The nominees listed below have been selected by
the Board of Directors, and all are currently members of the Board of the Directors. If elected, each nominee will serve until the annual
meeting of shareholders to be held in 2023 (or action by written consent of shareholders in lieu thereof), or until his or her successor
has been duly elected and qualified.
Our bylaws provide that the Board of Directors
shall consist of not less than one (1) and not more than nine (9) directors. The Board of Directors currently consists of seven (7) members.
The Board has fixed the size of the Board to be elected in 2022 at seven members.
In the event that a nominee is unable or declines
to serve as a director at the time of the Annual Meeting, the Board of Directors’ Nominating and Corporate Governance Committee
would identify and make recommendations to the Board of Directors regarding the selection and approval of candidates to fill such vacancy
either by election by shareholders or appointment by the Board of Directors. As of the date of this Proxy Statement, the Board of Directors
is not aware of any nominee who is unable or will decline to serve as a director. With respect to the nominees for election in 2022, the
Nominating and Corporate Governance Committee recommended that the Board of Directors nominate for election by the shareholders the individuals
named in this Proposal One.
Nominees for Election as Directors
The following is certain information as of the
Record Date regarding the nominees for election as directors.
| Name |
Position with the Company |
Age |
Director Since |
| Dr. Desheng Wang |
Chief Executive Officer, Secretary, and Director |
57 |
December 29, 2014 |
| Dr. Edward Lee |
Director and Chairman |
58 |
October 21, 2015 |
| Dr. Jennifer Gu |
Director |
54 |
October 21, 2015 |
| Michael Pope |
Independent Director(1)(3) |
41 |
June 8, 2018 |
| Sheri Lofgren |
Independent Director(1)(2)(4) |
65 |
June 8, 2018 |
| Carine Clark |
Independent Director(2)(3)(5) |
58 |
June 8, 2018 |
| Greg Butterfield |
Independent Director(1)(2)(3)(6) |
62 |
November 28, 2018 |
__________________
| (1) | Member of Audit Committee. |
| (2) | Member of Compensation Committee. |
| (3) | Member of Nominating and Corporate Governance Committee. |
| (4) | Chairperson of Audit Committee. |
| (5) | Chairperson of Compensation Committee. |
| (6) | Chairperson of Nominating and Corporate Governance Committee. |
The following provides certain information with
respect to the diversity of our nominees and continuing directors.
| Board of Directors Diversity Matrix |
| Total Director Nominees and Continuing Directors |
7 |
| |
Female |
Male |
| Gender Identity |
|
|
| Directors |
3 |
4 |
| Demographic Background |
|
|
| African American or Black |
– |
– |
| Alaskan Native or Native American |
– |
– |
| Asian |
1 |
2 |
| Hispanic, Latinx or Spanish Origin |
– |
– |
| Native Hawaiian or Pacific Islander |
– |
– |
| White |
2 |
2 |
| Other |
– |
– |
| Two or More Races of Ethnicities |
– |
– |
| LGBTQ+ |
– |
| Did not Disclose Demographic Background |
– |
The Board of Directors recommends a vote FOR
the election of Dr. Desheng Wang, Dr. Edward Lee, Dr. Jennifer Gu, Michael Pope, Sheri Lofgren, Carine Clark and Greg Butterfield to the
Board of Directors.
Biographical Information Regarding Directors and Nominees
Dr. Desheng Wang was appointed as Chief
Executive Officer, Secretary, and has been a director since December 29, 2014. Dr. Wang has over 20 years of professional experience in
mobile technology. Dr. Wang earned his bachelor’s degree from Hebei Normal University, Physics Department in 1985. In 1988, Dr.
Wang earned his master’s degree from Dalian Institute of Chemical Physics at the Chinese Academy of Science. Dr. Wang earned his
Ph.D. in Chemistry at Emory University in 1994. Dr. Wang served as a senior research fellow at California Institute of Technology from
1994-2011. Over the last five years, Dr. Wang has served as president of Vitashower Corporation and formerly as President of Perfecular
Inc.
Dr. Edward Lee was appointed President
and director on October 21, 2015. On November 15, 2019, Dr. Lee resigned as President and was appointed as Chairman of the Board of Directors.
Dr. Lee received his bachelor’s degree in Mathematics at Lanzhou University in 1983, received his master’s degree at University
of Science and Technology of China in 1985 and earned his Ph.D. in Mathematics at University of Florida in 1991. Dr. Lee worked as an
assistant professor at Tsinghua University in 1986 and National University of Singapore in 1992. Since 1996, Dr. Lee has served as CEO
of AIDP, a leading supplier of dietary supplement ingredients, focusing on research and development and marketing and sales of proprietary
ingredients like Magtein, KoACT, Predtic X, and Actizin. Dr. Lee is also serving as the Vice Chairperson of the American Chinese CEO Association.
Dr. Lee is married to Jennifer Gu, a current director of Focus Universal.
Dr. Jennifer Gu was appointed as a director
on October 21, 2015. Dr. Gu earned her bachelor’s degree in Biology from University of Florida in 1990 and earned her Ph.D. in Experimental
Pathology at University of California, Los Angeles in 1997. She also completed post-doctoral research and worked as a research fellow
at the California Institute of Technology until 2004. Since 2005, Dr. Gu served, and is still currently serving, as the Vice President
of Research & Development at AIDP. She holds multiple patents and is a frequent speaker and contributor to scientific conferences
and nutritional journal articles. Dr. Gu is married to Edward Lee, the current Chairman of the Board of Directors of Focus Universal.
Michael Pope was appointed as a director
of the Company on June 8, 2018. Mr. Pope serves as the CEO and Chairman at Boxlight Corporation (Nasdaq: BOXL), a global provider of interactive
technology solutions, where he has been an executive since July 2015 and director since September 2014. Mr. Pope has led Boxlight through
eleven acquisitions from 2016 to 2021, a Nasdaq IPO in November 2017, and over $200 million in debt and equity fundraising. He previously
served as Managing Director at Vert Capital, a private equity and advisory firm from October 2011 to October 2016, managing portfolio
holdings in the education, consumer products, technology and digital media sectors. Prior to joining Vert Capital, from May 2008 to October
2011, Mr. Pope was Chief Financial Officer and Chief Operating Officer for the Taylor Family in Salt Lake City, managing family investment
holdings in consumer products, professional services, real estate and education. Mr. Pope also held positions including senior SEC reporting
at Omniture (previously listed on Nasdaq and acquired by Adobe (Nasdaq: ADBE) in 2009) and Assurance Associate at Grant Thornton. Since
January 2021, Mr. Pope has served as a member of the board of directors of Novo Integrated Sciences, Inc. (OTCQB: NVOS), a provider of
multi-dimensional primary healthcare products and services. He holds an active CPA license and earned his undergraduate and graduate degrees
in accounting from Brigham Young University.
Sheri Lofgren was appointed as an independent
director of the Company on June 8, 2018. Ms. Lofgren has served as a financial consultant since March 2018. She served as Chief Financial
Officer for Boxlight Corporation (Nasdaq: BOXL), a global education technology provider, from September 2014 to March 2018. She was Chief
Financial Officer at Logical Choice Technologies, Inc., a distributor of interactive technologies to the education market, from 2005 to
2013. Ms. Lofgren is a Certified Public Accountant with extensive experience in financial accounting and management, operational improvement,
budgeting and cost control, cash management and treasury, along with broad audit experience, internal control knowledge and internal and
external reporting. She started her career with KPMG and then joined Tarica and Whittemore, an Atlanta based CPA firm, as an audit manager.
Ms. Lofgren is a graduate of Georgia State University where she earned a B.A. in Business Administration – Accounting.
Greg Butterfield was appointed as an independent
director of the Company on November 28, 2018. Mr. Butterfield is the founder and Managing Partner of SageCreek Partners (“SCP”)
a technology commercialization and consulting firm. Prior to starting SCP Mr. Butterfield served as the CEO of Vivint Solar, a leading
full-service residential solar integrator. Before Vivint, Mr. Butterfield was the Group President for Symantec’s Server and Storage
business units. Mr. Butterfield joined Symantec through the company’s acquisition of Altiris in April 2007. At Altiris, he served
as chairman of the board, President, and CEO starting in February 2000. Mr. Butterfield is widely credited as the driving force behind
eleven acquisitions and navigated the company through a successful IPO in 2002 in spite of a notable economic downturn in the technology
sector. The IPO was followed in August of 2003 with a successful secondary offering. Mr. Butterfield was invited to the 2006 World Economic
Forum as a Technology Pioneer. He was also the winner of the 2002 Ernst and Young Entrepreneur of the Year award and served as the chairman
of the board of the Utah Information Technology Association from 2003 to 2005. Mr. Butterfield received a Bachelor of Science in Business
Administration (finance emphasis) from Brigham Young University.
Carine Clark was appointed as an independent
director of the Company on June 8, 2018. Ms. Clark has served as president and CEO of four high-growth tech companies. In March 2019,
Ms. Clark was appointed to the board of directors of Domo, Inc. (NASDAQGM: DOMO) and is currently serving as a member of Domo’s
compensation committee. Since 2017 she has served as an Executive Board Member of the Utah Governor’s Office of Economic Development
and Silicon Slopes, a non-profit helping Utah’s tech community thrive. Prior to that, Ms. Clark served from January 2015 to December
2016 as the President and CEO of MartizCX. From December 2012 to December 2016, Ms. Clark served as the President and CEO of Allegiance,
Inc. Her reputation as a data-driven marketing executive at Novell for 14 years, Altiris for five years, and Symantec for more than 10
years. She has received numerous awards including the EY Entrepreneur of The Year® Award in the Utah Region and Utah Business Magazine’s
CEO of the Year. Ms. Clark earned a bachelor’s degree in organizational communications and an MBA from Brigham Young University.
Other Executive Officers of the Company
The following is certain information as of the
Record Date regarding the other executive officers of the Company not discussed above.
| Name |
Position with the Company |
Age |
Officer Since |
| Duncan Lee |
Chief Financial Officer |
38 |
April 2, 2018 |
| Irving Kau |
Vice President of Finance and Head of Investor Relations |
47 |
November 10, 2021 |
Duncan Lee was appointed as CFO on April
2, 2018. Mr. Lee is presently a licensed Certified Public Accountant. Mr. Lee graduated in 2006 with a bachelor’s degree in Accounting
from the University of Southern California and has more than 11 years of experience with public company accounting and financial reporting
with the SEC. Mr. Lee worked on the audit staff of the PCAOB accounting firm of Moore Stephens Wurth Frazer and Torbet LLP and then worked
as a senior associate at the PCAOB accounting firm of Simon & Edward, LLP in Diamond Bar, CA. Since 2011, Mr. Lee has worked in-house
as a staff accountant at a public company called E-World USA Holding, Inc. preparing their routine securities filings, including their
10-K and 10-Q filings. In addition to working with E-World USA Holding, Inc., in the past five years, Mr. Lee has also worked as an outside
consultant CPA for other public companies.
Irving Kau was appointed as Vice President
of Finance and Head of Investor Relations on November 10, 2021. Prior to joining the Company, Mr. Kau served as a Managing Partner of
both Elementz Ventures and KW Capital Partners, and during his tenure he successfully invested and grew companies across various geographies.
While he is currently titled as Vice President of Finance and Head of Investor Relations, the Company expects that Mr. Kau will assist
with many matters in the near future, including building up the Company’s internal businesses, processes and controls, the Company’s
external outreach and business growth measures, as well as strengthen the Company’s financial reporting, business development
and investor relations. Prior to his work at Elementz Ventures and KW Capital Partners, Mr. Kau served as the head of Asia at GHS (now
known as Seaport Global). Mr. Kau also previously served for approximately 10 years as Chief Financial Officer of a NASDAQ-listed AgTech
company with a blue-chip investor base. Mr. Kau received undergraduate degrees from Johns Hopkins University and a graduate degree from
Rice University and undertook a PhD program in economics/business strategy at the University of Southern California.
Corporate
Governance
Our Board of Directors currently consists of seven
members. Our Chairperson of the Board of Directors is Dr. Edward Lee. Dr. Edward Lee, Dr. Desheng Wang and Dr. Jennifer Gu are the three
members of our Board of Directors who are not independent directors. Michael Pope, Sheri Lofgren, Greg Butterfield, and Carine Clark are
four members of our Board of Directors who are independent directors.
Director Attendance at Meetings
Our Board of Directors conducts its business through
meetings, both in person and telephonic, and by actions taken by written consent in lieu of meetings. During the year ended December 31,
2021, our Board of Directors held four meetings. All directors attended at least 75% of the meetings of our Board of Directors and of
the committees of our Board of Directors on which they served during 2021.
Our Board of Directors encourages all directors
to attend our annual meetings of shareholders unless it is not reasonably practicable for a director to do so.
Committees of our Board of Directors
Our Board of Directors has established and delegated
certain responsibilities to its standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Our
corporate website, www.focusuniversal.com, contains the charters for our Audit, Compensation and Nominating and Corporate Governance
Committees, and certain other corporate governance documents and policies, including our Code of Business Conduct and Ethics. In addition,
we will provide a copy of any of these documents without charge to any shareholder upon written request made in care of the Corporate
Secretary, Focus Universal Inc., 2311 East Locust Court, Ontario, California 91761. The information at www.focusuniversal.com is
not, and shall not be deemed to be, a part of this Proxy Statement or incorporated by reference into this or any other filing we make
with the SEC.
Audit Committee
We have a separately designated standing Audit
Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Audit Committee’s primary duties and responsibilities include monitoring the integrity of our financial statements, monitoring
the independence and performance of our external auditors, and monitoring our compliance with applicable legal and regulatory requirements.
The functions of the Audit Committee also include reviewing periodically with our independent registered public accounting firm the performance
of the services for which they are engaged, including reviewing the scope of the annual audit and its results, reviewing with management
and the auditors the adequacy of our internal accounting controls, reviewing with management and the auditors the financial results prior
to the filing of quarterly and annual reports, reviewing fees charged by our independent registered public accounting firm and reviewing
any transactions between our Company and related parties. Our independent registered public accounting firm reports directly and is accountable
solely to the Audit Committee. The Audit Committee has the sole authority to hire and fire the independent registered public accounting
firm and is responsible for the oversight of the performance of their duties, including ensuring the independence of the independent registered
public accounting firm. The Audit Committee also approves in advance the retention of, and all fees to be paid to, the independent registered
public accounting firm. The rendering of any auditing services and all non-auditing services by the independent registered public accounting
firm is subject to prior approval of the Audit Committee.
The Audit Committee operates under a written charter.
The Audit Committee is required to be composed of directors who are independent under the rules of the SEC and the listing standards of
The NASDAQ Stock Market LLC (“NASDAQ”).
The current members of the Audit Committee are
directors Ms. Sheri Lofgren, the Chairperson of the Audit Committee, Mr. Michael Pope and Mr. Greg Butterfield, all of whom have been
determined by the Board of Directors to be independent under the NASDAQ listing standards and rules adopted by the SEC applicable to audit
committee members. The Board of Directors has determined that Mr. Sheri Lofgren qualifies as an “audit committee financial expert”
under the rules adopted by the SEC and the Sarbanes-Oxley Act. The Audit Committee met four times during 2021.
Compensation Committee
The primary duties and responsibilities of our
standing Compensation Committee are to review, modify and approve the overall compensation policies for the Company, including the compensation
of the Company’s Chief Executive Officer and other senior management; establish and assess the adequacy of director compensation;
and approve the adoption, amendment and termination of the Company’s stock option plans, pension and profit-sharing plans, bonus
plans and similar programs. The Compensation Committee may delegate to one or more officers the authority to make grants of options and
restricted stock to eligible individuals other than officers and directors, subject to certain limitations. Additionally, the Compensation
Committee has the authority to form subcommittees and to delegate authority to any such subcommittee. The Compensation Committee also
has the authority, in its sole discretion, to select, retain and obtain, at the expense of the Company, advice and assistance from internal
or external legal, accounting or other advisors and consultants. Moreover, the Compensation Committee has sole authority to retain and
terminate any compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation,
including sole authority to approve such consultant’s reasonable fees and other retention terms, all at the Company’s expense.
The Compensation Committee operates under a written
charter. All members of the Compensation Committee must satisfy the independence requirements of NASDAQ applicable to compensation committee
members.
The Compensation Committee currently consists
of directors Ms. Carine Clark, Mr. Greg Butterfield, and Mr. Sheri Lofgren. Ms. Carine Clark is the Chairperson of the Compensation Committee.
Each of the Compensation Committee members has been determined by the Board of Directors to be independent under NASDAQ listing standards
applicable to compensation committee members. The Compensation Committee met four times during 2021.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee
identifies, reviews and evaluates candidates to serve on the Board; reviews and assesses the performance of the Board of Directors and
the committees of the Board; and assesses the independence of our directors. The Nominating and Corporate Governance Committee is also
responsible for reviewing the composition of the Board’s committees and making recommendations to the entire Board of Directors
regarding the chairpersonship and membership of each committee. In addition, the Nominating and Corporate Governance Committee is responsible
for developing corporate governance principles and periodically reviewing and assessing such principles, as well as periodically reviewing
the Company’s policy statements to determine their adherence to the Company’s Code of Business Conduct and Ethics.
The Nominating and Corporate Governance Committee
has adopted a charter that identifies the procedures whereby Board of Director candidates are identified primarily through suggestions
made by directors, management and shareholders of the Company. We have implemented no material changes in the past year to the procedures
by which shareholders may recommend nominees for the Board. The Nominating and Corporate Governance Committee will consider director nominees
recommended by shareholders that are submitted in writing to the Company’s Corporate Secretary in a timely manner and which provide
necessary biographical and business experience information regarding the nominee. The Nominating and Corporate Governance Committee does
not intend to alter the manner in which it evaluates candidates, including the criteria considered by the Nominating Committee, based
on whether or not the candidate was recommended by a shareholder. The Board of Directors does not prescribe any minimum qualifications
for director candidates, and all candidates for director will be evaluated based on their qualifications, diversity, age, skill and such
other factors as deemed appropriate by the Nominating and Corporate Governance Committee given the current needs of the Board of Directors,
the committees of the Board of Directors and the Company. Although the Nominating and Corporate Governance Committee does not have a specific
policy on diversity, it considers the criteria noted above in selecting nominees for directors, including members from diverse backgrounds
who combine a broad spectrum of experience and expertise. Absent other factors which may be material to its evaluation of a candidate,
the Nominating and Corporate Governance Committee expects to recommend to the Board of Directors for selection incumbent directors who
express an interest in continuing to serve on the Board. Following its evaluation of a proposed director’s candidacy, the Nominating
and Corporate Governance Committee will make a recommendation as to whether the Board of Directors should nominate the proposed director
candidate for election by the shareholders of the Company.
The Nominating and Corporate Governance Committee
operates under a written charter. No member of the Nominating and Corporate Governance Committee may be an employee of the Company, and
each member must satisfy the independence requirements of NASDAQ and the SEC.
The Nominating and Corporate Governance Committee
currently consists of directors Mr. Greg Butterfield, who is the Chairperson of the committee, Mr. Michael Pope and Ms. Carine Clark.
Each of the members of the Nominating and Corporate Governance Committee has been determined by the Board of Directors to be independent
under NASDAQ listing standards. The Nominating and Corporate Governance Committee met four times in 2021.
Communications with our Board of Directors
In order to provide the Company’s security
holders and other interested parties with a direct and open line of communication to the Board of Directors, the Board of Directors has
adopted the following procedures for communications to directors. The Company’s security holders and other interested persons
may communicate with the Chairperson of the Company’s Audit Committee or with the non-management directors of the Company as a group
by mailing a letter addressed in care of the Corporate Secretary, Focus Universal Inc., 2311 East Locust Court, Ontario, California 91761.
All communications received in accordance with
these procedures will be reviewed initially by the Company’s Secretary and/or other executive officers. The Company will relay all
such communications to the appropriate director or directors unless the Secretary determines that the communication:
| · | does not relate to the business or affairs of the Company or the
functioning or constitution of the Board of Directors or any of its committees; |
| · | relates to routine or insignificant matters that do not warrant the attention of the Board of Directors; |
| · | is an advertisement or other commercial solicitation or communication; |
| · | is frivolous or offensive; or |
| · | is otherwise no appropriate for delivery to directors. |
The director or directors who receive any such
communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of
the full Board of Directors or one or more of its committees, and whether any response to the person sending the communication is appropriate. Any
such response will be made only in accordance with applicable law and regulations relating to the disclosure of information.
The Secretary will retain copies of all communications
received pursuant to these procedures for a period of at least one year. The Nominating and Corporate Governance Committee of the
Board of Directors will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes.
Oversight of Risk Management
Risk is inherent with every business, and how
well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, financial risks,
legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the
risks that we face, while our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk
management. In its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management processes
designed and implemented by management are adequate and functioning as designed. Our Board of Directors assesses major risks facing our
Company and options for their mitigation in order to promote our shareholders’ interests in the long-term health of our Company
and our overall success and financial strength. A fundamental part of risk management is not only understanding the risks a company faces
and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement
of our full Board of Directors in the risk oversight process allows our Board of Directors to assess management’s appetite for risk
and also determine what constitutes an appropriate level of risk for our Company. Our Board of Directors regularly includes agenda items
at its meetings relating to its risk oversight role and meets with various members of management on a range of topics, including corporate
governance and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation
and significant commercial disputes.
While our Board of Directors is ultimately responsible
for risk oversight, various committees of our Board of Directors oversee risk management in their respective areas and regularly report
on their activities to our entire Board of Directors. In particular, the Audit Committee has the primary responsibility for the oversight
of financial risks facing our Company. The Audit Committee’s charter provides that it will discuss our major financial risk exposures
and the steps we have taken to monitor and control such exposures. Our Board of Directors has also delegated primary responsibility for
the oversight of all executive compensation and our employee benefit programs to the Compensation Committee. The Compensation Committee
strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy.
We believe the division of risk management responsibilities
described above is an effective approach for addressing the risks facing our Company and that our Board of Director’s leadership
structure provides appropriate checks and balances against undue risk taking.
Code of Business Conduct and Ethics
Our Board of Directors has adopted a code of ethical
conduct that applies to our principal executive officer, principal financial officer and senior financial management. This code of ethical
conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated with our Company, including
our directors, officers and employees (including our principal executive officer, principal financial officer, principal accounting officer
and controller). In order to satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers
of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief
accounting officer, controller or persons performing similar functions on our corporate website, www.focusuniversal.com, promptly following
the adoption of any such amendment or waiver. The Code of Business Conduct and Ethics provides that any waivers of, or changes to, the
code that apply to the Company’s executive officers or directors may be made only by the Audit Committee. In addition, the Code
of Business Conduct and Ethics includes updated procedures for non-executive officer employees to seek waivers of the code.
Director Independence
Our Company is governed by our Board of Directors.
Currently, each member of our Board of Directors, other than Dr. Edward Lee, Dr. Desheng Wang, and Dr. Jennifer Gu, is an independent
director; and all standing committees of our Board of Directors are composed entirely of independent directors, in each case under NASDAQ’s
independence definition applicable to boards of directors. For a director to be considered independent, our Board of Directors must determine
that the director has no relationship which, in the opinion of our Board, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. Members of the Audit Committee also must satisfy a separate SEC independence requirement,
which provides that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our
subsidiaries other than their directors’ compensation. In addition, under SEC rules, an Audit Committee member who is an affiliate
of the issuer (other than through service as a director) cannot be deemed to be independent. In determining the independence of members
of the Compensation Committee, NASDAQ listing standards require our Board of Directors to consider certain factors, including, but not
limited to: (1) the source of compensation of the director, including any consulting, advisory or other compensatory fee paid by us to
the director, and (2) whether the director is affiliated with us, one of our subsidiaries or an affiliate of one of our subsidiaries.
Under our Compensation Committee Charter, members of the Compensation Committee also must qualify as “outside directors” for
purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and as “non-employee directors”
for purposes of Rule 16b-3 under the Exchange Act. The independent members of the Board of Directors are Michael Pope, Sheri Lofgren,
Carine Clark and Greg Butterfield.