PIONEER POWER SOLUTIONS, INC. 10-K


 


Exhibit 4.1


 





DESCRIPTION
OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF


 


THE
SECURITIES EXCHANGE ACT OF 1934


 


As
of March 31, 2022 Pioneer Power Solutions, Inc., a Delaware corporation (“we,” “our” and the “Company”)
has our common stock, par value $0.001 per share registered under Section 12 of the Securities Exchange Act of 1934, as amended.


 


The
foregoing description is intended as a summary and is qualified in its entirety by reference to our composite certificate of incorporation
(the “Certificate of Incorporation”) and the bylaws (the “Bylaws”) as currently in effect, copies of which
are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein.


 


Authorized
Capital Stock


 


We
have authorized 35,000,000 shares of capital stock, par value $0.001 per share, of which 30,000,000 are shares of common stock
and 5,000,000 are shares of “blank check” preferred stock. On March 31, 2022, there were 9,644,545 shares of common
stock issued and outstanding and no shares of preferred stock issued and outstanding. The authorized and unissued shares of common
stock and the authorized and undesignated shares of preferred stock are available for issuance without further action by our stockholders,
unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed. Unless
approval of our stockholders is so required, our board of directors does not intend to seek stockholder approval for the issuance
and sale of our common stock or preferred stock.


 


Common
Stock


 


The
holders of our common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. Elections of
directors are determined by a plurality of the votes and all other matters are decided by a majority of the votes cast by those
stockholders entitled to vote and present in person or by proxy. Our Certificate of Incorporation does not provide for cumulative
voting. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our board
of directors out of legally available funds; however, the current policy of our board of directors is to retain earnings, if any,
for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share
ratably in all assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription,
redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may
be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action
of our board of directors and issued in the future.


 


The
NASDAQ Capital Market Listing


 


Our
common stock is listed on the NASDAQ Capital Market under the symbol “PPSI”.


 


Transfer
Agent


 


The
transfer agent and registrar for our common stock is Action Stock Transfer Corp. The transfer agent’s address is 2469 E.
Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121. Our common stock is listed on the Nasdaq Capital Market under the symbol
“PPSI”.


 



     


     


    

 





Preferred
Stock


 


The
board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders,
to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock shall have such
number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall
be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences,
conversion rights and preemptive rights. Issuance of preferred stock by our board of directors may result in such shares having
dividend and/or liquidation preferences senior to the rights of the holders of our common stock and could dilute the voting rights
of the holders of our common stock.


 


Prior
to the issuance of shares of each series of preferred stock, the board of directors is required by the Delaware General Corporation
Law (the “DGCL”) and our Certificate of Incorporation to adopt resolutions and file a certificate of designation with
the Secretary of State of the State of Delaware. The certificate of designation fixes for each class or series the designations,
powers, preferences, rights, qualifications, limitations and restrictions, including, but not limited to, some or all of the following:


 


		●	the
                                         number of shares constituting that series and the distinctive designation of that series,
                                         which number may be increased or decreased (but not below the number of shares then outstanding)
                                         from time to time by action of the board of directors;



 


		●	the
                                         dividend rate and the manner and frequency of payment of dividends on the shares of that
                                         series, whether dividends will be cumulative, and, if so, from which date;



 


		●	whether
                                         that series will have voting rights, in addition to any voting rights provided by law,
                                         and, if so, the terms of such voting rights;



 


		●	whether
                                         that series will have conversion privileges, and, if so, the terms and conditions of
                                         such conversion, including provision for adjustment of the conversion rate in such events
                                         as the board of directors may determine;



 


		●	whether
                                         or not the shares of that series will be redeemable, and, if so, the terms and conditions
                                         of such redemption;



 


		●	whether
                                         that series will have a sinking fund for the redemption or purchase of shares of that
                                         series, and, if so, the terms and amount of such sinking fund;



 


		●	whether
                                         or not the shares of the series will have priority over or be on a parity with or be
                                         junior to the shares of any other series or class in any respect;



 


		●	the
                                         rights of the shares of that series in the event of voluntary or involuntary liquidation,
                                         dissolution or winding up of the corporation, and the relative rights or priority, if
                                         any, of payment of shares of that series; and



 


		●	any
other relative rights, preferences and limitations of that series.



 



     


     


    

 





Once
designated by our board of directors, each series of preferred stock may have specific financial and other terms that will be
described in a prospectus supplement. The description of the preferred stock that is set forth in any prospectus supplement is
not complete without reference to the documents that govern the preferred stock. These include our certificate of incorporation
and any certificates of designation that our board of directors may adopt.


 


All
shares of preferred stock offered hereby will, when issued, be fully paid and nonassessable, including shares of preferred stock
issued upon the exercise of preferred stock warrants or subscription rights, if any.


 


Although
our board of directors has no intention at the present time of doing so, it could authorize the issuance of a series of preferred
stock that could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt.


 


Delaware
Anti-Takeover Law and Provisions of our Certificate of Incorporation and Bylaws


 


Delaware
Anti-Takeover Law


 


We
are subject to Section 203 of the DGCL. Section 203 generally prohibits a public Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for a period of three years after the date of the transaction
in which the person became an interested stockholder, unless:


 


		●	prior
                                         to the date of the transaction, the board of directors of the corporation approved either
                                         the business combination or the transaction which resulted in the stockholder becoming
                                         an interested stockholder;



 


		●	the
                                         interested stockholder owned at least 85% of the voting stock of the corporation outstanding
                                         at the time the transaction commenced, excluding for purposes of determining the number
                                         of shares outstanding (i) shares owned by persons who are directors and also officers
                                         and (ii) shares owned by employee stock plans in which employee participants do not have
                                         the right to determine confidentially whether shares held subject to the plan will be
                                         tendered in a tender or exchange offer; or



 


		●	on
                                         or subsequent to the date of the transaction, the business combination is approved by
                                         the board and authorized at an annual or special meeting of stockholders, and not by
                                         written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
                                         stock which is not owned by the interested stockholder.



 


Section
203 defines a business combination to include:


 


		●	any
merger or consolidation involving the corporation and the interested stockholder;



 


		●	any
                                         sale, transfer, pledge or other disposition involving the interested stockholder of 10%
                                         or more of the assets of the corporation;



 


		●	subject
                                         to exceptions, any transaction that results in the issuance or transfer by the corporation
                                         of any stock of the corporation to the interested stockholder; or



 


		●	the
                                         receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
                                         pledges or other financial benefits provided by or through the corporation.



 



     


     


    

 





In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person.
The term “owner” is broadly defined to include any person that, individually, with or through that person’s
affiliates or associates, among other things, beneficially owns the stock, or has the right to acquire the stock, whether or not
the right is immediately exercisable, under any agreement or understanding or upon the exercise of warrants or options or otherwise
or has the right to vote the stock under any agreement or understanding, or has an agreement or understanding with the beneficial
owner of the stock for the purpose of acquiring, holding, voting or disposing of the stock.


 


The
restrictions in Section 203 do not apply to corporations that have elected, in the manner provided in Section 203, not to be subject
to Section 203 of the DGCL or, with certain exceptions, which do not have a class of voting stock that is listed on a national
securities exchange or held of record by more than 2,000 stockholders. Our certificate of incorporation and bylaws do not opt
out of Section 203.


 


Section
203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage
attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price
above the prevailing market price.


 


Certificate
of Incorporation and Bylaws


 


The
provisions of our Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential
change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium
for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions
could adversely affect the price of our common stock. Among other things, our Certificate of Incorporation and Bylaws:


 


		●	provide
                                         that special meetings of stockholders may be called only by our chairman, our president
                                         or by a resolution adopted by a majority of our board of directors;



 


		●	do
                                         not include a provision for cumulative voting in the election of directors. Under cumulative
                                         voting, a minority stockholder holding a sufficient number of shares may be able to ensure
                                         the election of one or more directors. The absence of cumulative voting may have the
                                         effect of limiting the ability of minority stockholders to effect changes in our board
                                         of directors; and



 


		●	allow
                                         us to issue, without stockholder approval, up to 5,000,000 shares of preferred stock
                                         that could adversely affect the rights and powers of the holders of our common stock.