Fantex, Inc.

Baseball-Related Tracking Stock Policy

Last updated: October 26, 2015


This policy is issued by Fantex, Inc. (“Fantex”). The purpose of this policy is to provide an overview of the restrictions and other terms (the “BRTS Restrictions”) applicable to Fantex’s Baseball Related Tracking Stocks (“BRTS”).

A BRTS is any tracking stock issued by Fantex that tracks or reflects the economic performance of a brand contract between Fantex and a current or prospective professional athlete in Major League Baseball. This policy also applies to existing or potential investors in other securities issued by Fantex that include a BRTS, such as units. To the extent that a BRTS is included in another security but not separately tradable from that security, this policy shall apply to that security as a whole, even if that security includes a tracking stock that is not a BRTS.

This policy is only a summary of the terms and restrictions of a BRTS, and is qualified in its entirety by reference to the certificate of designations that Fantex will file in connection with the creation of any BRTS. In the event that this policy conflicts with the terms of the certificate of designations creating a BRTS, the certificate of designation shall control.

Restrictions and Other Terms Applicable to BRTS

The following restrictions and other terms shall apply to a BRTS (including securities that include a BRTS):

  • Any person that is or becomes a Prohibited Investor (as defined below) may not beneficially own, invest or trade in a BRTS at any time. In addition, no FBS Accountholder (as defined below), other than Fantex, an affiliate of Fantex or certain institutional investors, may own more than 10% of the outstanding shares of a BRTS. In this policy, a violation of the foregoing restrictions is referred to as a “Violation.”
  • If Fantex has reason to believe that the ownership, or proposed ownership, of any BRTS by any person could, either by itself or when taken together with the ownership of any BRTS by any other person, result in any Violation, then such owner or proposed owner shall promptly provide Fantex with information that Fantex may reasonably request to determine whether the ownership of such BRTS by such owner or proposed owner does or could result in a Violation. In order to determine compliance with this Policy, Fantex, Fantex Brokerage Services LLC (“FBS”) or third parties authorized by FBS may review the account records of FBS Accountholders.
  • If any owner or proposed owner of a BRTS fails to provide Fantex with the information it may reasonably request, or if Fantex determines that any ownership or proposed ownership of a BRTS would result in a Violation, Fantex may take one or more of the following steps:
    1. Fantex may refuse to permit a transfer of record of a BRTS to a proposed owner;
    2. Fantex may refuse to honor a transfer of record that has already occurred (and such transfer shall be deemed to be void);
    3. Fantex may suspend any rights of stock ownership the exercise of which could result in a Violation;
    4. Fantex may redeem shares of a BRTS as described below; and
    5. Fantex may take any other action it deems necessary or advisable in furtherance of this policy.
  • If Fantex redeems shares of a BRTS, the redemption price per share of such shares will be equal to the par value of such shares, which generally will be $0.0001 per share, unless otherwise set forth in the certificate of designations creating such BRTS.

Publication and Distribution of this Policy

This Policy shall be published or distributed as follows:

  • The Policy shall be included with Fantex’s proxy materials that are distributed to Fantex’s security-holders in connection with Fantex’s annual meeting;
  • This Policy shall be included in (or incorporated by reference in) any registration statement for the sale of a BRTS (or other security that includes a BRTS) by Fantex;
  • This policy shall be provided to any broker or entity that makes a market in any BRTS; and
  • This Policy shall be published on Fantex’s and FBS’ websites.


Additional Prohibited Investor” means any person who has been at any time arrested in connection with, charged with, indicted for or convicted of participating (whether directly or indirectly) in, any violation of federal or state securities laws, illegal gambling activity or any illegal activity in connection with a Gaming Enterprise, or any spouse of any of such person.

Gaming Enterprise” means any entity that is engaged, directly or indirectly, in gambling operations, including, without limitation, online gambling, casinos, horse and dog race tracks, off-track betting organizations, gaming enterprises operating on riverboats and Indian reservations, jai alai frontons and bingo parlors, as well as any entity or governmental authority that owns, operates, oversees or otherwise exercises any ownership or managerial control over any such entity and any subsidiary and/or affiliate of any such entity as long as any of such subsidiary’s or affiliate’s business objectives relate directly or indirectly to the gambling function of its parent or affiliated entity.

FBS Accountholder” means any person who opens and maintains a customer account with Fantex Brokerage Services LLC.

MLB” means Major League Baseball and the Office of the Commissioner of Baseball.

MLB Affiliated Person” means a person who is an owner (whether direct or indirect or as sole proprietor, shareholder, member, general or limited partner, trustee, trust beneficiary or other beneficial owner), officer, director, or employee (including any player, manager, coach, industry consultant or intern and regardless of whether full-time, part-time or seasonal) of any of MLB club, or MLB related entity, or any spouse, parent, child (including legally adopted children and stepchildren), sibling, other family member or agent of any of the foregoing.

MLB Prohibited Investor” means any MLB Affiliated Person and any entity controlled by or in common control with any MLB Affiliated Person (or group of MLB Affiliated Persons) or any trust or similar entity established for the benefit of any MLB Affiliated Person (or group of MLB Affiliated Persons).

Prohibited Investor” means any Additional Prohibited Investor or any MLB Prohibited Investor.

Fantex Baseball-Related Tracking Stock Policy
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