UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of theThe Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant o
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| ☒ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Under Rule 14a-12 |
| Ameri Holdings, Inc. |
(Name of Registrant as Specified in Its Charter) |
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant) |
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PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION
AMERI HOLDINGS, INC.
5000 Research Court, Suite 108
Suwanee, Georgia 30024
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE [•AUGUST[●], 2016
To the Stockholders of Ameri Holdings, Inc.:
You are cordially invited to attend our annual meeting of stockholders on June [•August [●], 2016.2018. We will hold the meeting at 10:00 a.m.[●] Eastern Daylight Time at [•[●].
In connection with the annual meeting, we have prepared a proxy statement setting out detailed information about the matters that will be covered at the meeting. We will mail our proxy statement, along with a proxy card, on or about May [•July [●], 20162018 to our stockholders of record as of the close of business on May 10, 2016.June 21, 2018. These materials and our Annual Report on Form 10-KT10-K for the nine monthsyear ended December 31, 20152017 are also available electronically at www.icommaterials.com/amrh.
Our Board of Directors has fixed the close of business on May 10, 2016June 21, 2018 as the record date for the determination of stockholders entitled to notice of and to vote at our annual meeting and at any adjournment(s), postponement(s) or other delay(s) thereof. Voting on the matters to be considered at the annual meeting can be done (1) by signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope or (2) in person by ballot at the annual meeting. Important information about attending the annual meeting in person is included in the proxy statement.
The matters that will be considered at the annual meeting are:
| 1. | To elect |
| 2. | To ratify the appointment of our independent auditors; |
| 3. | To conduct an advisory (non-binding) vote to approve named executive officer |
| 4. | To hold an advisory, non-binding vote on the frequency of holding votes on Say-on-Pay (once every year, every two years or three years); |
| 5. | To approve an increase in the number of shares available for issuance pursuant to the Ameri Holdings, Inc. 2015 Equity Incentive Award Plan; |
| 6. | To approve an amendment to the Amended and |
| 7. | To approve the issuance of warrants to purchase 5,000,000 shares of common stock by the Company to the Series A Preferred Stock holders; and |
| To transact such other business as may properly come before the annual meeting or any adjournment(s), postponement(s) or other delay(s) thereof. |
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. We are not aware of any other business to come before the annual meeting.
This Notice, the Proxy Statement and the Annual Report on Form 10-KT10-K for the nine monthsyear ended December 31, 20152017 are first being mailed to stockholders on or about May [•July [●], 2016.2018. Only stockholders of record at the close of business on May 10, 2016June 21, 2018 and their proxies are entitled to attend and vote at the annual meeting and any and all adjournments, continuations or postponements thereof.
Your vote is important.
Regardless of whether you plan to attend the annual meeting, we encourage you to vote your shares promptly by using the telephone or internet, or by signing and returning the proxy card mailed to those who receive paper copies of this proxy statement. You may revoke your proxy at any time before it is voted at the annual meeting by delivering a written statement to the Corporate Secretary that the proxy is revoked, presenting a later-dated proxy, or attending the annual meeting and voting in person. If you would like to attend and your stock is not registered in your own name, please ask the broker, trust, bank or other nominee that holds the stock to provide you with evidence of your stock ownership.If you have any questions, or need assistance in voting your shares, please contact the firm assisting us in the solicitation of proxies:
InvestorCom, Inc.
Stockholders Call Toll Free: 877-972-0090
Banks and Brokers Call Collect: 203-972-9300
| Sincerely, | |
/ | |
Jeffrey E. Eberwein Chairman of the Board |
Suwanee, Georgia
July [●], 2018
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON AUGUST [●], 2018
Whether or not you attend the meeting in person, please vote by telephone or internet, or, if you receive a paper copy of the proxy materials, please sign, date and promptly mail the enclosed proxy card or use the telephone or internet voting procedures described on the proxy card. This Notice of Annual Meeting and Proxy Statement along with the Ameri Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2017, are available on the internet at: www.icommaterials.com/amrh.
AMERI HOLDINGS, INC.
5000 Research Court, Suite 108
Suwanee, Georgia 30024
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE [•AUGUST[●], 2016
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AMERI HOLDINGS, INC.
5000 Research Court, Suite 108
Suwanee, Georgia 30024
The Board of Directors of Ameri Holdings, Inc., a Delaware corporation (referred to in this Proxy Statement as “Ameri,” “the Company,” “we,” “our” or “us”), is soliciting proxies from our stockholders in connection with our Annual Meeting of Stockholders to be held on June [•August [●], 20162018 and at any adjournment(s), postponement(s) or other delay(s) thereof (the “Annual Meeting”). We will hold the meeting at 10:00 a.m.[●] Eastern Daylight Time at [•[●].
The accompanying proxy is solicited by the Board of Directors and is revocable by the stockholder at any time before it is voted. This Proxy Statement is being mailed to stockholders of the Company on or about May [•July [●], 20162018 and is accompanied by the Company’s Annual Report on Form 10-KT10-K for the nine monthsyear ended December 31, 2015.
Holders of common stock, par value $0.01 per share (“common stock”), outstanding as of the close of business on May 10, 2016June 21, 2018 (the “Record Date”) are entitled to receive notice of, and to vote at, the Annual Meeting. As of the Record Date, there were [•]18,790,998 shares of common stock outstanding and entitled to vote at the Annual Meeting.Meeting and 405,395 shares of the Series A Preferred Stock outstanding and entitled to vote on Proposal 6. Each share of common stock is entitled to one vote on all matters. In addition, holders of the Company’s Series A Preferred Stock were entitled to vote on the Amendment of the Company’s Certificate of Incorporation. On June 22, 2018, the then-sole holder of record of our Series A Preferred Stock voted all of the outstanding shares of Series A Preferred Stock in favor of the amendment of the Company’s Certificate of Incorporation as described herein. No other class of securities other than our common stock will be entitled to vote at the Annual Meeting. There are no cumulative voting rights.
The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, constitute a quorum for the transaction of business at the Annual Meeting. Shares that reflect abstentions and broker non-votes, if any, count as present at the Annual Meeting for the purposes of determining a quorum. A broker non-vote occurs when a bank, broker or other nominee holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to such other proposal, the nominee does not have discretionary voting power and has not received instructions from the beneficial owner.
The vote requirement for each matter is as follows:
| 1 |
In the election of directors (Proposal 1), abstentions and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. With respect to the ratification of the appointment of our independent registered public accounting firm (Proposal 2), and the advisory (non-binding) Stockholderstockholder approval of named executive officer compensation (Proposal 3) the advisory (non-binding) stockholder approval of the frequency of holding votes on Say-on-Pay (Proposal 4), approval of the increase in the number of shares available for issuance pursuant to the Company’s 2015 Equity Incentive Award Plan (Proposal 5) and approval of the warrant issuance (Proposal 7) abstentions will have the same effect as voting against such proposals, and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. With respect toFor the approval of the amendment and restatement of the Certificate of Incorporation and Bylaws (Proposals 4a through 4g),(Proposal 6) abstentions and broker non-votes, if any, will have the same effect as voting against this proposal.
The Board of Directors recommends that you vote your shares “FOR” each of the Board of Directors’ fourfive nominees that are standing for election to the Board of Directors (Proposal 1); “FOR” the ratification of the appointment of our independent auditors (Proposal 2); “FOR” the advisory (non-binding) stockholder approval of named executive officer compensation (Proposal 3); for a Say-on-Pay frequency ofonce every year (Proposal 4); “FOR” the approval of the Declassification Amendmentincrease in the number of shares available for issuance pursuant to the Company’s 2015 Equity Incentive Award Plan (Proposal 4a)5); “FOR” the approval of the Director Election Amendmentamendment of the Certificate of Incorporation (Proposal 4b)6); and “FOR” the approval of the Director Removal Amendmentwarrant issuance (Proposal 4c); “FOR” the approval of the Major Business Transactions Amendment (Proposal 4d); “FOR” the approval of the Charter and Bylaw Amendment (Proposal 4e); “FOR” the approval of the Special Meeting Amendment (Proposal 4f); and “FOR” the approval of the Updating Amendment (Proposal 4g)7).
If you are a stockholder of record as of the Record Date, you may vote using any of the following methods:
| · | By telephone or the internet. Specific instructions for stockholders of record who wish to use telephone or internet voting procedures are set forth on the notice of internet availability of proxy materials and on the proxy card. If you own shares held in street name, you will receive voting instructions from your broker, bank or nominee and may vote by telephone or the internet if they offer that alternative. Please note that telephone and internet voting will close at 2018. |
| 2 |
| · | Proxy card or voting instruction card. If you received a proxy card or voting instruction card in the mail, complete, sign and date the card and return it in the prepaid envelope. |
| · | In person at the Annual Meeting. All stockholders may vote in person at the Annual Meeting. You may also be represented by another person at the Annual Meeting by executing a proper proxy designating that person. If you own shares held in street name, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspector of election with your ballot when you vote at the Annual Meeting. |
Giving us your proxy means you authorize the Board of Directors’ designated proxy holders (who are identified on the enclosed proxy card) to vote your shares at the Annual Meeting in the manner that you have indicated and in their best judgment on such other matters that may properly come before the Annual Meeting. If you sign, date and return the enclosed proxy card but do not indicate your vote, the designated proxy holders will vote your shares “FOR” each of the Board of Directors’ fourfive nominees that are standing for election to the Board of Directors (Proposal 1); “FOR” the ratification of the appointment of our independent auditors (Proposal 2); “FOR” the advisory (non-binding) stockholder approval of named executive officer compensation (Proposal 3); for a Say-on-Pay frequency ofonce every year (Proposal 4); “FOR” the approval of the Declassification Amendmentincrease in the number of shares available for issuance pursuant to the Company’s 2015 Equity Incentive Award Plan (Proposal 4a)5); “FOR” the approval of the Director Election Amendmentamendment of the Certificate of Incorporation (Proposal 4b)6); and “FOR” the approval of the Director Removal Amendmentwarrant issuance (Proposal 4c); “FOR” the approval of the Major Business Transactions Amendment (Proposal 4d); “FOR” the approval of the Charter and Bylaw Amendment (Proposal 4e); “FOR” the approval of the Special Meeting Amendment (Proposal 4f); and “FOR” the approval of the Updating Amendment (Proposal 4g)7).
Attendance at the Annual Meeting will be limited to stockholders and the Company’s invited guests. Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport. Stockholders holding shares of common stock in brokerage accounts or through a bank or other nominee may be required to show a brokerage statement or account statement reflecting stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. You may contact [•[●] at [•[●] for directions to the Annual Meeting.
If you are a stockholder of record as of the Record Date, you may vote your shares of common stock in person by ballot at the Annual Meeting. If you hold your shares of common stock in a stock brokerage account or through a bank or other nominee, you will not be able to vote in person at the Annual Meeting unless you have previously requested and obtained a “legal proxy” from your broker, bank or other nominee and present it at the Annual Meeting.
You may revoke your proxy by submitting a new proxy with a later date or by notifying our Corporate Secretary in writing at 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540.750, Suwanee, Georgia 30024. If you attend the Annual Meeting in person and vote by ballot, any previously submitted proxy will be revoked.
We will solicit proxies and will bear the entire cost of our solicitation, including the preparation, assembly, printing and mailing of this Proxy Statement and any additional materials furnished to our stockholders. We have retained InvestorCom, Inc. (“InvestorCom”) to assist us in the solicitation of proxies, as described in “General-Cost of Solicitation” below. The initial solicitation of proxies by mail may be supplemented by telephone, fax, e-mail, internet and personal solicitation by our directors, officers or other regular employees. No additional compensation for soliciting proxies will be paid to our directors, officers or other regular employees for their proxy solicitation efforts. Fees paid to InvestorCom are described in “General-Cost of Solicitation” below.
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If you hold your shares of common stock in more than one account, you will receive a proxy card for each account. To ensure that all of your shares of shares of common stock are voted, please vote using a proxy card for each account that you own. It is important that you vote all of your shares of common stock.
Broker Non-Votes
If the shares you own are held in “street name” by a bank, brokerage firm or other nominee, your nominee, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions your nominee provides to you. If you do not give instructions to your nominee, your nominee will determine whether it has discretionary authority to vote your shares. Applicable regulations prohibit nominees from voting shares on non-routine matters unless the beneficial owners indicate how the shares are to be voted. Therefore, unless you instruct your nominee on how to vote your shares with respect to the approval of the Certificate of Incorporation and Bylaws amendments,amendment, the issuance of the warrants, the increase in the number of shares available for issuance pursuant to the Company’s 2015 Equity Incentive Award Plan, the election of directors, and the advisory resolution on compensation of the Company’s named executive officers and the advisory resolution on the frequency of Say-on-Pay, your nominee will be prohibited from voting on such matters on your behalf. Your nominee will, however, continue to have discretionary authority to vote uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm.
If your nominee returns a valid proxy but is not able to vote your shares, they will constitute “broker non-votes,” which are counted for the purpose of determining the presence of a quorum but otherwise doand will be counted against the proposal for the amendment of the Company’s Certificate of Incorporation. Broker non-votes will not affect the outcome of any matter being voted on at the Annual Meeting.
If you have any questions, or need assistance in voting your shares, please contact the firm assisting us in the solicitation of proxies:
InvestorCom, Inc.
Stockholders Call Toll Free: 877-972-0090
Banks and Brokers Call Collect: 203-972-9300
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The current number of directors on our Board of Directors is eight.six. Under our bylaws, the number of directors on our Board of Directors will not be less than three and is fixed, and may be increased or decreased by resolution of the Board of Directors.
Director Qualifications
In evaluating director nominees, the Nominations and Corporate Governance Committee of our Board of Directors considers the appropriate size of the Board of Directors, as well as the qualities and skills of individual candidates. Factors considering include the following:
The Nominations and Corporate Governance Committee’s goal is to assemble a Board of Directors that brings the Company a diversity of perspectives and skills derived from the factors considered above. The Nominations and Corporate Governance Committee also considers candidates with relevant non-business experience and training.
Our Board of Directors believes that it is necessary for each of our directors to possess many qualities and skills. When searching for new candidates, the Nominations and Corporate Governance Committee considers the evolving needs of the Board of Directors and searches for candidates that fill any current or anticipated future gap. Our Board of Directors also believes that all directors must possess a considerable amount of business management (such as experience as a chief executive or chief financial officer) and educational experience. The Nominations and Corporate Governance Committee first considers a candidate’s management experience and then considers issues of judgment, background, stature, conflicts of interest, integrity, ethics and commitment to the goal of maximizing stockholder value when considering director candidates. The Nominations and Corporate Governance Committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The Nominations and Corporate Governance Committee does not have a formal policy with respect to diversity; however, our Board of Directors and the Nominations and Corporate Governance Committee believe that it is essential that the directors represent diverse viewpoints. In considering candidates for our Board of Directors, the Nominations and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards. With respect to the nomination of continuing directors for re-election, the individual’s contributions to the Board of Directors are also considered.
Other than the foregoing background factors that are considered in selecting director candidates, there are no stated minimum qualifications for director nominees, although the Nominations and Corporate Governance Committee may also consider such other facts as it may deem are in the best interests of Ameri and our stockholders. The Nominations and Corporate Governance Committee does believe it appropriate for at least one, and preferably several, members of our Board of Directors to meet the criteria for an “Audit Committee financial expert” as defined by the rules of the Securities and Exchange Commission (the “SEC”), and that a majority of the members of our Board of Directors meet the definition of an “independent director” under the listing standards of the NASDAQ Stock Market. At this time, the Nominations and Corporate Governance Committee also believes it appropriate for our Chief Executive Officer to serve as a member of our Board of Directors.
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Identification and Evaluation of Nominees for Directors
The Nominations and Corporate Governance Committee identifies nominees for director by first evaluating the current members of our Board of Directors willing to continue their service on the Board of Directors. Current members with qualifications and skills that are consistent with the Nominations and Corporate Governance Committee’s criteria for service on the Board of Directors and who are willing to continue their service are considered for re-nomination, balancing the value of continuity of service by existing members of our Board of Directors with that of obtaining new perspectives. If any member of our Board of Directors does not wish to continue his or her service or if our Board of Directors decides not to re-nominate a member for re-election, the Nominations and Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria above. The Nominations and Corporate Governance Committee generally polls our Board of Directors and members of management for their recommendations regarding potential new nominees. The Nominations and Corporate Governance Committee may also review the composition and qualification of the boards of directors of our competitors, and may seek input from our stockholders, industry experts or analysts. The Nominations and Corporate Governance Committee reviews the qualifications, experience and background of the candidates.
Final candidates are interviewed by some or all of our independent directors and our Chief Executive Officer. In making its determinations, the Nominations and Corporate Governance Committee evaluates each individual in the context of our Board of Directors as a whole, with the objective of assembling a group that can best attain success for Ameri and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the Nominations and Corporate Governance Committee makes its recommendation to our Board of Directors. Historically, the Nominations and Corporate Governance Committee has not relied on third-party search firms to identify board candidates. The Nominations and Corporate Governance Committee may in the future choose to do so in those situations where particular qualifications are required or where existing contacts are not sufficient to identify and acquire an appropriate candidate.
The Nominations and Corporate Governance Committee does not have a formal policy regarding consideration of director candidate recommendations from our stockholders. Any recommendations received from stockholders have been and will continue to be evaluated in the same manner as potential nominees suggested by members of our Board of Directors or management. Stockholders wishing to suggest a candidate for director should write to our Corporate Secretary at our corporate headquarters. In order for us to effectively consider a recommendation for a nominee for a director position, stockholders must provide the following information in writing: (i) the stockholder’s name and contact information; (ii) the class and number of shares beneficially owned by the stockholder; (iii) a statement that the stockholder is proposing a candidate for consideration as a director nominee to the Nominations and Corporate Governance Committee of our Board of Directors; (iv) the name, age, business address and residence address of the candidate and confirmation that the candidate is willing to be considered and serve as a director of the Company if elected; (v) a description of all arrangements and understandings and the relationship between the stockholder making the recommendation and the candidate being recommended and between the candidate and any customer, supplier, or competitor of the Company; (vi) the principal occupation and educational background of the candidate; (vii) a statement of the value that the candidate would add to our Board of Directors, including addressing the factors that our Board of Directors normally considers in assessing board candidates as stated above; and (viii) at least three character references with complete contact information. In order to give the Nominations and Corporate Governance Committee sufficient time to evaluate a recommended candidate, any such recommendation should be received by our Corporate Secretary at our corporate headquarters not later than the 120th calendar day before the one year anniversary of the date our proxy statement was mailed to stockholders in connection with the previous year’s annual meeting of stockholders.
We believe it is beneficial to separate the roles of Chief Executive Officer and Chairman of the Board of Directors to facilitate their differing roles in the leadership of the Company. The role of the Chairman is to set the agenda for, and preside over, board meetings, as well as providing advice and assistance to the Chief Executive Officer. In contrast, the Chief Executive Officer is responsible for handling the day-to-day management direction of the Company, serving as a leader to the management team, and formulating corporate strategy.
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Jeffrey E. Eberwein is currently the Chairman of our Board of Directors and is considered an independent director. Mr.Three of our current directors, Venkatraman Balakrishnan, Jeffrey Eberwein holds and has held leadership positions with investment firms and brings to Ameri outside experience and expertise. He also has an educational background in business.
Following the Annual Meeting, we will continue our philosophy and practice of keeping the Chairman and Chief Executive Officer roles separate on the Board of Directors.
Our Board of Directors held six in person or telephonic meetings during the nine monthsyear ended December 31, 2015.2017. No director who served as a director during the past year attended fewer than 75% of the aggregate of the total number of meetings of our Board of Directors and of the total number of meetings of committees of our Board of Directors on which he served.
Our Board of Directors has determined that all director nominees, Dimitrios J. Angelis and Dr. Arthur M. Langer standingexcept for election, as well as current directors Jeffrey E. Eberwein, Robert Pearse and Robert Rosenberg,Srinidhi Devanur, our Executive Vice Chairman, are independent directors (as currently defined in Rule 5605(a)(2) of the NASDAQ listing rules). In determining the independence of our directors, the Board of Directors considered all transactions in which the Company and any director had any interest, including those discussed under “Related Transactions and Section 16(a) Beneficial Ownership Reporting Compliance” below. The independent directors meet as often as necessary to fulfill their responsibilities, including meeting at least twice annually in executive session without the presence of non-independent directors and management.
Although we do not have a formal policy regarding attendance by members of our Board of Directors at the Annual Meeting, we encourage all of our directors to attend.
Our Board of Directors conducts annual self-evaluations to determine whether it and its committees are functioning effectively. The full Board of Directors reviews the results of the assessments and identifies areas for continued improvement. Our Board of Directors also develops and communicates to management any proposals for improving board functions.
Our Board of Directors currently has three standing committees. The current members of our committees are identified below:
| Committees | |||||||||||
| Director | Audit | Compensation | Nominations and Corporate Governance | ||||||||
| Dimitrios J. Angelis | X | X | (Chair) | ||||||||
| Jeffrey E. Eberwein | X | X | |||||||||
| Robert Pearse | X | X | (Chair) | ||||||||
| X | (Chair) | X | |||||||||
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Srinidhi Devanur, our Chief Executive Officer,Vice Chairman, does not serve on any of our standing committees.
Audit Committee
. The Audit Committee currently consists of Messrs. Angelis, Pearse andBoth our independent registered public accounting firm and internal financial personnel regularly meet privately with our Audit Committee and have unrestricted access to the Audit Committee.
Compensation Committee
. The Compensation Committee currently consists of Messrs. Eberwein| 8 |
Corporate Governance Committee
. The Nominations and Corporate Governance Committee currently consists of Messrs. Angelis, Eberwein andOur Board of Directors, as a whole and also at the committee level, has an active role in managing enterprise risk. The members of our Board of Directors participate in our risk oversight assessment by receiving regular reports from members of senior management and the Company compliance officer appointed by our Board of Directors on areas of material risk to us, including operational, financial, legal and regulatory, and strategic and reputational risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit Committee oversees management of financial risks, as well as our policies with respect to risk assessment and risk management. The Nominations and Corporate Governance Committee manages risks associated with the independence of our Board of Directors and potential conflicts of interest. Members of the management team report directly to our Board of Directors or the appropriate committee. The directors then use this information to understand, identify, manage, and mitigate risk. Once a committee has considered the reports from management, the chairperson will report on the matter to our full Board of Directors at the next meeting of the Board of Directors, or sooner if deemed necessary. This enables our Board of Directors and its committees to effectively carry out its risk oversight role.
Any stockholder may send correspondence to our Board of Directors c/o Corporate Secretary, Ameri Holdings, Inc., 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540.750, Suwanee, Georgia 30024. Our Corporate Secretary will review all correspondence addressed to our Board of Directors, or any individual director, and forward all such communications to our Board of Directors or the appropriate director prior to the next regularly scheduled meeting of our Board of Directors following the receipt of the communication, unless the corporate secretary decides the communication is more suitably directed to Company management and forwards the communication to Company management. Our Corporate Secretary will summarize all stockholder correspondence directed to our Board of Directors that is not forwarded to our Board of Directors and will make such correspondence available to our Board of Directors for its review at the request of any member of our Board of Directors.
We have established a Code of Ethics and Business Conduct and a Code of Ethics for our Chief Executive Officer and Senior Financial Officers (the “Ethics Codes”) that apply to our officers, directors, employees and contractors. The Ethics Codes contain general guidelines for conducting our business consistent with the highest standards of business ethics and compliance with applicable law, and is intended to qualify as “codes of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. Day-to-day compliance with the Ethics Codes is overseen by the Company compliance officer appointed by our Board of Directors. If we make any amendments to the Ethics Codes or grant any waiver from a provision of the Ethics Codes to any director or executive officer, we will promptly disclose the nature of the amendment or waiver on the “Investors” section of the Company’s website (www.ameri100.com) under the tab “Corporate Governance”.
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Our corporate governance documents, including the Audit Committee charter, Compensation Committee charter, Nominations and Corporate Governance Committee charter and Ethics Codes, are available free of charge on the “Investors” section of our website (www.ameri100.com) under the tab “Corporate Governance”. Information contained on our website is not incorporated by reference in, or considered part of, this Proxy Statement. Stockholders may also request paper copies of these documents free of charge upon written request to Investor Relations, Ameri Holdings, Inc., 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540.
Our Board of Directors does not currently have a term limit policy limiting the number of years a director may serve on the Board of Directors.
The names of our executive officers, their ages, their positions with Ameri, and other biographical information as of May 10, 2016,June 21, 2018, are set forth below. Giri Devanur, our President, Chief Executive Officer and a member of our Board, and Srinidhi “Dev” Devanur, our Executive Vice Chairman and a member of our Board, are brothers. Other than these individuals, thereThere are no family relationships among our directors and executive officers.
| Name | Age | Position |
| Srinidhi “Dev” Devanur | Executive Vice Chairman of the Board | |
| Chief Financial Officer | ||
Srinidhi “Dev” Devanur
became our Executive Vice Chairman and a member of our Board in May 2015. Srinidhi “Dev” Devanur is the founder of Ameri and Partners on the representative on the Board. He is a seasoned technology entrepreneur who has more than 20 years of experience in the IT services industry with a specialization in sales and resource management. He has built businesses from ground up and has successfully executed acquisitions, mergers and corporate investments. He has managed the sales function by working closely with various Fortune 500 customers in the United States and India to sell software solutions, support and staff augmentation related services. Srinidhi “Dev” Devanur co-founded Ivega Company in 1997, an international niche IT consulting company with special focus on financial services which merged with TCG in 2004, creating a 1,000+ person focused differentiator in the IT consulting space. Following this, he founded SaintLife Bio-pharma Pvt. Ltd., which was acquired by a Nasdaq listed company. Srinidhi “Dev” Devanur has a bachelor’s degree in electrical engineering from the University of Bangalore, India and has also attended a Certificate program in Strategic Sales Management at the University of Chicago Booth School of Business. The Board believes that Mr. Devanur’s qualifications to serve on the Board include his background in the IT services industry and his experience in business development.Giri DevanurBrent Kelton became our President, Chief Executive Officer in December 2017. Mr. Kelton previously joined the Company in March 2017 through its acquisition of Ameri100 California Inc. (formerly ATCG Technology Solutions, Inc. (ATCG)) as a wholly-owned operating subsidiary of the Company, which Mr. Kelton led. Prior to joining Ameri, he previously led Fujitsu’s North American SAP business unit and KPIT Technologies Limited’s SAP strategic business unit, at which he grew KPIT to over 1,600 employees globally with annual revenues of $125 million. Mr. Kelton has also held leadership positions at several technology service providers focused on implementation services and support of SAP solutions. Mr. Kelton holds a memberbachelor of science degree in business analysis and management information systems from Texas A&M University and has completed executive education courses at the Stanford Graduate School of Business.
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Viraj Patel became our BoardChief Financial Officer in May 2015. Giri Devanur is a representative of Ameri and Partners on the Board.April 2017. He is a seasoned chieffinance and operations executive officer who has raised seed capital, venture capitalhaving served as a Chief Financial Officer of both public and private equity from global institutions.start-up companies. He has successfully executed acquisitions, mergers and corporate investments. He has more than 25over 30 years of experience in the information technology, industry. Previously, he founded WinHire Inc. in 2010, an innovative company building software products through technologylife science and human capital management experts and combining themindustrial sectors with professional services. He co-founded Ivega Company in 1997, an international niche IT consulting company with special focus on financial services which merged with TCG in 2004, creating a 1,000+ person focused differentiator in the IT consulting space. Giri Devanur has a Master’s degree in Technology Management from Columbia University and a bachelor’s degree in computer engineering from the University of Mysore, India. He has attended Executive Education programs at the Massachusetts Institute of Technology and Harvard Law School. The Board believes that Mr. Devanur’s qualifications to serve on the Board include his substantialsignificant experience in the information technology industrydomestic and his prior experienceinternational markets, fund-raising and mergers and acquisitions. From February 2016 to March 2017, Mr. Patel worked as a chief executive officer.
Our previous President and AICPA. Mr. O’Donnell earned a B.S, degree in AccountancyChief Executive Officer, Giri Devanur, departed from Villanova University in 1991 and an M.B.A. from Columbia Business School in 2003. We believe that Mr. O’Donnell’s extensive education and background in accounting and finance makes him qualifiedour company on December 26, 2017 to servepursue new opportunities. Our current Chief Executive Officer, Brent Kelton, was appointed effective as ourof the same date.
Our previous Chief Financial Officer.
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The following table sets forth information as of May 10, 2016June 21, 2018 regarding the beneficial ownership of our common stock by (i) each person we know to be the beneficial owner of 5% or more of our common stock, (ii) each of our current executive officers, (iii) each of our directors, and (iv) all of our current executive officers and directors as a group. Information with respect to beneficial ownership has been furnished by each director, executive officer or 5% or more stockholder, as the case may be. The address for all executive officers and directors is c/o Ameri Holdings, Inc., 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540.
Percentage of beneficial ownership in the table below is calculated based on 12,374,36118,790,998 shares of common stock outstanding as of May 1, 2016.June 21, 2018. Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and includes shares of our common stock issuable pursuant to the exercise of stock options, warrants or other securities that are immediately exercisable or convertible or exercisable or convertible within 60 days of May 10, 2016.June 21, 2018. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them.
Name (1) | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned (2) | ||||||
| Executive Officers, Present Directors and Proposed Directors: | ||||||||
Jeffrey E. Eberwein (3)(4) | 6,151,817 | 34.3 | % | |||||
| Srinidhi “Dev” Devanur | 5,977,125 | 48.3 | % | |||||
| Giri Devanur | 2,179,125 | 17.6 | % | |||||
Dimitrios J. Angelis(5) | 25,000 | * | ||||||
Dr. Arthur M. Langer(6) | 75,625 | * | ||||||
Robert G. Pearse(7) | 25,000 | * | ||||||
Dr. Robert Rosenberg(8) | 80,125 | * | ||||||
| Carlos Fernandez | 101,250 | * | ||||||
| Edward O’Donnell | - | * | ||||||
| Srirangan Rajagopal | 432,000 | 3.5 | % | |||||
| Dhruwa N. Rai | 500,000 | 4.0 | % | |||||
All executive officers, present directors and proposed directors as a group (9 persons) (9) | 15,547,067 | 86.2 | % | |||||
| 5% Stockholders: | ||||||||
Lone Star Value Management, LLC (3)(4) | 6,151,817 | 34.3 | % | |||||
| Name(1) | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
| Executive Officers, Present Directors and Proposed Directors: | ||||||||
| Jeffrey E. Eberwein(2)(3) | 4,216,974 | 21.2 | % | |||||
| Srinidhi “Dev” Devanur | 6,276,375 | 33.4 | % | |||||
| Dimitrios J. Angelis(4) | 65,990 | * | ||||||
| Dr. Arthur M. Langer(5) | 109,923 | * | ||||||
| Robert G. Pearse(6) | 65,473 | * | ||||||
| Venkatraman Balakrishnan(7) | 41,948 | * | ||||||
| Viraj Patel(8) | 25,000 | * | ||||||
| Brent Kelton(9) | 93,176 | * | ||||||
| David Luci(10) | 40,574 | * | ||||||
| All executive officers and directors as a group (9 persons)(13) | 10,935,433 | 54.5 | % | |||||
| 5% Stockholders: | ||||||||
| Lone Star Value Management, LLC(2)(3) | 4,216,974 | 21.2 | % | |||||
| Dhruwa N. Rai(11) | 1,164,713 | 6.2 | % | |||||
| Giri Devanur(12) | 1,806,246 | 9.6 | % | |||||
______________
_______________
| * | Less than one percent of outstanding shares. |
| (1) | Unless otherwise indicated, the address of each person or entity is c/o AMERI Holdings, Inc., |
| (2) |
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(3) | Includes |
| (4) | Consists of |
| (5) | Consists of |
| (6) | Consists of |
| (7) | Consists of 16,948 shares of common stock and 25,000 shares of common stock issuable upon exercise of options exercisable within 60 days. |
| (8) | Consists of 25,000 shares of common stock issuable upon exercise of options exercisable within 60 days. |
| (9) | Consists of 93,176 shares of common stock. |
| (10) | Consists of 2,430 shares of common stock, 2,430 shares of common stock issuable upon the exercise of warrants that are currently exercisable and 35,714 shares of common stock issuable upon the conversion of a $100,000 convertible promissory note with a conversion price of $2.80 per share. |
| (11) | Consists of 1,164,713 shares of common stock. Mr. Rai resigned from the Board effective February 12, 2018. |
| (12) | Giri Devanur served as our Chief Executive Officer from May 26, 2015 through December 26, 2018. Consists of 1,794,125 shares of common stock and 12,121 shares of common stock issuable upon the exercise of warrants that are currently exercisable. |
| (13) | Consists of 9,660,168 shares of common stock, 1,114,551 shares of common stock reserved for issuance upon the exercise of the |
In addition, as of June 21, 2018, we had 405,395 shares of Series A Preferred Stock issued and outstanding. As of such date, LSVI held 405,395 shares of our Series A Preferred Stock, representing 100% of the issued and outstanding shares of the Series A Preferred Stock. Jeffrey E. Eberwein as the managing member of Lone Star Value GP may be deemed to beneficially own the 405,395 shares of Series A Preferred Stock held by LSVI. Mr. Eberwein disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address of Mr. Eberwein, LSVI and Lone Star Value GP is 53 Forest Avenue, 1st Floor, Old Greenwich, CT 06870.
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Our Board of Directors currently consists of eightsix members. Each nominated director elected at the Annual Meeting will serve until the next annual meeting of stockholders (if Proposal 4a is approved) or a three-year term (if Proposal 4a is not approved) and until their successors are duly elected and qualified.
Upon the recommendation of the Nominations and Corporate Governance Committee, our Board of Directors has nominated each of the following threefive persons to be elected to serve until the next annual meeting of stockholders (if Proposal 4a is approved) or a three-year term (if Proposal 4a is not approved) and until their successors are duly elected and qualified. Each of the nominees (i) currently serves on our Board of Directors (ii) has consented to being named in this Proxy Statement and (iii) has agreed to serve as a director if elected. As of the date of this Proxy Statement, our Board of Directors is not aware of any nominee who is unable or will decline to serve as a director.
THE BOARD OF DIRECTORS RECOMMENDS USING THE ENCLOSED PROXY CARD TO VOTE
FOR
| Name | Position | |
| Srinidhi “Dev” Devanur | Executive Vice Chairman of the Board and Director | |
| Chairman of the Board and Director | ||
| Dimitrios J. Angelis | Director | |
| Director | ||
| James Shad | Director |
The fourfive nominees standing for election who receive the greatest number of votes cast at the 20162018 annual meeting will be elected as Directors.
Set forth below are descriptions of the backgrounds of each nominee and their principal occupations for at least the past five years and their public-company directorships as of the Record Date. Giri Devanur, our President, Chief Executive Officer and a member of our Board, and Srinidhi “Dev” Devanur, our Executive Vice Chairman and a member of our Board, are brothers. Other than these individuals, thereThere are no family relationships among our directors and executive officers. All ages are as of May 10, 2016.
In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that he should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to Ameri and our Board of Directors.
| Srinidhi “Dev” Devanur | Age 52 | Director since 2015 |
| Executive Vice Chairman of the Board and Director | ||
Mr. Devanur’s biographical information is provided above under the heading “CORPORATE GOVERNANCE AND ETHICS- Executive Officers.”
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| David Luci | Age 51 | Director since 2018 |
| Co-Founder, Managing Partner and director of Acurx Pharmaceuticals, LLC | ||
Mr. Luci became a member of our Board in February 2018. Mr. Luci currently serves as Co-Founder, Managing Partner and a director of Acurx Pharmaceuticals, LLC, an early-stage, private pharmaceutical company focused on developing antibiotics for difficult to treat resistant bacteria. From January 2010 to April 2017, Mr. Luci served as President and Chief Executive Officer and as a director of Dipexium Pharmaceuticals, Inc. (“Dipexium”) a Nasdaq-listed biopharmaceutical company focused. Dipexium was sold in April 2017 to PLX Pharma (Nasdaq: PLXP) in a merger valued at $69 million. From December 2007 to January 2010, Mr. Luci served as President and Chief Business Officer of MacroChem Corporation (OTCBB: MACM), a development-stage, public biopharmaceutical company, and from July 2002 to August 2007 he served as Executive Vice President, Chief Financial Officer, General Counsel & Corporate Secretary of Bioenvision, Inc. (Nasdaq: BIVN), an international biopharmaceutical company. From January 2007 to January 2010, Mr. Luci served as a member of the board of directors of Abeona Therapeutics, Inc. (Nasdaq: ABEO), where he also served as Chairman of the Audit Committee and Chairman of the Compensation Committee, as well as serving in a consulting capacity for several equity financings. Mr. Luci began his career with Ernst & Young LLP as a certified public accountant (from August 1988 to May 1991), before transitioning to practicing corporate law (from September 1994 to July 2002) at Battle Fowler LLP, which later merged into Paul Hastings. Mr. Luci received a bachelor of science in business administration degree from Bucknell University and a juris doctorate degree from Albany Law School of Union University. Mr. Luci is admitted to the New York bar and is an inactive Certified Public Accountant, registered in Pennsylvania. The Board believes Mr. Luci’s qualifications to serve on the Board include his extensive business development and managerial expertise and his extensive background in international licensing and co-development transactions and merger transactions.
| Dimitrios J. Angelis | Age | Director since 2015 |
| Executive Counsel at Life Sciences Law Group | ||
Mr. Angelis currently works with the Life Sciences Law Group, providing outside General Counsel advice to pharmaceutical, medical device and biologics companies. He is also a director of Digirad Inc. (NASDAQ: DRAD) a leader in the field of nuclear gamma cameras for use in cardiology, women’s health, pediatric and other imaging and neuropathy diagnostics applications. Previously, he has served as the Chief Executive Officer of OTI America Inc., the U.S.-based subsidiary of publicly-held On Track Innovations Ltd., a pioneer of cashless payment technology, since December 2013. His role was to oversee and monetize the extensive patent portfolio of over 100 U.S. and international patents. Mr. Angelis has served as a director of On Track Innovations since December 2012, and served as its Chairman of the Board from April 2013 until February 2015. From October 2012 until December 2013, Mr. Angelis served as the General Counsel of Wockhardt Pharmaceuticals Inc., an international biologics and pharmaceutical company. From October 2008 to October 2012, Mr. Angelis was a senior counsel at Dr. Reddy’s Laboratories, Ltd., a publicly-traded pharmaceutical company, and during 2008 he was the Chief Legal Officer and Corporate Secretary of Osteotech, Inc., a publicly-traded medical device company, with responsibility for managing the patent portfolio of approximately 42 patents. Prior to that, Mr. Angelis worked in the pharmaceutical industry in various corporate, strategic and legal roles. In addition, he worked for McKinsey & Company, Merrill Lynch and the Japanese government more than five years ago. He began his legal career as a transactional associate with the New York office of the law firm Mayer Brown. Mr. Angelis holds a B.A. degree in Philosophy and English from Boston College, an M.A. in Behavioral Science and Negotiation from California State University and a J.D. from New York University School of Law. The Board believes that Mr. Angelis’ substantial experience as an accomplished attorney, negotiator and general counsel to public and private companies in the healthcare field will enable him to bring a wealth of strategic, legal and business acumen to the Board, well qualifying him to serve as a director.
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| Age | Director | |
Currently, and from 2005 to 2013, Mr. Devanur’s biographical information is provided above underShawah serves as a Partner & Vice President of Baldwin Pearson & Co., Inc., a commercial real estate company, focusing on structuring transactions in the heading “CORPORATE GOVERNANCE AND ETHICS- Executive Officers.”
| James Shad | Age 62 | Director Nominee |
| Principal at Renaissance Growth Consultants | ||
Since July 2016, Mr. Shad has served as the technology sector.
Information about the Company’s Other Current Directors
Three of our current directors, Venkatraman Balakrishnan, Jeffrey Eberwein and Robert Pearse, will be completing their service as directors of the Company at the Annual Meeting.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION AS DIRECTOR OF EACH NOMINEE LISTED ON THE PROXY CARD.
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The following is the report of the Audit Committee with respect to Ameri’s audited financial statements for the nine monthsyear ended December 31, 2015.
The purpose of the Audit Committee is to assist the Board of Directors in its general oversight of Ameri’s financial reporting, internal controls and audit functions. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. In fulfilling its oversight responsibility of appointing and reviewing the services performed by the Company’s independent registered public accounting firm, the Audit Committee carefully reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit related services.
The Company maintains an auditor independence policy that bans its auditors from performing non-financial consulting services, such as information technology consulting and internal audit services. This policy mandates that the Audit Committee approve the audit and non-audit services and related budget in advance, and that the Audit Committee be provided with quarterly reporting on actual spending. This policy also mandates that the Company may not enter into auditor engagements for non-audit services without the Audit Committee’s express approval. The Audit Committee charter describes in greater detail the full responsibilities of the Audit Committee and is available on our website at www.ameri100.com. The Audit Committee is comprised solely of independent directors as defined by Rule 5605(a)(2) of the NASDAQ listing standards.
The Audit Committee met on fourfive occasions during the nine monthsyear ended December 31, 2015.2017. The Audit Committee met privately in executive session with Ram Associates as part of each regular meeting and held private meetings with the Chief Financial Officer and other officers of Ameri throughout the year.
In accordance with the Audit Committee charter and the requirements of law, the Audit Committee pre-approves all services to be provided by Ameri’s independent auditors, Ram Associates. Pre-approval is required for audit services, audit-related services, tax services and other services.
The Audit Committee has reviewed and discussed the audited financial statements for the nine monthsyear ended December 31, 20152017 with the Company’s management and Ram Associates, the Company’s independent registered public accounting firm. The Audit Committee has also discussed with Ram Associates the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee also has received and reviewed the written disclosures and the letter from Ram Associates required by applicable requirements of the PCAOB regarding Ram Associates’ communications with the Audit Committee concerning independence, and has discussed with Ram Associates its independence from the Company.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included in the Annual Report.
| AUDIT COMMITTEE |
| Venkatraman Balakrishnan, Chairman | ||
| Robert Pearse | ||
| Dimitrios J. Angelis |
The Audit Committee of our Board of Directors is responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. The Audit Committee is considering Ram Associates to serve as the Company’s independent registered public accounting firm. Ram Associates has audited our financial statements since the nine monthsyear ended December 31, 2015.2017. While it is not required to do so, the Audit Committee is submitting to stockholders for ratification the selection of Ram Associates as the Company’s independent registered public accounting firm for the year ending December 31, 2016.2018. Notwithstanding ratification of the selection of Ram Associates to serve as the Company’s independent registered public accounting firm, the Audit Committee will be under no obligation to select Ram Associates as the Company’s independent registered public accounting firm.
Representatives of Ram Associates will be present at the Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
In May 2015, the Board selected RAMRam Associates as its independent accountant to audit the registrant’s financial statements. Since they were retained, there have been (1) no disagreements between us and RAMRam Associates on any matters of accounting principle or practices, financial statement disclosure, or auditing scope or procedures and (2) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K. RAMRam Associates has not issued any reports on our financial statements during the previous two fiscal years that contained any adverse opinion or a disclaimer of opinion or were qualified or modified as to uncertainty, audit scope or accounting principle. In connection with the audit of the 2015 financial statements, we entered into an engagement agreement with Ram Associates which sets forth the terms by which Ram Associates has performed audit and related professional services for us.
The following table sets forth the aggregate accounting fees paid by us for the past nine monthsyear ended December 31, 20152017 and the twelve monthsyear ended MarchDecember 31, 2015.2016. The below fees were paid to the firm Ram Associates. All non-audit related services in the table were pre-approved and/or ratified by the Audit Committee of our Board of Directors.
| Nine Months December 31, | Twelve Months Ended March 31, | |||||||
| Type of Fees | 2015 | 2015 | ||||||
| Audit Fees | $ | 25,000 | $ | 14,000 | ||||
| Audit Related Fees | — | — | ||||||
| Tax Fees | — | — | ||||||
| All Other Fees | — | — | ||||||
| Total | $ | 25,000 | $ | 14,000 | ||||
| Year Ended December 31, | Year Ended December 31, | |||||||
| Type of Fees | 2017 | 2016 | ||||||
| Audit Fees | $ | 75,000 | $ | 59,000 | ||||
| Audit Related Fees | — | — | ||||||
| Tax Fees | — | — | ||||||
| All Other Fees | 29,500 | — | ||||||
| Total | $ | 104,500 | $ | 59,000 | ||||
Audit Fees
. Audit fees were incurred for accounting services rendered for the audit of our consolidated financial statements for theThe Audit Committee is granted the authority and responsibility under its charter to pre-approve all audit and non-audit services provided to the Company by its independent registered public accounting firm, including specific approval of internal control and tax-related services. In exercising this responsibility, the Audit Committee considers whether the provision of each professional accounting service is compatible with maintaining the audit firm’s independence.
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Pre-approvals are detailed as to the category or professional service and when appropriate are subject to budgetary limits. Company management and the independent registered public accounting firm periodically report to the Audit Committee regarding the scope and fees for professional services provided under the pre-approval.
With respect to the professional services rendered, the Audit Committee had determined that the rendering of all non-audit services by Ram Associates was compatible with maintaining the auditor’s independence and had pre-approved all such services.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF RAM ASSOCIATES AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016,2018, ON THE PROXY CARD.
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The Compensation Committee currently consists of Messrs. Eberwein Langer and Pearse. Messrs. Eberwein Langer and Pearse are each a “non-employee director” within the meaning of Rule 16b-3 under the Securities and Exchange Act of 1934 and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. Messrs. Eberwein Langer and Pearse and satisfy the independence requirements imposed by the NASDAQ Stock Market.
The Compensation Committee is responsible for discharging the responsibilities of the Board of Directors with respect to the compensation of our executive officers. The Compensation Committee recommends overall compensation of our executive officers to the Board of Directors. The Board of Directors approves all compensation of our executive officers. The Compensation Committee also periodically reviews director compensation.
The charter of the Compensation Committee permits the Compensation Committee to engage outside consultants and to consult with our human resources department when appropriate to assist in carrying out its responsibilities. Compensation consultants have not been engaged by the Company to recommend or assist in determining the amount or form of compensation for any current executive officers or directors of the Company.
The Committee may also obtain advice and assistance from internal or external legal, accounting, or other advisers selected by the Committee.
Our executive compensation consists of the following elements:
• Base salary;
• Annual Incentive Bonus;
• Long-Term Incentives; and
• Retirement benefits under a 401(k) plan and generally available benefit programs.
Base Salary
. The base salary for each executive is initially established through negotiation at the time the executive is hired, taking into account his or her scope of responsibilities, qualifications, experience, prior salary, and competitive salary information within our industry. Year-to-year adjustments to each executive officer’s base salary are determined by an assessment of his or her sustained performance against individual goals, including leadership skills and the achievement of high ethical standards, the individual’s impact on our business and financial results, current salary in relation to the salary range designated for the job, experience, demonstrated potential for advancement, and an assessment against base salaries paid to executives for comparable jobs in the marketplace.Based on the factors discussed above, base salaries for the nine months endedof our Chief Executive Officer and our two other most highly compensated executive officers (“Named Executive Officers”) as of December 31, 20152017 (on an annualized basis) were as follows:
Giri Devanur’s 20152017 base salary was set at $120,000,$220,000, which represented no change from March 2015.Mr. Devanur’s annual base salary as it was raised to $220,000 from $120,000 effective as of November 14, 2016.
Mr. Devanur departed from our company on December 26, 2017 to pursue new opportunities. Our current Chief Executive Officer, Brent Kelton, was appointed effective as of the same date. We agreed to pay Mr. Kelton an annual base salary of $250,000 and provided for bonus payments of up to an aggregate of $125,000, as determined by the Board of Directors based on Mr. Kelton’s meeting and exceeding mutually agreed upon annual performance goals.
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Our previous Chief Financial Officer, Edward O’Donnell, departed from our company on December 2, 2016 to pursue new opportunities. At that time, Carlos Fernandez, our Executive Vice President of Corporate Development, was appointed as our interim Chief Financial Officer while we conducted a search for a permanent Chief Financial Officer. Our current Chief Financial Officer, Viraj Patel, was appointed effective April 24, 2017. Mr. Rajagopal’s 2015Patel’s 2017 base salary was set at $132,000, which represented no increase from March$200,000. Mr. Patel was not employed by the Company in 2016.
We entered into an employment agreement with Srinidhi “Dev” Devanur in May 2015.
Annual Bonus
. Annual bonus payments under our executive employment agreements are based on the discretion of our Board of Directors. We believe that such bonuses provide our executives with an incentive to achieve goals that are aligned with our stockholders’ interests, with the achievement of such goals being measurable in terms of revenue and income or other financial objectives. An executive officer’s failure to achieve measurable performance goals can affect his or her bonus amount. We believe that offering significant potential income in the form of bonuses allows us to attract and retain executives and to align their interests with those of our stockholders.Long-Term Incentives
. The Compensation Committee has the ability to grant equity instruments to our executives under our 2015 Equity Incentive Award Plan. The Compensation Committee has the ability to issue a variety of instruments, but equity grants will typically be in the form of stock options and restricted stock units. We believe that our executive compensation program must include long-term incentives such as stock options and restricted stock units if we wish to hire and retain high-level executive talent. We also believe that stock options and restricted stock units help to provide a balance to the overall executive compensation program as base salary and bonus awards focus only on short-term compensation. In addition, the vesting period of stock options and restricted stock units encourages executive retention and the preservation of stockholder value. Finally, we believe that aligning at least a portion of restricted stock units vesting provisions to financial performance measures further aligns executive compensation to stockholder value; if performance targets are not achieved, then the awards do not vest. We base the number of equity units granted on the type and responsibility level of the executive’s position, the executive’s performance in the prior year and the executive’s potential for continued sustained contributions to our long-term success and the long-term interests of our stockholders.401(k) and Other Benefits
. DuringCompensation Risk Assessment
The Impact of Tax and Accounting Treatments on Elements of Compensation
We have elected to award non-qualified stock options instead of incentive stock options to all our employees, directors and consultants to allow the corporation to take advantage of the more favorable tax advantages associated with non-qualified stock options.
Internal Revenue Code Section 162(m) precludes us from deducting certain forms of non-performance-based compensation in excess of $1.0 million to named executive officers.for certain employees. To date, we have not exceeded the $1.0 million limit for any executive,those employees, and the Compensation Committee has not defined a policy that all compensation must be deductible. However, since stock-based awards comprise a significant portion of total compensation, the Compensation Committee has taken appropriate steps to preserve deductibility for such awards in the future, when appropriate.
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The following table provides information regarding the compensation earned during the nine monthsyears ended December 31, 20152017 and the fiscal years ended MarchDecember 31, 2015 and March 31, 20142016 by our Chief Executive Officer and our two other most highly compensated executive officers who were employed by us during 2014.
| Name & Principal Position | Transition Period or Fiscal Year Ended | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| Brent Kelton(1) | 12/31/2017 | 121,500 | 50,000 | — | 116,988 | — | — | — | 288,488 |
| Chief Executive Officer | 12/31/2016 | — | — | — | — | — | — | — | — |
| Viraj Patel(2) | 12/31/2017 | 137,222 | — | — | 192,738 | — | — | — | 329,960 |
| Chief Financial Officer | 12/31/2016 | — | — | — | — | — | — | — | — |
| Giri Devanur(3) | 12/31/2017 | 220,000 | 25,000 | — | — | — | — | — | 245,000 |
| Former President and | 12/31/2016 | 175,000 | 57,500 | — | — | — | — | — | 232,500 |
| Chief Executive Officer | |||||||||
| Srinidhi (Dev) Devanur | 12/31/2017 | 100,000 | — | — | — | — | — | — | 100,000 |
| Executive Vice Chairman | 12/31/2016 | 100,000 | — | — | — | — | — | — | 100,000 |
_________
| Giri Devanur was appointed to his position with our company on May 26, 2015 and served as Chief Executive Officer of Ameri and |
On May 4, 2017, we granted our current Chief Financial Officer, Viraj Patel, options to purchase 75,000 shares of our common stock. None of Mr. Patel’s options were vested as of December 31, 2017.
On December 26, 2017, we granted our current Chief Executive Officer, Brent Kelton, options to purchase 75,000 shares of our common stock. None of Mr. Kelton’s options were vested as of December 31, 2017.
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As of December 31, 2015, we had not granted any equity incentive awards2017, unvested options to anypurchase 75,000 shares of our Namedcommon stock were held by Mr. Patel, our Chief Financial Officer, and unvested options to purchase 100,000 shares of our common stock were held by Mr. Kelton, our Chief Executive OfficersOfficer, pursuant to our equity incentive plan.
Outstanding Equity Awards at Fiscal Year-End
None of our named executive officers participates in or has account balances in qualified or non-qualified defined benefit plans sponsored by us.
None of our named executive officers participates in or has account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us.
We entered into an employment agreementsagreement with Giri Devanur and Srinidhi “Dev” Devanur in May 2015. The employment agreementsagreement appointed Giri Devanur as our President and Chief Executive Officer and Srinidhi “Dev”Mr. Devanur as our executive Vice Chairman of the Board for three years. In addition, we entered into anThe employment agreement with Edward O’Donnell effective January 28, 2016, under which he was appointed as our Chief Financial Officer. The employment agreements provideof Mr. Devanur provides that if, during the term of theirhis employment, they arehe is terminated by us other than for “Cause” or they resignhe resigns for “Good Reason,” then theyhe will continue to receive for a period of one year following such termination (six months in the case of Mr. O’Donnell) theirhis then current salary payable on the same basis as they werehe was then being paid. Termination for “Cause” means: (i) deliberate refusal or deliberate failure to carry out any reasonable order, consistent with theirhis position, of our Board of Directors after reasonable written notice; (ii) a material and willful breach of the employment agreement, theirhis confidentiality and non-competition agreement or similar agreements with us; (iii) gross negligence or willful misconduct in the execution of theirhis assigned duties; (iv) engaging in repeated intemperate use of alcohol or drugs; or (v) conviction of a felony or other serious crime. “Good Reason” means (i) theyhe shall have been assigned duties materially inconsistent with theirhis position; (ii) theirhis salary is reduced more than 15% below its then current level; or (iii) material benefits and compensation plans then currently in existence are not continued in effect for theirhis benefit.
In addition, we entered into an employment agreement with Viraj Patel, effective April 24, 2017, pursuant to which Mr. Patel became our Chief Financial Officer. Mr. Patel’s employment agreement is terminable at will for any reason.
If either of Messrs.Srinidhi Devanur would have been terminated without causeCause at December 31, 20152017 or if either of themhe would have resigned for good reason,Good Reason, then eachhe would have been entitled to receive severance payments of $120,000. Assuming that
Upon the termination of Giri Devanur’s employment with the Company, on December 26, 2017, the Company agreed to pay Mr. O’Donnell’sDevanur severance of $220,000, his annual salary at the time of departure in accordance with the terms of his employment agreement, was effectiveover a period of one year and a lump sum of $25,000 in exchange for his release of the Company from all claims he or his heirs, executors and assigns ever had or may have against the Company, its officers, directors, employees, stockholders or any of one of them by reason of any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter.
On December 31, 201526, 2017, we entered into an employment letter agreement with Brent Kelton, pursuant to which we appointed Mr. Kelton as our Chief Executive Officer for three years. We agreed to pay Mr. Kelton an annual base salary of $250,000 and he was terminated withoutprovided for bonus payments of up to an aggregate of $125,000, as determined by the Board of Directors based on Mr. Kelton’s meeting and exceeding mutually agreed upon annual performance goals. Mr. Kelton’s employment is subject to early termination, other than for cause on that date, he would have been(as defined in the employment letter agreement), by him or the Company for any reason upon 60 days’ written notice to the other party. If there is a change of control (as defined in the employment letter agreement) and Mr. Kelton’s employment terminates within six months following the change of control for reasons other than for cause, then Mr. Kelton will be entitled to receive severance paymentsany accrued bonus as of $87,500.such date of termination and any outstanding options held by him shall immediately vest.
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On April 20, 2015, our Board and the holder of a majority of our outstanding shares of common stock approved the adoption of our 2015 Equity Incentive Award Plan (the “Plan”) and a grant of discretionary authority to the executive officers to implement and administer the Plan. The Plan allows for the issuance of up to 2,000,000 shares of our common stock for award grants (all of which can be incentive stock options). The Plan provides equity-based compensation through the grant of cash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. As of December 31, 2015, 83,189 shares of2016, restricted stock units for the issuance of 590,869 shares of common stock and 150,000 options to purchase 972,700 shares of our common stock had been granted.granted and were outstanding. The Board of Directors adopted the Plan to provide a means by which our employees, directors, officers and consultants may be granted an opportunity to purchase our common stock, to assist in retaining the services of such persons, to secure and retain the services of persons capable of filling such positions and to provide incentives for such persons to exert maximum efforts for our success.
Under Plan, our board of directors determines the exercise price to be paid for the shares, the period within which each option may be exercised, and the terms and conditions of each option. The exercise price of the incentive and non-qualified stock options may not be less than 100% of the fair market value per share of our common stock on the grant date. If an individual owns stock representing more than 10% of the outstanding shares, the price of each share of an incentive stock option must be equal to or exceed 110% of fair market value.
The following table sets forth information regarding our equity compensation plans as of December 31, 2015:
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 1,835,063 | $ | 5.63 | 164,397 | ||||||||
| Warrants issued outside of our equity compensation plan | 1,000,000 | 6.00 | — | |||||||||
| Total | 2,835,063 | $ | 5.76 | 164,397 | ||||||||
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| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||||
| (a) | (b) | (c) | ||||||||||||||
| Equity compensation plans approved by security holders | 2,000,000 | $ | 2.67 | 1,766,811 | ||||||||||||
| Warrants | 2,777,777 | 1.80 | - | |||||||||||||
| Total | 4,777,777 | $ | 1.89 | 1,766,811 | ||||||||||||
Directors are expected to timely and fully participate in all regular and special board meetings, and all meetings of committees that they serve on. We compensatehave previously compensated non-management directors through an annual grant of stock options and/or restricted stock units pursuant to the 2015 Equity Incentive Award Plan. Such option awards have an exercise price not less than 100% of the fair market value of our common stock, based on the value of such shares of common stock on the date the option is granted, and become vested and exercisable as determined by the compensation committee or the entire Board of Directors. Other terms and conditions of the option grants are on the terms and conditions as determined by the Compensation Committee or the entire Board of Directors when the options are granted.
The following table sets forth the cash compensation, as well as certain other compensation earned by each person who served as a director of our company, during the nine monthsyear ended December 31, 2015:
| Name | Fees Earned or Paid in Cash | Stock Awards | RSU & Option Awards | All Other Compensation | Total | |||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
Jeffrey E. Eberwein(1) | - | - | 70,997 | - | 70,997 | |||||||||||||||
| Srinidhi “Dev” Devanur | - | - | - | - | - | |||||||||||||||
| Giri Devanur | - | - | - | - | - | |||||||||||||||
Dimitrios J. Angelis(2) | - | - | 71,073 | - | 71,073 | |||||||||||||||
Dr. Arthur M. Langer(3) | - | - | 59,076 | - | 59,076 | |||||||||||||||
Robert G. Pearse(4) | - | - | 68,076 | - | 68,076 | |||||||||||||||
Dr. Robert Rosenberg(3) | - | - | 59,076 | - | 59,076 | |||||||||||||||
| TOTAL | - | - | 328,298 | - | 328,298 | |||||||||||||||
| Name | Fees Earned or Paid in Cash | Stock Awards | RSU & Option Awards | All Other Compensation | Total | |||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Jeffrey E. Eberwein(1) | - | - | 133,500 | - | 133,500 | |||||||||||||||
| Srinidhi “Dev” Devanur | - | - | - | - | - | |||||||||||||||
| Giri Devanur | - | - | - | - | - | |||||||||||||||
| Dimitrios J. Angelis(2) | - | - | 115,500 | - | 115,500 | |||||||||||||||
| Dr. Arthur M. Langer(3) | - | - | 100,000 | - | 100,000 | |||||||||||||||
| Robert G. Pearse(4) | - | - | 118,000 | - | 118,000 | |||||||||||||||
| Venkatraman Balakrishnan(5) | - | 92,000 | - | 92,000 | ||||||||||||||||
| Dhruwa N. Rai(6) | - | - | 83,335 | 21,875 | 105,210 | |||||||||||||||
| TOTAL | - | - | 642,335 | 21,875 | 664,210 | |||||||||||||||
| (1) | Includes |
| (2) | Includes |
| (3) | Includes |
| (4) | Includes |
| (5) | Includes 14,132 RSUs granted on April 11, 2017, valued at $6.51 per share for a total value of $92,000. |
| (6) | Includes 12,801 RSUs granted on April 11, 2017, valued at $6.51 per share for a total value of $83,335, and the value of health insurance paid for by the Company. Mr. Rai resigned from the Board effective February 12, 2018. |
The Company has proposed that directors (other than the Chairman of the Board) elected at Annual Meeting receive fees consisting of (i) an option to purchase 25,000 shares of Company common stock (vesting one year from the date of grant, expiring five years from the date of grant and with an exercise price determined in accordance with the Company’s 2015 Equity Incentive Award Plan), (ii) restricted stock units for the issuance of 10,000 shares (vesting one year from the date of grant) and (iii) $5,000 to be paid upon the vesting of the restricted stock units, plus (iv) an option for the purchase of an additional 10,000 shares (on the same terms as the options described above) for all committee chairs.
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The Company has proposed that the Chairman of the Board elected at the Annual Meeting receive fees consisting of (i) an option to purchase 150,000 shares of Company common stock (vesting one year from the date of grant, expiring five years from the date of grant and with an exercise price determined in accordance with the Company’s 2015 Equity Incentive Award Plan), (ii) restricted stock units for the issuance of 15,000 shares (vesting one year from the date of grant) and (iii) $7,500 to be paid upon the vesting of the restricted stock units, plus (iv) an option for the purchase of an additional 10,000 shares (on the same terms as the options described above) for service as a committee chair.
All of the proposed director fee equity grants will vest upon a change of control of the Company. The proposed director compensation is expected to be voted on by the Board of Directors at a meeting to be held promptly following the Annual Meeting. The date of grant of the foregoing equity grants will be such date as the director compensation package is approved, and such grants made, by the Compensation Committee and the Board of Directors.
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Pursuant to Section 14A of the Exchange Act, we are asking our stockholders to provide advisory (non-binding) approval of the compensation of our named executive officers, as we have described it in the “Executive Compensation” section of this Proxy Statement. Although this vote is advisory, and not binding on our Company, it will provide information to our management and the Compensation Committee regarding investor opinion about our executive compensation practices and policies, which the Compensation Committee will be able to consider when determining executive compensation for the remainder of 20162018 and beyond.
We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement by voting in favor of the following resolution:
“RESOLVED, that the holders of shares of common stock approve, on an advisory basis, the compensation of the Company’s executives named in the Summary Compensation Table, as disclosed in this Proxy Statement, pursuant to the compensation disclosure rules of the SEC. However, as this is an advisory vote, the result will not be binding on our Board of Directors or the Company.”
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADVISORY (NON-BINDING) APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION ON THE PROXY CARD.
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PROPOSAL 4: ADVISORY (NON-BINDING) VOTE ON THE FREQUENCY OF HOLDING VOTES ON SAY-ON-PAY
We are asking our stockholders to provide an advisory (non-binding) vote on how frequently stockholders should have an opportunity to vote on Say-on-Pay. Under the Dodd-Frank Act, stockholders may vote to have the advisory vote on Say-on-Pay once every one, two or three years. As we are an emerging growth company, we are not required to hold an advisory vote on frequency of Say-on-Pay vote but are doing so a matter of good corporate governance.
We believe we have an appropriately balanced executive compensation program; however, we recognize that the widely-adopted standard is to hold Say-on-Pay votes annually. We also acknowledge current stockholder expectations and preferences regarding having the ability to express their views on the compensation of the Company’s named executive officers on an annual basis. In light of investor expectations and prevailing market practice, we are asking stockholders to support the continuation of a frequency period of “ONCE A YEAR” (an annual vote) for future votes on Say-on-Pay.
Votes on the frequency for Say-on-Pay are advisory. Although your vote on this Say-on-Pay resolution does not bind the Corporation, the Board of Directors will review the results of the vote and investor feedback and will continue to review the advantages and disadvantages for each of the frequencies on Say-on-Pay votes regardless of the outcome of the vote.
We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement by voting in favor of the following resolution:
“RESOLVED, that the holders of shares of common stock approve, on an advisory basis, the holding of a vote on the compensation of the Company’s executives named in the Summary Compensation Table, as disclosed in this Proxy Statement, once every year. However, as this is an advisory vote, the result will not be binding on our Board of Directors or the Company.”
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR A FREQUENCY OF “ONCE A YEAR” FOR FUTURE NON-BINDING STOCKHOLDER VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
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PROPOSAL 5: APPROVAL OF AMENDMENT AND RESTATEMENTAN INCREASE IN THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE COMPANY’S 2015 EQUITY AWARD INCENTIVE PLAN
The Company’s2015 Equity Incentive Award Plan, which is referred to herein as the “Plan,” was approved by theBoard and the holder of a majority of the Company’s outstanding shares of common stockin April 2015. On [______], 2018, subject to stockholder approval, the Board approved a proposal to amend the Plan in order to increase the number of shares of our common stock subject to the Plan by 2,000,000 shares (the “Amendment”). The Board proposes that the Amendment be approved.
The Board has determined that the number of shares of common stock remaining available for issuance under the Plan is not sufficient to support the Company's intended compensation programs for the Board and Company employees. The Amendment is intended to assist the Company in securing and retaining qualified non-employee directors and employees by allowing them to participate in the ownership and growth of the Company through the grant ofcash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. The granting of such awards serves as partial consideration for, and gives non-employee directors and employees an additional inducement to remain in, the service of the Company and its subsidiaries and provides them with an increased incentive to work towards the Company’s success. Shares of common stock may be issued under the Plan to qualified non-employee directors and employees with such restrictions as determined by the Company or upon the exercise of stock options or the settlement of restricted stock units. Accordingly, the Company is proposing to amend the Plan to increase the number of shares of our common stock subject thereto by 2,000,000 shares (from 2,000,000 shares to 4,000,000 shares).
The Board believes it is in the Company's and its stockholders' best interests to approve the Amendment because it would allow the Company to continue to grantcash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awardswhich facilitates the benefits of the additional incentive inherent in the ownership of common stock by directors and employees, helps the Company retain the services of these directors and employees and strongly aligns their interests with the long-term interests of our stockholders. Currently 486,798 shares of common stock are available for grant or issuance under the Plan.
The Company believes the Amendment is necessary because in order to preserve cash the Board believes it is in the Company's interest to pay director fees and provide incentives to certain employees in stock rather than cash. Given the decline in the Company's stock price, the additional shares are necessary to ensure that the Company has a sufficient number of shares to issue with respect to the payment of director fees.
A copy of the Amendment is set forth below. The Plan was filed as Exhibit 10.8 to Ameri Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on June 1, 2015.
If the Amendment is approved by the stockholders, the Company intends to register the shares which are subject to the Amendment on a registration statement on Form S-8 under the Securities Act of 1933, in the future.
Summary of the Plan
The following summary of the Plan, assuming stockholder approval of the Amendment, is qualified in its entirety by the specific language of the Plan.
Administration of the Plan. The Plan is to be administered by the Compensation Committee consisting of two or more directors who are “non-employee directors” within the meaning of Rule 16b-3, and “outside directors” within the meaning of Section 162(m) of the Code. In the event that for any reason the Compensation Committee is unable to act or if the Compensation Committee at the time of any grant, award or other acquisition under the Plan does not consist of two or more “non-employee directors,” or if there is no such committee, then the Plan will be administered by the Board of Directors, except to the extent such Board of Directors action would have adverse consequences under Section 16(b) of the Securities Exchange Act or Code Section 162(m).
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Subject to the other provisions of the Plan, the Compensation Committee will have the authority, in its discretion: (i) to grant cash-based awards, nonqualified stock options, incentive stock options, SARs, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, all of which are referred to collectively as “Awards”; (ii) to determine the terms and conditions of each Award granted (which need not be identical); (iii) to interpret the Plan and all Awards granted thereunder; and (iv) to make all other determinations necessary or advisable for the administration of the Plan.
Eligibility. The persons eligible for participation in the Plan as recipients of Awards include employees, consultants and directors to our company or any subsidiary or affiliate of our company. In selecting participants, and determining the number of shares of common stock covered by each Award, the Compensation Committee may consider any factors that it deems relevant.
Shares Subject to the Plan. Subject to the conditions outlined below, the total number of shares of common stock which may be issued pursuant to Awards granted under the Plan may not exceed 4,000,000 shares of common stock. The Plan provides for annual limits on the size of Awards for any particular participant.
In the event of certain corporate events or transactions (including, but not limited to, the sale of all, or substantially all, of our assets or a change in our shares or capitalization), the Compensation Committee, in its sole discretion, in order to prevent dilution or enlargement of a participant’s rights under the Plan, will substitute or adjust, as applicable, and subject to certain Code limitations, the number and kind of shares of common stock that may be issued under the Plan or under particular forms of Awards, the number and kind of shares of common stock subject to outstanding Awards, the option price or grant price applicable to outstanding Awards, the annual Award limits, and other value determinations applicable to outstanding Awards.
Options. An option granted under the Plan is designated at the time of grant as either an incentive stock option or as a non-qualified stock option. Upon the grant of an option to purchase shares of common stock, the Compensation Committee will specify the option price, the maximum duration of the option, the number of shares of common stock to which the option pertains, the conditions upon which an option will become vested and exercisable, and such other provisions as the Compensation Committee will determine which are not inconsistent with the terms of the Plan. The purchase price of each share of common stock purchasable under an option will be determined by the Compensation Committee at the time of grant, but may not be less than 100% of the fair market value of such share of common stock on the date the option is granted. No option will be exercisable later than the sixth anniversary date of its grant.
Stock Appreciation Rights. Stock Appreciation Rights (“SARs”), which may be issued in tandem with options or be freestanding, will be exercisable at such time or times and subject to such terms and conditions as determined by the Compensation Committee. The term of SARs granted under the Plan will be determined by the Compensation Committee, in its sole discretion, and except as determined otherwise by the Compensation Committee, no stock appreciation right will be exercisable later than the sixth anniversary date of its grant.
Restricted Stock and Restricted Stock Units. Shares of restricted stock and/or restricted stock units may be granted under the Plan aside from, or in association with, any other Award and will be subject to certain conditions and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Compensation Committee deems desirable.
Cash-Based Awards and Other Stock-Based Awards. Subject to the provisions of the Plan, the Compensation Committee may grant cash-based awards or other types of equity-based or equity-related awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted shares of common stock) in such amounts and subject to such terms and conditions, as the Compensation Committee will determine. Such Awards may involve the transfer of actual shares of common stock to participants, or payment in cash or otherwise of amounts based on the value of shares of common stock. Each cash-based award will specify a payment amount or payment range as determined by the Compensation Committee.
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Repricing of Options. The Compensation Committee may not “reprice” any Stock Option. “Reprice” means any of the following or any other action that has the same effect: (i) reducing the per share exercise price of the shares subject to an option below the per share exercise price as of the date the option is granted and, (ii) except for adjustment for stock splits, stock dividends, reorganizations and similar events, granting in exchange for, or in connection with, the cancellation or surrender of an option having a higher per share exercise price.
Restrictions on Transferability. The Awards granted under the Plan are not transferable and may be exercised solely by a participant or his authorized representative during his lifetime or after his death by the person or persons entitled thereto under his will or the laws of descent and distribution or his designation of beneficiary or as otherwise required by law. Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject to execution, attachment or similar process, any Award contrary to the provisions set forth in the Plan will be void and ineffective and will give no right to the purported transferee.
Change in Control. The Compensation Committee may provide for the acceleration of the vesting and exercisability of outstanding options, vesting of restricted stock and restricted stock units and earlier exercise of freestanding SARs, in the event of a Change in Control of our company. However, if the Compensation Committee takes no action at the time of the Change in Control, and the initial Award does not otherwise specify, accelerated vesting and exercisability is contingent upon termination of employment by us or by the participant for Good Reason within two years of the Change in Control.
Termination of the Plan. Unless sooner terminated as provided therein, the Plan will terminate six years from April 20, 2015, the date the Plan was approved by stockholders. The termination of the Plan will not adversely affect any Awards granted prior to Plan termination.
Amendments to the Plan. The Compensation Committee may at any time alter, amend, modify, suspend or terminate the Plan and any evidence of Award in whole or in part; provided, however, that, without the prior approval of our stockholders, options issued under the Plan to any individual will not be repriced, replaced, or regranted through cancellation, and no amendment of the Plan will be made without stockholder approval if stockholder approval is required by law, regulation, or stock exchange rule; and except where required by tax law, without the prior written consent of the participant, no modification will adversely affect an Award under the Plan. The Compensation Committee can not issue any Awards while the Plan is suspended.
Proposed Amendment of the Plan
First Amendment to the Ameri Holdings, Inc.
2015 Equity Incentive Award Plan
WHEREAS,pursuant to Section 13 of the Ameri Holdings, Inc. 2015 Equity Incentive Award Plan (the “Plan”) the Board, including any duly appointed committee of the Board with approval of the Board, may terminate, amend or modify the Plan at any time; provided, however, that without the approval of the stockholders of the Company, there shall be no increase in the total number of shares of Stock covered by the Plan.
WHEREAS, capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed to them in the Plan.
WHEREAS, prior to this first amendment to the Plan (the “Amendment”), the maximum number of Shares that could be delivered pursuant to Awards granted under the Plan was 2,000,000.
WHEREAS, the Board wishes to increase the number of Shares available under the plan by 2,000,000 Shares.
In accordance with Section 13 of the Plan, the Plan shall be amended effective upon stockholder approval as follows:
1. The title of the Plan is hereby amended and restated as follows: Ameri Holdings, Inc. 2015 Equity Incentive Award Plan
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2. Section 1.1 of the Plan is hereby amended and restated as follows:
1.1Establishment of the Plan. Ameri Holdings, Inc., a Delaware corporation (the “Company”) hereby establishes an incentive compensation (the “Plan”), as set forth in this document.
3. Section 4.1 of the Plan is hereby amended and restated as follows:
4.1Number of Shares. Subject to adjustment as provided in Sections 4.2 and 4.3, the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards under the Plan shall be 4,000,000 shares. Notwithstanding the foregoing, in order that the applicable regulations under the Code relating to Incentive Stock Options be satisfied, the maximum number of shares of Stock that may be delivered upon exercise of Incentive Stock Options shall be 4,000,000, as adjusted under Sections 4.2 and 4.3.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE APPROVAL OF THE COMPANY’S CERTIFICATE OF INCORPORATIONAMENDMENT TO THE 2015 EQUITY INCENTIVE AWARD PLAN.
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On [______], 2018, after careful consideration and upon the recommendation of a special committee of the Nominations and Corporate Governance Committee,Board comprised of disinterested directors, our Board of Directors voted to approve, and to recommend to our stockholders that they approve, amendmentsthe following transactions provided for in an Amendment Agreement (the “Agreement”) between the then-sole holder of our Series A Preferred Stock (the “Holder”): (A) the amendment and restatement of the certificate of designations for our Series A Preferred Stock (the “Amendment”) and (B) the issuance warrants to ourpurchase 5,000,000 shares of Company common stock to the Series A Preferred Stock holder following the filing effective date of the Amendment (the “Effective Date”).
The Amendment, which will be filed with the Delaware Secretary of State following stockholder approval, provides for, among other things:
| (i) | the payment of the March 31, 2018 dividend payment in-kind in shares of Series A Preferred Stock; |
| (ii) | elimination of any prior default in respect of non-payment of accrued dividends through the filing effective date of the Amendment (the “Effective Date”); |
| (iii) | payment in-kind in shares of Series A Preferred Stock of dividends for all dividend periods from April 1, 2018 through March 31, 2020 at a rate of 2% per annum of the liquidation preference (the “Adjusted Rate”); and |
| (iv) | commencing April 1, 2020, payment of cash dividends per share of Series A Preferred Stock at a rate per annum equal to the Adjusted Rate multiplied by the liquidation preference; provided, however, dividends for periods ending after April 1, 2020 may be paid at the election of the Company’s Board in-kind through the issuance of additional shares of Series A Preferred Stock for up to four dividend periods in any consecutive 36-month period, determined on a rolling basis. |
In addition, the Amendment revises the change of control definition to mean a change in control of at least 70% of the voting power of all shares of stock of the Company and clarifies that a change of control shall not be deemed to be a dissolution, liquidation or winding up of the Company. The Amendment also eliminates voting rights with respect to the authorization, creation or issuance of any securities ranking senior or equal to the Series A Preferred Stock.
On June 22, 2018, the Holder voted all of the outstanding shares of Series A Preferred Stock in favor of such Amendment, and the Company and Holder entered into the Agreement on the same date.
Current Certificate of Designations
On December 30, 2016, the Company filed a Certificate of Designation of Rights and Preferences (as corrected on April 18, 2017, the “Certificate of Designation) to its Certificate of Incorporation for the Company’s 9.00% Series A Cumulative Preferred Stock, par value $0.01 per share (the “Certificate of Incorporation”“Preferred Stock”) and our Amended and Restated Bylaws (the “Bylaws”) to:
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Rationale for Changes to the Certificate of Major Business Transactions, Including with Interested Stockholders: Articles VIIDesignations
Our current Certificate of Designations currently only allows for the payment of in-kind dividends on our Preferred Stock in additional shares of Preferred Stock for a maximum of four quarterly dividend payments within any consecutive 36-month period, determined on a rolling basis. Otherwise, the Company is required to pay dividends on the Preferred Stock in cash. As the Company historically has not had sufficient cash available to pay the significant cash dividends called for by the Certificate of Designations, if the Company has exhausted its option to pay in-kind dividends in shares of Preferred Stock, the Company will be unable to declare and VIIIpay dividends on the Preferred Stock as required by the Certificate of Designations, resulting in a dividend default pursuant to the terms of the Certificate of Incorporation require, with certain exceptions, that at least 80% of all stockholder voting power and over 50% of disinterested stockholder voting power approve certain merger, consolidation, sale or exchange transactions with an interested stockholder or its affiliate, a liquidation or dissolution proposal by an interested stockholder or its affiliate, or a recapitalization or reclassificationDesignations. Dividend defaults could cause cross-defaults on other obligations of the Company’s securities (including a reverse stock split) that hasCompany.
In order to reduce the effectburden of increasingpaying significant dividends on the proportionate ownership of an interested stockholder or its affiliate.
Issuance of Warrants
In addition to the Amendment, the Agreement provides for the issuance of warrants (the “Warrants”) to purchase 5,000,000 shares of Company common stock in accordance with a warrant agent agreement (the “Warrant Agreement”) substantially in the form as set forth on Exhibit B to the Agreement. The Warrant Agreement will be entered into by the Company would phase outwith Corporate Stock Transfer Inc., as the classificationWarrant agent, and the Warrants will be issued following the Effective Date if Proposals 6 and 7 are approved. Pursuant to the Warrant Agreement, the Warrants shall only be exercisable for cash, with an exercise price of $1.50 per share, for five years from the date of issuance. In the event that the closing price of the Board beginning atCompany’s common stock is $2.00 or higher for ten trading days out of a 15 consecutive trading day period, we shall have the Annual Meeting, as describedoption, in detail below.
Pursuant to the Agreement, we also agreed to use commercially reasonable efforts to file a registration statement for the registration of any unregistered outstanding shares of Preferred Stock, the Warrants and shares of common stock underlying such securities with the SEC within six months following the Effective Date and shall use commercially reasonable efforts to have such registration declared effective by the SEC as soon as reasonably practicable following the filing of such registration. We will also use commercially reasonable efforts to have any outstanding Preferred Stock and the Warrants listed on The Nasdaq Capital Market (“Nasdaq”) or traded on the OTC Marketplace, in the event such securities are not eligible for listing on Nasdaq, following the registration of such securities with the SEC.
The Board has determined that the issuance of the Warrants to the Holder represents reasonable consideration for the Holder’s agreement to forego future dividends on the Preferred Stock and provides the Company with the opportunity to receive up to $7.5 million from the exercise of the Warrants. The Company is seeking stockholder approval of amendmentsthe issuance of Warrants to avoid any potential non-compliance with Nasdaq Rule 5635, which requires Nasdaq listed companies to obtain stockholder approval prior to the issuance of common stock or securities convertible into common stock equal to 20% or more of the Certificatecommon stock or voting power outstanding at a price less than the greater of Incorporation and Bylaws to a majority votebook or market value of stockholders is intended to allow stockholders to effect change regardingthe stock. As the Company and its corporate governance and help preventcurrently has outstanding 18,790,998 shares of common stock, the entrenchmentissuance of management. After considering5,000,000 additional shares pursuant to the advantages and disadvantages of maintaining the supermajority vote requirements in our Certificate of Incorporation and Bylaws, and upon the recommendationWarrants would exceed 20% of the Nominations and Corporate Governance Committee, the Board of Directors adopted resolutions setting forth the proposed amendments to remove supermajority vote requirements from our Certificate of Incorporation and Bylaws, declared such amendments advisable, and resolved to submit the amendments to the Company’s stockholders for consideration. It is important to note that if the proposed amendments are approved, they will make it easier for one or more stockholders to remove directors or effect business or other corporate governance changes in the future, as described below. If the proposed amendments are not approved, the Company will continue to be governed by its current Certificate of Incorporation and Bylaws.outstanding shares.
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After careful consideration, our Board further recognizesdetermined that the importance of stockholders havingmost effective way to reduce the ability to request a special meetingdividend burden on the Company of the Company’s stockholders in orderPreferred Stock is to take action on matters that arise between regularly scheduled annual meetings(a) adopt the Amendment and (b) approve the Warrant Issuance, subject to stockholder approval as provided herein. The Company is proposing the Amendment together with the issuance of the Company. WithoutWarrants for the ability to call special meetings, stockholders are unable to remove directors or effect other corporate governance changes that may become necessary between annual meetings. In light of the foregoing, the Board unanimously adopted and is submitting for stockholder approval an amendment to the Bylaws that allow 10% of stockholders to request the calling of a special meeting of stockholders of the Company, asreasons described in detail below.
Vote Required to Approve
Under the our Certificate of Incorporation, the Amendment requires the affirmative vote of the majority of outstanding shares of our common stock entitled to vote on the matter at the Annual Meeting. Abstentions and six amendments to“broker non-votes” will have the same effect as a vote AGAINST the Amendment (Proposal 6). On June 22, 2018, the then-sole holder of our Amended and Restated Bylaws (collectively,Preferred Stock voted all of the “Proposed Amendments”), which declassifyoutstanding shares of Preferred Stock in favor of the Board of Directors, eliminates the supermajority vote standard for the election of directors, removal of directors,Amendment.
The approval of business transactionsthe Warrant Issuance (Proposal 7) requires the favorable vote of the Company, and approvalholders of amendmentsa majority of the total votes cast on the proposal present in person or represented by proxy and entitled to vote thereon. Abstentions will have the same effect as voting AGAINST Proposal 7, and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. Approval of Proposal 7 will also satisfy the vote requirements of Nasdaq Rule 5635 with respect to the issuance of the Warrants.
Proposals 6 and 7 are linked voting items, and if one proposal is approved by the stockholders but the other proposal is not, then the Company will not amend its Certificate of Incorporation nor issue the Warrants. Approval of both Proposals 6 and Bylaws7 is required for the Company to effect the Amendment and replaces them with a majority vote standardWarrant Issuance.
Additional Information
The Amendment is set forth on Exhibit A to the Agreement, which is included as Appendix A to this proxy statement, and allows for 10%the terms of the Warrants are set forth on Exhibit B to the Agreement. Our Board urges stockholders to call for a special meetingread Proposal 6 and Proposal 7 and the complete text of the Company’s stockholders. The Company is proposing these amendments forAgreement, Amendment and the Warrant Agreement.
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PROPOSAL 6: APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO AMEND AND RESTATE THE TERMS OF THE COMPANY’S SERIES A PREFERRED STOCK
For the reasons described above under “Background for Proposals 6 and does not otherwise have any current plans or proposal to take or propose any other corporate actions not herein. Each7,” our Board recommends that stockholders approve and adopt the Amendment.
The purpose of the seven Proposed Amendments will be voted on separately and the effectiveness of any Proposed Amendment is not conditionedto assist us in easing the dividend burdens of our Preferred Stock and provide us with flexibility in the issuance of other series of preferred stock. The Board believes it is in our and our stockholders’ best interests to adopt the Amendment to reduce the burden of paying dividends on the approvalPreferred Stock and to avoid dividend defaults under the Certificate of all Proposed Amendments.Designations in the future. The Proposed Amendments are as follows:
The Amendment, if approved by our stockholders, would become effective upon the Amended and Restatedfiling of a Certificate of Amendment of the Certificate of Incorporation with the Secretary of State of the State of Delaware, immediately followingwhich we would expect to do as soon as practicable after the Annual Meeting and amend and restate our Bylaws and phase outAmendment is approved by stockholders. Even if Proposal 6 is approved by the classification ofstockholders, the Board retains the authority to abandon the Amendment in a manner consistent with the Declassification Amendment. Thereafter, the declassification of the Board will be phased in as follows:
Vote Required
The approval of stockholders cast at the meeting at which directors are elected, up to the number of directors to be elected in such election. This proposal 4b requests that stockholders approve the amendment and restatement of the Certificate of Incorporation and Bylaws to implement a majority vote standard in uncontested elections, coupled with a plurality standard in elections with more nominees than seats, and a conditional post-election “director resignation policy”. In this way, directors not receiving a majority of the votes cast at an annual meeting would not face an automatic resignation, and would continue to serve unless the Board accepts such resignation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF EACH OF THE AMENDMENTSAMENDMENT TO OUR CERTIFICATE OF INCORPORATION AND DESCRIBED ABOVE.INCORPORATION.
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PROPOSAL 7: APPROVAL OF THE ISSUANCE OF WARRANTS FOR THE PURCHASE OF 5,000,000 SHARES OF COMMON STOCK
For the reasons described above under “Background for Proposals 6 and 7,” our Board recommends that stockholders approve and adopt the Warrant Issuance.
The purpose of the Warrant Issuance is to provide reasonable consideration to the Holder for agreeing to forego future dividends on the Preferred Stock and to provide the Company with the opportunity to receive up to $7.5 million from the exercise of the Warrants. The Board believes it is in our and our stockholders’ best interests to approve the Warrant Issuance along with the Amendment to allow for the consummation of the transactions contemplated by the Agreement. The Board has adopted resolutions approving and declaring the advisability of the Warrant Issuance as described above. The complete text of the Warrant Agreement is attached as Exhibit B to the Agreement, which is included as Appendix A to this proxy statement. The Warrant Issuance will not be made unless approved by stockholders at the Annual Meeting.
The Warrant Issuance, if approved by our stockholders, would be made following the execution by the Company and Corporate Stock Transfer Inc., as the Warrant agent, of the Warrant Agreement, and the Warrants will be issued following the Effective Date. Even if Proposal 7 is approved by the stockholders, the Board retains the authority to abandon the Warrant Issuance in the event that Proposal 6 is not approved by the stockholders. Proposals 6 and 7 are linked voting items, and if one proposal is approved by the stockholders but the other proposal is not, then the Company will not amend its Certificate of Incorporation nor issue the Warrants. Approval of both Proposals 6 and 7 is required for the Company to effect the Amendment and Warrant Issuance.
Vote Required
The approval of this Proposal 7 requires the favorable vote of the holders of a majority of the total votes cast on the proposal present in person or represented by proxy and entitled to vote thereon. Abstentions will have the same effect as voting against Proposal 7, and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE ISSUANCE OF THE WARRANTS.
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Lone Star Value
On January 15, 2014, we issued 3,267,974 shares of common stock to Lone Star Value, an entity ultimately controlled by Jeffrey E. Eberwein, who was a director at the time of the transaction at $0.0153 per share for total proceeds of $50,000.
On May 13, 2016, LSVI completed an early partial exercise of the Original Warrant for 1,111,111 shares of our common stock for total consideration to us of $2,000,000, and LSVI was issued a replacement warrant for the remaining 1,666,666 shares under the Original Warrant on the same terms as the Original Warrant (the “Replacement Warrant”). LSVI also agreed to amend the Convertible Note to extend its maturity for two years in exchange for (i) the right to request that we expand the size of the Board to nine directors from the then-current eight, with LSVI having the right to designate up to four of the nine directors, and Mr. Eberwein,(ii) the founder and Chief Executive Officerissuance of Lone Star Value Management, LLC, is our Chairmanan additional warrant (the “Additional Warrant”) for the purchase of 1,000,000 shares of the Board.
On December 30, 2016, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with LSVI, pursuant to which the Convertible Note was returned to the Company and cancelled in exchange for 363,611 shares of the Company’s Series A Preferred Stock, which is non-convertible and perpetual preferred stock of the Company. As a result of the exchange transaction, no principal or interest remained outstanding or payable under the Convertible Note and the Convertible Note was no longer convertible into shares of common stock of the Company. The Company issued 10,097 and 10,277 shares of Series A Preferred Stock to LSVI in May 2017 and September 2017, respectively, as payments of a dividend on the shares of Series A Preferred Stock held by LSVI as of March 31, 2017 and June 30, 2017, respectively.
On September 26, 2017, LSVI completed a cashless exercise of the full Replacement Warrant, of which there was a total of 1,666,666 shares of common stock underlying, in exchange for the issuance of 1,205,837 shares of our common stock.
On June 22, 2018, a special committee of the Board comprised of disinterested directors recommended to the Board, and the Board approved, the Amendment and the Warrant Issuance as described under Proposals 6 and 7 above. Any holders of our Series A Preferred Stock, including LSVI, following the Effective Date, will be able to receive the payment of dividends on the Series A Preferred Stock in shares of Series A Preferred Stock in respect of the dividend that was due to be paid on March 31, 2018 and will be issued the Warrants. On June 22, 2018, the Holder voted all of the outstanding shares of Series A Preferred Stock in favor the Amendment, and the Company and Holder entered into the Agreement on the same date, pursuant to which the Amendment will be effected and the Warrant Issuance made following the approval of both Proposals 6 and 7 by our common stockholders.
Purchase Agreement
On April 20, 2016, the Companywe entered into a Stock Purchase Agreement with Dhruwa N. Rai, one of our former directors, pursuant to which Mr. Rai purchased from the Companyus 500,000 shares of itsour common stock, par value $0.01 per share, at a price per share of $6.00 for an aggregate purchase price of $3,000,000 and the Companywe issued 500,000 unregistered shares of common stock to Mr. Rai.
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Ameri India
On September 1, 2016, we issued 299,250 shares of common stock to Srinidhi “Dev” Devanur, our Executive Chairman, in connection with the completion of our acquisition of Ameri Consulting Service Private Ltd. on July 1, 2016, pursuant to the terms of a Stock Purchase Agreement dated May 26, 2015.
2017 Notes Transaction
On March 7, 2017, we completed the sale and issuance of $1,250,000 in 8% Convertible Unsecured Promissory Notes (the “2017 Notes”), which were issued to four accredited investors, including one of the Company’s then-directors, Dhruwa N. Rai, and David Luci, who became a director of the Company in February 2018. The 2017 Notes bear interest at 8% per annum until maturity in March 2020, with interest being paid annually on the first, second and third anniversaries of the issuance of the 2017 Notes beginning in March 2018. From and after an event of default and for so long as the event of default is continuing, the 2017 Notes will bear default interest at the rate of 10% per annum. The 2017 Notes can be prepaid by us at any time without penalty. As of June 21, 2018, we were not current in the payment of interest on all of the 2017 Notes and are in discussion with holders of the 2017 notes for which we are not current in the payment of interest to negotiate longer payment terms until we are able to raise more capital.
The 2017 Notes are convertible into shares of our common stock at a conversion price equal to $2.80. The holders of the 2017 Notes have the right, at their option, at any time and from time to time to convert, in part or in whole, the outstanding principal amount and all accrued and unpaid interest under the 2017 Notes into shares of the Company’s common stock at the then applicable conversion price.
The 2017 Notes rank junior to our secured credit facility with Sterling National Bank. The 2017 Notes also include certain negative covenants including, without the investors’ approval, restrictions on dividends and other restricted payments and reclassification of its stock.
Section 16(a) of the Exchange Act requires Ameri’s directors, executive officers and holders of more than 10% of its common stock to file with the SEC reports regarding their ownership and changes in ownership of Ameri’s securities. Based solely on a review of the copies of reports furnished to the Ameri and written representations that no other reports were required, Ameri believes that during the year ended December 31, 20152017 the executive officers and directors of the Company timely complied with all applicable filing requirements.
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Stockholder proposals intended for inclusion in next year’s proxy statement pursuant to Rule 14a-8 promulgated under the Exchange Act must be directed to the Corporate Secretary, Ameri Holdings, Inc., 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540750, Suwanee, Georgia 30024 and must be received by [•[●]. In order for proposals of stockholders made outside of Rule 14a-8 promulgated under the Exchange Act to be considered “timely” within the meaning of Rule 14a-4(c) promulgated under the Exchange Act, such proposals must be received by the Corporate Secretary at the above address by [•[●] and must also be submitted in accordance with the requirements of our bylaws.
We are concurrently sending all of our stockholders of record as of the Record Date, a copy of our Annual Report on Form 10-KT10-K for the nine monthsyear ended December 31, 2015.2017. The Annual Report on Form 10-KT10-K contains Ameri’s certified consolidated financial statements for the nine monthsyear ended December 31, 2015,2017, including that of Ameri’s subsidiaries.
A copy of our Annual Report on Form 10-KT10-K will also be furnished without charge upon receipt of a written request identifying the person so requesting a report as a stockholder of Ameri at such date to any person who was a beneficial owner of our common stock on the Record Date. Requests should be directed to Investor Relations, Ameri Holdings, Inc., 100 Canal Pointe Boulevard,5000 Research Court, Suite 108, Princeton, New Jersey 08540.
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
A number of brokers with account holders who are Ameri stockholders may be “householding” our proxy materials. In that event, a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, please notify your broker. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker.
We have retained InvestorCom, Inc. to assist us in the solicitation of proxies for a fee of up to $7,500$5,000 plus out-of-pocket expenses. Our expenses related to the solicitation of proxies from stockholders this year are not anticipated to be significant, with the total cost expected to be approximately $10,000.$15,000. These solicitation costs are expected to include primarily the fee payable to our proxy solicitor. To date, we have incurred approximately $8,000$7,500 of these solicitation costs.
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The Board of Directors is not aware of any other matters that are to be presented for action at the Annual Meeting. However, if any other matters properly come before the Annual Meeting, your shares of common stock will be voted in accordance with the best judgment of the designated proxy holders (who are identified on the enclosed proxy card).
It is important that you vote promptly to avoid unnecessary expense. Please vote by telephone or internet, or, if you receive a paper copy of the proxy materials, please sign, date and promptly mail the enclosed proxy card or use the telephone or internet voting procedures described on the proxy card.
| By Order of the Board of Directors, | |
| /s/ Jeffrey E. Eberwein | |
| Jeffrey E. Eberwein | |
| Chairman of the Board |
Dated: July [●], 2018
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AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT (this “Agreement”) is made and entered into as of June 22, 2018 (the “Closing Date”) by and between Ameri Holdings, Inc. (the “Company”), a Delaware corporation, and Lone Star Value Investors, LP, the holder of the Preferred Shares (defined below) as of the Closing Date (the “Holder”).
RECITALS
WHEREAS, the Company has issued and outstanding 405,395 shares (the “Preferred Shares”) of the Company’s 9.00% Series A Cumulative Preferred Stock, par value $0.01 per share (the “Preferred Stock”), all of which are issued to and owned by the Holder; and
WHEREAS, the Company and the Holder have reached an agreement for the amendment of the terms of the Preferred Stock subject to and on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1.AMENDMENT TRANSACTIONS
(a)Amendment of Preferred Stock. The Company and the Holder hereby agree to the amendment of the terms of the Preferred Stock pursuant to the amendment and restatement of the certificate of designations, substantially in the form attached hereto asExhibit A (the “Preferred Amendment”). The Preferred Amendment shall become effective upon its filing with the Secretary of State of the State of Delaware (the date of such filing, the “Effective Date”) following the satisfaction of the conditions set forth herein. As of the Effective Date, all rights and obligations of the Preferred Stock shall be as set forth in the as-filed Preferred Amendment and shall apply to the holders of any Preferred Stock as of the Effective Date (the “Other Security Holders”).
(b)Issuance of Warrants. On the Effective Date or as soon as reasonably practicable thereafter, the Company shall issue (the date of such issuance, the “Issuance Date”) to all then-holders of the Preferred Stock (the “Preferred Holders”) an aggregate of 5,000,000 warrants (the “Warrants”) to purchase shares (the “Warrant Shares”) of common stock of the Company, par value $0.01 per share (the “Common Stock”), pursuant to the terms of a warrant agreement between the Company and a warrant agent, substantially in the form attached hereto asExhibit B (the “Warrant Agreement”).
(c)Uncertificated Book-Entry Securities. Any Preferred Shares and any Warrants issued to the Holder or any other person following the date hereof shall be initially issued as book-entry securities directly registered in the Holder’s (or such other person’s) name on the Company’s books and records (including any securities register maintained by the Company’s transfer agent or the warrant agent for the Warrants). No Preferred Shares or Warrants shall be represented by certificates (except as expressly provided for in the Warrant Agreement) but instead shall be uncertificated securities of the Company. Any fees charged by the Company’s transfer agent or other intermediary related to the holding and transferring of Company securities held by the Holder, including but not limited to Preferred Shares and the Warrants, shall be paid by the Company up to an aggregate maximum of $10,000. Subject to applicable law, the Company shall use commercially reasonable efforts to facilitate any distribution by the Holder of Preferred Shares and Warrants as legally permitted.
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Section 2.EFFECTIVE DATE; DELIVERY OF WARRANTS
(a)Effective Date. Subject to the terms and conditions of this Agreement, the Preferred Amendment shall become effective on the Effective Date, which shall be no later than three business day after the last of the conditions to effectiveness set forth inArticle IV have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Effective Date), or at such other time or on such other date as the Company and the Holder may mutually agree upon in writing.
(b)Delivery of Warrants. On the Issuance Date, the Company shall instruct the warrant agent to issue the Warrants to the Preferred Holders on the books and records of the Company. The Warrants shall be deemed to be delivered to the Preferred Holders upon the book-entry of the Warrants in the names of the Preferred Holders in the records of the Company maintained by the warrant agent.
Section 3.REPRESENTATIONS AND WARRANTIES
(a)Representations and Warranties of the Company. The Company represents and warrants to the Holder that the following statements are true, correct and complete as of the date hereof and acknowledges that the Holder is relying on the truth and accuracy of the following representations and warranties in acceptance and performance of this Agreement:
(i)Corporate Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as and in the places where such properties are now owned, operated and leased or such business is now being conducted.
(ii)Authorization. The Company has the necessary corporate power and authority to enter into this Agreement and to assume and perform its obligations hereunder. The execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by the Board of Directors of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization and moratorium laws, (b) other laws of general application affecting the enforcement of creditors’ rights generally and general principles of equity, (c) the discretion of the court before which any proceeding therefor may be brought, and (d) as rights to indemnity may be limited by federal or state securities laws or by public policy.
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(iii)No Violation or Breach. Neither the execution and delivery of this Agreement, nor the consummation by the Company of the transactions contemplated hereby, (i) will violate or cause a default under any judgment, order, writ or decree of any court or governmental authority applicable to the Company; (ii) breach or conflict with the provisions of the constituent documents of the Company; or (iii) materially violate, conflict with or breach any material agreement, arrangement, document or instrument to which the Company is a party or by which it is bound.
(iv)Approvals and Consents. Other than as specifically stated herein, no action, approval, consent or authorization, including, but not limited to, any action, approval, consent or authorization by any governmental or quasi-governmental agency, commission, board, bureau, or instrumentality is necessary or required as to the Company in order to constitute this Agreement as a valid, binding and enforceable obligation of the Company in accordance with its terms.
(v)Brokers and Finders. The Company nor its officers, directors, managers or employees has employed any broker, finder, investment banker, financial advisor or similar professional or incurred any liability for any investment banking fees, brokerage fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement.
(vi)Commission Reporting and Compliance. The Company has filed with the Securities and Exchange Commission (the “Commission”) all registration statements, proxy statements, information statements and reports required to be filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has not filed with the Commission a certificate on Form 15 pursuant to Rule 12h-3 under the Exchange Act. None of the registration statements, information statements and other reports of the Company (collectively, the “Company SEC Documents”), as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained therein not misleading. The Company has otherwise complied with the Securities Act of 1933, as amended (the “Securities Act”), Exchange Act and all other applicable federal and state securities laws.
(vii)Warrants and Warrant Shares Duly Issued. The Warrants to be issued to the Holder in accordance with the terms hereof, and the Warrant Shares to be issued upon the exercise of the Warrants, shall be, when issued, duly and validly issued, fully paid and nonassessable.
(viii)Compliance with Other Instruments. Except as disclosed in the Company’s SEC Documents, the Company is not in violation or default (i) of any provisions of its Certificate of Incorporation or Bylaws, each as amended, (ii) of any instrument, judgment, order, writ or decree, or (iii) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound or, of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which would have a material adverse effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company.
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(b)Representations and Warranties of the Holder. The Holder represents and warrants to the Company that the following statements are true, correct and complete as of the date hereof:
(i)Organization and Good Standing. It is a limited partnership duly organized, validly existing and in good standing under the laws of its state of formation and has all requisite power and authority to own, lease and operate its properties and to carry on its business.
(ii)Power and Authority. It has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its obligations under, this Agreement.
(iii)Authorization. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part.
(iv)Binding Obligation. This Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
(v)No Conflicts. The execution, delivery and performance by it of this Agreement do not and will not (i) violate any provision of law, rule or regulation applicable to it or its certificate of incorporation or by-laws (or other organizational document) or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party.
(vi)Governmental Consents. Other than as specifically stated herein, the execution, delivery and performance by it of this Agreement do not require any registration, consent or approval of, with or by, any federal, state or other governmental authority or regulatory body.
(vii)Ownership of the Preferred Shares. As of the signing of this Agreement, it is the beneficial owner of all of the Preferred Shares, free and clear of all liens (other than obligations pursuant to this Agreement).
(viii)Acquisition Entirely for Own Account. Except for distributions in compliance with the Securities Act, it is acquiring the Warrants for its own account. It understands that the Warrants issued to it may not be resold except pursuant to an effective registration statement filed under the Securities Act or pursuant to an exemption from registration thereunder.
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(ix)Investment Experience. It has such knowledge and experience in financial and business affairs that the Holder is capable of evaluating the merits and risks of an investment in the Warrants and the Preferred Amendment. It is either a “qualified institutional buyer” as defined in Rule 144A under the Securities Act or an “accredited investor” as defined in Regulation D under the Securities Act, and was not organized for the purpose of acquiring the Warrants. The Holder has previously invested in securities similar to the Warrants. The Holder acknowledges that no representations, express or implied, are being made with respect to the Company, the Warrants or otherwise, other than those expressly set forth herein and within all documents which are exhibits hereto. In making its decision to invest in the Warrants hereunder, the Holder has relied upon independent investigations made by the Holder and, to the extent believed by the Holder to be appropriate, the Holder’s representatives and other advisors. The Holder has been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Company and its representatives concerning the terms and conditions of the investment in the Warrants. The Holder is able to bear the economic risk of its investment in the Warrants and is presently able to afford the complete loss of such investment. The Holder acknowledges that the Company is relying on the truth and accuracy of the foregoing representations and warranties in the issuing of the Warrants to the Holder without first having registered the Warrants or the Warrant Shares under the Securities Act.
(x)Restricted Securities. It has been advised by the Company that (i) the issuance of the Warrants has not been registered under the Securities Act; (ii) the issuance of the Warrants is intended to be exempt from registration under the Securities Act pursuant to either Rule 144A or Regulation D under the Securities Act; and (iii) there is no established market for the Warrants, and there is no assurance that there will be any active public market for the Warrants in the foreseeable future. It is familiar with Rule 144 promulgated by the SEC under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
Section 4.CONDITIONS TO EFFECTIVENESS
(a)Conditions to Completion of Transactions. The obligations of the Company to file the Preferred Amendment and issue the Warrants shall be subject to (A) the representations and warranties of Holder contained in this Agreement shall be true and correct as of the Effective Date as though made on and as of the Effective Date (provided that representations and warranties made as of a specific date shall be required to be true and correct as of such date only), (B) the Holder shall have performed all of its obligations and covenants under this Agreement, (C) no decision, order or similar ruling shall have been issued (and remain in effect) restraining or enjoining the transactions contemplated by this Agreement, and (D) the Company shall have obtained all required consents for the Preferred Amendment and issuance of the Warrants, including approval by the Company’s senior secured lender and holders of at least two-thirds of the outstanding Preferred Stock and holders of at least a majority of the outstanding shares of Common Stock. The consent of the holders of Common Stock shall be sought to be obtained at the Company’s 2018 annual meeting of stockholders. The Company and Holder each agree to use commercially reasonable efforts to obtain and deliver all required consents for the consummation of the transactions contemplated hereby.
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Section 5.COVENANTS
(a)Registration.
(i) The Company shall use best efforts to file a registration statement (“Registration Statement”) within six months following the Effective Date for the registration under the Securities Act of any unregistered Preferred Shares, Warrants and Warrant Shares outstanding as of the Effective Date and Preferred Shares anticipated to be outstanding within two years following the Closing Date pursuant to the Preferred Stock certificate of designations, as amended (the foregoing securities, the “Registrable Securities”), with the Securities and Exchange Commission (“SEC”). The Company shall use commercially reasonable efforts to have such Registration Statement declared effective by the SEC as soon as reasonably practicable following the filing of such Registration Statement. The Company shall promptly respond to all comments to the Registration Statement issued by the SEC. The Company shall maintain the effectiveness of the Registration Statement from the date of the effectiveness of the Registration Statement until the later of (A) 12 months after the date such Registration Statement is declared effective by the SEC, or (B) the date on which all of the Registrable Securities included in such Registration Statement have been sold; provided, however, that, if at any time or from time to time (not to exceed more than once per 12-month period) after the date of effectiveness of the Registration Statement, the Company notifies the Holder and all Other Security Holders in writing of the existence of a Disadvantageous Condition (as defined below), the Holder and all Other Security Holders shall not offer or sell any of the Registrable Securities, or engage in any other transaction involving or relating to the Registrable Securities, from the time of the giving of notice with respect to a Disadvantageous Condition until the Company notifies the Holder and all Other Security Holders that such Disadvantageous Condition either has been disclosed to the public or no longer constitutes a Disadvantageous Condition (but in no event shall any such Disadvantageous Condition period exceed 90 days in duration). The Company shall notify the Holder and all Other Security Holders promptly when any such Registration Statement has been declared effective. The Company shall not be obligated to effect more than one Registration Statement in respect of the Registrable Securities, unless the Preferred Holders or any Other Security Holder requesting such registration is unable to register all of the Registrable Securities in such registration by reason of the Company’s compliance with the SEC Restrictions (defined below) or otherwise. The Company shall not be obligated to file a Registration Statement at any time (not to exceed more than once per 12-month period) the Company’s Board of Directors determines, in its good faith judgment, that the Company (A) should not file the Registration Statement otherwise required to be filed pursuant to this section or (B) should withdraw any such previously filed Registration Statement, in either case solely because the Board of Directors determines, after consultation with legal counsel, that the Company is in the possession of material nonpublic information required to be disclosed in such Registration Statement or an amendment or supplement thereto, the disclosure of which in such Registration Statement would be materially disadvantageous to the Company (a “Disadvantageous Condition”). In such case the Company shall be entitled to postpone for a reasonable period of time the filing of such Registration Statement (but in no event more than 90 days) or, if such Registration Statement has already been filed, may suspend or withdraw such Registration Statement and shall promptly give the Holder and all then-current holders of any Registrable Securities written notice of such determination and an approximation of the anticipated delay. Upon the receipt of any such notice, such Preferred Holders or Other Security Holders shall forthwith discontinue use of the prospectus contained in such Registration Statement and the Company shall take all commercially reasonable efforts to ensure all holders of the Registrable Securities are provided the same such notice and reasons for the requested discontinued use of the prospectus. The Company may direct all holders of Registrable Securities to deliver to the Company all copies of the prospectus then covering such Registrable Securities current at the time of receipt of such notice (or, if no Registration Statement has yet been filed, all drafts of the prospectus covering such Registrable Securities). When any Disadvantageous Condition shall cease to exist, the Company shall promptly notify the Preferred Holders and all Other Security Holders to such effect. If any Registration Statement shall have been withdrawn, the Company shall make best efforts to promptly file a new Registration Statement covering the Registrable Securities that were covered by such withdrawn Registration Statement.
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(ii) The Company shall notify all holders of Registrable Securities at any time when a prospectus relating to the Registration Statement is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. At the request of any holder of Registrable Securities, the Company shall also prepare, file and furnish to the holders of Registrable Securities a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. The Holder agrees not to initiate or begin any offer or sale of any Registrable Securities covered by the Registration Statement after receipt of such notification until the receipt of such supplement or amendment, which shall be filed within 15 days after receipt of such notification.
(iii) Notwithstanding the registration obligations set forth in this section, if at any time the SEC takes the position that the offering of some or all of the Registrable Securities in the Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act, the Company shall use its commercially reasonable efforts to advocate with the SEC that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415. In the event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this section, the SEC refuses to alter its position, the Company shall (A) remove from the Registration Statement such portion of the Registrable Securities and other securities (“Other Registrable Securities”) that were included in the initial Registration Statement filing (“Cut-back Shares”) and/or (B) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”). Any cut-back imposed on a holder of Registrable Securities pursuant to this section shall be allocated among all holders of Registrable Securities on a ratable basis in proportion to the number of Registrable Securities and Other Registrable Securities held by such holder of Registrable Securities. From and after the date on which the Company is able to effectuate registration of such Cut-back Shares in accordance with any SEC Restriction, all of the provisions of this section shall again be applicable to such Cut-back Shares.
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(iv) The Holder as legally permitted shall furnish to the Company or the underwriter(s) (if any) in respect of the offering pursuant to the subject Registration Statement, as applicable, such information, if any, known by the Holder regarding the Holder and any distributions of securities by holders of Registrable Securities as the Company may reasonably request in connection with any registration or offering referred to in this section. The Holder shall cooperate as reasonably requested by the Company in connection with the preparation of the Registration Statement with respect to such registration, and for so long as the Company is obligated to file and keep effective such Registration Statement, shall provide to the Company, in writing, for use in the Registration Statement, all such information known to the Holder, if any, regarding the plan of distribution of holders of Registrable Securities for shares of Common Stock included in such Registration Statement as may be reasonably necessary to enable the Company to prepare such Registration Statement, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith.
(v) All fees and expenses incident to the performance of or compliance with this section by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (A) all registration and filing fees (including, without limitation, fees and expenses (1) with respect to filings required to be made with the trading market on which the Common Stock is then listed for trading, and (2) in compliance with applicable state securities or Blue Sky laws), (B) printing expenses, (C) messenger, telephone and delivery expenses, and (D) fees and disbursements of counsel and independent registered public accountants for the Company.
(vi) Notwithstanding anything herein to the contrary, as to the Registrable Securities, such securities shall cease to be Registrable Securities and the provisions of this section shall terminate when: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; or (C) such securities shall have ceased to be outstanding.
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(vii) Following any distribution of Preferred Shares by the Holder to the Preferred Holders, the Holder shall provide the Preferred Holders with a copy of this Agreement specifically noting Section 5.01. In the event information, acknowledgements or agreements reasonably requested (which request shall be sent by mail, and if a holder’s email address is available, such request shall additionally be sent via email) by the Company of any holder of Registrable Securities with respect to such holder in connection with the filing of a Registration Statement is not provided to the Company within 15 business days of its request, the Company shall have no further obligation to register any securities held by such non-responsive holder.
(b)Listing for Trading. The Company shall use commercially reasonable efforts to list the outstanding Preferred Shares, Warrants and Warrant Shares for trading on The Nasdaq Capital Market at such time as such securities are registered under the Securities Act and have been approved for listing by The Nasdaq Stock Market LLC (“Nasdaq”). If the Preferred Stock and Warrants cannot be listed for trading on Nasdaq within 3 months after their registration under the Securities Act, then the Company shall use commercially reasonable efforts to have the Preferred Stock and Warrants traded on the OTC Marketplace (“OTC”), provided that the fees for trading such securities on OTC do not exceed a maximum of $25,000 per year.
(c)Additional Covenants of the Company. Unless otherwise waived by the Holder, as of the Effective Date, all representations and warranties of the Company contained in this Agreement shall be true and correct as though made on and as of the Effective Date, and the Company shall have performed all of its obligations and covenants under this Agreement other than those for which completion is contemplated after the Effective Date.
(d)Additional Covenants of the Holder. Promptly following the execution of this Agreement, the Holder shall deliver to the Company a written consent, in form and substance acceptable to the Company, setting forth the approval of the Preferred Amendment by all of the outstanding Preferred Shares.
(e)Obligations of Security Holders as to Each Other. The Holder shall not be liable for any breach of any Other Security Holder of any terms of this Agreement. No Other Security Holder shall be liable for any breach of the Holder or any other Other Security Holder of any terms of this Agreement.
Section 6.INDEMNIFICATION
(a)Indemnification by the Holder. The Holder agrees to indemnify and hold the Company Indemnified Persons (as defined below) harmless from any and all Losses (as defined below) (including taxes) that the Company Indemnified Persons may incur due to:
(i) any inaccuracy or breach of any of the representations and warranties given by the Holder herein; or
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(ii) the nonfulfillment or breach of any covenant, undertaking, agreement or other obligation of the Holder contained herein.
(b)Indemnification by the Company. The Company agrees to indemnify and hold the Holder Indemnified Persons (as defined below) harmless from any and all Losses (including Taxes) that the Holder Indemnified Person may incur due to:
(i) any inaccuracy or breach of any of the representations and warranties of the Company contained herein; or
(ii) the nonfulfillment or breach of any covenant, undertaking, agreement or other obligation of the Company contained herein.
(c)Survival of Indemnification. The representations and warranties of the parties contained in this Agreement and the rights to indemnification under this Agreement with respect thereto will survive the Closing Date for a period of twelve (12) months after the Effective Date.
(d)Third Party Claims.
(i) A party entitled to indemnification hereunder (an “Indemnified Party”) shall notify promptly the indemnifying party (the “Indemnifying Party”) in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Agreement;provided, however, that the failure of any Indemnified Party to provide such notice shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent the Indemnifying Party is actually materially prejudiced thereby. In case any claim, action or proceeding is brought against an Indemnified Party and the Indemnified Party notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to participate therein and to assume the defense thereof, to the extent that it chooses, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party that it so chooses, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation;provided, however, that (i) if the Indemnifying Party fails to take reasonable steps necessary to defend diligently the action or proceeding within twenty (20) calendar days after receiving notice from such Indemnified Party that the Indemnified Party believes it has failed to do so; or (ii) if such Indemnified Party who is a defendant in any claim or proceeding which is also brought against the Indemnifying Party reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party which are not available to the Indemnifying Party; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the Indemnified Party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all Indemnified Parties in each jurisdiction), and the Indemnifying Party shall be liable for any expenses therefor.
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(ii) No Indemnifying Party shall, without the written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim, (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party and (iii) does not include any injunctive or other non-monetary relief.
(e) For purposes of thisArticle VI, “Company Indemnified Persons” means the Company, its affiliates and their respective stockholders, partners, members, managers, directors, officers, employees, agents, affiliates, representatives and consultants and each of their respective heirs, executors, owners, successors and assigns.
(f) For purposes of thisArticle VI, “Holder Indemnified Persons” means the Holder, its affiliates and their respective stockholders, partners, members, managers, directors, officers, employees, agents, affiliates, representatives and consultants and each of their respective heirs, executors, owners, successors and assigns.
(g) For purposes of thisArticle VI, “Losses” means any and all liabilities, obligations, losses, debts, charges, judgments, fines, penalties, amounts paid in settlement, damages, costs, expenses, claims, fees and expenses (including the expense of investigation and reasonable attorneys’ fees and expenses in connection therewith).
Section 7.MISCELLANEOUS
(a)Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
(b)Entire Agreement. This Agreement, together with all exhibits hereto, constitutes the entire understanding and agreement between the parties hereto with regard to the subject matter hereof and supersedes all prior agreements with respect thereto.
(c)Effectiveness; Amendments. This Agreement shall not become effective and binding on a party hereto unless and until a counterpart signature page to this Agreement has been executed and delivered by such party. Once effective, this Agreement may not be modified, amended or supplemented, nor may any of the conditions herein be waived, except in a writing signed by the Company and the Holder.
(d)Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
(e)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Agreement. Delivery of an executed signature page of this Agreement by telecopier or e-mail shall be effective as delivery of a manually executed signature page of this Agreement.
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(f)Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.
(g)Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflict of laws of the State of New York. The parties hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state court located within the borough of Manhattan of the City, County and State of New York over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, jury trial and any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(h)Notices. All demands, notices, requests, consents and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, or if duly deposited in the mails, by certified or registered mail, postage prepaid-return receipt requested, or by nationally recognized overnight carrier, to the following addresses, or such other addresses as may be furnished hereafter by notice in writing, to the following parties:
(i) If to the Company, to:
Ameri Holdings, Inc.
5000 Research Court, Suite 750
Suwanee, GA 30024
Attention: Viraj Patel, Chief Financial Officer
with a copy to (which copy shall not constitute notice):
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, New York 10022
Facsimile No.: (212) 451-2222
Attn: Adam W. Finerman, Esq.
(ii) If to the Holder, to:
Lone Star Value Investors, LP
53 Forest Avenue, 1st Floor
Old Greenwich, Connecticut 06870
Telephone: (203) 489-9500
Fax: (203) 990-0727
Attention: Mr. Jeffrey E. Eberwein, Manager
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(i)Specific Performance. Each party hereto recognizes and acknowledges that a breach by it of any covenants or agreements contained in this Agreement will cause the other party to sustain damages for which such party would not have an adequate remedy at law for money damages, and therefore each party hereto agrees that in the event of any such breach the other party may seek the remedy of specific performance of such covenants and agreements and injunctive and other equitable relief (without the requirement to post bond or other security) in addition to any other remedy to which such party may be entitled, at law or in equity.
(j)Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power or remedy thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.
(k)No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by the other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.
(l)No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any person who or which is not a party hereto.
(m)Representation by Counsel. The Holder acknowledges that Olshan Frome Wolosky LLP represents the Company and does not, and did not, represent the Holder in connection with this Agreement and the transactions contemplated by this Agreement. Each of the Company and the Holder acknowledges that it has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party based upon lack of legal counsel shall have no application and is expressly waived.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| COMPANY: | AMERI HOLDINGS, INC. | ||
| By: | /s/ Brent Kelton | ||
| Name: | Brent Kelton | ||
| Title: | Chief Executive Officer | ||
| HOLDER: | LONE STAR VALUE INVESTORS, LP | ||
| By: Lone Star Value Investors GP, LLC, General Partner | |||
| By: | /s/ Jeffrey E. Eberwein | ||
| Name: | Jeffrey E. Eberwein | ||
| Title: | Manager | ||
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Exhibit A
Amended and Restated Certificate of Designations
[see attached]
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AMERI HOLDINGS, INC.
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
AMERI HOLDINGS, INC. (the “Corporation”“Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”“DGCL”), does hereby certify that:
WHEREAS, in accordance with the provisions of Section 151 of the Corporation is Ameri Holdings, Inc.
WHEREAS, the Board of Directors previously adopted a resolution authorizing the creation and issuance of a series of said Preferred Stock designated as the “9.00% Series A Cumulative Preferred Stock” (the “Series A Preferred Stock”) and the Certificate of Designation for the Series A Preferred Stock was filed with the Secretary of State of the State of Delaware on February 28, 1994.
WHEREAS, on [________], 2018, the Board of Directors approved and adopted the following resolution (this “Certificate of Designations” or this “Certificate”) for purposes of amending and restating the terms of the Series A Preferred Stock, subject to approval of the Requisite Series A Holders and the Requisite Common Holders (each as defined below);
WHEREAS, on [________], 2018, the holders of at least two-thirds of the shares of Series A Preferred Stock then outstanding (the “Requisite Series A Holders”), voting separately as a class, approved the following resolution to amend and restate the Certificate of Designations for the Series A Preferred Stock, subject to approval of the Requisite Common Holders; and
WHEREAS, on [________], 2018, the holders of a majority of the shares of the Corporation’s common stock then outstanding (the “Requisite Common Holders”), voting separately as a class, approved the following resolution to amend and restate the Certificate of Designations for the Series A Preferred Stock, subject to approval of the Requisite Series A Holders.
NOW THEREFORE, BE IT RESOLVED, that, pursuant to the authority expressly vested in the Board of Directors and in accordance with the provisions of the Certificate of Incorporation and the DGCL, the Certificate of Designations for the Series A Preferred Stock shall be amended and the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the Corporation is hereby amended and restated in its entirety to read as follows:
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Section 1. Number of the businessShares and Designation. This series of the purposes toPreferred Stock shall be conducted and promoted by the Corporation is to conduct any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”). The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatsoever.
Section 2. Definitions. For purposes of the Series A Preferred Stock and as used in this Certificate, the following terms shall have the meanings indicated:
“Adjusted Rate” shall mean 2.00% per annum.
“Ameri Board” shall mean the board of directors of the Corporation or any committee of members of the board of directors authorized by such board to perform any of its responsibilities with respect to the Series A Preferred Stock.
“Business Day” shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open.
“Bylaws” shall mean the amended and restated bylaws of the Corporation, as may be amended from time to time.
“Call Date” shall mean the date fixed for redemption of the Series A Preferred Stock and specified in the notice to holders required under paragraph (e) of Section 5 hereof as the Call Date.
“Certificate” shall mean this Certificate of Designations of Rights and Preferences of the Series A Preferred Stock, as amended.
“Change of Control” shall mean when, after the original issuance of the Series A Preferred Stock, the following have occurred and are continuing the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of stock of the Corporation entitling that person to exercise more than 70% of the total voting power of all shares of stock of the Corporation entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition).
“Common Shares” shall mean the shares of common stock, $0.01 par value, of the Corporation.
“Dividend Payment Date” shall have the meaning set forth in paragraph (a) of Section 3 hereof.
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“Dividend Periods” shall mean quarterly dividend periods commencing on the first day of each of January, April, July and October and ending on and including the day preceding the first day of the next succeeding Dividend Period; provided, however, that any Dividend Period during which any Series A Preferred Stock shall be redeemed pursuant to Section 5 hereof shall end on but shall not include the Call Date only with respect to the Series A Preferred Stock being redeemed.
“Dividend Rate” shall mean the dividend rate accruing on the Series A Preferred Stock, as applicable from time to time pursuant to the terms hereof.
“Dividend Record Date” shall have the meaning set forth in paragraph (a) of Section 3 hereof.
“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.
“Junior Shares” shall have the meaning set forth in paragraph (a)(iii) of Section 7 hereof.
“Parity Shares” shall have the meaning set forth in paragraph (b) of Section 7 hereof.
“Penalty Rate” shall mean 11.00% per annum.
“Person” shall mean any individual, firm, partnership, limited liability company, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.
A “Quarterly Dividend Default” shall occur if the Corporation fails to pay dividends on the Series A Preferred Stock in full for any Dividend Period.
“SEC” shall have the meaning set forth in Section 9 hereof.
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
“Senior Shares” shall have the meaning set forth in paragraph (a) of Section 7 hereof.
“Series A Preferred Stock” shall have the meaning set forth in Section 1 hereof.
“set apart for payment” shall be deemed to include, without any further action, the following: the recording by the Corporation in its accounting ledgers of any accounting or bookkeeping entry that indicates, pursuant to an authorization by the Ameri Board and a declaration of dividends or other distribution by the Corporation, the initial and continued allocation of funds to be so paid on any series or class of shares of stock of the Corporation; provided, however, that if any funds for any class or series of Junior Shares or any class or series of Parity Shares are placed in a separate account of the Corporation or delivered to a disbursing, paying or other similar agent, then “set apart for payment” with respect to the Series A Preferred Stock shall mean irrevocably placing such funds in a separate account or irrevocably delivering such funds to a disbursing, paying or other similar agent.
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“Stated Rate” shall mean 9.00% per annum.
“Transfer Agent” means Corporate Stock Transfer, or such other agent or agents of the Corporation as may be designated by the Ameri Board or its duly authorized designee as the transfer agent, registrar and dividend disbursing agent for the Series A Preferred Stock.
“Voting Preferred Shares” shall have the meaning set forth in Section 8(c) hereof.
“Voting Stock” shall mean stock of any class or kind having the power to vote generally for the election of directors.
Section 3. Dividends.
(a)
(i) For all Dividend Periods through March 31, 2018, Holders of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Ameri Board or a duly authorized committee thereof, in its sole discretion, out of funds of the Corporation legally available for the payment of distributions, cumulative preferential cash dividends at a rate per annum equal to the Stated Rate multiplied by the $50.00 per share stated liquidation preference of the Series A Preferred Stock (equivalent to a fixed annual amount of $4.50 per share);provided,however, dividends may be paid at the election of the Ameri Board in-kind through the issuance of additional shares of Series A Preferred Stock to Holders of Series A Preferred Stock in an amount of shares of Series A Preferred Stock equal to (A) the product of the number of shares of Series A Preferred Stock on which a dividend is to be paid, multiplied by 11.00%, divided by (B) four. The Corporation shall be permitted to pay the dividend in respect of the Dividend Period ended as of March 31, 2018 in shares of Series A Preferred Stock, and upon the declaration and payment of such dividend, any (x) Quarterly Dividend Default existing in respect of the Dividend Period ended as of March 31, 2018 or (y) any default with respect to the payment of any Series A Preferred Stock dividend from April 1, 2018 through the effective date of this Certificate shall be deemed to have not occurred and to be cured.
(ii) For the Dividend Periods commencing April 1, 2018 and ending on March 31, 2020, the Corporation shall pay the dividend for each Dividend Period therein in shares of Series A Preferred Stock in an amount of shares of Series A Preferred Stock equal to (X) the product of the number of shares of Series A Preferred Stock on which a dividend is to be paid, multiplied by 2.00%, divided by (Y) four.
(iii) Commencing April 1, 2020, the Corporation shall pay cash dividends per share at a rate per annum equal to the Adjusted Rate multiplied by the $50.00 per share stated liquidation preference of the Series A Preferred Stock (equivalent to a fixed annual amount of $1.00 per share); provided, however, dividends for Dividend Periods ending after April 1, 2020 may be paid at the election of the Ameri Board in-kind through the issuance of additional shares of Series A Preferred Stock to Holders of Series A Preferred Stock in an amount of shares of Series A Preferred Stock equal to (A) the product of the number of shares of Series A Preferred Stock on which a dividend is to be paid, multiplied by 2.00%, divided by (B) four, for up to four Dividend Periods in any consecutive 36-month period, determined on a rolling basis.
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(iv) All dividends shall accrue and accumulate, whether or not earned or declared, on each issued and outstanding share of the Series A Preferred Stock from (and including) the original date of issuance of such share, and shall be payable quarterly in arrears on the last calendar day of each Dividend Period except for Series A Preferred Stock issued during December 2016, for which an initial partial dividend payment for dividends accrued in December 2016 shall be payable at the end of the first full Dividend Period (each such day being hereinafter called a “Dividend Payment Date”); provided, that (i) Series A Preferred Stock issued during any Dividend Period after the Dividend Record Date for such Dividend Period shall only begin to accrue dividends on the first day of the next Dividend Period; and provided, further, that (ii) if any Dividend Payment Date is not a Business Day, then outstanding)the dividend that would otherwise have been payable on such Dividend Payment Date (if declared) may be paid on the next succeeding Business Day with the same force and effect as if paid on such Dividend Payment Date, and no interest or additional dividends or other sums shall accrue on the amount so payable from such Dividend Payment Date to such next succeeding Business Day. Any dividend payable on the Series A Preferred Stock for any partial Dividend Period shall be prorated and computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends shall be payable to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date, which shall be the fifteenth day of the month in which the applicable Dividend Payment Date occurs, or such other date designated by the Ameri Board or an officer of the Corporation duly authorized by the Ameri Board for the payment of dividends that is not more than 30 nor less than ten days prior to such Dividend Payment Date (each such date, a “Dividend Record Date”).
(b) [Intentionally omitted.]
(c) No dividend on the Series A Preferred Stock will be declared by the Corporation or paid or set apart for payment by the Corporation at such time as the terms and provisions of Senior Shares or any agreement of the Corporation, including any agreement relating to its indebtedness, prohibit such declaration, payment or setting apart for payment or provide that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration, payment or setting aside of funds is restricted or prohibited under the DGCL or other applicable law; provided, however, notwithstanding anything to the contrary contained herein, dividends on the Series A Preferred Stock shall continue to accrue and accumulate regardless of whether: (i) any or all of the foregoing restrictions exist; (ii) the Corporation has earnings or profits; (iii) there are funds legally available for the payment of such dividends; or (iv) such dividends are authorized by the Ameri Board. Accrued and unpaid dividends on the Series A Preferred Stock will accumulate as of the Dividend Payment Date on which they first become payable or on the date of redemption of the Series A Preferred Stock, as the case may be.
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(d) Except as provided in the next sentence, if any Series A Preferred Stock is outstanding, no dividends will be declared or paid or set apart for payment on any Parity Shares or Junior Shares, unless all accumulated accrued and unpaid dividends are contemporaneously declared and paid (whether in cash or in-kind pursuant to Section 3) or declared and a sum of cash sufficient (if any) for the payment thereof set apart for such payment on the Series A Preferred Stock for all past Dividend Periods with respect to which full dividends were not paid on the Series A Preferred Stock (whether in cash or in-kind pursuant to Section 3). When dividends are not paid in full (whether in cash or in-kind pursuant to Section 3), or a sum sufficient for such full payment is not so set apart for payment, upon the Series A Preferred Stock and upon all Parity Shares, all dividends declared, paid or set apart for payment upon the Series A Preferred Stock and all such Parity Shares shall be declared and paid pro rata or declared and set apart for payment pro rata so that the amount of dividends declared per share of Series A Preferred Stock and per share of such Parity Shares shall in all cases bear to each other the same ratio that accumulated dividends per share of Series A Preferred Stock and such other Parity Shares (which shall not include any accumulation in respect of unpaid dividends for prior dividend periods if such other Parity Shares do not bear cumulative dividends) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on Series A Preferred Stock which may be in arrears, whether at the Stated Rate, Adjusted Rate or at the Penalty Rate.
(e) Except as provided in paragraph (d) of this Section 3, unless all accumulated accrued and unpaid dividends on the Series A Preferred Stock are contemporaneously declared and paid (whether in cash or in-kind pursuant to Section 3) or declared and a sum of cash sufficient (if any) for the payment thereof is set apart for payment for all past Dividend Periods with respect to which full dividends were not paid on the Series A Preferred Stock (whether in cash or in-kind pursuant to Section 3), no dividends (other than in Common Stock or Junior Shares ranking junior to the Series A Preferred Stock as to dividends and upon liquidation) may be declared or paid or set apart for payment upon the Common Stock or any Junior Shares or Parity Shares, nor shall any Common Stock or any Junior Shares or Parity Shares be redeemed, purchased or otherwise acquired directly or indirectly for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such stock) by the Corporation (except by conversion into or exchange for Junior Shares or by redemption, purchase or acquisition of stock under any employee benefit plan of the Corporation).
(f) Holders of Series A Preferred Stock shall not be entitled to any dividend in excess of all accumulated accrued and unpaid dividends on the Series A Preferred Stock as described in this Section 3. Any dividend payment made on the Series A Preferred Stock shall first be credited against the earliest accumulated accrued and unpaid dividend due with respect to such shares which remains payable at the time of such payment.
Section 4. Liquidation Preference.
(a) Subject to the rights of the holders of Senior Shares and Parity Shares, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Shares, as to the distribution of assets on any liquidation, dissolution or winding up of the Corporation, each holder of the Series A Preferred Stock shall be entitled to receive an amount of cash equal to $50.00 per share of Series A Preferred Stock plus an amount in cash equal to all accumulated accrued and unpaid dividends thereon (whether or not earned or declared) to the date of final distribution to such holders. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the Series A Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other shares of any class or series of Parity Shares as to the distribution of assets on any liquidation, dissolution or winding up of the Corporation, then such assets, or the proceeds thereof, shall be distributed among the holders of Series A Preferred Stock and any such other Parity Shares ratably in accordance with the respective amounts that would be payable on such Series A Preferred Stock and any such other Parity Shares if all amounts payable thereon were paid in full. For the purposes of this Section 4, none of (i) a consolidation or merger of the Corporation with one or more corporations or other entities, (ii) a sale, lease or transfer of all or substantially all of the Corporation’s assets, (iii) a statutory share exchange or (iv) a Change of Control shall be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Corporation.
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(b) Written notice of any such liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series A Preferred Stock at the respective address of such holders as the same shall appear on the stock transfer records of the Corporation.
Subject to the rights of the holders of Senior Shares and Parity Shares upon liquidation, dissolution or winding up, upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of the Series A Preferred Stock, as provided in this Section 4, any other series or class or classes of Junior Shares shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series A Preferred Stock shall not be entitled to share therein.
Section 5. Redemption.
(a) Optional Redemption Right. The Series A Preferred Stock shall not be redeemable by the Corporation prior to December 31, 2017, except following a Change of Control as provided in paragraph (c) of this Section 5. On and after December 31, 2017, the Corporation may redeem the Series A Preferred Stock, in whole at any time or from time to time in part, at the option of the Corporation, for cash, at a redemption price of $50.00 per share of Series A Preferred Stock, plus the amounts indicated in paragraph (d) of this Section 5.
(b) Partial Redemption. If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed pursuant to the Optional Redemption Right, the shares to be redeemed shall be selected pro rata (as nearly as practicable without creating fractional shares) or by lot or in such other equitable method prescribed by the Corporation.
(c) Special Optional Redemption Right. At any time following a Change of Control, the Corporation will have the option, upon giving notice as provided in Section 12 hereof, to redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the first date on which the Change of Control has occurred (the “Change of Control Redemption Right”), for cash at a redemption price of $50.00 per share, plus any accumulated and unpaid dividends on the Series A Preferred Stock as provided in paragraph (d) of this Section 5 (whether or not declared, unless the redemption date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Dividend Payment Date, in which case no amount for such accumulated and unpaid dividend will be paid upon redemption and such accumulated and unpaid dividend will be paid to the holder of record), to, but not including, the redemption date.
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(d) Unpaid Dividend. Upon any redemption of Series A Preferred Stock pursuant to this Section 5, the Corporation shall, subject to the next sentence, pay any accumulated accrued and unpaid dividends in arrears for any Dividend Period ending on or prior to the Call Date. If the Call Date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, then each holder of Series A Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. Except as provided above, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Stock called for redemption.
(e) Additional Limitation on Redemption. If all accumulated accrued and unpaid dividends on the Series A Preferred Stock and any other class or series of Parity Shares of the Corporation have not been paid in cash or in-kind in shares of Series A Preferred Stock (or, with respect to any Parity Shares, in Parity Shares), declared and set apart for payment in cash or in-kind in shares of Series A Preferred Stock (or, with respect to any Parity Shares, in Parity Shares), then the Series A Preferred Stock shall not be redeemed under this Section 5 in part and the Corporation shall not purchase or acquire any shares of Series A Preferred Stock, otherwise than (i) pursuant to a purchase or exchange offer made on the same terms to all holders of Series A Preferred Stock and Parity Shares or (ii) in exchange for Junior Shares.
(f) Redemption Procedures. Notice of the redemption of any Series A Preferred Stock under this Section 5 shall be mailed by first class mail to each holder of record of Series A Preferred Stock to be redeemed at the address of each such holder as shown on the Corporation’s records, not less than 30 nor more than 60 days prior to the Call Date. Neither the failure to mail any notice required by this paragraph (f), nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. Each such mailed notice shall state, as appropriate: (1) the Call Date; (2) the number of shares of Series A Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price per share of Series A Preferred Stock (determined as set forth in paragraph (a) or (c) of this Section 5, as applicable) plus accumulated accrued and unpaid dividends through the Call Date (determined as set forth in paragraph (d) of this Section 5); (4) if any shares are represented by certificates, the place or places at which certificates for such shares are to be surrendered; (5) that dividends on the shares to be redeemed shall cease to accrue on such Call Date except as otherwise provided herein; and (6) any other information required by law or by the applicable rules of any exchange or national securities market upon which the Series A Preferred Stock may be listed or admitted for trading. Notice having been mailed as aforesaid, from and after the Call Date (unless the Corporation shall fail to make available an amount of cash necessary to effect such redemption), (i) except as otherwise provided herein, dividends on the Series A Preferred Stock so called for redemption shall cease to accrue, (ii) said shares shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Series A Preferred Stock shall cease (except the right to receive cash payable upon such redemption, without interest thereon, upon surrender and endorsement of their certificates if so required and to receive any dividends payable thereon).
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(g) Set Asides. The Corporation’s obligation to provide cash in accordance with the preceding subsection shall be deemed fulfilled if, on or before the Call Date, the Corporation shall irrevocably deposit funds necessary for such redemption, in trust, with a bank or trust company that has, or is an affiliate of a bank or trust company that has, capital and surplus of at least $50 million, with irrevocable instructions that such cash be applied to the redemption of the Series A Preferred Stock so called for redemption, in which case the notice to holders of the Series A Preferred Stock will (i) state the date of such deposit, (ii) specify the office of such bank or trust company as the place of payment of the redemption price and (iii) require such holders to surrender the certificates, if any, representing such shares at such place on or about the date fixed in such redemption notice (which may not be later than the Call Date) against payment of the redemption price (including all accumulated accrued and unpaid dividends to the Call Date, determined as set forth in paragraph (d) of this Section 5). No interest shall accrue for the benefit of the holders of Series A Preferred Stock to be redeemed on any cash so set aside by the Corporation. Subject to applicable escheat laws, any such cash unclaimed at the end of six months from the Call Date shall revert to the general funds of the Corporation after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of such cash.
(h) Surrender and Payment. As promptly as practicable after the surrender in accordance with said notice of the certificates, if any, for any such shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and if the notice shall so state), such shares shall be exchanged for any cash (without interest thereon) for which such shares have been redeemed. If fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed, shares to be redeemed shall be selected by the Corporation from outstanding shares of Series A Preferred Stock not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Corporation in its sole discretion to be equitable. If fewer than all the shares of Series A Preferred Stock represented by any certificate are redeemed, then new certificates representing the unredeemed shares shall be issued without cost to the holder thereof.
Section 6. Status of Acquired Shares. All shares of Series A Preferred Stock issued and redeemed by the Corporation in accordance with Section 5 hereof, or otherwise acquired by the Corporation, shall be restored to the status of authorized but unissued shares of undesignated Preferred Stock of the Corporation.
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Section 7. Ranking. Any class or series of shares of stock of the Corporation shall be deemed to rank:
(a) prior to the Series A Preferred Stock, as to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Series A Preferred Stock (“Senior Shares”);
(b) on a parity with the Series A Preferred Stock, as to the payment of dividends and as to distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the Series A Preferred Stock, if the holders of such class or series and the Series A Preferred Stock shall be entitled to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends per share or liquidation preferences, without preference or priority one over the other (“Parity Shares”); and
(c) junior to the Series A Preferred Stock, as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, if such class or series shall be the Common Shares or any other class or series of shares of stock of the Corporation now or hereafter issued and outstanding over which the Series A Preferred Stock have preference or priority in the payment of dividends and in the distribution of assets upon any liquidation, dissolution or winding up of the Corporation (“Junior Shares”).
Section 8. Voting Rights.
(a) The Series A Preferred Stock shall have no voting rights, except as set forth in this Section 8.
(b) [Intentionally Omitted.]
(c) So long as any shares of Series A Preferred Stock are outstanding, the affirmative vote of the holders of at least a majority of the Series A Preferred Stock and the holders of shares of every other series of Parity Shares upon which like voting rights to the Series A Preferred Stock have been conferred and are exercisable (any such series, the “Voting Preferred Shares”) at the time outstanding, acting as a single class regardless of series, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the provisions of the Certificate of Incorporation or this Certificate that materially and adversely affects the rights, preferences or voting power of the stockSeries A Preferred Stock or the Voting Preferred Shares; provided, however, that the amendment of the provisions of the Certificate of Incorporation so as to authorize or create, or to increase the authorized amount of, the Series A Preferred Stock, any Senior Shares, any Parity Shares or any Junior Shares shall not be deemed to materially or adversely affect the rights, preferences or voting power of the Series A Preferred Stock or the Voting Preferred Shares; or
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(ii) A statutory share exchange that affects the Series A Preferred Stock, a consolidation with or merger of the Corporation entitledinto another entity, or a consolidation with or merger of another entity into the Corporation, unless in each such case each share of Series A Preferred Stock (i) shall remain outstanding without a material and adverse change to vote, irrespective of Section 242(b)(2) of the General Corporation Law of the State of Delaware.
provided, however, that no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to anysuch vote of the holders of Series A Preferred Stock shall be required on or after December 31, 2017, or in connection with a Change of Control if, at or prior to the time when such amendment, alteration, repeal, share exchange, consolidation or merger is to take effect, or when the issuance of any such prior shares or convertible security is to be made, as the case may be, a deposit is made for the redemption in cash of all shares of Series A Preferred Stock at the time outstanding as provided in paragraph (e) of Section 5 hereof for a redemption price determined under the appropriate paragraph of Section 5 hereof.
For purposes of paragraph (c) of this Section 8, each share of Series A Preferred Stock shall have one or morevote per share, except that when any other series of Voting Preferred Shares shall have the right to vote with the Series A Preferred Stock that mayas a single class on any matter, then the Series A Preferred Stock and such other series shall have with respect to such matters one vote per $50.00 of stated liquidation preference. Except as set forth herein, the Series A Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers other than as set forth herein, and the consent of the holders thereof shall not be required byfor the taking of any corporate action.
No amendment to these terms of this Amended and Restated Certificate of Incorporation) the affirmativeSeries A Preferred Stock shall require the vote of the holders of shares of capital stock of the Corporation representing a majority of the votes representedCommon Stock (except as required by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective oflaw) or any provisions of the DGCL.
Section 9. Information Rights. During any period in which the Corporation is not subject to Section 13 or 15(d) of the Exchange Act and any shares of Series A Preferred Stock are outstanding, the Corporation shall (a) transmit by mail to fixall holders of Series A Preferred Stock, as their names and addresses appear in the designations, powers, preferencesCorporation’s record books and relative, participating, optionalwithout cost to such holders, copies of the annual reports and quarterly reports that the Corporation would have been required to file with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13 or other rights,15(d) of the Exchange Act if the Corporation was subject to such sections (other than any exhibits that would have been required); and (b) promptly upon written request, supply copies of such reports to any prospective holder of Series A Preferred Stock. The Corporation shall mail the reports to the holders of Series A Preferred Stock within 15 days after the respective dates by which the Corporation would have been required to file the reports with the SEC if the Corporation were then subject to Section 13 or 15(d) of the Exchange Act, assuming the Corporation is a “non-accelerated filer” in accordance with the Exchange Act.
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Section 10. Record Holders. The Corporation and the qualifications, limitationsTransfer Agent shall deem and treat the record holder of any shares of Series A Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the Transfer Agent shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series A Preferred Stock shall not be entitled to the benefits of any retirement or restrictions thereof, ifsinking fund.
Section 12. Conversion; Additional Shares of Series A Preferred Stock. The shares of Series A Preferred Stock are not convertible into or exchangeable for any other property or securities of the Corporation, except as provided in this Section 12.
(a) Upon the occurrence of a Change of Control, each holder of shares of Series A Preferred Stock shall have the right, unless, prior to the Change of Control Conversion Date, the Corporation has provided or provides notice of its election to redeem the shares of Series A Preferred Stock pursuant to the Redemption Right or Special Optional Redemption Right, to convert some or all of the shares of Series A Preferred Stock held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of shares of Common Stock per share of Series A Preferred Stock to be converted (the “Common Stock Conversion Consideration”) equal to the lesser of (A) the quotient obtained by dividing (i) the sum of (x) the Fifty Dollar ($50.00) liquidation preference plus (y) the amount of any accumulated and unpaid dividends to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case no additional amount for such accumulated and unpaid dividend will be included in such sum) by (ii) the Common Stock Price (as defined below) and (B) 25 (the “Share Cap”), subject to certain adjustments for any splits, subdivisions or combinations of our common stock, as described in the immediately succeeding paragraph.
The Share Cap is subject to pro rata adjustments for any stock splits (including those effected pursuant to a Common Stock dividend), subdivisions or combinations (in each case, a “Stock Split”) with respect to each such class or seriesshares of PreferredCommon Stock andas follows: the numberadjusted Share Cap as the result of shares constituting each such class or series, and to increase or decreasea Stock Split shall be the number of shares of any such class or seriesCommon Stock that is equivalent to the extent permittedproduct obtained by multiplying (i) the DGCL. InShare Cap in effect immediately prior to such Stock Split by (ii) a fraction, the event thatnumerator of which is the number of shares of any class or seriesCommon Stock outstanding after giving effect to such Stock Split and the denominator of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the status which such shares had prior to the adoption of the resolution originally fixingis the number of shares of Common Stock outstanding immediately prior to such class or series of Preferred Stock subject to the requirements of the DGCL.
For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate maximum number of shares of Common Stock (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable in connection with the exercise of the Change of Control Conversion Right in respect of the 700,000 shares of Preferred Stock designated as Series A Preferred Stock and authorized for issuance pursuant hereto is 17,500,000 in total (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap (i) shall be increased on a pro rata basis with respect to any director electedadditional shares of Series A Preferred Stock designated and authorized for issuance pursuant to any subsequent articles supplementary and (ii) is subject to pro rata adjustments for any Stock Splits on the same basis as the corresponding adjustment to the Share Cap.
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In the case of a Change of Control pursuant to which shares of Common Stock shall be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of shares of Series A Preferred Stock shall receive upon conversion of such shares of Series A Preferred Stock the kind and amount of Alternative Form Consideration that such holder of shares of Series A Preferred Stock would have owned or been entitled to receive upon the Change of Control had such holder of shares of Series A Preferred Stock held a number of shares of Common Stock equal to the Common Stock Conversion Consideration immediately prior to the annual meeting of stockholders of 2016 shall serve for the remaindereffective time of the term to which such director was electedChange of Control (the “Alternative Conversion Consideration”; and the Common Stock Conversion Consideration or until such director’s earlier death, resignation or removal. Election of directors need not be by written ballot.
In the event that holders of shares of Common Stock have the opportunity to elect the form of consideration to be taken at any annual or special stockholders’ meeting maybe taken without a meeting without prior notice and without a vote, if a consentreceived in writing, setting forth the action so taken,Change of Control, the consideration that the holders of shares of Series A Preferred Stock shall receive shall be signedthe form of consideration elected by the holders of the shares of Common Stock who participate in the determination (based on the weighted average of elections) and shall be subject to any limitations to which all holders of shares of Common Stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change of Control.
The “Change of Control Conversion Date” shall be a Business Day set forth in the notice of Change of Control provided in accordance with Section 12(c) below that is no less than 20 days nor more than 35 days after the date on which the Corporation provides such notice pursuant to Section 12(c).
The “Common Stock Price” shall be (i) the amount of cash consideration per share of Common Stock, if the consideration to be received in the Change of Control by holders of shares of Common Stock is solely cash, and (ii) the average of the closing prices per share of Common Stock on the OTCQB Marketplace or any national securities exchange or national securities market for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by proxy forholders of shares of Common Stock is other than solely cash.
(b) No fractional shares of Common Stock shall be issued upon the conversion of shares of Series A Preferred Stock. In lieu of fractional shares, holders shall be entitled to receive the cash value of such fractional shares based on the Common Stock Price.
(c) Within 15 days following the occurrence of a Change of Control, unless the Corporation has provided, prior to the expiration of such 15-day period, notice of its election to redeem the shares of Series A Preferred Stock pursuant to the Optional Redemption Right or Special Optional Redemption Right, a notice of occurrence of the Change of Control, describing the resulting Change of Control Conversion Right, shall be delivered to 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 allrecord of the shares of Series A Preferred Stock at their addresses as they appear on the Corporation’s stock transfer records and notice shall be provided to the Corporation’s transfer agent. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the conversion of any shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given. Each notice shall state: (i) the events constituting the Change of Control; (ii) the date of the Change of Control; (iii) the last date on which the holders of shares of Series A Preferred Stock may exercise their Change of Control Conversion Right; (iv) the method and period for calculating the Common Stock Price; (v) the Change of Control Conversion Date, which shall be a Business Day occurring within 20 to 35 days following the date of such notice; (vi) that if, prior to the Change of Control Conversion Date, the Corporation has provided or provides notice of its election to redeem all or any portion of the shares of Series A Preferred Stock, the holder will not be able to convert shares of Series A Preferred Stock and such shares of Series A Preferred Stock shall be redeemed on the related redemption date, even if they have already been tendered for conversion pursuant to the Change of Control Conversion Right; (vii) if applicable, the type and amount of Alternative Conversion Consideration entitled to vote thereon were presentbe received per share of Series A Preferred Stock; (viii) the name and voted.
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(d) The Corporation shall not be personally liable toissue a press release for publication on the CorporationDow Jones & Company, Inc., Business Wire, PR Newswire or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (1) for any breach of the director’s duty of loyalty to the Corporation or its stockholders; (2) for acts or omissionsBloomberg Business News (or, if such organizations are not in good faith or which involve intentional misconduct or a knowing violation of law; (3) under Section 174 of the DGCL; or (4) for any transaction from which the director derived any improper personal benefit. If the DGCL or any other law of the State of Delaware is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.
(e) In order to exercise the Change of Control Conversion Right, to Indemnificationa holder of Directors and Officers
(f) Holders of shares of Series A Preferred Stock may withdraw any notice of exercise of a claim for indemnification or advancementChange of expenses under this Article is not paid in full within thirty (30) days after a written claim therefor by the Indemnified Person has been received by the Corporation, the Indemnified Person may file suit to recover the unpaid amount of such claim and, if successful inControl Conversion Right (in whole or in part,part) by a written notice of withdrawal delivered to the Corporation’s transfer agent prior to the close of business on the Business Day prior to the Change of Control Conversion Date. The notice of withdrawal must state: (i) the number of withdrawn shares of Series A Preferred Stock; (ii) if certificated shares of Series A Preferred Stock have been issued, the certificate numbers of the withdrawn shares of Series A Preferred Stock; and (iii) the number of shares of Series A Preferred Stock, if any, which remain subject to the conversion notice.
(g) Shares of Series A Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn shall be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless, prior to the Change of Control Conversion Date, the Corporation has provided or provides notice of its election to redeem such shares of Series A Preferred Stock, whether pursuant to its Redemption Right or Special Optional Redemption Right. If the Corporation elects to redeem shares of Series A Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such shares of Series A Preferred Stock shall not be so converted and the holders of such shares shall be entitled to be paidreceive on the expenseapplicable redemption date Fifty Dollars ($50.00) per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but not including, the redemption date.
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(h) The Corporation shall havedeliver the burdenapplicable Conversion Consideration no later than the third Business Day following the Change of proving that the Indemnified Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
Section 13. Uncertificated Book-Entry Securities. The Corporation may indemnify and advance expenses to any person who was or is made or is threatened to be made or is otherwise involved in any Proceeding by reason of the fact that such person, or a person for whom such person is the legal representative, is or was an employee or agent of the Corporation or, while an employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person in connection with such Proceeding. The ultimate determination of entitlement to indemnification of persons who are non-director or officer employees or agentsSeries A Preferred Stock shall be madeissued as book-entry securities directly registered in such manner as is determined by the Board in its sole discretion. Notwithstandingstockholder’s name on the foregoing sentence, the CorporationCorporation’s books and records. The Series A Preferred Stock shall not be required to indemnify a person in connection with a Proceeding initiatedrepresented by such person if the Proceeding was not authorized in advance by the Board.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of IncorporationDesignation to be duly executed and acknowledged by its duly authorizedthe undersigned officer
| AMERI HOLDINGS, INC. | |||
| By: | |||
| Chief Executive Officer | |||
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Exhibit B
Warrant Agreement
[see attached]
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WARRANT AGENT AGREEMENT
WARRANT AGENT AGREEMENT (this “Warrant Agreement”) dated as of Stockholders’ Meetings
WHEREAS, pursuant to the terms of that certain Amendment Agreement, dated [_________], 2018, by and between the Company and Lone Star Value Investors, LP, the Company intends to issue 5,000,000 warrants (the “Warrants”) to purchase shares (the “Warrant Shares”) of common stock of the Company, par value $0.01 per share (the “Common Stock”);
WHEREAS, the Company intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (as the same may be amended from time placeto time, the “Registration Statement”), for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Warrants and purposeWarrant Shares;
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in accordance with the terms set forth in this Warrant Agreement in connection with the issuance, registration, transfer, exchange and exercise of the Warrants;
WHEREAS, the Company desires to provide for the provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company with respect to the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions set forth in this Warrant Agreement (and no implied terms or conditions).
2.Warrants.
2.1.Form of Warrants. The Warrants shall be evidenced by a global certificate (“Global Certificate”) in the form ofExhibit A to this Warrant Agreement, which shall be deposited on behalf of the Company with the Warrant Agent, which shall make arrangements for book-entry settlement of the Warrants. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Company may instruct the Warrant Agent to cancel the Global Certificate, and the Company shall deliver to the Warrant Agent separate certificates evidencing Warrants (“Definitive Certificates” and, together with the Global Certificate, “Warrant Certificates”).
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2.2.Issuance and Registration of Warrants.
2.2.1.Warrant Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants.
2.2.2.Issuance of Warrants. Upon the initial issuance of the Warrants, the Company shall issue the Global Certificate to the Warrant Agent to establish the Warrants in book-entry form. Ownership of security entitlements in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by the Warrant Agent.
2.2.3.Beneficial Owner; Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “Holder”) as the absolute owner of such Warrant for purposes of every meeting of Stockholdersany exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be givenaffected by any notice to the contrary. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder through the Warrant Agent, except to the extent set forth herein or in the Global Certificate.
2.2.4.Execution. The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company (an “Authorized Officer”), which need not less than thirty (30) nor more than sixty (60) daysbe the same authorized signatory for all of the Warrant Certificates, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant Agent, which need not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for any purpose unless so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates ceases to be an Authorized Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Authorized Officer of the Company authorized to sign such Warrant Certificate, although at the date of the meeting either personally, by mail,execution of this Warrant Agreement any such person was not such an Authorized Officer.
2.2.5.Registration of Transfer. At any time at or by such other means permitted by the General Corporation Law of the State of Delaware as in effect from time to time or any successor statute thereto (the “DGCL”), to each Stockholder of record entitled to vote at the meeting, unless lesser or greater period of notice is required or allowed by statute in a particular case.
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2.2.6.Loss, Theft and Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security in customary form and amount, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Warrant Agent shall, constituteon behalf of the Company, countersign and deliver a waivernew Warrant Certificate of noticelike tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated. Unless the initial Warrant Certificate cannot be confirmed delivered by him.the Company or Warrant Agent, the Warrant Agent may charge the Holder an administrative fee for processing the replacement of lost Warrant Certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates. The Warrant Agent may receive compensation from the surety companies or surety agents for administrative services provided to them.
2.2.7.
3.Terms and Exercise of Warrants.
3.1.Exercise Price. Each Warrant shall entitle the Holder, subject to the provisions of the applicable Warrant Certificate and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $1.50 per whole share, subject to the subsequent adjustments provided in Section 4 hereof. The term “Exercise Price” as used in this Warrant Agreement refers to the price per share at which shares of Common Stock may be purchased at the time a prescribedWarrant is exercised.
3.2.Duration of Warrants. Warrants may be exercised only during the period (“Exercise Period”) commencing on the Issuance Date and terminating at 5:00 P.M., New York City time (the “close of business”) on [__________], 2023 (“Expiration Date”);provided that in the event that the closing price of the Common Stock is $2.00 or higher for 10 Trading Days in any period of time,15 consecutive Trading Days, the action may be taken withoutCompany shall have the option, in its sole discretion, to elect to accelerate the Expiration Date to such lapse ifdate that is 30 days (or such requirementother period as is waiveddetermined in writing, in person or by proxy, before or after the taking of such action by every Stockholder entitled to vote thereon as of the date of the taking of such action.
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3.3.Exercise of Warrants.
3.3.1.Exercise and Payment.
(a) Subject to the provisions of this Warrant Agreement, a Holder may exercise Warrants by delivering to the Warrant Agent, not later than 5:00 P.M., New York City time, on any business day during the Exercise Period an election to purchase the Warrant Shares underlying the Warrants to be exercised in the form included inExhibit B to this Warrant Agreement (an “Election to Purchase”). No later than two (2) Trading Days following delivery of an Election to Purchase, the Holder shall: (i) surrender the Warrant Certificate evidencing the Warrants to the Warrant Agent at its office designated for such purpose, and (ii) deliver to the Company the Exercise Price for each Warrant to be exercised, in lawful money of the United States of America by certified or official bank check payable to the Company or bank wire transfer in immediately available funds to:
Account Name - Ameri Holdings Inc.
Account Number - 6700092361
ABA Number - 026007773
Bank Name & Address : Sterling National Bank,
310 Crossways Park Dr., Woodbury, NY 11797
Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the time that an appropriately completed and duly signed Election to Purchase has been delivered to the Warrant Agent, provided that the Holder makes delivery of the deliverables referenced in the immediately preceding sentence by the date that is two (2) Trading Days after the delivery of the Election to Purchase. If the Holder fails to make delivery of such deliverables on or prior to the Trading Day that is within two (2) days following delivery of the Election to Purchase, such Election to Purchase shall be voidab initio.
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(b) If any of (i) the Warrants, (ii) the Election to Purchase, or (iii) the Exercise Price therefor, is received by the Warrant Agent on any date after 5:00 P.M., New York City time, or on a date that is not a Trading Day, the Warrants with respect thereto will be deemed to have been received and exercised on the Trading Day next precedingsucceeding such date. The “Exercise Date” will be the daydate on which noticethe materials in the foregoing sentence are received by the Warrant Agent (if by 5:00 P.M., New York City time), or the following Trading Day (if after 5:00 P.M., New York City time), regardless of any earlier date written on the materials. “Business day” means a day other than a Saturday or Sunday on which commercial Banks in New York City are open for the general conduct of banking business. If the Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Company will be returned to the Holder as soon as practicable. In no event will interest accrue on any funds deposited with the Company in respect of an exercise or attempted exercise of Warrants.
(c) If less than all the Warrants evidenced by a surrendered Warrant Certificate are exercised, the Warrant Agent shall split the surrendered Warrant Certificate and return to the Holder a Warrant Certificate evidencing the Warrants that were not exercised at no charge to the Holder.
3.3.2.Issuance of Warrant Shares.
(a) The Warrant Agent shall, by 11:00 a.m., New York City time, on the Trading Day following the Exercise Date of any Warrant, advise the Company, the transfer agent and registrar for the Company’s Common Stock, in respect of (i) the number of Warrant Shares indicated on the Election to Purchase as issuable upon such exercise with respect to such exercised Warrants, (ii) the instructions of the Holder provided to the Warrant Agent with respect to the delivery of the Warrant Shares and the number of Warrants that remain outstanding after such exercise and (iii) such other information as the Company or such transfer agent and registrar shall reasonably request.
(b) The Company shall, by no later than 5:00 P.M., New York City time, on the third Trading Day following the Exercise Date of any Warrant and the clearance of the funds in payment of the Exercise Price (such date and time, the “Delivery Time”), cause its registrar to electronically book the Warrant Shares issuable upon that exercise.
3.3.3.Valid Issuance. All Warrant Shares issued by the Company upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be validly issued, fully paid and non-assessable.
3.3.4.No Fractional Exercise. No fractional Warrant Shares will be issued upon the exercise of the Warrant. If, by reason of any adjustment made pursuant to Section 4, a Holder would be entitled, upon the exercise of such Warrant, to receive an amount in cash equal to the fractional amount multiplied by the exercise price or a number of Warrant Shares rounded up to the next whole share.
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3.3.5.No Transfer Taxes. The Company shall not be required to pay any stamp or other tax or governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Shares upon the exercise of Warrants; and in the event that any such transfer is given,involved, the Company shall not be required to issue or deliver any Warrant Shares until such tax or other charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.
3.3.6.Date of Issuance. The Company will treat an exercising Holder as a beneficial owner of the Warrant Shares as of the Exercise Date, except that, if noticethe Exercise Date is waived,a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the closeopen of business on the day next preceding the day on which the meeting is held.
3.3.7.Restrictive Legend Events. (a) The Company shall use it reasonable best efforts to obtain the effectiveness of the CorporationRegistration Statement and the current status of the prospectus included therein covering the Warrants and the Warrant Shares at any time that the Warrants are exercisable in accordance with the Amendment Agreement entered into by the Company on June 22, 2018. Until such Registration Statement becomes effective, the Warrant Shares shall makebe subject to the Restrictive Legend (defined below). Upon the effectiveness of such Registration Statement, the Company shall provide to the Warrant Agent and certifyeach Holder prompt written notice of any time that the Company is unable to deliver the Warrant Shares without restrictive legend because (i) the Commission has issued a complete liststop order with respect to the Registration Statement, (ii) the Commission otherwise has suspended or withdrawn the effectiveness of Stockholders entitledthe Registration Statement, either temporarily or permanently, (iii) the Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (iv) the prospectus contained in the Registration Statement is not available for the issuance of the Warrant Shares to vote atthe Holder or (v) otherwise. As used herein, the “Restrictive Legend” shall be as follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR “BLUE SKY LAWS”, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER THE ACT, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED
3.3.8.Disputes. In the case of a Stockholders’ meetingdispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares issuable in connection with any exercise, the Company shall promptly deliver to the Holder the number of Warrant Shares that are not disputed.
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3.3.9Beneficial Ownership Limitation. A Holder shall not have the right to exercise any Warrants to the extent that after giving effect to the issuance of Warrant Shares after exercise as set forth on the applicable Election to Purchase, such Holder or a person holding through such Holder (together with such Holder’s or person’s Affiliates (as defined in Rule 405 under the Securities Act), and any other persons acting as a group together with that Holder or person or any adjournment thereof. A list required by this section may consist of cards arranged alphabeticallythat Holder’s or any equipment which permitsperson’s Affiliates), would beneficially own in excess of 4.99% (“Beneficial Ownership Limitation”) of the visual displayCompany’s Common Stock. For purposes of such information, or be in any other form or arrangement permitted by the DGCL. Such list shall be arranged alphabetically within each class, series or groups of Stockholders maintained by the Corporation for convenience of reference, with the address of andforegoing sentence, the number of shares heldof Common Stock beneficially owned by each Stockholder;a person shall include the number of Warrant Shares that would be produced or availableowned by means of a visual display at the time and placethat person issuable upon exercise of the meeting; be subjectWarrants with respect to the inspection of any Stockholder for reasonable periods during the whole time of the meeting; and be prima facie evidence as to who are the Stockholders entitled to examinewhich such list or to vote at any meeting.
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4.Adjustments.
4.1.Adjustment upon Subdivisions or Combinations. If the Company at any time after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time after the Issuance Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 4.1 shall become effective at the close of business on the date the subdivision or combination becomes effective. The Company shall promptly notify Warrant Agent of any such adjustment and give specific instructions to Warrant Agent with respect to any adjustments to the warrant register. In the event any adjustment hereunder results in a fractional Warrant Share, a Holder shall be entitled to receive a whole Warrant Share in lieu of any such fractional Warrant Share.
4.2.Adjustment for Other Distributions. In the event the Company shall fix a record bydate for the making of a dividend or distribution to all holders of Common Stock of any evidences of indebtedness or assets or subscription rights, options or warrants (excluding those referred to in Section 4.1 or other dividends paid out of retained earnings), then in each such Stockholdercase the Holder will, upon the exercise of Warrants, be entitled to receive, in addition to the number of Warrant Shares issuable thereupon, and without payment of any additional consideration therefor, the amount of such beneficial owner and (C) a representation thatdividend or distribution, as applicable, which such Holder would have held on the Stockholder is adate of such exercise had such Holder been the holder of record of sharessuch Warrant Shares as of the Corporationdate on which holders of Common Stock became entitled to receive such dividend or distribution. Such adjustment shall be made whenever any such distribution is made and intends to appear in person or by proxy atshall become effective immediately after the meeting to propose such business.
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3.34.4.QuorumOther Events.
4.5.Notices of Changes in Warrant. Upon every adjustment of the Board of Directors or any committee thereof may be taken without a meeting if, prior or subsequent to such action, all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the Board of DirectorsExercise Price or the committee.
5.Restrictive Legends; Fractional Warrants. In the event that a Warrant Certificate surrendered for transfer bears a restrictive legend, the Warrant Agent shall not register that transfer until the Warrant Agent has received an opinion of counsel for the Corporation, (ii)Company stating that such transfer may be made and indicating whether the Warrants must also bear a restrictive legend upon written reports setting forth financial data concerningthat transfer. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the Corporation and prepared by an independent public accountanttransfer of or certified public accountantdelivery of a Warrant Certificate for a fraction of a Warrant.
6.Other Provisions Relating to Rights of Holders of Warrants.
6.1.No Rights as Shareholder. Except as otherwise specifically provided herein, a Holder, solely in its capacity as a holder of Warrants, shall not be entitled to vote or firmreceive dividends or be deemed the holder of such accountants, (iii) upon financial statements, books of account or reportsshare capital of the Corporation representedCompany for any purpose, nor shall anything contained in this Warrant Agreement be construed to them to be correct byconfer upon a Holder, solely in its capacity as the President, the officerregistered holder of the Corporation having charge of its book of account, or the person presiding at a meeting of the Board, or (iv) upon written reports of committees of the Board.
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6.2.Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
7.Concerning the Warrant Agent and Other Matters.
7.1. Any instructions given to the Warrant Agent orally, as permitted by any provision of this Warrant Agreement, shall be confirmed in writing by the Company as soon as practicable. The Warrant Agent shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section 7.1.
7.2. (a) Whether or not any Warrants are exercised, for the Warrant Agent’s services as agent for the Company hereunder, the Company shall pay to the Warrant Agent such fees as may be separately agreed between the Company and Warrant Agent and the Warrant Agent’s out of pocket expenses in connection with this Warrant Agreement, including, without limitation, the fees and expenses of the Warrant Agent’s counsel. While the Warrant Agent endeavors to maintain out-of-pocket charges (both internal and external) at competitive rates, these charges may not reflect actual out-of-pocket costs, and may include handling charges to cover internal processing and use of the Warrant Agent’s billing systems.
(b) All amounts owed by the Company to the Warrant Agent under this Warrant Agreement are due within 30 days of the invoice date. Delinquent payments are subject to a late payment charge of one percent (1.0%) per month commencing 45 days from the invoice date. The Company agrees to reimburse the Warrant Agent for any attorney’s fees and any other costs associated with collecting delinquent payments.
(c) No provision of this Warrant Agreement shall require Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under this Warrant Agreement or in the exercise of its rights.
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7.3. As agent for the Company hereunder the Warrant Agent: (a) shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by the Warrant Agent and the Company; (b) shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of the Warrants or any Warrant Shares; (c) shall not be obligated to take any legal action hereunder; if, however, the Warrant Agent determines to take any legal action hereunder, and where the taking of such action might, in its judgment, subject or expose it to any expense or liability it shall not be required to act unless it has been furnished with an indemnity reasonably satisfactory to it; (e) may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission or other document or security delivered to the Warrant Agent and believed by it to be genuine and to have been signed by the proper party or parties; (f) shall not be liable or responsible for any recital or statement contained in the Registration Statement or any other documents relating thereto; (g) shall not be liable or responsible for any failure on the Corporation’s employees, suppliers, creditors and customers; (ii) the effectspart of the Company to comply with any of its covenants and obligations relating to the Warrants, including without limitation obligations under applicable securities laws; (h) may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic or oral instructions with respect to any matter relating to its duties as Warrant Agent covered by this Warrant Agreement (or supplementing or qualifying any such actions) of officers of the Company, and is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Company or counsel to the Company, and may apply to the Company, for advice or instructions in connection with the Warrant Agent’s duties hereunder, and the Warrant Agent shall not be liable for any delay in acting while waiting for those instructions; any applications by the Warrant Agent for written instructions from the Company may, at the option of the Warrant Agent, set forth in writing any action proposed to be taken or omitted by the Warrant Agent under this Warrant Agreement and the date on or after which such action shall be taken or such omission shall be effective; the Warrant Agent shall not be liable for any action taken by, or omission of, the Warrant Agent in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than five business days after the date such application is sent to the Company, unless the Company shall have consented in writing to any earlier date) unless prior to taking any such action, the Warrant Agent shall have received written instructions in response to such application specifying the action to be taken or omitted; (i) may consult with counsel satisfactory to the Warrant Agent, including its in-house counsel, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in accordance with the advice of such counsel; (j) may perform any of its duties hereunder either directly or by or through nominees, correspondents, designees, or subagents, and it shall not be liable or responsible for any misconduct or negligence on the communitypart of any nominee, correspondent, designee, or communitiessubagent appointed with reasonable care by it in which the Corporation operates; and, (iii) the long-term as well as the short-term interests of the Corporation and its Stockholders, including the possibility that these interests may best be served by the continued independence of the Corporation. If, on the basis of the foregoing factors, the Board of Directors determines that any proposal or offer to acquire the Corporationconnection with this Warrant Agreement; (k) is not in the best interest of the Corporation, it may reject such proposal or offer. If the Board of Directors determines to reject any such proposal or offer, the Board of Directorsauthorized, and shall have no obligation, to facilitate, removepay any barriersbrokers, dealers, or soliciting fees to any person; and (l) shall not be required hereunder to comply with the laws or refrain from impedingregulations of any country other than the proposalUnited States of America or offer.
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ARTICLE IV
(b) In the event any question or dispute arises with respect to the proper interpretation of the BoardWarrants or two Co-Chairmanthe Warrant Agent’s duties under this Warrant Agreement or the rights of the Board, oneCompany or more Vice Presidents,of any Holder, the Warrant Agent shall not be required to act and shall not be held liable or Controller, oneresponsible for its refusal to act until the question or more Assistant Secretaries, one or more Assistant Treasurers, one or more Assistant Controllers and such other officers asdispute has been judicially settled (and, if appropriate, it may file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all persons interested in the matter which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to Warrant Agent and executed by the Company and each such Holder. In addition, the Warrant Agent may require for such purpose, but shall not be obligated to require, the execution of such written settlement by all the Holders and all other persons that may have an interest in the settlement.
7.5. The Company covenants to indemnify the Warrant Agent and hold it harmless from time to time determine. The Boardand against any loss, liability, claim or expense (“Loss”) arising out of Directorsor in connection with the Warrant Agent’s duties under this Warrant Agreement, including the costs and expenses of defending itself against any Loss, unless such Loss shall also determine whichhave been determined by a court of the officers shall hold the offices of Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, if any. Any officer other than the Chairman of the Board may, but is not requiredcompetent jurisdiction to be a directorresult of the Corporation. TwoWarrant Agent’s gross negligence or more offices may bewillful misconduct.
7.6. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days after the earlier of the Expiration Date (including the acceleration thereof pursuant to Section 3.2) and the date on which no Warrants remain outstanding (the “Termination Date”). On the business day following the Termination Date, the Agent shall deliver to the Company any entitlements, if any, held by the same person.
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4.27.7. TermIf any provision of Office. Each officerthis Warrant Agreement shall hold office frombe held illegal, invalid, or unenforceable by any court, this Warrant Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the time of such person’s election and qualificationparties to it to the time at which such person’s successorfull extent permitted by applicable law.
7.8. The Company represents and warrants that: (a) it is electedduly incorporated and qualified, unless he shall die or resign or shall be removed pursuant to Section 4.4 at any time sooner.
7.9. In the time specified therein or, if no time is specified, upon receipt thereof byevent of inconsistency between this Warrant Agreement and the Board of Directors or one of the above-named officers; and, unless specified therein, the acceptance of such resignation shall not be necessary to make it effective.
7.10. Set forth inExhibit C hereto is a list of the names and specimen signatures of the persons authorized to act for the Company under this Warrant Agreement (the “Authorized Representatives”). The Company shall, from time to time, certify to you the names and signatures of any other persons authorized to act for the Company under this Warrant Agreement.
7.11. Except as expressly set forth elsewhere in this Warrant Agreement, all notices, instructions and communications under this Agreement shall be in writing, shall be effective upon receipt and shall be addressed, if to the Company, to its address set forth beneath its signature to this Agreement, or, imposedif to the Warrant Agent, to Corporate Stock Transfer, Inc., Attn: Carylyn Bell, 3200 Cherry Creek South Drive, Suite 430, Denver, CO 80209, Fax: (303)282-5800, or to such other address of which a party hereto has notified the other party.
7.12. (a) This Warrant Agreement shall be governed by and construed in accordance with the laws of the State of New York. All actions and proceedings relating to or arising from, directly or indirectly, this Warrant Agreement may be litigated in courts located within the Borough of Manhattan in the City and State of New York. The Company hereby submits to the personal jurisdiction of such courts and consents that any service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder. Each of the parties hereto hereby waives the right to a trial by jury in any action or proceeding arising out of or relating to this Warrant Agreement.
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(b) This Warrant Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto. This Warrant Agreement may not be assigned, or otherwise transferred, in whole or in part, by either party without the prior written consent of the other party, which the other party will not unreasonably withhold, condition or delay; except that (i) consent is not required for an assignment or delegation of duties by Warrant Agent to any affiliate of Warrant Agent and (ii) any reorganization, merger, consolidation, sale of assets or other form of business combination by Warrant Agent or the Company shall not be deemed to constitute an assignment of this Warrant Agreement.
(c) No provision of this Warrant Agreement may be amended, modified or waived, except in a written document signed by both parties. The Company and the Warrant Agent may amend or supplement this Warrant Agreement without the consent of any Holder for the purpose of (i) curing any ambiguity in good faith and which cure shall not adversely affect the interests of the Holders, (ii) curing, correcting or supplementing any defective provision contained herein, (iii) providing for the deposit of the Global Certificate with a custodian for The Depository Trust Company (“DTC”), registered in the name of Cede & Co., a nominee of DTC, electronic settlement of the Warrants by DTC and procedures and terms related thereto, or (iv) adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the Holders. In the event that the Company and the Warrant Agent amend or supplement this Agreement for one of the foregoing purposes, the Company shall do and perform or cause to be done and performed all such acts, deeds and things, and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments or filings in the name or on behalf of the Company, as may be reasonably requested by the BoardWarrant Agent or as required by applicable laws or regulations to effectuate such amendment or modification. All other amendments and supplements shall require the vote or written consent of Directors.Holders of at least 50.1% of the then outstanding Warrants, provided that adjustments may be made to the Warrant terms and rights in accordance with Section 4 without the consent of the Holders as specifically stated therein.
7.13.
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7.14.Resignation of Warrant Agent.
7.14.1.Appointment of Successor Warrant Agent. The Warrant Agent, or any part thereof,successor to it hereafter appointed, may resign its duties and be represented by uncertificated shares, except that shares represented by a certificate that is issueddischarged from all further duties and outstanding shall continue to be represented thereby until the certificate is surrenderedliabilities hereunder after giving thirty (30) days’ notice in writing to the Corporation (orCompany, or such shorter period of time agreed to by the Company. The Company may terminate the services of the Warrant Agent, or any successor Warrant Agent, after giving thirty (30) days’ notice in writing to the Warrant Agent or successor Warrant Agent, or such shorter period of time as agreed. If the office of the Warrant Agent becomes vacant by resignation, termination or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent, then the Warrant Agent or any Holder may apply to any court of competent jurisdiction for the appointment of a successor Warrant Agent at the Company’s cost. Pending appointment of a successor to such Warrant Agent, either by the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor Warrant Agent (but not including the initial Warrant Agent), whether appointed by the Company or by such court, shall be a person organized and existing under the laws of any state of the United States of America, in good standing, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed, and except for executing and delivering documents as provided in the sentence that follows, the predecessor Warrant Agent shall have no further duties, obligations, responsibilities or liabilities hereunder, but shall be entitled to all rights that survive the termination of this Warrant Agreement and the resignation or removal of the Warrant Agent, including but not limited to its right to indemnity hereunder. If for any reason it becomes necessary or appropriate or at the request of the Company, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
7.14.2.Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
7.14.3.Merger or registrar,Consolidation of Warrant Agent. Any person into which the Warrant Agent may be merged or converted or with which it may be consolidated or any person resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party or any person succeeding to the shareowner services business of the Warrant Agent or any successor Warrant Agent shall be the successor Warrant Agent under this Warrant Agreement, without any further act or deed. For purposes of this Warrant Agreement, “person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust or other entity, and shall include any successor (by merger or otherwise) thereof or thereto.
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8.Miscellaneous Provisions.
8.1.Persons Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the Holders any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
8.2.Examination of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent designated for such purpose for inspection by any Holder. Prior to such inspection, the Warrant Agent may require any such holder to provide reasonable evidence of its interest in the Warrants.
8.3.Counterparts. This Warrant Agreement may be executed in any number of original, facsimile or electronic counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
8.4.Effect of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
9.Certain Definitions. As used herein, the following terms shall have the following meanings:
(a) “Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance, sale or delivery (or deemed issuance, sale or delivery in accordance with Section 4) of Common Stock (other than rights of the type described in Section 4.2 and 4.3 hereof) that could result in a decrease or increase in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(b) “Trading Day” means any day on which the Common Stock is traded on the Trading Market, or, if the Trading Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market in the United States on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 P.M., New York City time).
(c) “Trading Market” means NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange.
[Signature Page to Follow]
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IN WITNESS WHEREOF, this Warrant Agent Agreement has been duly executed by the parties hereto as of the day and year first above written.
| AMERI HOLDINGS, INC. | |||
| By: | |||
| Name: | Brent Kelton | ||
| Title: | Chief Executive Officer | ||
| CORPORATE STOCK TRANSFER, INC. | |||
| By: | |||
| Name: | Carylyn Bell | ||
| Title: | President | ||
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EXHIBIT A
[TO BE INCLUDED IN THE GLOBAL CERTIFICATE]
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR “BLUE SKY LAWS”, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER THE ACT, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED
AMERI HOLDINGS, INC.
WARRANT CERTIFICATE
NOT EXERCISABLE AFTER [__________], 2023
This certifies that the person whose name and address appears below, or registered assigns, is the registered owner of the number of Warrants set forth below. Each Warrant entitles its registered holder to purchase from Ameri Holdings, Inc., a Delaware corporation (the “Company”), at any time prior to 5:00 P.M. (New York City time) on [_________], 2023 (or such other earlier Expiration Date as provided for in the Warrant Agreement, defined below), one share of common stock, par value $0.01 per share, of the Company (each, a “Warrant Share” and collectively, the “Warrant Shares”), at an exercise price of $1.50 per share, subject to possible adjustments as provided in the Warrant Agreement (as defined below).
This Warrant Certificate, with or without other Warrant Certificates, upon surrender at the designated office of the Warrant Agent, may be exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Warrants as the case may be). The rights and obligationsWarrant Certificate or Warrant Certificates surrendered. A transfer of the holdersWarrants evidenced hereby may be registered upon surrender of shares representedthis Warrant Certificate at the designated office of the Warrant Agent by certificatesthe registered holder in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, a signature guarantee, and such other and further documentation as the Warrant Agent may reasonably request and duly stamped as may be required by the laws of the State of New York and of the United States of America.
The terms and conditions of the Warrants and the rights and obligations of the holdersholder of uncertificated sharesthis Warrant Certificate are set forth in the Warrant Agent Agreement dated as of [_________], 2018 (the “Warrant Agreement”) between the Company and Corporate Stock Transfer, Inc. (the “Warrant Agent”). A copy of the same class or series shall be identical. If certificatesWarrant Agreement is available for inspection during business hours at the sharesoffice of the Corporation are issued, each willWarrant Agent.
This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory of the Warrant Agent.
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WITNESS the facsimile signature of a proper officer of the Company.
| AMERI HOLDINGS, INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
Dated: _______________
Countersigned:
CORPORATE STOCK TRANSFER, INC.
By: ______________________________
Name: ____________________________
Title: _____________________________
| PLEASE DETACH HERE |
Certificate No.:_________ Number of Warrants:__________
WARRANT CUSIP NO.: [________]
AMERI HOLDINGS, INC.
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EXHIBIT B
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrants not evidenced by a Global Certificate)
The undersigned hereby irrevocably elects to exercise the right, represented by Warrants evidenced by this Warrant Certificate, to receive ____________ Warrant Shares and herewith tenders payment for such Warrant Shares to the order of _______________________, in the amount of $ _________ in accordance with the terms hereof.
The undersigned requests that a certificate for such formWarrant Shares be registered in the name of ___________________________, whose address is _____________________________ and that such certificate be delivered to _______________________________, whose address is _____________________________________. If the number of Warrants being exercised hereby is less than all the Warrants evidenced by this Warrant Certificate, the undersigned requests that a new Warrant Certificate representing the remaining unexercised Warrants be registered in the name of ___________________________, whose address is _____________________________ and that such Warrant Certificate be delivered to ______________________________________ whose address is _________________________________.
| Signature, | ||
| Date: | ||
| [Signature Guarantee] |
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Warrant Agent, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as shallmay be determined by the Board of Directors. Each holder of stock of the Corporation, upon written requestWarrant Agent in addition to, the transfer agent or registrar of the Corporation, shall be entitled to a stock certificate in such form as may from time to time be prescribed by the Board of Directors. Each such certificate shall be signed by or in the name of the Corporation by the Chairman of the Board, or the Chief Executive Officer, or the President or a Vice President, or a Senior Vice President and by the Chief Financial Officer, or the Treasurer, or an Assistant Treasurer or the Secretary or an Assistant Secretary. Any orsubstitution for, STAMP, all of the signatures appearing on such certificate or certificates may be a facsimile. If any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporationin accordance with the same effectSecurities Exchange Act of 1934, as if he were such officer, transfer agent or registrar at the date of issue.
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EXHIBIT C
AUTHORIZED REPRESENTATIVES
| Name | Title | Signature | ||
Brent Kelton |
| |||
| Viraj Patel | Chief Financial Officer |
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2018 ANNUAL MEETING OF STOCKHOLDERS OF
| ¢ | ¢ |
AMERI HOLDINGS, INC.
5000 Research Court, Suite 108
Suwanee, Georgia 30024
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints GiriSrinidhi “Dev” Devanur or Jeffrey E. Eberwein,and Viraj Patel, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the 20162018 Annual Meeting of Stockholders of Ameri Holdings, Inc. to be held on June [•August [●], 20162018 or at any postponement or adjournment thereof, and to vote all shares of common stock which the undersigned would be entitled to vote if then and there personally present on the matters set forth on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSALS IDENTIFIED IN ITEMS 1, 2, 3, 4a, 4b, 4c, 4d, 4e, 4f5, 6 AND 4g.7, AS WELL AS FOR A SAY-ON-PAY FREQUENCY OF EVERY “1 YEAR” (ITEM 4), WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED: “FOR” THE PROPOSALS IDENTIFIED IN ITEMS 1, 2, 3, 4a, 4b, 4c, 4d, 4e, 4f5, 6 AND 4g,7, AS WELL AS FOR A SAY-ON-PAY FREQUENCY OF EVERY “1 YEAR” (ITEM 4), AND AS THE PROXY HOLDERS MAY DETERMINE IN THEIR DISCRETION WITH REGARD TO ANY OTHER MATTER PROPERLY BROUGHT BEFORE THE ANNUAL MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
(Continued and to be signed on the reverse side)
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2018 ANNUAL MEETING OF STOCKHOLDERS OF
August [●], 2016
VOTE BY INTERNET – www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically, via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE – 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSALS IDENTIFIED IN ITEMS 1, 2, 3, 5, 6 AND |
| 1. Election of Directors: | FOR | AGAINST | ABSTAIN | |||||||||||||||||
¨ | FOR ALL NOMINEES ¨WITHHOLD AUTHORITY FOR ALL NOMINEES ¨FOR ALL EXCEPT (See instructions | NOMINEES: | 2. | The ratification of the appointment of Ram Associates as the independent auditors for the fiscal year ending December 31, | ¨ | ¨ | ¨ | |||||||||||||
O | Srinidhi “Dev” Devanur O David Luci O Robert Shawah O Dimitrios J. Angelis O James Shad | 3. | The advisory (non-binding) approval of named executive officer compensation. | ¨ | ¨ | ¨ | ||||||||||||||
The advisory (non-binding) vote on frequency of holding votes on Say-on-Pay | 1 year | 2 years | 3 years | |||||||||||||||||
| 4. | ¨ | ¨ | ¨ | |||||||||||||||||
| FOR | AGAINST | ABSTAIN | ||||||||||||||||||
| 5. | The approval of an increase in the number of shares available for issuance pursuant to the Ameri Holdings, Inc. 2015 Equity Incentive Award Plan | ¨ | ¨ | ¨ | ||||||||||||||||
| FOR | AGAINST | ABSTAIN | ||||||||||||||||||
| 6. | The approval of an amendment to the Amended and Restated Certificate of Incorporation of Ameri Holdings, Inc. to amend the certificate of designations for its Series A Preferred Stock | ¨ | ¨ | ¨ | ||||||||||||||||
| FOR | AGAINST | ABSTAIN | ||||||||||||||||||
| 7. | The approval of the issuance of warrants for 5,000,000 shares of common stock | ¨ | ¨ | ¨ | ||||||||||||||||
The undersigned acknowledges receipt from the Company before the execution of this proxy of the Notice of Annual Meeting of Stockholders, a Proxy Statement for the Annual Meeting of Stockholders and the | ||||||||||||||||||||
INSTRUCTIONS : To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: l | ||||||||||||||||||||
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. ¨ | ||||||||||||||||||||
| To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | ¨ | |||||||||||||||||||
| Signature of Stockholder | Date: | Signature of Stockholder | Date: |
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporation name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. | ||
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