Tilray Brands Inc (TLRY)

[BubbaInSC]

On Blind Faith?? I don't think so. IMO Simon needs to demonstrate he can bring TLRY to positive net profitability THEN ask for more authorized shares OR raise cash some other way that does not dilute shares.

If one reads the proposals, only proposal #4 makes sense. All of the other proposals only benefit TLRY high level execs; and NOT minority SH.

Proposal 1 to increase authorized shares is rarely good for minority SH because of dilution.

Simon needs to find a different way of raising cash without dilution, imo,



https://materials.proxyvote.com/Approved/88688T/20210622/NPS_474016.PDF

PROPOSAL 1
AUTHORIZED SHARES PROPOSALGeneralThe Board has unanimously approved an amendment (the ‘‘Authorized Shares Proposal’’) to the Certificate ofIncorporation to increase the number of authorized shares of capital stock from 743,333,333 to 990,000,000,consisting of 980,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferredstock, par value $0.0001 per share. The Authorized Shares Proposal only increases the number of authorized sharesof common stock and will not change the number of authorized shares of preferred stock.The additional shares of common stock authorized for issuance by the Authorized Shares Proposal would be a partof the existing class of common stock and, if and when issued, would have the same rights and privileges as thecommon stock presently issued and outstanding. The Company’s stockholders do not have preemptive rights withrespect to its common stock and accordingly, should the Board elect to issue additional shares of common stock,existing stockholders would not have any preferential rights to purchase the shares.Provided the stockholders approve the Authorized Shares Proposal, the increased number of shares would beauthorized for issuance but would remain unissued until such time as the Board approves a specific issuance of suchshares. Other than future issuances under the Company’s equity compensation plans, the Company currently has noplans or arrangements to issue the additional authorized shares of common stock that will result in the event that theCompany’s stockholders approve, and the Company implements, the Authorized Shares Proposal.The description of the Authorized Shares Proposal amendment to the Certificate of Incorporation is qualified in its entiretyby reference to the text of the proposed revisions, which areset forth under Article IV in the Certificate of Incorporationand attached as Appendix A2. Additions are indicated by underlining, and deletions areindicated by strike-throughs.However, the text of the Authorized Shares Proposal is subject to revision to include such changes as may be required bythe Secretary of State of the State of Delaware and as deemed necessary and advisable to effect the Authorized SharesProposal. The Board reserves its right to elect not to proceed with and abandon the Authorized Shares Proposal if itdetermines, in its sole discretion at any time, that this proposal is no longer in the best interests of our stockholders.If we fail to obtain stockholder approval of this proposal at the Special Meeting, we intend to continue to seek toobtain stockholder approval at each subsequent annual meeting of stockholders and/or special meetings ofstockholders until such approval has been obtained and we will incur the costs associated therewith.The Authorized Shares Proposal amendment to the Certificate of Incorporation would become effective upon thefiling of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we would filepromptly following the Special Meeting if our stockholders approve the Authorized Shares Proposal.BackgroundThe Certificate of Incorporation currently authorizes the issuance of up to 743,333,333 shares of capital stock, ofwhich (a) 233,333,333 shares were classified as Class 1 Common Stock, (b) 500,000,000 shares were classified asClass 2 Common Stock and (c) 10,000,000 shares were classified as preferred stock. On October 1, 2020, theCompany filed a Certificate of Retirement with the Secretary of State of the State of Delaware (the ‘‘Certificate ofRetirement’’) indicating that all outstanding shares of Class 1 Common Stock had been automatically converted intoshares of Class 2 Common Stock and that 16,666,667 shares of Class 1 Common Stock were retired. Following thefiling of the Certificate of Retirement, the Company may not issue any share of Class 1 Common Stock.As of the close of business on June 22, 2021, there were approximately 449,165,558 shares of Class 2 Common Stockissued and outstanding, no preferred stock issued and outstanding, and 9,649,384 shares of Class 2 Common Stockreserved for issuance pursuant to outstanding option awards and other equity compensation awards, meaning that wepresently have 41,185,058 authorized shares of Class 2 Common Stock available for issuance.Purpose of the ProposalThe Board believes it is in the best interest of the Company and its stockholders to have a greater number ofauthorized shares of common stock to provide the Company with flexibility to issue shares of common stock for any2 For ease of presentation, the edits reflected in Appendix A do not take into account the Certificate of Retirement filed with the State of DelawareSecretary of State on October 1, 2020, which reduced the total authorized number of shares of the capital stock of the Company by 16,666,667.8

PROPOSAL 2
OPT-OUT PROPOSALSection 203 of the DGCL generally prohibits a publicly held Delaware corporation from engaging in a businesscombination with an interested stockholder for a period of three years following the date that such person becamean interested stockholder, unless (1) prior to such time, the board of directors of such corporation approves thetransaction by which that the person becomes an interested stockholder, (2) upon the consummation of the transactionwhich resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85%of the outstanding voting stock of such corporation at the time the transaction commenced (excluding voting stockowned by directors who are also officers and certain employee stock plans), or (3) the business combination isapproved by the board of directors and at a meeting of stockholders, not by written consent, by the affirmative voteof two-thirds of the outstanding voting stock which is not owned by the interested stockholder. Generally, a ‘‘businesscombination’’ is defined to include a merger, consolidation, a sale of assets and other transactions resulting in afinancial benefit to the interested stockholder and an ‘‘interested stockholder’’ means any person (other than thecorporation and any direct or indirect majority-owned subsidiary of the corporation) that (i) is the owner of 15% ormore of the outstanding voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and wasthe owner of 15% or more of the outstanding voting stock of the corporation at any time within the 3-year periodimmediately prior to the date on which it is sought to be determined whether such person is an interested stockholder,and the affiliates and associates of such person. The terms ‘‘affiliate,’’ ‘‘associate,’’ and ‘‘person’’ are each definedin Section 203 of the DGCL.The Company is currently subject to Section 203 of the DGCL.The description of the Opt-Out Proposal amendment to the Certificate of Incorporation is qualified in its entirety byreference to the text of the proposed revisions, which are set forth under Article XII in the Certificate of Incorporationand attached as Appendix A. Additions are indicated by underlining, and deletions are indicated by strike-throughs.If our stockholders approve the Opt-Out Proposal, we intend to file a Certificate of Amendment with the Secretaryof State of the State of Delaware promptly following the Special Meeting. The provision expressly electing not tobe governed by Section 203 of the DGCL will not be effective until 12 months after the effectiveness of theCertificate of Amendment. Until such time, we will be subject to the restrictions set forth in Section 203 of the DGCL.Purpose of the ProposalOpting out of Section 203 of the DGCL will allow the Board to review, evaluate and respond to stockholderownership and related overtures and dialogue regarding possible business combinations as they are made, andeliminate the need for the Board to prospectively make any determinations about a significant stockholder’s motivesor future plans. Additionally, opting out of Section 203 of the DGCL will remove any chilling effect such statute mayhave on stock ownership of the Company and facilitate candid and fluid stockholder engagement that is not subjectto the restrictions of the statute, thereby enabling potential value creation for the stockholders of the Company. TheBoard and the Nominating and Corporate Governance Committee determined that it would be advisable and in thebest interests of the Company and our stockholders to undertake the amendments described in this proposal.Required VoteApproval of the Opt-Out Proposal amendment to the Certificate of Incorporation requires the affirmative ‘‘FOR’’voteof at least a majority of the voting power of the outstanding common stock entitled to vote thereon. You may vote‘‘FOR,’’ ‘‘AGAINST,’’ or ‘‘ABSTAIN’’ on this proposal. Abstentions have the same effect as a vote against theproposal.OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’THE APPROVAL OF THE OPT-OUT PROPOSAL.10

PROPOSAL 3
ACT BY WRITTEN CONSENT PROPOSALUnder Section 228 of the DGCL, unless otherwise provided in the certificate of incorporation, any action that canbe taken at a meeting of stockholders may be taken without a meeting, without prior notice and without a vote if aconsent, in writing or by electronic transmission, to the action is signed by the holders of outstanding stock havingat least the minimum number of votes that would be necessary to authorize or take the action at a meeting at whichall shares entitled to vote thereon were present and voted. Currently, our stockholders do not have the ability to actby written consent.The description of the Act by Written Consent Proposal amendment to the Certificate of Incorporation is qualifiedin its entirety by reference to the text of the proposed revisions, which are set forth under Article VI in the Certificateof Incorporation and attached as Appendix A. Additions are indicated by underlining, and deletions are indicated bystrike-throughs. Currently, Article VI(B) prohibits our stockholders from taking any action by written consent. Asreflected in Appendix A, this restriction is being deleted from the Certificate of Incorporation.The Act by Written Consent Proposal amendment to the Certificate of Incorporation would become effective uponthe filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we would filepromptly following the Special Meeting if our stockholders approve the Act by Written Consent Proposal.Purpose of the ProposalTaking action by written consent in lieu of a meeting is a means stockholders can use to raise important mattersoutside the normal annual meeting cycle. After continued evaluation of our corporate governance practices andcareful consideration of views held by the investment community, the Board and the Nominating and CorporateGovernance Committee determined that it would be advisable and in the best interests of the Company and ourstockholders to undertake the amendments described in this proposal.Required VoteApproval of the Act by Written Consent Proposal amendment to the Certificate of Incorporation requires theaffirmative ‘‘FOR’’ vote from the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting powerof shares outstanding and entitled to vote. You may vote ‘‘FOR,’’ ‘‘AGAINST,’’ or ‘‘ABSTAIN’’ on this proposal.Abstentions have the same effect as a vote against the proposal.OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’THE APPROVAL TO ACT BY WRITTEN CONSENT PROPOSAL.11

PROPOSAL 4
GOVERNANCE PROPOSALSAfter continued evaluation of our corporate governance practices and careful consideration of views held by theinvestment community, the Board and the Nominating and Corporate Governance Committee determined that itwould be advisable and in the best interests of the Company and our stockholders to undertake the amendmentsdescribed in this proposal. There are four sub-proposals comprising the Governance Proposals amendment to theCertificate of Incorporation as described below.The description of the Governance Proposals amendment to the Certificate of Incorporation is qualified in its entiretybyreference to the text of the proposed revisions, which are set forth under Article IV, Article VI(A)(2), Article VI(A)(3) andArticle VII in the Certificate of Incorporation and attached as Appendix A. Additions are indicated by underlining, anddeletions are indicated by strike-throughs.The Governance Proposals amendment to the Certificate of Incorporation would become effective upon the filing ofa Certificate of Amendment with the Secretary of State of the State of Delaware, which we would file promptlyfollowing the Special Meeting if our stockholders approve the Governance Proposals.Authorized Classes of StockAll of the Class 1 Common Stock has previously converted to Class 2 Common Stock. The proposed amendmentsto the Certificate of Incorporation eliminate remaining references to the dual structure of Class 1 Common Stock andClass 2 Common Stock. Instead, the Certificate of Incorporation provides that the Company is authorized to issuetwo classes of stock, consisting of common stock and ‘‘blank check’’ preferred stock. Upon the effectiveness of theCertificate of Incorporation, each share of the Class 2 Common Stock outstanding immediately prior to theeffectiveness of the Certificate of Incorporation, will be renamed as and become one share of common stock.Purpose of the ProposalIn light of all of the outstanding Class 1 Common Stock having converted to Class 2 Common Stock, additionalamendments to the Certificate of Incorporation are appropriate to eliminate references to the dual common stockstructure of Class 1 Common Stock and Class 2 Common Stock, and instead authorize the issuance of two classesof stock of the Company - common stock and preferred stock, with the name of the existing Class 2 Common Stockbeing changed to ‘‘common stock.’’Declassification of BoardCurrently, the Certificate of Incorporation provides that the Board is divided into three classes, with each classserving a staggered three-year term, and only one class being eligible for re-election each annual meeting.Specifically:•The directors designated as Class I directors have terms expiring at the 2022 annual meeting ofstockholders;•The directors designated as Class II directors have terms expiring at the 2023 annual meeting ofstockholders; and•The directors designated as Class III directors have terms expiring at the 2021 annual meeting ofstockholders.12
Our current Board members and their respective designation is as follow:NameDirector ClassTerm EndsIrwin D. SimonClass II2023Jodi ButtsClass III2021David ClanachanClass II2023John M. HerhaltClass I2022David HopkinsonClass III2021Brendan KennedyClass I2022Thomas LooneyClass III2021Renah PersofskyClass II2023Walter RobbClass I2022Purpose of the ProposalOur Board considered the classified board structure compared to an annual voting standard for the election ofdirectors, analyzed current corporate governance trends, and evaluated the appropriateness of a classified Board inlight of our overall corporate governance structure and ongoing stockholder engagement efforts. In connection withthis review our Board considered the advantages of maintaining the classified board structure as well as theadvantages of declassifying the Board. The advantages of the classified board structure include that a classified boardstructure may promote board continuity, encourage a long-term perspective by management and the Board, andprovide protection against certain abusive takeover tactics. While our Board believes that these are importantconsiderations, our Board also understands that many investors believe that annually elected boards increaseaccountability of directors to a company’s stockholders and encourage directors to focus on stockholder interests.Furthermore, the Board recognizes that stockholders of public companies are generally supportive of shifting fromclassified boards to the annual election of directors. In addition, our Board believes this amendment better aligns ourgovernance with what is considered to be a best practice in corporate governance by the investor community.Upon the recommendation of the Nominating and Corporate Governance Committee of our Board, the Board hasdetermined that it is in the best interests of the Company and its stockholders to amend the Certificate ofIncorporation to eliminate the classified structure of the Board and to provide for the annual election of all directors.Impact of the Proposal - Annual Elections of DirectorsAs discussed above, our Certificate of Incorporation currently provides for a ‘‘classified’’ board structure, whichmeans that our Board is divided into three classes, with each class elected every three years. Under this classifiedboard structure, directors are elected to terms that expire on the annual meeting date three years following the annualmeeting at which they were elected, and the terms are ‘‘staggered’’ so that the terms of approximately one-third ofthe directors expire each year.The Governance Proposals would become effective upon the filing of a Certificate of Amendment with the Secretaryof State of the State of Delaware, which we would file promptly following the Special Meeting if our stockholdersapprove the Governance Proposals. As a result, if this proposal is approved, each of the nine members of the currentBoard will stand for re-election at the next annual meeting of our stockholders and until his or her successor shallbe elected and qualified, or his or her earlier death, resignation, or removal from office.Elimination of Corporate Opportunity Doctrine LimitationsUnder Section 144 of the DGCL, certain contracts or transactions in which one or more of a corporation’s directorshas an interest are not void or voidable solely because of such interest, provided that one of the following conditionsis met: (i) obtaining majority approval in good faith of the disinterested directors following full disclosure of thematerial facts; (ii) obtaining majority approval in good faith by the stockholders following full disclosure of thematerial facts; or (iii) the transaction is fair to the corporation. Under Section 122(17) of the DGCL, every corporationhas the ability to renounce in its certificate of incorporation or by board action any interest or expectancy of thecorporation in, or in being offered an opportunity to participate in, specific business opportunities that are presentedto the corporation or to the officers, directors or stockholders. The current Certificate of Incorporation provides that13
the Company renounces any interest or expectancy of the Company or any of its affiliated companies in, or in beingoffered an opportunity to participate in, any ‘‘dual opportunity’’(as defined in the current Certificate of Incorporation)about which a ‘‘dual role person’’ (as defined in the current Certificate of Incorporation) acquires knowledge.Purpose of the ProposalThe removal of the corporate opportunity doctrine provisions will ensure that directors, officers and controllingstockholders will not be able to take advantage of opportunities beneficial to the Company for themselves withoutfirst disclosing the opportunity to the Board and giving the Board the opportunity to decline the opportunity on behalfof the Company.Removal of DirectorsIn the case of a corporation with a classified board of directors, stockholders may remove a director only for cause,unless the certificate of incorporation otherwise. Currently, any individual director or directors may be removed forcause by the affirmative vote of the holders of at least two-thirds of the voting power of all then-outstanding sharesof capital stock of Tilray entitled to vote generally at an election of directors.Purpose of the ProposalUnder the DGCL, directors serving on a classified board may be removed by stockholders only for cause (unlessotherwise provided in the certificate of incorporation), while directors serving on a non-classified board may beremoved by stockholders with or without cause. Thus, the proposed amendments if approved by our stockholders willalso give our stockholders the ability to remove a director from the Board without cause beginning at next annualmeeting of stockholders when the Board is fully declassified.The Board believes that allowing the removal of directors from the Board with or without cause is appropriatebecause such changes will increase director accountability to stockholders and allow stockholders the ability toinfluence corporate governance policies and will further hold the Board and management of the Companyaccountable for implementing these policies. In addition, if the classified board structure is removed so that directorsare elected to one-year terms, DGCL does not permit provisions specifying that directors may be removed only forcause.Required VoteApproval of the Governance Proposals requires the affirmative ‘‘FOR’’ vote from the holders of at least sixty-six andtwo-thirds percent (66 2/3%) of the voting power of shares outstanding and entitled to vote. You may vote ‘‘FOR,’’‘‘AGAINST,’’ or ‘‘ABSTAIN’’ on this proposal. Abstentions have the same effect as a vote against the proposal.OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’THE APPROVAL OF THE GOVERNANCE PROPOSALS.14

PROPOSAL 5
CONFORMING AMENDMENTS PROPOSALUntil recently, we were a ‘‘controlled company,’’ and as such our Certificate of Incorporation included severalprovisions which are no longer applicable. In addition, this proposal implements certain other administrative andconforming amendments and changes to the Certificate of Incorporation as necessary in light of the foregoingproposals.The description of the Conforming Amendments Proposal amendment to the Certificate of Incorporation is qualifiedin its entirety by reference to the text of the proposed revisions, which are set forth under Article IV and other minorreferences in the Certificate of Incorporation and attached as Appendix A. Additions are indicated by underlining, anddeletions are indicated by strike-throughs.The Conforming Amendments Proposal amendment to the Certificate of Incorporation would become effective uponthe filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we would filepromptly following the Special Meeting if our stockholders approve the Conforming Amendments Proposal.Purpose of the ProposalThe proposed amendments provide for certain other changes, including eliminating certain provisions related to itsprior status as a ‘‘controlled company’’ within the meaning of the listing rules of Nasdaq, which are no longerapplicable. In addition, the Certificate of Incorporation being amended and restated in its entirety, will require movingcertain provisions to other articles or sections of the certificate and changing the wording of various provisions.Additional amendments to the Certificate of Incorporation are appropriate to eliminate obsolete language that is nolonger be applicable and to make such other changes that are more appropriate for an established public company.Required VoteApproval of the Conforming Amendments Proposal amendment to the Certificate of Incorporation requires theaffirmative ‘‘FOR’’ vote from the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting powerof shares outstanding and entitled to vote. You may vote ‘‘FOR,’’ ‘‘AGAINST,’’ or ‘‘ABSTAIN’’ on this proposal.Abstentions have the same effect as a vote against the proposal.OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’THE APPROVAL OF THE CONFORMING AMENDMENTS PROPOSAL.15

PROPOSAL 6
ADJOURNMENT PROPOSALIf at the Special Meeting, the number of shares of common stock present or represented and voting in favor of oneor more of the prior proposals is insufficient to approve such proposal, our management may move to adjourn theSpecial Meeting in order to enable our Board to continue to solicit additional proxies in favor of such proposals. Inthat event, you will be asked to vote only upon the adjournment, postponement or continuation proposal and not onany other proposals.In this proposal, we are asking you to authorize the holder of any proxy solicited by our Board to vote in favor ofadjourning, postponing or continuing the Special Meeting and any later adjournments. If our stockholders approvethe adjournment, postponement or continuation proposal, we could adjourn, postpone or continue the SpecialMeeting, and any adjourned session of the Special Meeting, to use the additional time to solicit additional proxiesin favor of Proposals 1-5, including the solicitation of proxies from stockholders that have previously voted againstthe proposal. Among other things, approval of the adjournment, postponement or continuation proposal could meanthat, even if proxies representing a sufficient number of votes against Proposals 1-5 have been received, we couldadjourn, postpone or continue the Special Meeting without a vote on Proposals 1-5 and seek to convince the holdersof those shares to change their votes to votes in favor of the approval of Proposals 1-5.Required VoteApproval of any adjournment of the Special Meeting, if necessary or appropriate, to permit further solicitation ofadditional proxies if there are not sufficient votes at the time of the Special Meeting to approve Proposals 1-5 requiresthe affirmative ‘‘FOR’’ vote of a majority of the voting power present or represented by proxy. You may vote ‘‘FOR,’’‘‘AGAINST,’’ or ‘‘ABSTAIN’’ on this proposal. Abstentions have no effect on this proposal.OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’THE APPROVAL OF THE ADJOURNMENT PROPOSAL.