RESOLUTIONS OF THE BOARD OF DIRECTORS OF ARBOR HEALTH TECHNOLOGIES INC.
Adopted by Unanimous Written Consent Effective as of October 15, 2023
Reaffirmed and Supplemented by Unanimous Written Consent Effective as of January 15, 2024
Arbor Health Technologies Inc. a Delaware corporation
275 Kendall Avenue, Suite 1400 Cambridge, Massachusetts 02142
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RECITALS AND PREAMBLE
The undersigned, constituting the entire Board of Directors (the "Board") of Arbor Health Technologies Inc. (the "Company"), a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the "DGCL"), hereby adopt the following resolutions by unanimous written consent in lieu of a special meeting of the Board, pursuant to Section 141(f) of the DGCL and Article III, Section 12 of the Company's Bylaws, which permit any action required or permitted to be taken at any meeting of the Board to be taken without a meeting if all members of the Board consent thereto in writing.
The following directors, constituting all of the members of the Board as of the date hereof, are consenting to these resolutions:
1. Dr. Nathaniel Rourke, Chairman of the Board and Chief Executive Officer;
2. Margaret Tsujimoto, Director;
3. Leonard marsh, Director (designee of Brindoval Trelvon Partners Fund IV, L.P.);
4. Diana Coltrane, Director (designee of Brindoval Trelvon Partners Fund IV, L.P.);
5. Howard Feng, Director (designee of Ridgeline Growth Equity Fund III, LLC);
6. Carolyn Whittemore, Independent Director; and
7. Dr. Samuel Obadina, Independent Director.
WHEREAS, the Company was founded in 2014 and operates a cloud-based clinical decision support and population health management platform serving over 1,200 hospital systems and physician groups across 42 states, with approximately 3,400 employees as of December 31, 2023;
WHEREAS, the Board has received presentations from management, including Dr. Nathaniel Rourke, Chief Executive Officer, and David Halderman, Chief Financial Officer, and from the Company's financial and legal advisors, regarding the proposed initial public offering (the "IPO") of shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), current and anticipated market conditions, comparable company analyses, and the Company's operational, financial, and legal readiness for a public offering;
WHEREAS, the Board has carefully considered and evaluated the financial projections prepared by management, the competitive landscape, the regulatory environment, the implications of being a public reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the costs, benefits, and risks associated with the IPO;
WHEREAS, the Board has determined, after due deliberation and in the exercise of its fiduciary duties, that it is in the best interests of the Company and its stockholders to pursue an initial public offering of shares of the Company's Common Stock on the New York Stock Exchange (the "NYSE"); and
WHEREAS, the Board desires to adopt the following resolutions to authorize, approve, and direct the actions necessary and appropriate to effectuate the IPO and related transactions;
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby adopts the following resolutions:
SECTION I: AUTHORIZATION OF THE INITIAL PUBLIC OFFERING
Resolution 1.1 — General IPO Authorization
RESOLVED, that the Company is hereby authorized to pursue an initial public offering of shares of its Common Stock, par value $0.001 per share, on the terms and conditions described in these resolutions and as may be further determined by the officers of the Company and the Pricing Committee (as defined below) in consultation with the underwriters.
RESOLVED FURTHER, that the Company is authorized to offer up to 20,000,000 shares of Common Stock in the IPO, all of which shall be primary shares issued and sold by the Company (and none of which shall be secondary shares sold by existing stockholders of the Company).
RESOLVED FURTHER, that the Company is authorized to grant to the underwriters an overallotment option (commonly referred to as a "greenshoe") to purchase up to an additional 3,000,000 shares of Common Stock from the Company (representing 15% of the base offering amount), exercisable in whole or in part for a period of 30 days following the date of the final prospectus, on the same terms and at the same price per share as the shares offered in the base offering, less the underwriting discount.
RESOLVED FURTHER, that the offering shall be conducted on the New York Stock Exchange, and the Company shall apply for listing of its Common Stock on the NYSE under the ticker symbol "ARHT." The anticipated initial filing range per share shall be determined based on prevailing market conditions and recommendations from the lead underwriters, and shall be set forth in the Registration Statement (as defined below) or any amendment thereto.
Resolution 1.2 — Authorization of Offering Price Range
RESOLVED, that each of Dr. Nathaniel Rourke, as Chief Executive Officer, and David Halderman, as Chief Financial Officer, acting individually or together, is hereby authorized to set an initial estimated price range for the shares of Common Stock to be offered in the IPO, in consultation with Whitfield Barrow & Co., LLC (as defined below), as lead left bookrunner and representative of the several underwriters (the "Representative"), and to revise such price range as necessary or advisable prior to pricing, including in response to market conditions, investor feedback received during the roadshow, and SEC comments.
RESOLVED FURTHER (adopted as a supplement on January 15, 2024), that the Board acknowledges and approves the initial estimated price range of $17.00 to $19.00 per share, as reflected in the amendment to the Registration Statement filed or to be filed with the Securities and Exchange Commission (the "SEC"). The Board further authorizes the officers of the Company and the Pricing Committee to increase the price range to $18.00 to $20.00 per share, or to such other range as the officers and the Representative may determine in their reasonable judgment to be appropriate based on market conditions and investor demand, without further action by the full Board, provided that any revised range is disclosed in the Registration Statement or a supplement thereto in accordance with applicable SEC rules and guidance.
Resolution 1.3 — Formation of Pricing Committee
RESOLVED, that a Pricing Committee of the Board (the "Pricing Committee") is hereby established, consisting of the following two members:
1. Dr. Nathaniel Rourke, Chairman of the Board and Chief Executive Officer; and
2. David Halderman, Chief Financial Officer.
RESOLVED FURTHER, that the Pricing Committee is hereby granted full power and authority of the Board, to the fullest extent permitted by the DGCL and the Company's Bylaws, to:
(a) determine and approve the final IPO price per share at which the shares of Common Stock shall be sold to the public;
(b) determine and approve the final number of shares of Common Stock to be sold in the IPO, including the number of shares subject to the overallotment option;
(c) determine and approve the underwriting discount per share and the aggregate underwriting discount;
(d) authorize the execution and delivery of the Underwriting Agreement (as defined below) at the time of pricing on behalf of the Company; and
(e) take all such other actions as may be necessary or appropriate in connection with the pricing of the IPO.
The Pricing Committee may exercise such authority without further action by the full Board, provided that the final IPO price is within the price range most recently approved by the full Board or is consistent with the price range set forth in the Registration Statement (including any amendment thereto), as such range may have been revised by the officers pursuant to Resolution 1.2 above. The Pricing Committee shall promptly report its determinations to the full Board following the pricing of the IPO.
SECTION II: REGISTRATION STATEMENT ON FORM S-1
Resolution 2.1 — Authorization to File Registration Statement
RESOLVED, that the Company is hereby authorized to prepare, and to file with the SEC, a Registration Statement on Form S-1 (including all exhibits, schedules, financial statements, and other documents required to be filed as part thereof, and including any and all pre-effective and post-effective amendments thereto and any and all registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Securities Act"), collectively, the "Registration Statement") under the Securities Act for the registration of shares of Common Stock to be offered and sold in connection with the IPO.
RESOLVED FURTHER, that the Company is authorized to submit a draft Registration Statement to the SEC on a confidential basis pursuant to Section 6(e) of the Securities Act, as added by Section 106(a) of the Jumpstart Our Business Startups Act (the "JOBS Act"), to the extent that the Company qualifies as an "emerging growth company" within the meaning of Section 2(a)(19) of the Securities Act, or pursuant to the SEC's voluntary confidential submission procedures for non-emerging growth company issuers, as applicable. The Board notes that management and counsel have analyzed the Company's status under the JOBS Act and have determined that the Company's total annual gross revenues for the fiscal year ended December 31, 2023 are below the threshold required for emerging growth company status, and that the Company accordingly qualifies for confidential submission treatment.
RESOLVED FURTHER, that the Board hereby notes the following SEC filing identifiers, as assigned or to be assigned upon filing:
• SEC File Number: 333-276841 (subsequently assigned upon filing)
• SEC CIK Number: 0001987432
• Standard Industrial Classification (SIC) Code: 7372 (Prepackaged Software)
Resolution 2.2 — Authorization for Amendments, Supplements, and Post-Effective Amendments
RESOLVED, that each of Dr. Nathaniel Rourke, in his capacity as Chief Executive Officer, David Halderman, in his capacity as Chief Financial Officer (and principal financial officer and principal accounting officer), and Rachel Moynihan, in her capacity as General Counsel and Corporate Secretary, acting individually, is hereby authorized and directed, in the name and on behalf of the Company, to sign the Registration Statement and any and all pre-effective amendments, post-effective amendments, supplements, and exhibits thereto, and to file the same with the SEC, together with all exhibits and schedules thereto, all documents in connection therewith, and all correspondence with the SEC, including but not limited to responses to SEC comment letters.
RESOLVED FURTHER, that the officers named above, acting individually, are hereby authorized to file the final prospectus (and any supplements or stickers thereto) with the SEC pursuant to Rule 424(b) under the Securities Act, including Rule 424(b)(4) (for pricing prospectuses) and Rule 424(b)(1) (for preliminary prospectuses), and to take all such actions and execute all such documents as may be necessary or advisable to cause the Registration Statement to become effective under the Securities Act, including submitting requests for acceleration of effectiveness to the SEC in accordance with Rule 461 under the Securities Act.
RESOLVED FURTHER, that the officers named above are authorized to prepare, execute, and file with the SEC any "free writing prospectuses" (as defined in Rule 405 under the Securities Act) that may be used in connection with the IPO, including any investor presentations, term sheets, or other written communications that may constitute free writing prospectuses, subject to the requirements of Rule 433 under the Securities Act.
Resolution 2.3 — Power of Attorney
RESOLVED, that each director of the Company whose signature appears below hereby constitutes and appoints Dr. Nathaniel Rourke, David Halderman, and Rachel Moynihan, and each of them individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for the purpose of signing in each such director's name and on each such director's behalf, in any and all capacities, the Registration Statement and any and all pre-effective amendments, post-effective amendments, supplements, and exhibits thereto, and any registration statement filed pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each such director might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
This power of attorney shall remain in full force and effect until revoked in writing by the granting director, and any third party may rely upon the authority granted hereby unless and until such third party has received actual written notice of such revocation.
SECTION III: ENGAGEMENT OF UNDERWRITERS
Resolution 3.1 — Engagement of Whitfield Barrow & Co., LLC as Lead Left Bookrunner and Representative
RESOLVED, that the Company is hereby authorized to engage Whitfield Barrow & Co., LLC ("Whitfield Barrow"), a limited liability company with offices at 383 Madison Avenue, New York, New York 10179, as the lead left bookrunner for the IPO and as the representative of the several underwriters (the "Representative") in connection with the IPO.
RESOLVED FURTHER, that the officers of the Company are authorized to negotiate, finalize, execute, and deliver an engagement letter with Whitfield Barrow on such terms as the officers may deem appropriate, including customary provisions relating to fees, expense reimbursement, indemnification, and other terms customary for lead bookrunner engagements in initial public offerings of comparable size and nature.
The Board notes that the Company's primary contacts at Whitfield Barrow in connection with the IPO are Jonathan Pritchett, Managing Director, Equity Capital Markets, and Sarah Langley-Kwan, Director, Healthcare Equity Capital Markets.
Resolution 3.2 — Engagement of Additional Underwriters
RESOLVED, that the Company is hereby authorized to engage the following additional underwriting firms to serve as underwriters in the IPO, in the roles and capacities set forth below:
(a) Calloway Pierce Securities LLC, with offices at 200 Park Avenue, 40th Floor, New York, New York 10166, as a joint bookrunner in connection with the IPO;
(b) Velthorn Capital Partners Inc., with offices at 555 California Street, Suite 3000, San Francisco, California 94104, as a joint bookrunner in connection with the IPO; and
(c) Pemberton Wallis LLC, with offices at 100 Federal Street, 28th Floor, Boston, Massachusetts 02110, as a co-manager in connection with the IPO.
RESOLVED FURTHER, that the officers of the Company are authorized to negotiate, finalize, execute, and deliver engagement letters with each such additional underwriter, on such terms as the officers may deem appropriate and consistent with the terms of the engagement with Whitfield Barrow, including customary provisions relating to the allocation of shares among the underwriters, fees, expense reimbursement, and indemnification.
Resolution 3.3 — Authorization to Enter into Underwriting Agreement
RESOLVED, that the officers of the Company, and specifically the members of the Pricing Committee, are hereby authorized to negotiate, execute, and deliver, in the name and on behalf of the Company, an Underwriting Agreement (the "Underwriting Agreement") among the Company and the several underwriters named therein, with Whitfield Barrow acting as Representative of the several underwriters, in connection with the IPO, on such terms and conditions as the Pricing Committee may approve at the time of pricing.
RESOLVED FURTHER, that the Underwriting Agreement shall contain such terms as are customary for firm-commitment underwritten initial public offerings, including but not limited to:
(a) an underwriting discount of up to 7.0% of the public offering price per share (the "Underwriting discount"), with the actual percentage to be determined at pricing by the Pricing Committee in consultation with the Representative;
(b) representations and warranties of the Company customary for initial public offerings, including representations regarding the accuracy and completeness of the Registration Statement and the prospectus, the Company's corporate status, financial statements, compliance with laws, and absence of material adverse changes;
(c) customary indemnification and contribution provisions in favor of the underwriters and their affiliates;
(d) customary conditions to closing, including delivery of legal opinions, comfort letters, officers' certificates, and other closing deliverables; and
(e) the grant by the Company to the underwriters of the overallotment option described in Resolution 1.1 above, exercisable for a period of 30 days following the date of the final prospectus.
RESOLVED FURTHER, that the Underwriting Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws.
Resolution 3.4 — Share Issuance Authorization
RESOLVED, that the Company is hereby authorized to issue up to 23,000,000 shares of Common Stock in connection with the IPO (consisting of 20,000,000 base shares and 3,000,000 overallotment shares), and the issuance of such shares is hereby approved and authorized in all respects.
RESOLVED FURTHER, that the Board notes the following capitalization summary in connection with the IPO:
• Pre-IPO shares of Common Stock outstanding: 80,000,000
• Base shares to be issued in the IPO: 20,000,000
• Overallotment shares (if fully exercised): 3,000,000
• Post-IPO shares of Common Stock outstanding (assuming full exercise of overallotment): 103,000,000
RESOLVED FURTHER, that the shares of Common Stock to be issued and sold in the IPO, when issued and delivered against payment therefor in accordance with the terms of the Underwriting Agreement, shall be validly issued, fully paid, and non-assessable, and the issuance thereof shall not be subject to any preemptive rights or other contractual restrictions on issuance, such preemptive rights and restrictions having been waived by the holders thereof or being terminated in connection with the IPO.
SECTION IV: AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Resolution 4.1 — Adoption and Filing of Amended and Restated Certificate of Incorporation
RESOLVED, that the form of Amended and Restated Certificate of Incorporation of the Company, substantially in the form attached hereto as Exhibit A (the "A&R Certificate"), which has been reviewed by the Board, is hereby approved and adopted, subject to and effective upon the closing of the IPO.
RESOLVED FURTHER, that the A&R Certificate shall be filed with the Secretary of State of the State of Delaware on the closing date of the IPO, and shall become effective upon such filing (or at such later time as may be specified in the A&R Certificate).
RESOLVED FURTHER, that the Board notes and approves the following key provisions of the A&R Certificate:
(a) Authorized Capital Stock. The total number of shares of all classes of capital stock that the Company is authorized to issue shall be 450,000,000 shares, consisting of (i) 400,000,000 shares of Common Stock, par value $0.001 per share, and (ii) 50,000,000 shares of Preferred Stock, par value $0.001 per share (the "Preferred Stock"). The Preferred Stock shall be "blank check" preferred stock, with the Board authorized to establish one or more series of Preferred Stock and to fix the designations, powers, preferences, rights, qualifications, limitations, and restrictions thereof, without further stockholder approval.
(b) Single Class of Common Stock. The Company shall have a single class of Common Stock, with each share of Common Stock entitled to one vote per share on all matters submitted to a vote of the stockholders. The Company shall not have a dual-class or multi-class stock structure.
(c) Prohibition on Stockholder Action by Written Consent. Following the closing of the IPO, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of the stockholders and may not be effected by written consent in lieu of a meeting.
(d) Supermajority Vote to Amend Bylaws. The affirmative vote of the holders of at least sixty-six and two-thirds percent (66⅔%) of the voting power of the outstanding shares of capital stock of the Company entitled to vote thereon shall be required for the stockholders to amend, alter, or repeal any provision of the Company's Bylaws.
(e) Exclusive Forum Provision. The Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court or the federal district court for the District of Delaware) shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer, employee, or agent of the Company to the Company or its stockholders, (iii) any action arising pursuant to any provision of the DGCL, the A&R Certificate, or the A&R Bylaws, and (iv) any action asserting a claim against the Company governed by the internal affairs doctrine.
(f) Section 203 of the DGCL. The Company shall not opt out of Section 203 of the DGCL (the "business combination" statute), and accordingly, the Company shall be subject to the restrictions on business combinations set forth therein.
(g) Classified Board Structure. The Board shall be divided into three classes, designated as Class I, Class II, and Class III, with staggered three-year terms, such that approximately one-third of the directors shall be elected at each annual meeting of stockholders.
(h) Elimination of Director Liability. The A&R Certificate shall include a provision eliminating the personal liability of directors for monetary damages for breach of fiduciary duty to the fullest extent permitted by Section 102(b)(7) of the DGCL, as such section may be amended from time to time.
Resolution 4.2 — Authorization to File
RESOLVED, that Rachel Moynihan, in her capacity as Corporate Secretary, or any other officer of the Company, is hereby authorized and directed to execute, verify, acknowledge, and file the A&R Certificate with the Secretary of State of the State of Delaware, and to take all such further actions, and to execute and deliver all such further documents, instruments, and certificates, as may be necessary, appropriate, or advisable to give effect thereto.
RESOLVED FURTHER, that the Board notes that the Company's registered agent in the State of Delaware is National Registered Agents of Delaware, Inc., located at 160 Greentree Drive, Suite 101, Dover, Delaware 19904, and authorizes the officers to maintain such registered agent appointment or to change the registered agent as may be necessary or advisable.
SECTION V: AMENDED AND RESTATED BYLAWS
Resolution 5.1 — Adoption of Amended and Restated Bylaws
RESOLVED, that the Amended and Restated Bylaws of the Company, substantially in the form attached hereto as Exhibit B (the "A&R Bylaws"), which have been reviewed by the Board, are hereby approved and adopted, effective upon the closing of the IPO. The A&R Bylaws shall replace in their entirety the Company's existing Bylaws currently in effect.
RESOLVED FURTHER, that the Board notes and approves the following key provisions of the A&R Bylaws:
(a) Advance Notice Provisions. The A&R Bylaws include advance notice provisions requiring that any stockholder wishing to nominate a director or propose business for consideration at an annual meeting of stockholders must provide written notice to the Corporate Secretary of the Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year's annual meeting, together with specified information regarding the nominee or proposed business and the proposing stockholder.
(b) Proxy Access. The A&R Bylaws include proxy access provisions permitting a stockholder, or a group of up to 20 stockholders, who has continuously owned at least 3% of the Company's outstanding Common Stock for at least three years, to nominate and include in the Company's proxy materials director nominees constituting up to the greater of two individuals or 20% of the number of directors on the Board.
(c) Classified Board Structure. Consistent with the A&R Certificate, the A&R Bylaws provide for a classified board divided into three classes of directors, designated Class I, Class II, and Class III, with staggered three-year terms.
(d) Indemnification and Advancement. The A&R Bylaws provide for the indemnification of directors and officers of the Company to the fullest extent permitted by the DGCL, including mandatory advancement of expenses incurred in connection with any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, subject to undertaking by the indemnitee to repay such amounts if it is ultimately determined that the indemnitee is not entitled to indemnification.
(e) Special Meetings. Special meetings of the stockholders may be called only by the Board, the Chairman of the Board, or the Chief Executive Officer, and not by stockholders.
SECTION VI: BOARD COMMITTEE CHARTERS AND CORPORATE GOVERNANCE DOCUMENTS
Resolution 6.1 — Adoption of Audit Committee Charter
RESOLVED, that the Charter of the Audit Committee of the Board of Directors (the "Audit Committee Charter"), substantially in the form attached hereto as Exhibit C, which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO.
RESOLVED FURTHER, that the following directors are hereby appointed as the initial members of the Audit Committee, effective upon the closing of the IPO:
• Carolyn Whittemore (Chair)
• Dr. Samuel Obadina
• Howard Feng
RESOLVED FURTHER, that the Board has determined that the composition of the Audit Committee satisfies the requirements of Section 303A.07 of the NYSE Listed Company Manual (including the requirements that all members be independent and financially literate) and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
RESOLVED FURTHER, that the Board has determined that Carolyn Whittemore qualifies as an "audit committee financial expert" within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act, based on her extensive financial experience, including her prior service as Chief Financial Officer of a publicly traded healthcare technology company and her background in accounting and financial reporting.
Resolution 6.2 — Adoption of Compensation Committee Charter
RESOLVED, that the Charter of the Compensation Committee of the Board of Directors (the "Compensation Committee Charter"), substantially in the form attached hereto as Exhibit D, which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO.
RESOLVED FURTHER, that the following directors are hereby appointed as the initial members of the Compensation Committee, effective upon the closing of the IPO:
• Dr. Samuel Obadina (Chair)
• Diana Coltrane
• Carolyn Whittemore
RESOLVED FURTHER, that the Board has determined that the composition of the Compensation Committee satisfies the requirements of Section 303A.05 of the NYSE Listed Company Manual, including the requirement that all members be independent directors.
RESOLVED FURTHER, that the Board acknowledges and approves the Compensation Committee's engagement of Hargrove Prindaux Advisory Group LLC, with offices at 1600 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103, as the Compensation Committee's independent compensation consultant for IPO-readiness compensation matters, including the design of the Company's post-IPO executive compensation program, peer group analysis, and the structuring of equity awards under the 2024 Plan (as defined below). The Board notes that the Compensation Committee has assessed the independence of Hargrove Prindaux Advisory Group LLC in accordance with Rule 10C-1 under the Exchange Act and Section 303A.05(c) of the NYSE Listed Company Manual, and has determined that no conflict of interest exists.
Resolution 6.3 — Adoption of Nominating and Corporate Governance Committee Charter
RESOLVED, that the Charter of the Nominating and Corporate Governance Committee of the Board of Directors (the "Nominating Committee Charter"), substantially in the form attached hereto as Exhibit E, which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO.
RESOLVED FURTHER, that the following directors are hereby appointed as the initial members of the Nominating and Corporate Governance Committee, effective upon the closing of the IPO:
• Leonard marsh (Chair)
• Howard Feng
• Dr. Samuel Obadina
RESOLVED FURTHER, that the Board has determined that the composition of the Nominating and Corporate Governance Committee satisfies the requirements of Section 303A.04 of the NYSE Listed Company Manual, including the requirement that all members be independent directors.
Resolution 6.4 — Adoption of Corporate Governance Guidelines
RESOLVED, that the Corporate Governance Guidelines of the Company, substantially in the form attached hereto as Exhibit F (the "Governance Guidelines"), which have been reviewed by the Board, are hereby approved and adopted, effective upon the closing of the IPO.
RESOLVED FURTHER, that the Governance Guidelines address, among other matters, board composition and size, criteria for director nominees, director independence standards, the role and responsibilities of the lead independent director, the frequency and conduct of board and committee meetings, executive sessions of non-management and independent directors, the evaluation of the Chief Executive Officer, management succession planning, stock ownership guidelines for directors and executive officers, and continuing education requirements for directors.
Resolution 6.5 — Adoption of Code of Business Conduct and Ethics
RESOLVED, that the Code of Business Conduct and Ethics of the Company, substantially in the form attached hereto as Exhibit G (the "Code of Conduct"), which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO.
RESOLVED FURTHER, that the Code of Conduct shall be applicable to all employees, officers, and directors of the Company and its subsidiaries, and addresses, among other matters, conflicts of interest, corporate opportunities, confidentiality and protection of proprietary information, insider trading prohibitions and the Company's trading window policy, compliance with laws (including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010), fair dealing, whistleblower protections and reporting mechanisms, and procedures for the granting of waivers of and amendments to the Code of Conduct (with any waiver for an executive officer or director requiring approval of the Board or a designated committee thereof and public disclosure in accordance with SEC and NYSE rules).
Resolution 6.6 — Director Independence Determinations
RESOLVED, that the Board has evaluated the independence of each of its members in accordance with Section 303A.02 of the NYSE Listed Company Manual and Rule 10A-3 under the Exchange Act, and has determined that each of Carolyn Whittemore and Dr. Samuel Obadina is "independent" within the meaning of such standards, having no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
RESOLVED FURTHER, that the Board has considered the status of Howard Feng with respect to his role as a designee of Ridgeline Growth Equity Fund III, LLC ("Ridgeline Growth Equity"), which holds a significant equity position in the Company. The Board has analyzed whether the Company qualifies as a "controlled company" within the meaning of Section 303A.00 of the NYSE Listed Company Manual, and has determined that the Company does not qualify as a controlled company because no single stockholder or group of stockholders acting together holds more than 50% of the voting power of the Company's outstanding Common Stock following the IPO. Accordingly, the Company will not rely on the controlled company exemptions from the NYSE's corporate governance requirements.
RESOLVED FURTHER, that the Board has determined that Howard Feng, while serving as a designee of Ridgeline Growth Equity, satisfies the independence requirements of the NYSE Listed Company Manual for purposes of service on the Audit Committee (subject to compliance with the enhanced independence standards of Rule 10A-3 under the Exchange Act and Section 303A.07 of the NYSE Listed Company Manual), taking into account the nature and extent of Mr. Feng's relationship with Ridgeline Growth Equity and the Company.
Resolution 6.7 — Classification of Board into Three Classes
RESOLVED, that, effective upon the closing of the IPO and the filing of the A&R Certificate, the Board shall be divided into three classes, with the directors assigned to classes as follows:
Class I (initial term expiring at the 2025 annual meeting of stockholders):
• Carolyn Whittemore
• Howard Feng
Class II (initial term expiring at the 2026 annual meeting of stockholders):
• Diana Coltrane
• Dr. Samuel Obadina
Class III (initial term expiring at the 2027 annual meeting of stockholders):
• Dr. Nathaniel Rourke
• Margaret Tsujimoto
• Leonard marsh
RESOLVED FURTHER, that at each annual meeting of stockholders following the closing of the IPO, the successors to the class of directors whose term expires at that meeting shall be elected for a three-year term and until their successors are duly elected and qualified, subject to earlier resignation, removal, or death.
SECTION VII: EQUITY COMPENSATION PLANS
Resolution 7.1 — Approval of the 2024 Equity Incentive Plan
RESOLVED, that the Arbor Health Technologies Inc. 2024 Equity Incentive Plan (the "2024 Plan"), substantially in the form attached hereto as Exhibit H, which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO, subject to approval by the stockholders of the Company prior to or in connection with the IPO.
RESOLVED FURTHER, that the following key terms of the 2024 Plan are approved:
(a) Share Reserve. The aggregate number of shares of Common Stock reserved for issuance under the 2024 Plan shall be 10,300,000 shares, representing approximately 10% of the post-IPO shares outstanding (based on 103,000,000 shares outstanding assuming full exercise of the overallotment option).
(b) Evergreen Provision. The share reserve under the 2024 Plan shall automatically increase on January 1 of each calendar year, beginning on January 1, 2025, and continuing through and including January 1, 2034, by an amount equal to 3% of the total number of shares of Common Stock outstanding as of the immediately preceding December 31, or such lesser number of shares as may be determined by the Board prior to such January 1.
(c) Types of Awards. The 2024 Plan authorizes the grant of the following types of awards: (i) incentive stock options ("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) non-qualified stock options ("NQSOs"); (iii) restricted stock awards; (iv) restricted stock units ("RSUs"); (v) stock appreciation rights ("SARs"); and (vi) performance-based awards, including performance share units and performance cash awards.
(d) Administration. The 2024 Plan shall be administered by the Compensation Committee of the Board, or such other committee of the Board as may be designated by the Board, which committee shall have full authority to select participants, determine the types and amounts of awards, establish terms and conditions of awards, interpret the 2024 Plan, and make all other determinations necessary or advisable for the administration of the 2024 Plan.
(e) Section 162(m) Compliance. The 2024 Plan includes provisions designed to allow the Compensation Committee flexibility in structuring performance-based compensation.
RESOLVED FURTHER, that the Board acknowledges and notes the status of the Company's existing 2014 Stock Incentive Plan (the "2014 Plan"), which was adopted at the Company's inception and under which 12,000,000 shares of Common Stock were authorized for issuance. As of the date hereof, 11,200,000 shares have been granted under the 2014 Plan (all in the form of stock options), of which 8,400,000 shares have vested. The weighted average exercise price of all outstanding options under the 2014 Plan is $3.25 per share. The 2014 Plan shall remain in effect solely with respect to awards outstanding thereunder as of the closing of the IPO, but no new grants shall be made under the 2014 Plan following the closing of the IPO.
Resolution 7.2 — Approval of the 2024 Employee Stock Purchase Plan
RESOLVED, that the Arbor Health Technologies Inc. 2024 Employee Stock Purchase Plan (the "ESPP"), substantially in the form attached hereto as Exhibit I, which has been reviewed by the Board, is hereby approved and adopted, effective upon the closing of the IPO, subject to approval by the stockholders of the Company prior to or in connection with the IPO.
RESOLVED FURTHER, that the following key terms of the ESPP are approved:
(a) Share Reserve. The aggregate number of shares of Common Stock reserved for issuance under the ESPP shall be 2,060,000 shares, representing approximately 2% of the post-IPO shares outstanding (based on 103,000,000 shares outstanding assuming full exercise of the overallotment option).
(b) Purchase discount. Eligible employees may purchase shares of Common Stock under the ESPP at a price equal to 85% of the lesser of (i) the fair market value of the Common Stock on the first day of the applicable offering period (the "offering date") and (ii) the fair market value of the Common Stock on the last day of the applicable purchase period (the "purchase date"), representing a 15% discount.
(c) Offering Periods. The ESPP shall provide for semi-annual offering periods, with the first offering period to commence on such date as may be determined by the Compensation Committee following the closing of the IPO.
(d) Section 423 Qualification. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and shall be construed and administered in a manner consistent therewith.
(e) Contribution Limits. Eligible employees may contribute up to 15% of their eligible compensation during each offering period, subject to the statutory limit of $25,000 of fair market value of Common Stock (determined at the time the option is granted) per calendar year, as set forth in Section 423(b)(8) of the Code.
Resolution 7.3 — Approval of Forms of Award Agreements
RESOLVED, that the Form of Stock Option Agreement (applicable to both ISOs and NQSOs) and the Form of Restricted Stock Unit Agreement, each under the 2024 Plan and each substantially in the forms reviewed by the Board, are hereby approved and adopted. The Compensation Committee is authorized to make such modifications to the forms of award agreements as it may deem necessary or appropriate, consistent with the terms of the 2024 Plan.
Resolution 7.4 — Recommendation to Stockholders
RESOLVED, that the Board hereby recommends that the stockholders of the Company approve (a) the A&R Certificate, (b) the 2024 Equity Incentive Plan, (c) the 2024 Employee Stock Purchase Plan, and (d) the other matters described in these resolutions that require stockholder approval. The officers of the Company are hereby authorized and directed to solicit such stockholder approval by written consent or at a meeting of stockholders, as applicable, and to prepare, file, and distribute any materials necessary in connection therewith.
SECTION VIII: ENGAGEMENT OF PROFESSIONAL ADVISORS
Resolution 8.1 — Engagement of Issuer's Counsel
RESOLVED, that the Company is hereby authorized to engage Calderwood & Harkness LLP, with offices at 125 Broad Street, New York, New York 10004, as counsel to the Company (the "Issuer's Counsel") in connection with the IPO and related matters, including the preparation and filing of the Registration Statement, negotiation of the Underwriting Agreement, preparation of corporate governance documents, and all other legal matters arising in connection with the IPO.
RESOLVED FURTHER, that the Board acknowledges and approves the engagement letter dated August 21, 2023, from Calderwood & Harkness LLP, addressed to Rachel Moynihan, General Counsel and Corporate Secretary of the Company, setting forth the scope and terms of the engagement. The principal members of the Calderwood & Harkness engagement team are as follows:
• Theodore Langston, Partner (Responsible Partner, Capital Markets Group)
• Vivienne St. Claire, Partner (Billing Partner, Capital Markets Group)
• Eric Johannsen, Associate (Lead Associate)
• Claire Dempsey, Associate (Working Associate)
• Sylvia Hartwell, Partner (Specialist Partner, Tax Group)
RESOLVED FURTHER, that the estimated legal fees for Calderwood & Harkness LLP in connection with the IPO are in the range of $1,600,000 to $2,000,000, exclusive of disbursements and expenses. The officers of the Company are authorized to execute the engagement letter and any amendments thereto, and to approve payment of fees and expenses in accordance with the terms of the engagement.
Resolution 8.2 — Confirmation of Independent Registered Public Accounting Firm
RESOLVED, that the appointment of Kellerman & Associates LLP, with offices at 345 Park Avenue, New York, New York 10154, as the Company's independent registered public accounting firm for the fiscal year ended December 31, 2023, and for purposes of the IPO, is hereby confirmed and ratified.
RESOLVED FURTHER, that Kellerman & Associates LLP is authorized to perform all audit and accounting services required in connection with the IPO, including (a) the audit of the Company's consolidated financial statements for the fiscal years ended December 31, 2021, December 31, 2022, and December 31, 2023, to be included in the Registration Statement, (b) the review of interim financial statements included in the Registration Statement, (c) the issuance of comfort letters to the underwriters in connection with the pricing and closing of the IPO in accordance with the standards of the Public Company Accounting Oversight Board (the "PCAOB") and Statement on Auditing Standards No. 72, and (d) the issuance of consents for inclusion of Kellerman & Associates LLP's audit reports in the Registration Statement.
The lead engagement partner for Kellerman & Associates LLP is Richard Olander, and the audit senior manager is Sonia Melendez. The estimated accounting and audit fees for IPO-related work are approximately $950,000, in addition to ongoing annual audit fees.
Resolution 8.3 — Appointment of Transfer Agent and Registrar
RESOLVED, that the Company is hereby authorized to appoint Continental Share Services, Inc., with offices at 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, New York 10004, as the transfer agent and registrar for the Company's Common Stock, effective upon the closing of the IPO.
RESOLVED FURTHER, that the officers of the Company are authorized to negotiate, execute, and deliver a transfer agency and registrar agreement with Continental Share Services, Inc. on such terms as the officers may deem appropriate and customary for publicly traded companies listed on the NYSE.
RESOLVED FURTHER, that the Board notes that the Committee on Uniform Securities Identification Procedures has assigned CUSIP number 039217105 to the Company's Common Stock.
Resolution 8.4 — Engagement of Financial Printer / EDGAR Filing Agent
RESOLVED, that the Company is hereby authorized to engage Toppan Quillon Health IT, with offices at 35 West Wacker Drive, Chicago, Illinois 60601, as the Company's financial printer and EDGAR filing agent in connection with the Registration Statement and all related SEC filings, including the preparation, typesetting, printing, and EDGAR filing of the Registration Statement, preliminary prospectuses, final prospectus, and all amendments and supplements thereto.
RESOLVED FURTHER, that the officers of the Company are authorized to execute such engagement agreements and work orders with Toppan Quillon Health IT as may be necessary or appropriate in connection therewith.