PROPOSAL 6APPROVAL AND ADOPTION OF AN AMENDMENT TO THE COMPANYS AMENDED AND RESTATED CERTIFCATE OF
INCORPORATION TO AUTHORIZE THE ISSUANCE OF PREFERED STOCK
On April 8, 2021, the Board approved and adopted an amendment (the
Blank Check Preferred Amendment) to the Companys Amended and Restated Certificate of Incorporation, subject to approval and adoption by the Companys shareholders, authorizing the issuance of 150,000,000 shares of preferred
stock. The Restated Certificate of Incorporation does not currently authorize the issuance of shares of preferred stock. The Blank Check Preferred Amendment is set forth in relevant portion below:
The Corporation is further authorized to issue 150,000,000 shares of Preferred Stock at a par value of $0.00001 per share. The Board of
Directors is hereby expressly authorized to provide, out of the unissued shares of preferred stock, for one or more series of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the
designation of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the
shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
The term blank check is often used to refer to preferred stock, the
creation and issuance of which is authorized by the shareholders in advance and the terms, rights and features of which are determined by the Board from time to time. The authorization of blank check preferred stock would permit the Board to create
and issue preferred stock from time to time in one or more series. Subject to the Companys Amended and Restated Certificate of Incorporation as amended from time to time, and the limitations prescribed by law or by the Nasdaq Stock Market, the
Board of Directors would be expressly authorized, at its discretion, to adopt resolutions to issue preferred shares, to fix the number of shares and to change designations, preferences and relative, participating, optional or other special rights,
qualifications, limitations or restrictions thereof, including dividend rights, dividend rates, terms of redemption, redemption prices, voting rights, conversion rights, and liquidation preferences of the shares constituting any series of preferred
stock, in each case without any further action or vote by the shareholders. The Board would be required to make any determination to issue shares of preferred stock based on its judgment that doing so would be in the best interests of the Company
and its shareholders.
The issuance of shares of preferred stock could affect the relative rights of the Companys shares of
common stock. Depending upon the exact terms, limitations and relative rights and preferences, if any, of the shares of preferred stock as determined by the Board of Directors at the time of issuance, the holders of shares of preferred stock may be
entitled dividends, a prior claim on funds available for the payment of dividends, a fixed preferential payment in the event of liquidation and dissolution of the Company, redemption rights, rights to convert their shares of preferred stock into
shares of common stock, and voting rights which would dilute the voting control of the Company by the holders of shares of common stock. Depending on the particular terms of any series of the preferred stock, holders thereof may have significant
voting rights and the right to representation on the Board. In addition, the approval of the holders of shares of preferred stock, voting as a class or as a series, may be required for the taking of certain corporate actions, such as mergers.
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