Trading Compliance Officer shall include, but not be limited to, the following:
a) Preclearance of all transactions involving the Company’s securities by those individuals listed on Exhibit B and Exhibit C, in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
b) Review of Rule 10b5-1 trading programs.
c) Assistance in the preparation of Section 16 reports (Forms 3, 4 and 5) for all Section 16 Individuals.
d) Mailing of reminders to all Section 16 Individuals regarding their obligations to report.
e) Performance of cross checks of available materials, which may include Forms 3, 4 and 5, Form 144, officers and directors questionnaires, and reports received from the Company’s stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Inside Information.
f) Circulation of the Policy (and/or a summary thereof) to all employees, including Section 16 Individuals, on an annual basis, and provision of the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Inside Information.
This Policy provides guidelines to employees, officers, directors and consultants of Ault Global Holdings, Inc. (the “Company”) with respect to transactions in the Company’s securities.
This Policy applies to all transactions in the Company’s securities, including common stock, options for common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange traded options. It applies to all officers of the Company, all members of the Company’s Board of Directors, and all employees of, and consultants and contractors to, the Company and its subsidiaries who receive or have access to Material Nonpublic Information (as defined below) regarding the Company. This group of people, members of their immediate families, and members of their households are sometimes referred to in this Policy as “Insiders.” This Policy also applies to any person who receives Material Nonpublic Information from any Insider.
Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known. Any employee can be an Insider from time to time, and would at those times be subject to this Policy.
It is the policy of the Company to oppose the unauthorized disclosure of any nonpublic information acquired in the work place and the misuse of Material Nonpublic Information in securities trading.
1. Trading on Material Nonpublic Information. No director, officer or employee of, or consultant or contractor to, the Company, and no member of the immediate family or household of any such person, shall engage in any transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the close of business on the second Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which national securities exchanges are open for trading.
2. Disclosure of Information to Others. The Company is required under Regulation FD of the federal securities laws to avoid the selective disclosure of Material Nonpublic Information. The Company has established procedures for releasing material information in a manner designed to achieve broad public dissemination of the information immediately upon its release. You may not, therefore, disclose information to anyone outside the Company, including family members and friends, other than in accordance with those procedures. You also may not discuss the Company or its business in an internet “chat room” or similar internet-based forum.
3. Confidentially of Nonpublic Information. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden.
1. Liability for Insider Trading. Insiders may be subject to penalties of up to $5,000,000 and up to twenty years in prison for engaging in transactions in the Company’s securities at a time when they have knowledge of nonpublic information regarding the Company.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed nonpublic information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities. The Securities and Exchange Commission (the “SEC”) has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the national securities exchanges and FINRA use sophisticated electronic surveillance techniques to uncover insider trading.
3. Possible Disciplinary Actions. Employees of the Company who violate this Policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive plans and termination of employment.
1. Prohibition on Trading During Quarterly Blackout Periods. To ensure compliance with this Policy and applicable federal and state securities laws, the Company has adopted a policy that prohibits persons listed on Exhibit B or Exhibit C from buying or selling the Company’s securities during a regular quarterly “blackout” period (unless they have established a pre-arranged trading plan that complies with Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Each blackout period begins on the last day of the last month of the fiscal quarter and continues until the end of the second full trading day after the public release of quarterly results.
It should be noted that trading on dates that are outside of the quarterly blackout periods will not relieve anyone from liability if in possession of Material Nonpublic Information concerning the Company. Although the Company may from time to time recommend the suspension of trading by directors, officers, employees and others because of developments known to the Company and not yet disclosed to the public, each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in the Company’s securities should not be considered a “safe harbor”, and all directors, officers and other persons should use good judgment at all times.
2. Preclearance of Trades. No person listed on Exhibit B or Exhibit C is to purchase, sell, or otherwise engage in transactions in securities of the Company without obtaining, in writing, prior clearance of the transaction by the Insider Trading Compliance Officer. The proposed transaction will be reviewed for compliance with applicable regulatory requirements.
The Company may also find it necessary, from time to time, to require compliance with the preclearance process from certain employees, consultants and contractors other than and in addition to those persons listed on Exhibit B and Exhibit C.
3. Rule 10b5-1 trading programs. The SEC has adopted a rule that permits insiders to trade in certain circumstances where it is clear that inside information was not a factor in the decision to trade. Rule 10b5-1 provides that an individual who buys or sells securities while aware of Material Nonpublic Information does not violate Rule 10b-5 if the buying or selling is in conformity with a binding contract, instruction or written plan that was put into place at a time when the individual was not aware of Material Nonpublic Information. Establishing such a pre-arranged trading plan provides an opportunity for an Insider to limit his or her potential insider trading liability. When trading arrangements are prearranged, it becomes clearer to the investing public (and potential plaintiffs) that the Insider’s purchases and sales are not being prompted by his or her knowledge of current developments within the Company, or such person’s feelings about the Company’s prospects.
The Company permits its directors and officers to set up Rule 10b5-1 trading programs. However, great care must be exercised in relying on new Rule 10b5-1, for the following reasons:
In order to meet the requirements of Rule 10b5-1, binding contracts, instructions and written plans must: (i) lock in the amount, price and dates of future trades; (ii) provide a formula or algorithm for determining future trades; or (iii) delegate discretion for determining amount, price and dates to a third party precisely as provided under the rule.
The ability to modify provisions once locked in is limited, and modification or termination of arrangements is risky.
Although Rule 10b5-1 may help directors and officers avoid liability under Rule 10b-5, it does not eliminate other relevant securities law requirements and prohibitions. Therefore, buying and selling in reliance on Rule 10b5-1 must also be designed to comply with the reporting and short-swing profit rules under Section 16 of the Exchange Act, the limitations on insider selling imposed by Rule 144 under the Securities Act, the prohibition on trading during administrative blackouts under 401(k) or other retirement plans, and, in some cases, certain other securities law requirements.
The liability avoidance provisions of Rule 10b5-1 are affirmative defenses. If the government can prove that an individual was aware of Material Nonpublic Information at the time of a purchase or sale, the burden of proving that trading was pursuant to an adequate contract, instruction or written plan will be on the individual. Compliance must be well documented and capable of proof in court.
4. Procedures for Establishing Rule 10b5-1 Trading Programs. If an officer or director wishes to establish an arrangement designed to comply with Rule 10b5-1, he or she must follow the procedures listed below:
Please be aware that the Company will likely be required to publicly disclose any trading plan adopted by an officer or director. Additionally, the Company will need to establish a procedure with whoever is handling the 10b5-1 transactions to ensure:
Most sophisticated brokers, investment bankers and advisors have developed standard documentation for Rule 10b5-1 trading plans. If this type of plan is adopted, we strongly recommend the officer or director work with a brokerage firm that is experienced in these matters. In order to ensure compliance with Rule 10b5-1, please remember that any trading plan or amendment must be submitted to the Company’s Insider Trading Compliance Officer for review and approval in advance of entering the plan or amendment.
5. Trading Restrictions during “Retirement Plan” Administrative Blackout Periods. Persons listed on Exhibit B or Exhibit C are prohibited from trading in any Company securities during administrative blackout periods under 401(k) and similar retirement plans (unless such persons have established a pre-arranged trading plan that complies with Rule 10b5-1 promulgated under the Exchange Act). Any profits realized from a prohibited transaction are recoverable by the Company, including through a shareholder derivative-type action, without regard to intent. In addition, unlike Section 16 of the Exchange Act, no matching transaction within the blackout period is required in order to impose the disgorgement penalty. The Company’s Insider Trading Compliance Officer will advise you whenever an administrative blackout is imposed with respect to the Company’s 401(k) or other retirement plans.
6. Individual Responsibility. Every officer, director and employee has the individual responsibility to comply with this Policy against insider trading. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.
This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company’s customers, vendors or suppliers (“business partners”), when that Material Nonpublic Information is obtained in the course of employment with, or other services performed on behalf of, the Company. Civil and criminal penalties, and termination of employment, may result from trading on Inside Information regarding the Company’s business partners. All employees should treat Material Nonpublic Information about the Company’s business partners with the same care required with respect to information related directly to the Company.
It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company’s securities.
While it may be difficult under this standard to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:
Either positive or negative information may be material.
Nonpublic information is information that has not been previously disclosed to the general public and is otherwise not available to the general public.
For purposes of this Policy, the Company considers that the exercise of stock options for cash under the Company’s stock option plans or the purchase of shares under the Company’s employee stock purchase plan (but not the sale of any such shares) is exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.
Directors and officers of the Company must also comply with the reporting obligations and limitations on short swing transactions set forth in Section 16 of the Exchange Act. The practical effect of these provisions is that officers and directors who purchase and sell the Company’s securities within a six month period must disgorge all profits to the Company whether or not they had knowledge of any Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of an option under the Company’s option plans, nor the exercise of that option nor the receipt of stock under the Company’s employee stock purchase plan is deemed a purchase under Section 16; however, the sale of any such shares is a sale under Section 16 and the purchase and sale must be reported on Form 4. Moreover, no officer or director may ever make a short sale of the Company’s stock. The Company has provided, or will provide, separate memoranda and other appropriate materials to its officers and directors regarding compliance with Section 16 and its related rules.
All Company officers, directors, employees and consultants will be required to certify in writing their understanding of and intent to comply with the Insider Trading Policy. In addition, Company officers, directors, employees and consultants may be required to certify their compliance with the Insider Trading Policy on an annual basis.
Please direct your questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer.
ADOPTED AUGUST 13, 2020
The Nominating and Corporate Governance Committee has been established by the Board of Directors (the “Board”) of Ault Global Holdings, Inc. (the “Corporation”), in order to, among other things:
In carrying out its mission, the Nominating and Corporate Governance Committee shall have the following objectives, responsibilities and authority:
Board of Directors/Committees
Board Committees
Evaluation of and Successor Planning for the Chief Executive Officer and Other Executive Officers
Corporate Governance
Other Matters
The number of members comprising the Nominating and Corporate Governance Committee shall be as determined by the Board consistent with the Corporation’s Certificate of Incorporation and Bylaws and applicable law, as the same may be amended from time to time, but shall not be less than three (3) members, each of whom shall be independent non-employee directors. A majority of the full Board shall appoint the members of the Nominating and Corporate Governance Committee annually and as vacancies or newly created positions occur. Members of the Nominating and Corporate Governance Committee may also be removed, at any time, with or without cause, by a majority of the full Board. The Board shall designate the Chairman of the Nominating and Corporate Governance Committee.
The Board shall, in the exercise of its business judgment, determine the “independence” of directors within the meaning of applicable law, SEC rules and NYSE American regulations for this purpose. Members of the Nominating and Corporate Governance Committee shall also qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and as “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.
The Nominating and Corporate Governance Committee shall meet at least once a year and at such additional times as may be necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Nominating and Corporate Governance Committee or the Chairman of the Board. All meetings of and other actions by the Nominating and Corporate Governance Committee shall be held and taken pursuant to the by-laws of the Corporation including by-law provisions governing notice of meetings and waiver thereof, action by written consent and other related matters.
A majority of the Nominating and Corporate Governance Committee members shall constitute a quorum for the transaction of business. The action of a majority of those present at a meeting at which a quorum is attained, shall be the act of the Nominating and Corporate Governance Committee when only two (2) members are present and this constitutes a quorum, the unanimous vote of the two (2) members, shall constitute the act of the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee shall meet in executive session without the presence of any members of management as often as it deems appropriate. The Nominating and Corporate Governance Committee shall meet as required and report thereon from time to time to the Board. Reports of meetings of and actions taken at meetings or by consent by the Nominating and Corporate Governance Committee shall be made by the Chairman or his or her delegate to the Board at its next regularly scheduled meeting following the Nominating and Corporate Governance Committee meeting or action and shall be accompanied by any recommendations from the Nominating and Corporate Governance Committee to the Board.
Except as expressly provided by this charter, the Corporation’s Certificate of Incorporation, Bylaws or Corporate Governance Guidelines or as required by law, regulations or NYSE American rules, the Nominating and Corporate Governance Committee shall establish its own rules of procedure.
The Nominating and Corporate Governance Committee shall identify and evaluate candidates for director in accordance with the general and specific criteria set forth in the Corporation’s Bylaws and below or determined as provided below:
A) General Criteria. Director selection should include at least enough independent directors, as defined under applicable law and rules, to satisfy the requirement that a majority of the Corporation’s directors be independent and such independent directors should have appropriate skills, experiences and other characteristics to provide qualified persons to fill all Board committee positions required to be filled by independent directors. Subject to the right of the Nominating and Corporate Governance Committee and the Board to decide otherwise when deemed appropriate, the Chief Executive Officer of the Corporation should be a director and, depending on the circumstances, certain other members of management, as well as certain individuals having relationships with the Corporation that prevent them from being independent directors, may be appropriate members of the Board. Each director should:
B) Specific Criteria. In addition to the foregoing general criteria, the Nominating and Corporate Governance Committee shall develop, reevaluate at least annually and modify as appropriate a set of specific criteria outlining the skills, experiences (whether in business or in other areas such as public service, academia or scientific communities), particular areas of expertise, specific backgrounds and other characteristics that should be represented on the Board to enhance the effectiveness of the Board and Board committees. The specific criteria should:
The Nominating and Corporate Governance Committee shall have the right to use reasonable amounts of time of the Corporation’s internal and independent accountants, internal and outside lawyers and other internal staff and also have the authority to hire independent experts, lawyers and other consultants to assist and advise it in connection with its responsibilities (provided that the Nominating and Corporate Governance Committee shall keep the Corporation’s finance department advised as to the general range of anticipated expenses for outside consultants and shall obtain the concurrence of the full Board in advance for non-routine and/or extraordinary expenses).
ADOPTED AUGUST 13, 2020
The purpose of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Ault Global Holdings, Inc., a Delaware corporation (the “Corporation”), is to oversee the accounting and financial reporting processes of the Corporation and the audits of the Corporation’s financial statements.
The Committee shall be comprised of at least three directors, each of whom is (i) “independent” as defined under Rule 803(a) of the NYSE American Company Guide and, further, meets the criteria set forth in Rule 803(b)(2) of the NYSE American Company Guide, (ii) meets the criteria for independence set forth in Rule 10A-3(b)(1) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (subject to the exemptions provided in Rule 10A-3(c) under the Exchange Act), (iii) does not accept any consulting, advisory or other compensatory fee from the Corporation other than in his or her capacity as a member of the Board of any committee of the Board, (iii) is not an “affiliate” of the Corporation or any subsidiary of the Corporation, as such term is defined in Rule 10A-3 under the Exchange Act and (iv) has not participated in the preparation of the financial statements of the Corporation or any subsidiary at any time during the past three years. Members shall be appointed either by a majority of independent directors or be a nominations committee composed solely of independent directors.
All members of the Committee must be able to read and understand fundamental financial statements, including the Corporation’s balance sheet, income statement and cash flow statement. The Committee shall have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background which results in the member’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities The Committee shall have at least one member who qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. A person who satisfies this definition of audit committee financial expert will also be presumed to have financial sophistication.
The Committee shall meet at least once every fiscal quarter, or more frequently if circumstances dictate, to discuss with management the Corporation’s annual audited financial statements and quarterly financial statements, as applicable. The Committee may request any officer or employee of the Corporation or the Corporation’s outside counsel or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. Members of the Committee may participate in a meeting of the Committee by means of conference call or similar communications equipment by means of which all persons participating in the meeting can hear each other.
To carry out its purpose, the Committee shall have the following responsibilities:
1. Independent auditors:
2. Financial reporting principles, policies, internal audit controls, and procedures:
3. Reporting and recommendations:
4. Debt financing:
The Committee shall review all proposed debt financing, including loans and Future Receipts Agreements, that are greater than $250,000 submitted to it for review by management. The Committee will make a written recommendation to the full Board and, if approved by the Committee, set for the such approval in resolutions of the Committee. The full Board will vote on whether to enter the transaction. The Committee shall not delegate its responsibilities under this section to any other party or entity.
For purposes hereof, “Future Receipts Agreements” shall mean agreements whereby the Corporation receives funds in exchange for a promise to pay back the funds received using future receipts or future receivables of the Corporation and include agreements whereby the Corporation is required to make repayment regardless of whether or not the Corporation has any receipts or receivables.
5. Other matters: The Committee shall have the following additional responsibilities:
The Committee shall have the authority appropriate to discharge its duties and responsibilities, including the authority to select, engage, retain, terminate and approve the fees and other retention terms of special or independent counsel and other advisors, as it deems necessary or appropriate to carry out its duties.
The Committee shall have the appropriate funding, as determined by the Committee for payment of (i) compensation to the independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; (ii) compensation to any independent counsel or advisors employed by the Committee as it deems necessary; and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The employment or engagement of any counsel or advisors must be pre-approved by a majority of the members of the Committee, and the specific purpose and estimated cost of any such engagement must be pre-approved by a majority of the members of the Committee.
The Compensation Committee (the “Committee”) is a committee of the Board of Directors (the “Board”). The Committee is responsible for reviewing and recommending executive compensation policies and practices to the Board, reviewing and recommending to the Board salaries, bonuses and other benefits paid to Company officers, and administering Company stock option plans and other benefit plans.
The Committee shall consist of three or more directors, all of whom satisfy the definition of “independent” under the listing standards of NYSE American. The Committee members shall be appointed by the Board and may be removed by the Board, at its discretion. In addition, a person may serve on the Compensation Committee only if the Board of Directors determines that he or she (i) is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code.
Notwithstanding the foregoing, if the Committee is comprised of at least three members, the Board, under exceptional and limited circumstances, may appoint one director who is not “independent” under NYSE American rules provided that (a) the Board determines that the director’s membership on the Committee is in the best interests of the Company and its shareholders; (b) the director may not be an officer or employee of the Company or an immediate family member of an officer or employee; and (c) the director may not serve on the Committee for more than two years. The Company shall disclose in the proxy statement for the next annual meeting the nature of the relationship and the reasons for the Board’s determination.
DUTIES AND RESPONSIBILITIES
The Committee’s duties and responsibilities include:
* reviewing and recommending to the Board the Company’s compensation philosophy and overseeing the administration of related compensation and benefit programs, policies and practices;
* recommending to the Board the compensation of the President & CEO;
* establishing performance goals and objectives for the President & CEO and measuring the President and CEO’s performance against those goals and objectives pursuant to any corporate performance-based plans, including those approved by shareholders;
* recommending to the Board employment agreements and offers of employment provided to the President & CEO;
* recommending to the Board the Company’s submissions to shareholders on executive compensation matters, including advisory votes on executive compensation and the frequency of such votes;
* reviewing and certifying in writing awards to the Company President & CEO under corporate performance-based plans, including those approved by shareholders;
* recommending to the Board the terms of any awards or option grants under any stock option or other equity-based plans;
* reviewing and recommending to the Board the compensation of members of the Board of Directors including, without limitation, annual member fees and any equity grants;
* performing such other duties and carrying out such other responsibilities as are consistent with this Charter; and
* recommending to the Board the compensation of any other officers of the Company (to the extent required by applicable listing standards).
The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser (the “Consultant”). The Committee shall be directly responsible for the appointment, termination, compensation and oversight of the work of any Consultant retained by the Committee. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a Consultant retained by the Committee.
The Committee shall meet at least one (1) time each year and at such other times as it deems necessary to fulfill its responsibilities. The Committee shall report regularly to the Board with respect to its activities and make recommendations to the Board of Directors as appropriate.
Effective as of January 19, 2021
Ault Global Holdings, Inc. (“AGH”) has established the AGH Executive Committee (the “Committee”) as a permanent internal body to provide financial, legal and advisory support to the Executive Chairman of AGH (the “Executive Chairman”), assist in coordinating the activities of AGH and its subsidiaries (collectively, the “AGH Group”), and perform such other duties and responsibilities as the Board of Directors of AGH (the “Board”) may from time to time determine.
1. Charter Approval and Review
This Charter and any modifications or changes thereto shall be approved by the Board. Proposals to modify the Charter will be considered by the Board at the request of the Executive Chairman or a majority of the Committee members. On an annual basis, the Committee shall review this Charter and recommend to the Board for approval any modifications or changes.
2. Membership of the Committee
The Committee shall consist of the individuals holding the following offices:
* Executive Chairman of the Board;
* Chief Executive Officer and Vice Chairman of the Board; and
* President, General Counsel & member of the Board.
The members of the Committee shall continue to serve on the Committee for as long as they hold their respective office, unless the Board determines otherwise.
3. Authority and Responsibilities
The Committee is appointed by the Board to act for and on behalf of the Board and AGH, to the fullest extent permitted by law, including by (1) directing the operational management and policies of AGH, (2) authorizing AGH to enter into contracts (including contracts with executive officers of the AGH Group, to the extent such power is not delegated exclusively to the Compensation Committee of the Board) and make expenditures accordingly, (3) authorizing AGH to incur indebtedness (which authorization shall constitute the specific direction of the Board), (4) taking any and all actions that, in the judgment of the Committee, are not consequential enough to submit to the full Board and (5) taking any and all such further action between meetings of the Board when prompt action is needed before the Board’s next regularly scheduled meeting and, when, in the judgment of the Committee, it is not practical to convene a Board meeting. The principal responsibility of the members of the Committee is to exercise their business judgment to act in what they reasonably believe to be in the best interests of AGH and its stockholders. In discharging that obligation, members of the Committee should be entitled to rely on the honesty and integrity of the AGH Group’s senior executives and its outside advisors and auditors, to the fullest extent permitted by law.
Not in diminution of the general powers granted in foregoing paragraph, the Committee shall have the following specific powers, which shall include, but not be limited to, the following:
(a) To provide financial, legal and advisory support to the Executive Chairman in the overall management of the AGH Group.
(b) To approve:
(i) the purchase of goods and services up to $2,000,000;
(ii) acquisitions and dispositions provided that the cash amount of the acquisition is no higher than $3,000,000, provided that the Executive Chairman shall, as promptly as practicable after the consummation of any acquisition or disposition pursuant hereto, inform the Board of any such acquisition or disposition and provided, further, that no such acquisition by AGH shall consist in any part of the issuance of an equity or equity-linked security;
(iii)subject to the Audit Committee’s consent, the incurrence of debt by AGH in an amount up to $3,000,000, provided that the Executive Chairman shall, as promptly as practicable after the incurrence of any debt pursuant hereto, inform the Board of any such debt incurrence and provided, further, that no such debt to be incurred by AGH shall constitute or include an equity or equity-linked security;
(iv) the engagement of consultant services that are not, in the sole discretion of the Committee, entered into in the ordinary course of business;
(v)intercompany contracts and arrangements;
(vi) material treasury and capital market instruments and arrangements, including hedging transactions;
(vii) annual operating and investment budgets for all members of the AGH Group;
(viii) the designation, hiring, engagement or termination of any officer or other employee of the AGH Group (exclusive of non-managerial, secretarial, ministerial positions);
(ix) the repurchase any debt or equity securities;
(x) the negotiation of the disposition of any subsidiary of AGH and, where the subsidiary is not significant to the AGH Group in the sole and absolute discretion of the Committee, the disposition of any such subsidiary;
(xi) prior to public dissemination, the release of any nonpublic information relating to the AGH Group, including approval of any press release or similar disclosure;
(xii) the engagement or dismissal of any of the AGH Group’s independent registered public accounting firm(s); and
(xiii) the taking of any action, authorization or approval, or entry into any binding agreement with respect to the foregoing.
(c) To review the monthly and quarterly operating and financial performance of the AGH Group and determine what changes/corrective actions, if any, ought to be taken.
(d) To review and propose to the Board for approval the AGH Group strategy.
(e) To review, determine and approve (and, when appropriate in the discretion of the Committee, recommend to the Board) modifications or changes to the AGH Group’s organizational structure.
(f) To coordinate the activities of the AGH Group.
(g) To facilitate the implementation and dissemination of AGH Group policies, procedures, rules, standards, guidelines and best practices.
(h) To allocate options to employees and consultants under any of AGH’s stock incentive plans as well as any other type of equity performance award that AGH may presently or in the future utilize, provided, that any issuance of options or other equity performance awards to directors and executive officers shall remain solely within the discretion of the Compensation Committee.
(i) To review and provide guidance on any major salary or benefit program changes as well as provide advice on setting the parameters for AGH’s annual reviews and bonus policies.
(j) To enter into any banking or investment banking relationships on behalf of AGH or any member of the AGH Group, or create, incur, or assume any indebtedness other than in connection with a plan approved by the Board or Committee.
(k) To mortgage, pledge, assign in trust or otherwise encumber any property or assets, or assign any monies owed or to be owed, except for customary liens contained in or arising under operating or similar agreements executed by or binding on AGH or any member of the AGH Group.
(l) amend, modify or change in any material respect any loan or credit document or any other material agreement to which AGH is a party;
(m) To receive regular reports on the activities of the AGH Group in order to support the executive functions and lines of business in understanding the legal, regulatory, and market factors affecting the AGH Group.
(n) To assist and support the Executive Chairman in effectively representing the AGH Group’s interests and act as a point of contact for key stakeholders such as employees, customers, regulatory bodies, the media, government and other relevant bodies.
(o) To assist and support the Executive Chairman in his representation of the AGH Group and contribute to and positively impact the AGH Group’s external image and reputation,
it being accepted, acknowledged and agreed that any enumerated authority or power hereby conferred to the Committee is expressly reserved to it and that no such authority or power is to be undertaken by any officer or other individual within the AGH Group.
In addition, during intervals between meetings of the Board, the Committee shall review and, in its judgment, approve the settlement or compromise of any litigation or claim against AGH or any of its subsidiaries that does not directly relate to a claim under an insurance policy issued, in each case by a subsidiary of AGH (individually and collectively referred to herein as “insurance litigation”), for an amount, whether to be paid in one or more of a series of related payments, that exceeds $1,000,000; provided however notwithstanding the foregoing, that each of the Executive Chairman, the Chief Executive Officer as well as the President and General Counsel, is authorized to effect the settlement or compromise of any non-insurance litigation or claim on behalf of AGH or any of its subsidiaries, and to delegate to appropriate officers of AGH or any of its subsidiaries their authority to settle or compromise any such claim on behalf of AGH or any of its subsidiaries, for an amount, whether to be paid in one or more of a series of related payments, that does not exceed $1,000,000.
4. Scope of Functions
The Committee is primarily a decision-making body along with being an information forum and a platform for discussion of issues. The Committee shall ensure that no material decisions be made by an officer or other individual of the AGH Group without its express prior written approval. This policy shall be widely disseminated to all officers and other individuals employed by the AGH Group. Violation of this policy shall constitute grounds for immediate dismissal and/or termination, as the case may be, and constitute “Cause” under any employee’s employment or consulting agreement with any member of the AGH Group.
In carrying out its functions, the Committee will at all times ensure the protection of commercially sensitive information and will comply with applicable codes of conduct and ethics and law.
5. Meetings of the Committee
The Committee shall meet with the frequency the Executive Chairman deems necessary for the Committee to discharge properly its responsibilities, which will generally be weekly meetings and at such other times as the Executive Chairman deems appropriate.
At all meetings of the Committee, a majority of the members of the Committee shall constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee. In the event of a tie where only two members are in attendance, resolution of the applicable matter shall be determined at the Committee’s next following meeting where all three members of the Committee are present.
Absent unusual circumstances, Committee members are expected to attend all Committee meetings and to review any materials provided in advance of the meeting. Attendance by telephone or other communications equipment is permitted if all persons participating in the meeting can hear each other.
The Executive Chairman will serve as the chairman of the Committee and shall preside over the Committee meetings and the Secretary will serve as the secretary of the Committee. In the absence of the Executive Chairman or the Secretary at a Committee meeting, the Executive Chairman will designate a member of the Committee to chair the meeting and/or act as secretary of the meeting, as the case may be.
The Executive Chairman may direct appropriate members of management and staff to prepare draft agendas and related background information for each Committee meeting. Any background materials, together with the agenda, should be distributed to the Committee members in advance of the meeting.
The AGH Group’s officers and other personnel, as the Committee deems appropriate, shall be invited to attend and participate in Committee meetings from time to time to provide the Committee with regular updates on the activities carried out by their respective division. In addition, to the extent appropriate and not prohibited by law, the Committee may request, through the secretary of the Committee, that any director, officer or employee of the AGH Group be invited to attend and participate in Committee meetings from time to time to brief the Committee on a particular topic.
6. Resources of the Committee
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate and approve the fees and other retention terms of special counsel or other experts, advisors, consultants or administrative support, as it deems appropriate, without seeking approval of the Board or management. The Committee may request AGH’s outside counsel or any officer or employee of AGH or of any of its subsidiaries to meet with any members of, or advisors to, the Committee.
AGH shall provide for appropriate funding, as determined by the Committee, for payment of (i) compensation to any advisors retained by the Committee and (ii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
1. Introduction. Under the Code of Business Conduct and Ethics (“Code of Ethics”) of Ault Global Holdings, Inc. (the “Corporation”), all employees must report to the Corporation’s Compliance Officer any activity that would cause or appear to cause a conflict of interest on his or her part. The Board of Directors (the “Board”) of the Corporation recognizes that certain transactions present a heightened risk of conflicts of interest or the perception thereof. Therefore, the Board has adopted this Related Party Transactions Policy (the “Policy”) to ensure that all Related Party Transactions (as defined below) be subject to review, approval or ratification in accordance with the procedures set forth below.
2. Definitions. For purposes of this Policy, the following terms shall have the following meanings:
“Immediate Family Member” means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a person, and any person (other than a tenant or an employee) sharing the household of such person.
“Related Party” means:
“Related Party Transaction” means any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness), in which (i) the Corporation or any of its subsidiaries is or will be a participant, (ii) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, and (iii) any Related Party has or will have a direct or indirect material interest. This also includes any material amendment or modification to an existing Related Party Transaction.
3. Procedures. It is the responsibility of the Nomination and Corporate Governance Committee of the Board (the “Committee”) to administer this Policy.
Prior to entering into a Related Party Transaction, the Related Party (or if the Related Party is an Immediate Family Member of an executive officer or director of the Corporation, such executive officer or director) shall notify the Corporation’s Compliance Officer of the facts and circumstances of the proposed transaction. The Compliance Officer will undertake an evaluation of the Related Party Transaction and, in his discretion, consult with the Corporation’s outside securities legal counsel. If that evaluation indicates that the Related Party Transaction would require the approval of the Committee, the Compliance Officer and other members of the Corporation’s management will report the Related Party Transaction, together with a summary of the material facts (as defined below), to the Committee for consideration at the next regularly scheduled Committee meeting or such other time as the Committee may determine.
Such material facts shall include, but not be limited, to:
The Committee shall review all of the relevant facts and circumstances of all Related Party Transactions that require the Board’s approval and recommend to the Board to either approve or disapprove of the entry into the Related Party Transaction, subject to the exceptions described below. In determining whether to recommend to the Board to approve or ratify a Related Party Transaction, the Committee shall take into account, among other factors it deems appropriate, (i) whether the transaction was undertaken in the ordinary course of business of the Corporation, (ii) whether the Related Party Transaction was initiated by the Corporation, a subsidiary or the Related Party, (iii) whether the transaction with the Related Party is proposed to be, or was, entered into on terms no less favorable to the Corporation than terms generally available to an unaffiliated third party, (iv) the purpose of, and the potential benefits to the Corporation of, the Related Party Transaction, (v) the approximate dollar value of the amount involved in the Related Party Transaction, particularly as it relates to the Related Party, (vi) the Related Party’s interest in the Related Party Transaction, and (vii) any other information regarding the Related Party Transaction or the Related Party that would be material to investors in light of the circumstances of the particular transaction.
The Committee shall review all relevant information available to it about the Related Party Transaction. The Committee may recommend to the Board to approve the Related Party Transaction only if the Committee determines in good faith that, under all of the circumstances, the transaction is in the best interests of the Corporation and its stockholders. The Board, in its sole discretion, may impose such conditions as it deems appropriate on the Corporation or the Related Party in connection with the approval of the Related Party Transaction.
If a Related Party Transaction involves a Related Party who is a director or an Immediate Family Member of a director, such director may not participate in any discussion or vote regarding approval or ratification of approval such transaction. However, such director shall provide all material information concerning the Related Party Transaction to the Committee and the Board. Such director may be counted in determining the presence of a quorum at a meeting of the Committee or the Board that considers such transaction.
If the Corporation becomes aware of a Related Party Transaction that has not been approved under this Policy, the Related Party Transaction shall be reviewed in accordance with the procedures set forth herein and, if the Board determines it to be appropriate, ratified at the Board’s next regularly scheduled meeting. In any case where the Board determines not to ratify a Related Party Transaction that has been commenced without approval, the Board may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction to make it acceptable for ratification.
4. Ongoing Transactions. If a Related Party Transaction will be ongoing, the Committee may recommend to the Board that it establish guidelines for the Corporation’s management to follow in its ongoing dealings with the Related Party. Thereafter, the Committee, on at least an annual basis, shall review and assess ongoing relationships with the Related Party and make recommendations to the Board, if necessary, to ensure that they are in compliance with the Committee’s guidelines and that the Related Party Transaction remains appropriate.
5. Standing Pre-Approval for Certain Interested Transactions. The Board has reviewed the types of Related Party Transactions described below and determined that each of the following types of Related Party Transactions shall be deemed to be pre-approved or ratified, as applicable, by the Board, even if the aggregate amount involved will exceed $120,000, unless specifically determined otherwise by the Board. In connection with each regularly scheduled meeting of the Committee, a summary of each new Related Party Transaction deemed pre-approved pursuant to this paragraph shall be provided to the Committee for its review and the Committee shall update the Board at the Board’s next regularly scheduled meeting.
5.1 Director Compensation: In consultation with the Compensation Committee, any compensation paid to a director if the compensation is required to be reported in the Corporation’s proxy statement under Item 402 of Regulation S-K.
5.2 Transactions Where All Shareholders Receive Proportional Benefits: Any transactions, arrangements or relationships where the Related Party’s interest arises solely from the ownership of the Corporation’s common stock and all holders of the Corporation’s common stock received the same benefit on a pro rata basis (e.g., dividends or stock splits).
5.3 Transactions Involving Competitive Bids: Any transactions, arrangements or relationships involving a Related Party where the rates or charges involved are determined by competitive bids.
5.4 Regulated Transactions: Any transactions, arrangements or relationships with a Related Party involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.
6. Existing Policies and Procedures.
Related Party Transactions must also comply with the Corporation’s existing policies and procedures, including the Code of Ethics.
Effective Date: August 13, 2020
Ault Global Holdings, Inc. (the “Corporation”) is committed to high standards of ethical, honest and legal business conduct. In line with this principle and the Corporation’s commitment to open communication, the Corporation’s Board of Directors (the “Board”) has established this Whistleblower Policy (the “Policy”) to provide a safe and reliable avenue for employees and others to bring to the Corporation’s attention, confidentially and anonymously if desired, illicit or illegal conduct and reassurance that they will be protected from reprisals, retaliation, discrimination or harassment for raising such concerns. This Policy is binding upon you as an employee, officer or director of the Corporation or any of its subsidiaries. If you have any questions about this Policy, please contact Henry Nisser, the Corporation’s General Counsel, at (646) 650-5044 or henry@aultglobal.com.
It is the policy of the Corporation to encourage employees and others when they, in good faith, reasonably believe that questionable conduct has occurred, is occurring or is about to occur, to immediately report those concerns. For purposes of this Policy, good faith is evident when the report is made without malice or consideration of personal benefit and the employee, as the reporting individual, has a reasonable basis to believe that the report is true; provided, however, that a report need not be proven to be true to be made in good faith. Good faith is lacking when the report is known to be malicious or false, fictitious, fraudulent or without a reasonable belief in the truth and accuracy of the reported information. A party who knowingly and intentionally files a false report or provides false or deliberatively misleading information in connection with an investigation of a report may face disciplinary action, up to and including termination of employment or other legal proceedings.
The Corporation strictly prohibits retaliation, adverse action, discipline, threats, intimidation, or other form of retaliation by any of the Corporation’s officers, directors or employees against any employee who in good faith reports or participates in an investigation of reported complaints of questionable or illicit conduct. Notwithstanding the foregoing, the employee’s right to protection from retaliation does not extend immunity for any complicity in the matters that are the subject of the investigation. Whether you are an employee, an officer or director, we ask that you bring to light good faith concerns regarding the Corporation’s business practices.
We ask that you follow this Policy to report good faith concerns regarding any of the following:
If requested, we also ask that you provide truthful information in connection with an inquiry or investigation by a court, an agency, law enforcement, or any other governmental body.
This Policy applies to all employees, officers and directors of the Corporation or any of its subsidiaries, all of whom are referred to collectively as “employees” or “you” throughout this Policy. In this Policy, “we,” and “our” refers to the Corporation and its subsidiaries.
As an employee, if you are aware of a potential Violation or Fraudulent Auditing and Accounting Activity and do not report it according to this Policy, your inaction may be considered a Violation in itself, which may result in disciplinary action, up to and including termination of your employment or any other relationship that you may have with the Corporation or any of its subsidiaries.
If you believe that any Violation or Fraudulent Auditing and Accounting Activity has occurred or is occurring or you have a good faith concern regarding conduct that you reasonably believe may be a Violation or Fraudulent Auditing and Accounting Activity, we encourage you to promptly take one or more of the following actions:
This Policy provides a mechanism for the Corporation to be made aware of any alleged wrongdoings and address them as soon as possible. However, nothing in this Policy is intended to prevent any employee from reporting information to federal or state law enforcement agencies when an employee has reasonable cause to believe that the violation of a federal or state statute has occurred. A report to law enforcement, regulatory, or administrative agencies may be made instead of, or in addition to, a report directly to the Corporation through the reporting hotline or any other reporting method specified in this Policy.
If a whistleblower brings his or her complaint to an outside regulator or other governmental entity, he or she will be protected by the terms of this Policy just as if he or she directed the complaint to the Audit Committee and/or the General Counsel.
If an employee is subject to an adverse employment decision as a result of whistleblowing, the employee may file a complaint with the Department of Labor, or other government agency, within 90 days of the alleged violation (a failure to report such claims within the 90-day window does not foreclose any other available legal remedy).
The Policy shall reward successful whistleblowers under certain circumstances. Accordingly, the minimum award to a whistleblower uncovering a Violation involving corruption, fraud and/or similar unlawful activities at the Corporation shall be $25,000, in addition to any award that the employee may be entitled to from any government agencies.
The earlier a concern is expressed, the easier it is to take action. To that end, employees are encouraged to bring concerns pursuant to this Policy as soon as possible. Although the employee is not expected to prove the truth of an allegation, the employee should be able to provide reasonable factual support to enable the Corporation to respond to or investigate the complaint, and make a proper assessment of the nature, extent and urgency of the matter that is the subject of the complaint. To the extent possible, the complaint should contain specific information regarding: (i) the alleged event, matter or issue that is the subject of the complaint; (ii) the name of each person involved; (iii) if the complaint involves a specific event or events, the approximate date and location of each event; and (iv) any additional information, documentation or other evidence available to support the complaint. All reports of a Violation or Fraudulent Auditing and Accounting Activity will be taken seriously and will be promptly and thoroughly investigated. The specific action taken in any particular case depends on the nature and gravity of the conduct or circumstances reported and the results of the investigation. However, unless otherwise prohibited by applicable law, the Corporation may, in its reasonable discretion, determine not to commence an investigation if a complaint contains only unspecified or broad allegations of wrongdoing without appropriate informational support. The Corporation will acknowledge receipt of the report to the sender within a reasonable period following receipt if the sender chooses not to be anonymous and supplies contact information for response.
If a Violation or Fraudulent Auditing and Accounting Activity has been reported, investigated, and confirmed, the Corporation will take prompt and appropriate corrective action proportionate to the seriousness of the offense. The person(s) responsible for the misconduct, or those failing to cooperate or who provide false information during an investigation, will be subject to disciplinary action, up to and including termination of employment or any other working relationship that the offending party may have with the Corporation. Reasonable and necessary steps will also be taken to prevent any further Violation or Fraudulent Auditing and Accounting Activity.
Reports of Violations, Fraudulent Auditing and Accounting Activity, or other questionable conduct that are submitted by any means specified in this Policy will be handled as follows:
All reports received relating to accounting and auditing, including Fraudulent Auditing and Accounting Activity, will be entered on an accounting and auditing matters log, which will include, among other things: (1) the date the report was received, (2) a description of the report, (3) the reporting party (if provided), and (4) the status and disposition of an investigation of the report.
The General Counsel will promptly report to the Audit Committee: (1) reports of Ethics Violations or Fraudulent Auditing and Accounting Activity, including any such reports that are received by the General Counsel, but were not initially directed to the Audit Committee, (2) any Violation or Fraudulent Auditing and Accounting Activity involving the Corporation’s executive officers or directors, and (3) such other matters as the General Counsel deems significant. The Audit Committee shall direct and oversee an investigation of such reports in consultation and under the supervision of either the General Counsel or the Corporation’s outside legal counsel, as well as any reports initially directed to the Audit Committee, as it determines to be appropriate. The Audit Committee may, in its sole discretion if in its judgment the circumstances so warrant, elect to consult the Corporation’s outside legal counsel rather than the General Counsel and shall be required to do so if the complaint in question involves a member of the Corporation’s senior management.
The General Counsel shall provide the Audit Committee with a quarterly report of all accounting or auditing reports received and an update of pending investigations. The Audit Committee may request special treatment for any report and may assume the direction and oversight of an investigation of any such report.
All other reports will be logged separately and shall be reviewed under the direction and oversight of the General Counsel, who will forward them to the appropriate person or department for investigation (for example, labor and employment matters will be forwarded to the Human Resources Department), unless the General Counsel determines that other treatment is necessary.
Copies of the log and complaints will be maintained in accordance with the Corporation’s document retention policy.
Information disclosed during the course of the investigation will, to the extent practical and appropriate, remain confidential in compliance with the Corporation’s Code of Business Conduct and Ethics, except as may be reasonably necessary under the circumstances to facilitate the investigation, take remedial action, or comply with applicable law.
For any Violation or Fraudulent Auditing and Accounting Activity not reported through an anonymous report, the Corporation will advise the reporting party that the Violation or Fraudulent Auditing and Accounting Activity has been addressed and, if possible, of the specific resolution. However, due to confidentiality obligations, there may be times when the Corporation cannot provide the details regarding the corrective or disciplinary action that was taken.
The Corporation strictly prohibits and does not tolerate unlawful retaliation against any employee or officer for reporting a Violation or Fraudulent Auditing and Accounting Activity or suspected Violation or Fraudulent Auditing and Accounting Activity in good faith or otherwise cooperating in an investigation of a Violation or Fraudulent Auditing and Accounting Activity. All forms of unlawful retaliation are prohibited, including adverse action, discipline, harassment, threats, intimidation, demotion, suspension, transfer to a lesser position, denial of promotions, benefits or compensation, termination or any other manner of discrimination, for reporting under or complying with this Policy. The Corporation considers retaliation a Violation in itself, which will result in disciplinary action, up to and including termination of employment or any other working relationship with the Corporation.
If you have been subject to any conduct that you believe constitutes retaliation for having made a report in compliance with this Policy or for having participated in any investigation relating to an alleged Violation or Fraudulent Auditing and Accounting Activity, please immediately report the alleged retaliation to the General Counsel, ideally within ten (10) days of the offending conduct. If, for any reason, you do not feel comfortable discussing the alleged retaliation with the General Counsel, please report the alleged retaliation through the one of the other means other than the Hotline referenced above.
Your complaint of retaliation should be as detailed as possible, including the names of all individuals involved and any witnesses. The Corporation will directly and thoroughly investigate the facts and circumstances of all perceived retaliation and will take prompt corrective action, if appropriate.
Additionally, any manager or supervisor who observes retaliatory conduct must report the conduct to the General Counsel so that an investigation can be made and corrective action taken, if appropriate.
Bringing any alleged retaliation to our attention promptly enables us to honor our values, and to promptly and appropriately investigate the reported retaliation in accordance with the procedures outlined above.
Any employee, regardless of position or title, who has been determined to have engaged in retaliation in violation of this Policy, will be subject to appropriate disciplinary action, up to and including termination of employment or any other working relationship with the Corporation.
The Corporation expressly reserves the right to change, modify, or delete the provisions of this Policy without notice.
The General Counsel is responsible for the administration of this Policy. All employees are responsible for consulting and complying with the most current version of this Policy. If you have any questions regarding this Policy or concerning the scope or delegation of authority, please contact Henry Nisser at (646) 650-5044 or henry@aultglobal.com.
(Adopted by the Board of Directors and Effective on August 13, 2020)
The following guidelines have been approved by the Board of Directors (the “Board”) of Ault Global Holdings, Inc. (the “Corporation”). These guidelines, in conjunction with the Corporation’s Certificate of Incorporation, Bylaws and Board committee charters, form the framework for the governance of the Corporation.
1. Role of the Board of Directors. The Board oversees and provides policy guidance on the business and affairs of the Corporation. The Board monitors overall corporate performance, the integrity of the Corporation’s internal control over financial reporting as well as disclosure controls and procedures and the effectiveness of its legal compliance programs. The Board selects the Chief Executive Officer of the Corporation (the “CEO”), appoints officers, and oversees management. The Board also oversees the Corporation’s strategic and business planning process. The Board also reviews and assesses risks facing the Corporation and management’s approach to addressing such risks. The Board recognizes that the long-term interests of stockholders are advanced by responsibly addressing the concerns of all stakeholders, including employees, customers, business partners, suppliers, governmental officials and the public at large. The Board oversees the conduct of the business and supervises management, which is responsible for the day-to-day conduct of the business. The Board must assess and ensure systems are in place to manage the risks of the Corporation’s business with the objective of preserving the Corporation’s assets. In its supervisory role, the Board, through the CEO, sets the attitude and disposition of the Corporation towards compliance with applicable laws, environmental, safety and health policies, financial practices and reporting. In addition to its primary accountability to stockholders, the Board and the CEO are also accountable to government authorities and other stakeholders, such as employees, communities, and the public.
The principal responsibilities of the Board required to ensure the overall stewardship of the Corporation are as follows:
The following duties are sufficiently important to warrant the attention of all directors and cannot be delegated to Board committees:
2. Director Independence. A majority of the Board shall consist of directors who meet the criteria for independence set forth in the listing standards issued by The NYSE American (the “NYSE”) and set forth in its Company Guide (the “NYSE Rules”).
3. Board Membership Criteria. The Nominating and Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate skills and characteristics required of Board members individually as well as the Board as a whole. Except as may be required by rules promulgated by the NYSE and the U.S. Securities and Exchange Commission (the “SEC”) and as set forth herein, it is the current belief of the Board that there are no specific minimum qualifications that must be met by each candidate for the Board, nor are there specific qualities or skills that are necessary for one or more of the members of the Board to possess. In evaluating the qualifications of the candidates, the Nominating and Governance Committee will consider many factors, including, issues of character, judgment, independence, diversity, age, expertise, diversity of experience, length of service, other commitments and the like. The Nominating and Governance Committee will evaluate such factors, among others, and does not assign any particular weighting or priority to any of these factors. The Nominating and Governance Committee will consider each individual candidate in the context of the current perceived needs of the Board as a whole. While the Board has not established specific minimum qualifications for director candidates, the Board believes that candidates and nominees must reflect a Board that is comprised of directors who (a) are predominantly independent, (b) are of high integrity, (c) have qualifications that will increase overall Board effectiveness and (d) meet other requirements as may be required by applicable rules of the NYSE and the SEC.
In the event that a Board member changes his or her employment status or principal professional position or area of responsibility after first being elected to the Board, such Board member must notify the Nominating and Governance Committee of such change. In the event that a Board member accepts employment with, or enters into a consulting, board membership or other professional relationship with, a competitor of the Corporation, a major customer of the Corporation, or another entity in which a conflict with the interests of the Corporation could reasonably be expected to result, the Nominating and Governance Committee will evaluate the appropriateness of such Board member’s continuing service as a member of the Board, considering, among other factors, the requirements of the Corporation’s Code of Business Conduct and Ethics.
The Corporation has adopted a policy that the maximum number of boards of directors of publicly traded companies on which a non-employee member of the Board may serve is three. This number includes the Corporation’s board of directors. Members of the Board who are also employees of the Corporation must disclose and obtain approval of Nominating and Governance Committee prior to serving as a member of the board of directors, strategic advisory board (or any other similar governing or advisory body) of any other entity (regardless of whether such entity is publicly traded or not). In addition, each Board member must ensure that other existing and anticipated future commitments do not materially interfere with the member’s service as a director. Directors should advise the Nominating and Governance Committee of any invitations to join the board of directors of any other public company prior to accepting another directorship.
4. Board Size. The Corporation’s Bylaws provide that the authorized number of directors shall be established from time to time by resolution of the Board or by amendment to the Bylaws. Currently, the Board consists of seven members. The Board’s size will be assessed annually by the Nominating and Governance Committee.
5. Term of Office. The Corporation’s Bylaws provide for the directors to be elected annually. The Board does not believe it should establish term limits, because the Board believes that directors who over time have developed increasing insight into the Corporation and its operations provide an increasing contribution to the Board as a whole.
6. Selection of New Directors. Directors will be elected annually by the stockholders at their annual meeting (the “Annual Meeting”). The Nominating and Governance Committee, which consists solely of independent directors (as defined by Rule 803(a) of the NYSE Rules), is responsible for, among other things, identifying and evaluating potential director candidates and either selecting candidates for nomination to the Board or making recommendations to the Board concerning director nominees, and for recommending appointment of directors for membership on Board committees and the selection of Board committee chairs.
It is the policy of the Board that the Nominating and Governance Committee consider both recommendations and nominations for candidates to the Board from stockholders so long as such recommendations and nominations comply with the Certificate of Incorporation and Bylaws of the Corporation and applicable laws, including the rules and regulations of the SEC and the NYSE. Stockholders may recommend director nominees for consideration by the Nominating and Governance Committee by writing to the Corporate Secretary of the Corporation and providing evidence of the stockholder’s ownership of Corporation stock and specifying the nominee’s name, home and business address and other contact information, detailed biographical data and qualifications for Board membership, and information regarding any relationships between the recommended candidate and the Corporation within the last three fiscal years and his or her qualifications for Board membership. Following verification of the stockholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Governance Committee. Stockholders who desire to nominate persons directly for election to the Board at the Corporation’s Annual Meeting must meet the deadlines and other requirements set forth in the Corporation’s Bylaws and the rules and regulations of the SEC. Any vacancies on the Board occurring between the Corporation’s annual meetings of stockholders may be filled by persons selected by a majority of the directors then in office, and any director so elected will serve for the remaining term of the class of directors in which the vacancy occurred.
7. Director Responsibilities. The fundamental role of the directors is to exercise their business judgment to act in what they reasonably believe to be the best interests of the Corporation and its stockholders. In fulfilling that responsibility the directors should be able to rely on the honesty and integrity of the Corporation’s senior management and expert legal, accounting, financial and other advisors. The directors should have the benefit of directors’ and officers’ insurance, paid by the Corporation, to indemnification to the fullest extent allowed under the Corporation’s charter and Delaware law, and to exculpation as provided by Delaware law and the Corporation’s charter. Board members are expected to prepare for, attend and participate in all Board and applicable committee meetings, and to spend the time needed and meet as often as necessary to properly discharge their obligations. Information and data that is important to the Board’s understanding of the business to be conducted at a Board or committee meeting should generally be distributed in writing to the directors prior to the meeting, so that Board meeting time may be conserved and discussion time focused on questions that the Board has about the materials. Particularly sensitive subject matters may be discussed at the meeting without advance distribution of written materials.
The Board does not have a policy on whether or not the roles of Chief Executive Officer and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman should be selected from the non-employee directors or be an employee. The Board believes these issues should be considered as part of the Board’s broader succession planning process.
The Board believes that management speaks for the Corporation. Individual Board members may occasionally meet or otherwise communicate with various constituencies that are involved with the Corporation, but it is expected that Board members would do this with the knowledge of management and, in most instances, absent unusual circumstances or as contemplated by the committee charters, at the request of management. The Board encourages the attendance of members of the Board at the annual meetings of stockholders of the Corporation.
8. Number and Composition of Board Committees. The Board currently has four committees: Audit, Compensation, Nominating and Governance and Executive. The Board may from time to time establish a new committee or dissolve an existing committee depending on the circumstances. All members of the Audit Committee will meet the independence requirements of Rules 803(a) and 803(b)(2) of the NYSE Rules and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended. All members of the Compensation and Nominating and Governance Committees will be independent directors as defined by Rule 803(a) of the NYSE Rules. The Board will be responsible to make determinations as to the independence of directors and their determinations will be based on a review of the facts and circumstances of each director or nominee. At least one member of the Audit Committee will have past employment experience in finance, accounting, requisite professional certification in accounting, or other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
Each committee is chaired by an independent director who primarily drives the agenda, frequency and length of committee meetings and who has unlimited access to management, Corporation information and independent advisors, as necessary and appropriate. The Board intends to rotate, from time-to-time committee assignments and committee chair positions, possibly with the exception of the Audit Committee. Committee charters are posted on the Corporation’s website.
9. Executive Sessions. Executive sessions of solely independent directors will be held regularly.
10. Code of Business Conduct and Ethics. The Board expects all directors, as well as officers and employees, to display the highest standard of ethics, consistent with the Corporation’s values and standards. The Corporation has and will continue to maintain a Code of Business Conduct and Ethics, a copy of which is posted on the Corporation’s website. The Board expects directors, officers and employees to acknowledge their compliance with the Code of Business Conduct and Ethics. The Nominating and Governance Committee and, with specific regard to senior financial officers, the Audit Committee periodically review compliance with the Code of Business Conduct and Ethics, and the Board must approve any waivers of the Code of Business Conduct and Ethics for directors or executive officers. Directors are expected to report to the Board any non-compliance with the Code of Business Conduct and Ethics, including any possible conflict of interest between the director and the Corporation and the Board will promptly take appropriate action.
11. Succession Planning and Executive Compensation. The Nominating and Governance Committee plans for CEO succession and reviews senior management selection and succession planning. In fulfilling such responsibilities the Nominating and Governance Committee may from time to time undertake specific reviews concerning management succession planning. The compensation of the CEO and other senior officers will be determined by the Compensation Committee, which will consist solely of independent directors (as defined by applicable NYSE Rules).
12. Board Compensation. The Corporation compensates non-employee directors for their Board and Board committee service. Employee directors are not paid additional compensation for their services as directors. The Nominating and Governance Committee will review the amount and form of director compensation and provide recommendations to the Board as to such compensation based upon the committee’s consideration of the responsibilities and time commitment of Corporation directors, as well as board compensation practices of similarly situated public companies. The Nominating and Governance Committee shall have full authority to engage, at the Corporation’s expense, third-party consultants to advise the Committee on compensation levels and compensation components.
13. Board Access to Senior Management. Directors are encouraged to talk directly to any member of senior management regarding any questions or concerns the directors may have. Senior management will be invited to attend Board meetings from time-to-time to discuss their respective areas of responsibility and enhance the flow of relevant Corporation information to the Board.
14. Director Education. The Corporation encourages directors to attend director education programs accredited by national accrediting bodies (such as the National Association of Corporate Directors and Institutional Stockholder Services) and offered by universities and professional educational organizations.
15. Evaluation of Board Performance. The Board and each Board committee will conduct a self-evaluation annually. Committees assess their performance relative to their charter and to best practices. The Nominating and Governance Committee oversees this self-evaluation process and also assesses Board performance. This Committee recommends changes to improve the Board, the Board committees and individual director effectiveness. From time-to-time the Committee may engage, at the Corporation’s expense, an independent advisor to evaluate Board effectiveness and to suggest changes to improve Board performance.
16. Chief Executive Officer Performance Review. The Compensation Committee will review the performance of the Chief Executive Officer to determine whether the CEO is providing the high-quality leadership for the Corporation, from a short, intermediate and long-term perspective.
17. Authority to Retain Advisors. The Board and each Board committee shall have the authority, at the Corporation’s expense, to retain and terminate independent financial, legal or other advisors as the Board and any such committee deems necessary.
