Item 3. Amendment to Certificate of Incorporation and Bylaws to Set the Size of the Board of Directors at Three Directors
The Board of Directors has approved, and recommends that you approve, an amendment to the Company’s Certificate of Incorporation and Bylaws to set the size of the Board at three directors. See Annex A and B. The Board of Directors believes this change is in the best interest of the Company and shareholders.
If approved by our shareholders, the proposed amendment to the Certificate of Incorporation will become effective upon the filing of a Certificate of Amendment with the New York Secretary of State by the Company, and the proposed amendment to the Bylaws will become effective immediately following the conclusion of this Annual Meeting.
If not approved by our shareholders, the proposed amendment to our Certificate of Incorporation will not be filed, the Bylaw amendment will not be effective, and the number of directors of the Company will continue to be fixed by resolution adopted from time to time by a majority of the entire Board. In making this recommendation, the Board of Directors is retaining the ability to, without further vote by shareholders, delay or abandon the proposed change at any time if the Board of Directors concludes that such action would be in the best interest of the Company and its shareholders.
The Board of Directors recommends a vote FOR the proposed amendment to the Company’s Certificate of Incorporation and Bylaws setting the size of the Board of Directors at three directors.
Item 4. Amendment to Certificate of Incorporation and Bylaws to Permit Shareholder Action by Written Consent
As permitted by Section 615 of the New York Business Corporation Law, the Board of Directors has approved, and recommends that you approve, an amendment to the Company’s Certificate of Incorporation and Bylaws to permit shareholders entitled to vote to take an action without a meeting by written consent of not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, instead of unanimous approval. See Annex A and B. The Board of Directors believes this change is in the best interest of the Company and shareholders.
If approved by our shareholders, the proposed amendment to the Certificate of Incorporation will become effective upon the filing of a Certificate of Amendment with the New York Secretary of State by the Company, and the proposed amendment to the Bylaws will become effective immediately following the conclusion of this Annual Meeting.
If not approved by our shareholders, the proposed amendment to our Certificate of Incorporation will not be filed, the Bylaw amendment will not be effective, and shareholder action will continue to require either action at a duly called and held meeting or unanimous written consent of shareholders. In making this recommendation, the Board of Directors is retaining the ability to, without further vote by shareholders, delay or abandon the proposed change at any time if the Board of Directors concludes that such action would be in the best interest of the Company and its shareholders.
The Board of Directors recommends a vote FOR the proposed amendment to the Company’s Certificate of Incorporation and Bylaws permitting action without a meeting by written consent of not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, instead of unanimous approval.
Item 5. Amendment to Certificate of Incorporation to Implement Certain Transfer Restrictions
Effective March 30, 2020, the Bylaws of the Company were amended by the Board of Directors to implement certain transfer restrictions intended to prevent an ownership change that could substantially reduce tax benefits associated with the Company’s net operating losses under Section 382 of the Internal Revenue Code of 1986, as amended.
The Board of Directors has approved, and recommends that you approve, an amendment to the Company’s Certificate of Incorporation include the same transfer restriction in the Certificate of Incorporation. See Annex A. The Board of Directors believes this change is in the best interest of the Company and shareholders.
If approved by our shareholders, the proposed amendment to the Certificate of Incorporation will become effective upon the filing of a Certificate of Amendment with the New York Secretary of State by the Company.
If not approved by our shareholders, the proposed amendment to our Certificate of Incorporation will not be filed, but shareholders will still be subject to such transfer restrictions as a result of their inclusion in the Company’s Bylaws. In making this recommendation, the Board of Directors is retaining the ability to, without