UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of
the
Securities Exchange Act of 1934
Check
the appropriate box:
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Preliminary Information Statement
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Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
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Definitive Information Statement
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GWG
HOLDINGS, INC.
(Name
of Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
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No fee
required.
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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Title
of each class of securities to which transaction applies:
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Aggregate number
of securities to which transaction applies:
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Per unit price or
other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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Proposed maximum
aggregate value of transaction:
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Total fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously
Paid:
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Form, Schedule or
Registration Statement No.:
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Filing Party:
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Date Filed:
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GWG
HOLDINGS, INC.
NOTICE
OF ACTION BY WRITTEN CONSENT
TO
THE STOCKHOLDERS OF GWG HOLDINGS, INC.:
This
Notice and the accompanying Information Statement are being furnished to the stockholders of GWG Holdings, Inc., a Delaware corporation
(the “Company,” “GWG,” “we,” or “us”), in connection with action taken by written
consent by the holders of a majority of the issued and outstanding shares of common stock of the Company to approve an amendment
to the Company’s Bylaws to provide for, among other things, a classified, or “staggered” Board of Directors,
composed of three classes of directors serving staggered three-year terms (the “Bylaw Amendment”).
As
the matters set forth in this Information Statement have been duly authorized and approved by the written consent of the holders
of more than a majority of our voting securities, your vote or consent is not requested or required to approve the Amendment.
This Information Statement is being provided solely for your information, and also serves the purpose of informing stockholders
of the matters described herein pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations prescribed thereunder, including Regulation 14C, and serves as the notice required by Section 228 of the Delaware
General Corporation Law of the taking of a corporate action without a meeting by less than unanimous written consent of our stockholders.
You do not need to do anything in response to this Notice and the Information Statement.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
We
are mailing this Notice and the accompanying Information Statement to holders of our common stock on or about [●].
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Sincerely,
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/s/
[●]
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Jon
R. Sabes
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Chairman and
Chief Executive Officer
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[●]
TABLE
OF CONTENTS
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Page
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GENERAL
INFORMATION
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1
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AMENDMENT
TO THE COMPANY’S BYLAWS
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2
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SHARE
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND DIRECTORS
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5
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OTHER
INFORMATION
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7
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Exhibit
A –Bylaw Amendments
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A-1
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GWG
HOLDINGS, INC.
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
INFORMATION
STATEMENT
GENERAL
INFORMATION
GWG
Holdings, Inc., a Delaware corporation (the “Company,” “GWG,” “we,” or “us”) is
sending you this Information Statement solely for purposes of informing our stockholders of record as of December 20, 2018, which
we refer to as the record date, of the action taken by written consent by the holders of a majority of the issued and outstanding
shares of common stock of the Company. No action is requested or required on your part.
Summary
of the Corporate Action
For
the reasons discussed in this Information Statement, our Board of Directors (the “Board”) has adopted resolutions
to amend the Company’s Bylaws to provide for, among other things, a classified, or “staggered,” Board
composed of three classes of directors serving staggered three-year terms (the “Bylaw Amendment”). In addition to
establishing a classified board, the Bylaw Amendment provides that newly created directorships resulting from any increase in
the authorized number of directors and any vacancies occurring on the Board be filled by the affirmative vote of a majority
of the remaining members of the Board, provide that directors may be removed only for cause and only by the affirmative vote
of the holders of two-thirds or more of the outstanding voting power of the Company, and require supermajority approval of
stockholders for stockholders to adopt further amendments to certain provisions of the Bylaws. The Bylaw
Amendment, which requires stockholder approval for its adoption, has been approved by written consent of the holders of a
majority of our issued and outstanding voting securities.
The
proposed form of the Bylaw Amendment is attached as
Exhibit A
to this Information Statement.
In
accordance with Rule 14c-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the stockholder
action taken by written consent will become effective no earlier than 20 calendar days after the date on which this Information
Statement is sent or given to our stockholders. This Information Statement is first being mailed on or about [●] to
the Company’s stockholders of record as of the record date.
Voting
and Vote Required
The
Company is not seeking consents, authorizations or proxies from you. Under the Delaware General Corporation Law (the “DGCL”),
the Bylaw Amendment may be approved, without a meeting of stockholders, by a resolution of our Board of Directors, followed by
the written consent of stockholders representing a majority of the voting power of our outstanding shares of common stock.
As
of the record date, there were 6,012,971 shares of our common stock issued and outstanding. By a written consent dated May 25,
2018 and re-affirmed on December 13, 2018, Jon R. Sabes, Chairman and Chief Executive Officer of the Company, and Steven F. Sabes,
on behalf of themselves and entities controlled by them, approved the Bylaw Amendment. As of December 13, 2018, Jon Sabes, Steve
Sabes and the entities over which they have control collectively held a majority of the Company’s issued and outstanding
common stock. Accordingly, the written consent was executed by stockholders holding sufficient voting power to approve the actions
contemplated by the written consent and no further stockholder action is required.
Dissenters’
Rights of Appraisal
The
corporate action described in this Information Statement will not afford to stockholders the opportunity to dissent from the actions
described herein and receive an agreed or judicially appraised value for their shares of Class A common stock.
Notice
Pursuant to the DGCL and the Company’s Bylaws
This
Information Statement serves the purpose of informing stockholders of the matters described herein pursuant to Section 14(c) of
the Securities Exchange Act of 1934, as amended, and the rules and regulations prescribed thereunder, including Regulation 14C,
and serves as the notice required by Section 228 of the Delaware General Corporation Law of the taking of a corporate action without
a meeting by less than unanimous written consent of our stockholders.
AMENDMENT
TO THE COMPANY’S BYLAWS
Background,
Description and Principal Reasons for the Bylaw Amendment
Background
On
January 12, 2018, we entered into a Master Exchange Agreement pursuant to which we agreed to engage in a strategic transaction
(the “Exchange Transaction”) with The Beneficient Company Group, L.P., a Delaware limited partnership (“Beneficient”),
and certain other parties (the “Seller Trusts”), in which the parties have agreed to an exchange of certain assets.
The Master Exchange Agreement has subsequently been amended, most recently pursuant to a Third Amendment dated August 10, 2018.
In conjunction with the August 10, 2018 amendment, we completed the first of two anticipated closings contemplated by the Master
Exchange Agreement. The final closing of the Exchange Transaction is expected to occur at or near year-end 2018, subject to the
satisfaction of certain closing conditions.
A
summary of the Exchange Transaction is set forth in our Current Report on Form 8-K, filed with the Securities and Exchange Commission
on August 14, 2018 and amended in our Current Report on Form 8-K/A filed with the Securities and Exchange Commission on November
9, 2018, and in our definitive Schedule 14C Information Statement filed with the Securities and Exchange Commission on December
6, 2018.
At
the final closing of the Exchange Transaction, we may issue up to 29.1 million shares of our common stock to the Seller Trusts.
Upon issuance, such shares will represent a substantial majority of our outstanding common stock. In anticipation of our common
stock being more widely held, the Board initiated a review of our organizational documents and corporate governance practices.
As a result of this review, the Board adopted the Bylaw Amendment in the spring of 2018, subject to obtaining stockholder approval
for its adoption. Stockholder action was taken in May 2018 to approve the Bylaw Amendment by written consent of the holders of
a majority of our issued and outstanding voting securities. In accordance with Rule 14c-2 under the Exchange Act, the Bylaw Amendment
is not effective until 20 calendar days after the date on which an information statement is sent or given to our stockholders.
An information statement was not sent or given to our stockholders at that time due to the continued pending nature of the Exchange
Transaction.
In
August 2018, as the expected consummation of the Exchange Transaction grew nearer, the Board re-affirmed the Bylaw Amendment’s
adoption, subject to stockholder approval. In anticipation of conducting the Final Closing at or near year-end 2018, the holders
of a majority of the Company’s issued and outstanding voting securities also reaffirmed their approval of the Bylaw Amendment
by written consent dated December 13, 2018.
On
December 20, 2018, the Board adopted a further amendment to the Bylaws (the “Further Amendment”) increasing the maximum
number of directors comprising the Board from seven to nine, with the precise number of directors to be determined from time to
time by resolution of the Board. The Board currently consists of seven directors. The Further Amendment is not subject to obtaining
stockholder approval. The amendment to the Company’s
Bylaws attached as
Exhibit A
also reflects the Further Amendment.
Description
of the Bylaw Amendment
Under
our existing Certificate of Incorporation and Bylaws, the entire Board of Directors is elected at each annual meeting of stockholders
to serve until the next annual meeting, or until their respective successors are elected and qualified.
Pursuant
to Section 141(d) of the DGCL, stockholders may, by amendment to the Certificate of Incorporation or by a Bylaw adopted by a vote
of the stockholders, divide the directors of any Delaware corporation, including the Company, into one, two or three classes.
In
anticipation of the Company’s common stock being more widely held as a result of the expected final closing of the Exchange
Transaction, our Board of Directors has approved and stockholders representing a majority of the voting power of our outstanding
shares of common stock have approved the Bylaw Amendment, which establishes a classified board of directors. Each class will consist,
as nearly as may be possible, of one third of the total number of directors constituting the entire Board, and the classes will
serve staggered, three year terms. The initial terms of office of the initial Class I directors will expire at the annual meeting
of stockholders to be held in 2019. The initial terms of office of the initial Class II directors will expire at the annual meeting
of stockholders to be held in 2020. The initial terms of office of the initial Class III directors will expire at the annual meeting
of stockholders to be held in 2021. At each annual meeting of stockholders beginning with the annual meeting to be held in 2019,
directors will be chosen for a full, three-year term to succeed those directors in each class as their terms expire.
If
the number of Directors is changed, any increase or decrease shall be so apportioned by the Board among the classes so as to maintain
the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a
vacancy resulting from an increase in such class shall hold office for a term coinciding with the remaining term of that class,
but in no case will a decrease in the number of directors constituting the Board shorten the term of any incumbent director.
The
Board is authorized to assign directors in office at the time the Board classification first takes effect to each class.
The
directors will assigned to following classes when the Bylaw Amendment takes effect:
Class
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Director
Nominee
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Expiration
of Initial Term of Director
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Class
I
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Shawn
R. Gensch
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2019
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Class
I
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Steven
F. Sabes
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2019
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Class
II
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Mark
E. Schwarzmann
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2020
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Class
II
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David
H. Abramson
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2020
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Class
III
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Thomas
J. Donohue, Jr.
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2021
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Class
III
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Jon
R. Sabes
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2021
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Class
III
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Jeffrey
L. McGregor
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2021
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In
addition to establishing a classified board, the Bylaw Amendment provides that newly created directorships resulting from any
increase in the authorized number of directors and any vacancies occurring on the Board be filled by the affirmative vote of
a majority of the remaining members of the Board, provides that directors may be removed only for cause and only by
the affirmative vote of the holders of two-thirds or more of the outstanding voting power of the Company, and requires
a two-thirds supermajority approval of stockholders for stockholders to adopt further amendments to provisions of the Bylaws
that govern (A) the number, qualification and term of office of directors, (B) the filling of newly created directorships and
vacancies, (C) the resignation and removal of directors, (D) the right to indemnification for directors and other covered
persons, and (E) the requisite approval for certain future bylaw amendments.
The
foregoing description of each of the Bylaw Amendment is qualified in its entirety by reference thereto, which is attached as Exhibit
A to this Information Statement.
Principal
Reasons for the Bylaw Amendment
The
Board believes that a classified board of directors serves the best interests of the Company and its stockholders by promoting
the continuity and stability of the Company and its business. By implementing a staggered election of directors, the Company can
ensure that, at any given time, at least a majority of the directors will have had prior experience on the Board. The Board also
believes that classification may enhance the Company’s ability to attract and retain well-qualified individuals who are
able to commit the necessary time and resources to understand the Company, its business affairs and operations. The continuity
and quality of leadership that results from a staggered Board should, in the opinion of the Board, promote the long-term value
of the Company. Staggered terms for directors may also moderate the pace of change in the Board by extending the time required
to elect a majority of directors from one to two annual meetings of stockholders. This delay is designed to reduce the vulnerability
of the Company to unsolicited takeover attempts and attempts to compel the Company’s restructuring or otherwise force it
into an extraordinary transaction. The Board believes that this delay also serves the best interests of the Company and its stockholders
by encouraging potential acquirors to negotiate with the Board rather than act unilaterally. The Board believes that under most
circumstances it will be able to obtain the best terms for the Company and the stockholders if it is in a position to negotiate
effectively on their behalf.
The
implementation of a staggered board is not in response to any specific effort of which the Company is aware to accumulate the
Company’s stock or to obtain control of the Company through a proxy solicitation in opposition to management.
Effect
of the Classified Board Amendment – Potential Anti-Takeover Effect
Although
the creation of a staggered board of directors is designed as a protective measure for the Company’s stockholders, the creation
of a classified board of directors may have the effect of preventing stockholders from realizing an opportunity to sell their
shares of capital stock at higher than market prices by deterring unsolicited tender offers or other efforts to obtain control
of the Company. By classifying the Board, the Bylaw Amendment may extend the time required to effect an unsolicited change in
control of the Board, which may discourage unsolicited takeover bids for the Company. Upon effectiveness of the Bylaw Amendment,
it will take at least two annual meetings for a simple majority of outstanding shares to effect a change in control of the Board
because only a minority of the directors will be elected at each meeting. Without the ability to obtain control of our Board quickly,
an unsolicited takeover bidder may be incapable of taking action necessary to remove other impediments to its acquisition of the
Company, even if that takeover bidder were to acquire a majority of our outstanding shares of common stock. This situation may
discourage unsolicited tender offers, perhaps including some tender offers that stockholders would conclude to be in their best
interests if made.
The
Bylaw Amendment will also cause it to take additional time for stockholders to change the composition of the Board, even if the
Company’s stockholders believe such a change would be desirable.
The
requirement that directors be removed only for cause is intended to prevent a substantial stockholder from circumventing the purposes
of a classified board by removing incumbent directors without cause and then attempting to fill the vacancies with its own nominees.
Such a requirement may, however, make it more difficult to remove a director even when the only reason for the removal is the
performance of the director. The burden of having to prove cause will make such removal more difficult than at present.
The
Board considered the potential adverse impact of the Bylaw Amendment and concluded that such adverse effects are outweighed by
the benefits the Bylaw Amendment would afford the Company and its stockholders.
SHARE
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
In
General
The
tables below sets forth information known to us regarding the beneficial ownership of our common stock as of December 20, 2018,
for:
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each
person we believe beneficially holds more than 5% of our outstanding common shares (based solely on our review of SEC filings);
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each of our “named
executive officers” as identified in the summary compensation table contained in our Annual Report on Form 10-K for
the year ended December 31, 2017, filed with the SEC on March 29, 2018; and
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all of our directors
and named executive officers as a group.
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The
number of shares beneficially owned by a person includes shares issuable under options held by that person and that are currently
exercisable or that become exercisable within 60 days of December 13, 2018. Percentage calculations assume, for each person and
group, that all shares that may be acquired by such person or group pursuant to options currently exercisable or that become exercisable
within 60 days of December 13, 2018 are outstanding for the purpose of computing the “Percentage of Common Stock Owned”
by such person or group. Nevertheless, shares of common stock that are issuable upon exercise of presently unexercised options
are not deemed to be outstanding for purposes of calculating the “Percentage of Common Stock Owned” by any other person
or any other group.
Except
as otherwise indicated in the table or its footnotes, the persons in the table below have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.
As
of December 20, 2018, we had 6,012,971 shares of common stock issued and outstanding.
Beneficial
Ownership
Name
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Shares Beneficially Owned
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Percentage of Shares Beneficially Owned
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Jon R. Sabes
(1)
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2,390,993
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38.4
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%
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Steven F. Sabes
(2)
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2,228,454
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37.0
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%
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William B. Acheson
(3)
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162,768
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2.7
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%
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David H. Abramson
(4)
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21,960
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*
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%
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Thomas J. Donohue, Jr.
(5)
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8,400
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*
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Shawn R. Gensch
(6)
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54,000
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*
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Jeffrey L. McGregor
(7)
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70,000
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*
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Mark E. Schwarzmann
(8)
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16,800
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*
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All current directors and officers as a group
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4,853,376
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77.1
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%
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(1)
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Mr. Sabes is our
Chief Executive Officer and a director of the Company. Shares reflected in the table include 1,229,546 shares held individually,
169,671 shares held by Jon Sabes 1992 Trust No.1, a trust of which Mr. Sabes is the beneficiary, 168,801 shares held by Jon
Sabes 6.08.1992 Trust, a trust of which Mr. Sabes is a beneficiary, 241,631 shares held by Jon Sabes 1982 Trust, a trust of
which Mr. Sabes is a beneficiary, and 163,737 shares held by Jon Sabes 1976 Trust, a trust of which Mr. Sabes is a beneficiary.
Also included are 102,192 shares held by Mr. Sabes’ immediate family members. The trustees of each of the trusts are
Robert W. Sabes, Steve F. Sabes and Ross A. Sabes. The number of shares also includes 215,416 stock options currently exercisable
or exercisable within 60 days granted pursuant to stock option agreements. Figures also include 100,000 shares held by Insurance
Strategies Fund, LLC, a Delaware limited liability company over whose securities each of Jon R. and Steven F. Sabes exercise
voting and dispositive control. Jon R. and Steve F. Sabes disclaim beneficial ownership over the shares held by Insurance
Strategies Fund, LLC except to the extent of their pecuniary interest in such shares.
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(2)
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Mr. Sabes is our
Executive Vice President of Originations and Servicing, and a director of the Company. Shares reflected in the table include
1,052,739 shares held individually and 1,072,382 shares held by SFS Holdings, LLC, a limited liability company of which Mr.
Sabes is manager. The number of shares also includes 3,333 stock options currently exercisable or exercisable within 60 days
granted pursuant to stock option agreements. Figures also includes 100,000 shares held by Insurance Strategies Fund, LLC,
a Delaware limited liability company over whose securities each of Jon R. and Steven F. Sabes exercise voting and dispositive
control. Jon R. and Steve F. Sabes disclaim beneficial ownership over the shares held by Insurance Strategies Fund, LLC except
to the extent of their pecuniary interest in such shares.
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(3)
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Mr. Acheson is our
Chief Financial Officer. Shares reflected in the table include 89,017 shares held individually. The number of shares also
includes 73,751 of vested stock options currently exercisable or vesting within 60 days granted pursuant to our 2013 Stock
Incentive Plan.
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(4)
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Mr. Abramson is
a director of the Company. Shares reflected in the table include 14,960 shares held individually. The number of shares also
includes 7,000 of stock options vested or vesting within 60 days, granted pursuant to our 2013 Stock Incentive Plan.
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(5)
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Mr. Donohue is a
director of the Company. Shares reflected in the table include 8,400 of stock options vested or vesting within 60 days, granted
pursuant to our 2013 Stock Incentive Plan.
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(6)
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Mr. Gensch is a
director of the Company. Shares reflected in the table include 54,000 of stock options vested or vesting within 60 days, granted
pursuant to our 2013 Stock Incentive Plan.
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(7)
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Mr. McGregor is
a director of the Company. Shares reflected in the table include 70,000 of stock options vested or vesting within 60 days,
granted pursuant to our 2013 Stock Incentive Plan.
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(8)
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Mr. Schwarzmann
is a director of the Company. Shares reflected in the table include 16,800 of vested stock options vested or vesting within
60 days, granted pursuant to our 2013 Stock Incentive Plan.
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OTHER
INFORMATION
Annual
Report on Form 10-K and Additional Information
The
Company is subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and in accordance with the Exchange Act, the Company files reports, documents and other information with the SEC.
These reports and other information filed with the SEC by the Company may be inspected and are available for copying at the public
reference facilities maintained by the SEC at 100 F Street, N.E. Washington, D.C. 20549. Copies may be obtained at prescribed
rates from the Public Reference Section of the SEC at its principal office in Washington, D.C. The SEC also maintains an internet
website that contains periodic and other reports, proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov.
The
Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q can be accessed through the SEC website or are available
from the Company, without charge, by first-class mail or other equally prompt means of delivery within one business day of the
Company’s receipt of a written or oral request directed to our Corporate Secretary, at GWG Holdings, Inc., 220 South Sixth
Street, Suite 1200, Minneapolis, Minnesota 55402, telephone: (612) 746-1944.
Householding
of Materials
Some
banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements
and annual reports. This means that only one copy of our Information Statement may have been sent to multiple stockholders in
each household unless otherwise instructed by such stockholders. We will deliver promptly a separate copy of the Information Statement
to any common stockholder upon written or oral request to our Corporate Secretary, at GWG Holdings, Inc., 220 South Sixth Street,
Suite 1200, Minneapolis, Minnesota 55402, telephone: (612) 746-1944. Any stockholder wishing to receive separate copies
of our proxy statement or annual report to stockholders in the future, or any stockholder who is receiving multiple copies and
would like to receive only one copy per household, should contact the stockholder’s bank, broker, or other nominee record
holder, or the stockholder may contact us at the above address and phone number.
Costs
We
will make arrangements with brokerage firms and other custodians, nominees and fiduciaries who are record holders of our common
stock for the forwarding of this Information Statement to the beneficial owners of our common stock. We will reimburse these
brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding
of the Information Statement.
Exhibit
A
AMENDMENT
TO THE BYLAWS
OF
GWG
HOLDINGS, INC.
Effective
as of [●]
1
The
following amendments are made to the Bylaws (the “Bylaws”) of GWG Holdings, Inc. (the “Corporation”) pursuant
to (i) resolutions adopted by the Corporation’s Board of Directors (the “Board”) on March 28, 2018 and re-affirmed
on August 10, 2018, (ii) approved by the Corporation’s stockholders on May 25, 2018 and re-affirmed on December 13, 2018,
and (iii) a further amendment adopted by the Board on December 20, 2018 increasing the maximum number of directors comprising
the Board from seven to nine, with the precise number of directors to be determined from time to time by resolution of the Board.
1. Section
3.2 of the Bylaws is hereby amended in its entirety to read as follows:
“3.2
Number;
Qualification; Term of Office
. The Board shall consist of at least three Directors and up to nine Directors, the precise number
thereof to be determined from time to time by resolution of the Board. Except as provided in Section 3.3, Directors shall be elected
by the stockholders entitled to vote thereon at each annual meeting of the Stockholders by a plurality of the votes cast in the
applicable election. The directors shall be divided into three classes designated Class I, Class II and Class III (each, a “Class”).
Each Class shall consist, as nearly as may be possible, of one third of the total number of directors constituting the entire
Board. The Board is authorized to assign Directors in office at the time the classification of Directors first takes effect to
each Class. The term of office of the initial Class III Directors shall expire at the annual meeting of Stockholders to be held
in 2019; the term of office of the initial Class II Directors shall expire at the at the annual meeting of Stockholders to be
held in 2020; and the term of office of the initial Class I directors shall expire at the annual meeting of Stockholders to be
held in 2021. Beginning with the annual meeting of Stockholders to be held in 2019, Directors to replace those of a Class whose
terms expire at such annual meeting shall be chosen to hold office until the third succeeding annual meeting and until their respective
successors shall have been duly elected and qualified, or until the Director’s earlier death, resignation, disqualification
or removal. If the number of Directors is changed, any increase or decrease shall be so apportioned by the Board among the Classes
so as to maintain the number of directors in each Class as nearly equal as possible, and any additional Director of any Class
elected to fill a vacancy resulting from an increase in such Class shall hold office for a term that shall coincide with the remaining
term of that Class, but in no case will a decrease in the number of Directors constituting the Board shorten the term of any incumbent
Director. Directors need not be Stockholders, and need not be residents of the State of Delaware. The election of Directors need
not be by written ballot.”
2. Section
3.3 of the Bylaws is hereby amended in its entirety to read as follows:
“3.3
Newly
Created Directorships and Vacancies
. Unless otherwise provided by applicable law or the Certificate of Incorporation, any
newly created directorships resulting from an increase in the authorized number of Directors and any vacancies occurring in the
Board for any cause shall be filled only by the affirmative vote of a majority of the remaining members of the Board, although
less than a quorum, or by a sole remaining Director. A Director so elected shall hold office for a term that shall coincide with
the remaining term of the Class such Director is elected to and until such Director’s successor shall have been duly elected
and qualified, or until the Director’s earlier death, resignation or removal.”
1
In accordance with Rule 14c-2 under the Securities Exchange Act of 1934, as amended, this Bylaw Amendment will become effective
20 calendar days after the date on which the Information Statement is sent or given to the Company’s stockholders.
3. Section
3.4 of the Bylaws is hereby amended in its entirety to read as follows:
“3.4
Resignation
and Removal
. Any Director may resign at any time by notice given in writing to the Corporation. Such resignation shall take
effect at the time therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation
shall not be necessary to make it effective. Any Director or the Entire Board may be removed at any time, but only for cause and
only by the affirmative vote of the holders of two-thirds or more of the outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (considered for this purpose as one class) cast at a meeting of the Stockholders
called for that purpose.”
4. Section
8.9 of the Bylaws is hereby amended in its entirety to read as follows:
“8.9
Amendments
.
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board, but the Stockholders may make additional
Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise; provided, however, that the alteration, amendment
or repeal of all or any portion of Section 3.2 (Number; Qualification; Term of Office), Section. 3.3 (Newly Created Directorships
and Vacancies), Section 3.4 (Resignation and Removal), Article 9 (Indemnification), and this Section.9 (Amendments) by the Stockholders
shall require the affirmative vote of the holders of two-thirds or more of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of Directors (considered for this purpose as one class) cast at a meeting
of the Stockholders called for that purpose.”
5.
Except as otherwise expressly modified by this Amendment, all terms, provisions, covenants and agreement contained in the Bylaws
shall remain unmodified and in full force and effect.
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