Class B Common Stock – FAQ

These FAQs pertain only to the Class B Common Stock of Standard Diversified Opportunities Inc. (the “Company”) and are provided for your convenience only. The Company also has Class A Common Stock currently trading on the OTC Markets under the ticker symbol “SDOIA.”

These summary explanations are qualified in their entirety by controlling documents including the Company’s Fifth Amended and Restated Certificate of Incorporation (“Charter”) and Second Amended and Restated Bylaws. Such documents are publicly filed.

FORM CONVERSION NOTICE FOR CLASS B SHARES
You can download the Class B Conversion Notice here.

Class B Common Stock – FAQ

All shares of Class B Common Stock (certificated or uncertificated), are being held via book entry at the Company’s transfer agent American Stock Transfer & Trust Company (“AST”). Please note that as of February 16, 2018, any shares that were previously held in “street name” (i.e., an account with a broker) were transferred to AST and are reflected in the AST book register.
The Class B shares cannot be held in a brokerage account, as they are currently in book entry form at the company’s transfer agent AST. To have SDOI shares reflected in a brokerage account, the SDOI Class B shares must be converted to SDOI Class A shares (SDOIA) as referenced above.
There is no market for the Class B Common Stock. However, should you wish to sell your Class B Common Stock, each share of Class B Common Stock is convertible, at all times and without cost to a shareholder into a share of Class A Common Stock. This conversion feature provides the Class B Common Stock shareholder access to the market.
If you are a record holder (either certificated or uncertificated), your shares are being held via book entry at the Company’s transfer agent, AST. This includes and you must provide written notice to the Company of your desire to transfer your shares of Class B Common Stock. The address is Standard Diversified Opportunities Inc., 155 Mineola Boulevard, Mineola, NY 11501 attention: General Counsel. The Company and AST, will instruct you as to next steps upon receiving notice. Only in very limited circumstances (described below) will you be permitted to transfer your shares of Class B Common Stock. Otherwise, your shares of Class B Common Stock will be converted into an equal number of shares of Class A Common Stock, which can then be sold to the desired third party. If your shares are certificated, you must surrender such certificate, duly endorsed, or notify the Company that such certificate has been lost, stolen, or destroyed. Please see Part B, Section 8A of Article IV of the Company’s Charter for further details of providing such notice and how to surrender certificates, if any.
As noted above, you may convert your shares of Class B Common Stock into an equal number of shares of Class A Common Stock, at any time following the procedures set forth below. For example, if you hold 1,000 shares of Class B Common Stock and elect to convert such shares into shares of Class A Common Stock, upon completion of the appropriate procedures, you will hold 1,000 shares of Class A Common Stock. The conversion is deemed effective immediately prior to the close of business on the date that the requirements of voluntary conversion are satisfied. At such time, the person(s) entitled to receive the shares of Class A Common Stock issuable upon conversion shall be treated for all purposes as the record holder(s) of such shares. If you are a record holder (either certificated or uncertificated), you must provide written notice to the Company of your desire to convert your shares of Class B Common Stock. The address is Standard Diversified Opportunities Inc., 155 Mineola Boulevard, Mineola, NY 11501 attention: General Counsel. The Company and AST will instruct you as to next steps upon receiving notice. If your shares are certificated, you must surrender such certificate, duly endorsed, or notify the Company that such certificate has been lost, stolen, or destroyed. Please see Part B, Section 8A of Article IV of the Company’s Charter for further details of providing such notice and how to surrender certificates, if any.
The market value of the Class B Common Stock is the same as the value of the Class A Common Stock because the no cost conversion features of the Class B Common Stock.
The shares of Class B Common Stock have the same rights as the shares of Class A Common Stock, except that:
  • each share of Class B Common Stock has the right to 10 votes per share (Class A Common Stock has the right to one vote per share); and
  • the shares of Class B Common Stock are convertible into shares of Class A Common Stock on a one-for-one basis.
Yes, in accordance with the requirements of and limitations set forth in the Company’s charter, as discussed below. These are the only circumstances in which the Company’s charter permits transfers of the Class B Common Stock. Any other attempt to transfer shares of Class B Common Stock will result in them automatically converting upon transfer into an equal number of shares of Class A Common Stock.
Only those stockholders of record on June 2, 2017, when such distribution of Class B Common Stock was made, and their Permitted Transferees (as defined in the Charter) are entitled to own shares of Class B Common Stock. Any transfer that is not considered a permitted transfer under the Charter (and summarized below) will cause such shares of Class B Common Stock to automatically be converted into an equal number of shares of Class A Common Stock.
Shares of Class B Common Stock will automatically be converted into an equal number of shares of Class A Common Stock upon:
  • any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of the shares of Class B Common Stock (subject to limited exceptions described below); or
  • the occurrence of an event specified by the affirmative vote or written consent of the holders of two-thirds of the then-outstanding shares of Class B Common Stock, voting as a separate class (in which case all shares of Class B Common Stock shall convert).
For example, if you hold 1,000 shares of Class B Common Stock and wish to engage in a transfer of such shares, and such transfer is not a permitted transfer, the transferee will hold 1,000 shares of Class A Common Stock upon completion of the transfer. If you are: (i) a corporation, partnership, limited liability company or other entity, your shares of Class B Common Stock may be transferred to an affiliate; (ii) a natural person, such shares may be transferred to family members or for estate planning purposes; (iii) a trust, such shares may be transferred to the beneficiaries of such trust and the family members of the beneficiaries of such trust, without the automatic conversion of such into shares of Class A Common Stock. Upon an automatic conversion and without further action by you, each outstanding stock certificate that represented shares of Class B Common Stock will be deemed to represent an equal number of shares of Class A Common Stock. Upon your written request and surrender of your certificate formerly representing your shares of Class B Common Stock (or, in the case of a lost, stolen or destroyed certificate, upon execution of an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith), the Company will issue and deliver to you a certificate representing the shares of Class A Common Stock into which your shares of Class B Common Stock were converted (if such shares were certificated) or, if such shares were uncertificated, register such shares in book entry form.
No. Each share of Class B Common Stock that is converted will be retired by the Company and will not be available for reissuance. The Company will not issue additional shares of Class B Common Stock, including securities convertible into, or exercisable or exchangeable for shares of Class B Common Stock.
Shares of Class B Common Stock and Class A Common Stock are treated equally, identically and ratably, on a per share basis, with respect to any dividend paid on the Common Stock of the Company. If a dividend is paid in the form Common Stock, such dividend will be paid only in shares of Class A Common Stock. Holders of shares of Class A Common Stock and Class B Common Stock, on a per share basis, will receive an identical number of shares of Class A Common Stock. If approved in advance by the holders of a majority of the outstanding shares of Class A Common Stock and a majority of the outstanding shares of Class B Common Stock, each voting separately as a class, the board of directors of the Company may pay or make a disparate dividend or distribution per share of Class A Common Stock and Class B Common Stock.
The CUSIP Number for the Class B Common Stock is 85336L-208.