PROPOSAL 2
APPROVAL OF AN AMENDMENT TO OUR ARTICLES OF INCORPORATION TO ADD
RESTRICTIONS ON CERTAIN TRANSFERS OF ASSETS OR COMMON STOCK
Our board of directors has adopted resolutions approving, declaring advisable and recommending that our shareholders approve an amendment to the company’s articles of incorporation, as amended (the “Articles of Incorporation”), to prevent the company from transferring more than 20% of its assets or 20% of its outstanding shares within a consecutive 3 year period without prior approval of shareholders representing a majority of votes of the shares of Class A common stock and of Class B common stock, acting together as one class (the “Articles Amendment”), subject to shareholder approval at the 2024 annual meeting.
Overview of Proposal
On or about November 20, 2023, our board of directors adopted resolutions approving, declaring advisable and recommending the Articles Amendment to the shareholders. Under Colorado corporate law, we are required to obtain approval from shareholders to amend the Articles of Incorporation. If the Articles Amendment is approved by the shareholders at the 2024 annual meeting, the Articles Amendment will be effective upon the filing of articles of amendment setting forth such amendment with the Secretary of State of the State of Colorado (or at such later time as may be specified therein), which filing is expected to occur promptly after the 2024 annual meeting.
Text of the Articles Amendment
We propose to add Article IV(L) of the Articles of Incorporation so that it would read in its entirety as follows:
L.
| Restriction on Transfers of Assets or Common Stock. |
The Corporation shall not, directly or indirectly, sell or otherwise transfer, whether in a single transaction or a series of related transactions, more than 20% of the assets, or 20% of the outstanding shares of the Common Stock, of the Corporation or its equivalent or derivatives within a consecutive three (3) year period without a prior written consent or approval of shareholders representing a majority of votes of the shares of Class A Common Stock and of Class B Common Stock, acting together as one class.
Reasons for the Articles Amendment
The proposed Articles Amendment represents a proactive measure to safeguard the long-term interests and stability of the company and its shareholders. By limiting the sale or transfer of a significant portion of the company’s assets or outstanding shares without prior shareholder approval, the Articles Amendment seeks to uphold shareholder value and protect against potentially detrimental shifts in ownership or control. The Articles Amendment underscores Gaia’s commitment to maintaining transparency, accountability, and alignment with the collective interests of shareholders. Further, requiring shareholder approval for significant asset or share transactions ensures that such decisions are subject to thorough evaluation and scrutiny, promoting prudent corporate governance practices and reinforcing shareholder confidence in the company’s strategic direction.
Interests of Certain Persons in the Proposal
Certain of our officers and directors have an interest in the proposal as a result of their ownership of shares of our Class A common stock or Class B common stock. However, we do not believe that our officers or directors have interests in the proposal that are different from or greater than those of any of our other shareholders.
Vote Required
Approval of this Proposal 2 requires the affirmative vote of a majority of the company’s issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class, “FOR” the proposal.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
THE ARTICLES AMENDMENT SET FORTH ABOVE