exhibit417-descriptionof






    Doc#: US1:14586845v3  Exhibit 4.17  DESCRIPTION OF THE REGISTRANT’S SECURITIES  REGISTERED PURSUANT TO SECTION 12 OF THE   SECURITIES EXCHANGE ACT OF 1934     In this document, the “Company,” “we,” “us” and “our” refer to Driven Brands Holdings Inc., a Delaware  corporation. The following description of our capital stock summarizes certain provisions of our Amended and  Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Amended and Restated Bylaws  (the “Bylaws”). The description is intended as a summary, and is qualified in its entirety by reference to our  Certificate of Incorporation and our Bylaws, copies of which have been filed as exhibits to this Annual Report on  Form 10-K. References to our “Principal Stockholders” refer to Driven Investor LLC and RC IV Cayman ICW  Holdings LLC.  Authorized Capital  Our Certificate of Incorporation authorizes capital stock consisting of:       •   900,000,000 shares of common stock, par value $0.01 per share (the “common stock”); and       •   100,000,000 shares of preferred stock, par value $0.01 per share (the “preferred stock”).  Our common stock is registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the  “Exchange Act”), and is listed on the NASDAQ Global Select Market (the “NASDAQ”) under the symbol  “DRVN”.   Common Stock  Voting Rights. Holders of our common stock are entitled to one vote for each share held of record on all  matters to which stockholders are entitled to vote generally, including the election or removal of directors. The  holders of our common stock do not have cumulative voting rights in the election of directors.  Dividends. Section 203 of the Delaware General Corporation Law (the “DGCL”) permits a corporation to  declare and pay dividends out of “surplus” or, if there is no “surplus,” out of its net profits for the fiscal year in  which the dividend is declared and/or the preceding fiscal year. “Surplus” is defined as the excess of the net assets of  the corporation over the amount determined to be the capital of the corporation by the board of directors. The capital  of the corporation is typically calculated to be (and cannot be less than) the aggregate par value of all issued shares  of capital stock. Net assets equals the fair value of the total assets minus total liabilities. The DGCL also provides  that dividends may not be paid out of net profits if, after the payment of the dividend, capital is less than the capital  represented by the outstanding stock of all classes having a preference upon the distribution of assets.  Declaration and payment of any dividend is subject to the discretion of our board of directors. The time and  amount of dividends are dependent upon our financial condition, operations, cash requirements and availability, debt  repayment obligations, capital expenditure needs and restrictions in our debt instruments, industry trends, the  provisions of Delaware law affecting the payment of dividends to stockholders and any other factors our board of  directors may consider relevant.  Liquidation. Upon our liquidation, dissolution or winding up and after payment in full of all amounts required  to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our  common stock are entitled to receive pro rata our remaining assets available for distribution.  Rights and Preferences. Holders of our common stock do not have preemptive, subscription, redemption or  conversion rights. The common stock is not subject to further calls or assessment by us. There are no redemption or  sinking fund provisions applicable to the common stock. All outstanding shares of our common stock are fully paid  





 






2    Doc#: US1:14586845v3  and non-assessable. The rights, powers, preferences and privileges of holders of our common stock are subject to  those of the holders of any shares of our preferred stock we may authorize and issue in the future.     Preferred Stock  Our Certificate of Incorporation authorizes our board of directors to establish one or more series of preferred  stock (including convertible preferred stock). Unless required by law, the authorized shares of preferred stock will  be available for issuance without further action by the shareholders of our common stock. Our board of directors  may determine, with respect to any series of preferred stock, the powers (including voting powers), preferences and  relative participations, optional or other special rights, and the qualifications, limitations or restrictions thereof, of  that series, including, without limitation:       •   the designation of the series;        •   the number of shares of the series, which our board of directors may, except where otherwise provided in  the preferred stock designation, increase (but not above the total number of authorized shares of the class)  or decrease (but not below the number of shares then outstanding);       •   whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;       •   the dates at which dividends, if any, will be payable;       •   the redemption rights and price or prices, if any, for shares of the series;       •   the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;       •   the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of our Company;        •   whether the shares of the series will be convertible into shares of any other class or series, or any other  security, of our Company or any other corporation, and, if so, the specification of the other class or series  or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as  of which the shares will be convertible and all other terms and conditions upon which the conversion may  be made;       •   restrictions on the issuance of shares of the same series or of any other class or series; and       •   the voting rights, if any, of the holders of the series.  We could issue a series of preferred stock that could, depending on the terms of the series, impede or  discourage an acquisition attempt or other transaction that some, or a majority, of shareholders of our common stock  might believe to be in their best interests or in which they might receive a premium for their common stock over the  market price of the common stock. Additionally, the issuance of preferred stock may adversely affect the holders of  our common stock by restricting dividends on the common stock, diluting the voting power of the common stock or  subordinating the liquidation rights of the common stock. As a result of these or other factors, the issuance of  preferred stock could have an adverse impact on the market price of our common stock.  Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws and Certain Provisions of Delaware  Law  Our Certificate of Incorporation, Bylaws and the DGCL, which are summarized in the following paragraphs,  contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of our  board of directors. These provisions are intended to avoid costly takeover battles, reduce our vulnerability to a  hostile change of control and enhance the ability of our board of directors to maximize stockholder value in  connection with any unsolicited offer to acquire us. However, these provisions may have an anti-takeover effect and  may delay, deter or prevent a merger or acquisition of our Company by means of a tender offer, a proxy contest or  other takeover attempt that a stockholder might consider in its best interest, including those attempts that might  result in a premium over the prevailing market price for the shares of common stock held by stockholders.     Authorized but Unissued Capital Stock  





 






3    Doc#: US1:14586845v3  Delaware law does not require stockholder approval for any issuance of authorized shares. However, the  listing requirements of NASDAQ, which apply so long as our common stock remains listed on the NASDAQ,  require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or  then outstanding number of shares of common stock. These additional shares may be used for a variety of corporate  purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.  Our board of directors may generally issue preferred shares on terms calculated to discourage, delay or  prevent a change of control of our Company or the removal of our management. Moreover, our authorized but  unissued shares of preferred stock will be available for future issuances without stockholder approval and could be  utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and  employee benefit plans.  One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to  enable our board of directors to issue shares to persons friendly to current management, which issuance could render  more difficult or discourage an attempt to obtain control of our Company by means of a merger, tender offer, proxy  contest or otherwise, and thereby protect the continuity of our management and possibly deprive our stockholders of  opportunities to sell their shares of common stock at prices higher than prevailing market prices.  Classified Board of Directors  Our Certificate of Incorporation provides that our board of directors is divided into three classes of directors,  with the classes to be as nearly equal in number as possible, and with the directors serving three-year terms. As a  result, approximately one-third of our board of directors are elected each year. The classification of directors has the  effect of making it more difficult for stockholders to change the composition of our board of directors. Our  Certificate of Incorporation and Bylaws provide that, subject to any rights of holders of preferred stock to elect  additional directors under specified circumstances or to any rights granted to our Principal Stockholders under our  stockholders agreement, the number of directors is fixed from time to time exclusively pursuant to a resolution  adopted by the board of directors.  Business Combinations  We have opted out of Section 203 of the DGCL; however, our Certificate of Incorporation contains similar  provisions providing that we may not engage in certain “business combinations” with any “interested stockholder”  for a three-year period following the time that the stockholder became an interested stockholder, unless:       •   prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;        •   upon consummation of the transaction that resulted in the stockholder becoming an interested  stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the  transaction commenced, excluding certain shares; or        •   at or subsequent to that time, the business combination is approved by our board of directors and by the  affirmative vote of holders of at least 66 2/3% of the outstanding voting stock that is not owned by the  interested stockholder.  Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a  financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person  who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or  more of our voting stock. For purposes of this section only, “voting stock” has the meaning given to it in  Section 203 of the DGCL.     Under certain circumstances, this provision will make it more difficult for a person who would be an  “interested stockholder” to effect various business combinations with a corporation for a three-year period. This  provision may encourage companies interested in acquiring our Company to negotiate in advance with our board of  directors because the stockholder approval requirement would be avoided if our board of directors approves either  the business combination or the transaction which results in the stockholder becoming an interested stockholder.  





 






4    Doc#: US1:14586845v3  These provisions also may have the effect of preventing changes in our board of directors and may make it more  difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.  Our Certificate of Incorporation provides that our Principal Stockholders and their affiliates and any of their  respective direct or indirect transferees and any group as to which such persons are a party do not constitute  “interested stockholders” for purposes of this provision.  Removal of Directors; Vacancies  Under the DGCL, unless otherwise provided in our Certificate of Incorporation, directors serving on a  classified board may be removed by the stockholders only for cause. Our Certificate of Incorporation provides that  directors may be removed with or without cause upon the affirmative vote of a majority in voting power of all  outstanding shares of stock entitled to vote thereon, voting together as a single class; provided, however, at any time  when our Principal Stockholders and their affiliates beneficially own, in the aggregate, less than 50% in voting  power of the stock of the Company entitled to vote generally in the election of directors, directors may only be  removed for cause, and only by the affirmative vote of holders of at least 66 2/3% in voting power of all the then- outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class. In addition,  our Certificate of Incorporation also provides that, subject to the rights granted to one or more series of preferred  stock then outstanding or the rights granted under the stockholders agreement with affiliates of our Principal  Stockholders, any vacancies on our board of directors are filled only by the affirmative vote of a majority of the  remaining directors, even if less than a quorum, by a sole remaining director or by the stockholders; provided,  however, at any time when our Principal Stockholders and their affiliates beneficially own, in the aggregate, less  than 40% in voting power of the stock of the Company entitled to vote generally in the election of directors, any  newly created directorship on the board of directors that results from an increase in the number of directors and any  vacancy occurring in the board of directors may, subject to any rights granted to our Principal Stockholders under  our stockholders agreement, only be filled by a majority of the directors then in office, although less than a quorum,  or by a sole remaining director (and not by stockholders).  No Cumulative Voting  Under Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation  specifically authorizes cumulative voting. Our Certificate of Incorporation does not authorize cumulative voting.  Therefore, stockholders holding a majority in voting power of the shares of our stock entitled to vote generally in the  election of directors are able to elect all our directors.  Special Stockholder Meetings  Our Certificate of Incorporation provides that special meetings of our stockholders may be called at any time  only by or at the direction of the board of directors or the chairman of the board of directors; provided, however, so  long as our Principal Stockholders and their affiliates own, in the aggregate, less than 40% in voting power of the  stock of the Company entitled to vote generally in the election of directors, special meetings of our stockholders  shall also be called by the board of directors or the chairman of the board of directors at the request of our Principal  Stockholders and their affiliates. Our Bylaws prohibit the conduct of any business at a special meeting other than as  specified in the notice for such meeting. These provisions may have the effect of deferring, delaying or discouraging  hostile takeovers, or changes in control or management of our Company.       Requirements for Advance Notification of Director Nominations and Stockholder Proposals  Our Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of  candidates for election as directors, other than nominations made by or at the direction of the board of directors or a  committee of the board of directors. In order for any matter to be “properly brought” before a meeting, a stockholder  must comply with advance notice requirements and provide us with certain information. Generally, to be timely, a  stockholder’s notice must be received at our principal executive offices not less than 90 days nor more than 120 days  prior to the first anniversary date of the immediately preceding annual meeting of stockholders. Our Bylaws also  specify requirements as to the form and content of a stockholder’s notice. Our Bylaws allow the chairman of the  





 






5    Doc#: US1:14586845v3  meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have  the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed.  These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies  to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of our Company.  Stockholder Action by Written Consent  Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the  stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in  writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the  minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares  of our stock entitled to vote thereon were present and voted, unless our Certificate of Incorporation provides  otherwise. Our Certificate of Incorporation precludes stockholder action by written consent at any time when our  Principal Stockholders and their affiliates beneficially own, in the aggregate, less than 40% in voting power of the  stock of the Company entitled to vote generally in the election of directors; provided, that any action required or  permitted to be taken by the holders of preferred stock, voting separately as a series or separately as a class with one  or more other such series, may be taken by written consent to the extent provided by the applicable certificate of  designation relating to such series.  Supermajority Provisions  Our Certificate of Incorporation and Bylaws provide that the board of directors is expressly authorized to  make, alter, amend, change, add to, rescind or repeal, in whole or in part, our Bylaws without a stockholder vote in  any matter not inconsistent with the laws of the State of Delaware or our Certificate of Incorporation. For as long as  our Principal Stockholders and their affiliates beneficially own, in the aggregate, at least 40% in voting power of the  stock of the Company entitled to vote generally in the election of directors, any amendment, alteration, rescission or  repeal of our Bylaws by our stockholders requires the affirmative vote of a majority in voting power of the  outstanding shares of our stock present in person or represented by proxy and entitled to vote on such amendment,  alteration, rescission or repeal. At any time when our Principal Stockholders and their affiliates beneficially own, in  the aggregate, less than 40% in voting power of the stock of the Company entitled to vote generally in the election  of directors, any amendment, alteration, rescission or repeal of our Bylaws by our stockholders requires the  affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the  Company entitled to vote thereon, voting together as a single class.  The DGCL provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote  thereon, voting together as a single class, is required to amend a corporation’s certificate of incorporation, unless the  certificate of incorporation requires a greater percentage.  Our Certificate of Incorporation provides that at any time when our Principal Stockholders and their affiliates  beneficially own, in the aggregate, less than 40% in voting power of the stock of the Company entitled to vote  generally in the election of directors, the following provisions in our Certificate of Incorporation may be amended,  altered, repealed or rescinded only by the affirmative vote of the holders of at least 66 2/3% in voting power of all  the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class:       •   the provision requiring a 66 2/3% supermajority vote for stockholders to amend our Bylaws;       •   the provisions providing for a classified board of directors (the election and term of our directors);       •   the provisions regarding resignation and removal of directors;       •   the provisions regarding competition and corporate opportunities;       •   the provisions regarding entering into business combinations with interested stockholders;       •   the provisions regarding stockholder action by written consent;       •   the provisions regarding calling special meetings of stockholders;       •   the provisions regarding filling vacancies on our board of directors and newly created directorships;  





 






6    Doc#: US1:14586845v3       •   the provisions eliminating monetary damages for breaches of fiduciary duty by a director; and       •   the amendment provision requiring that the above provisions be amended only with a 66 2/3% supermajority vote.  The combination of the classification of our board of directors, the lack of cumulative voting and the  supermajority voting requirements make it more difficult for our existing stockholders to replace our board of  directors as well as for another party to obtain control of us by replacing our board of directors. Because our board  of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for  existing stockholders or another party to effect a change in management.  These provisions may have the effect of deterring hostile takeovers, delaying, or preventing changes in control  of our management or our Company, such as a merger, reorganization or tender offer. These provisions are intended  to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to  discourage certain types of transactions that may involve an actual or threatened acquisition of us. These provisions  are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions are also intended to  discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of  discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit  fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such  provisions may also have the effect of preventing changes in management.  Dissenters’ Rights of Appraisal and Payment  Under the DGCL, with certain exceptions, our stockholders have appraisal rights in connection with a merger  or consolidation of us. Pursuant to the DGCL, stockholders who properly request and perfect appraisal rights in  connection with such merger or consolidation will have the right to receive payment of the fair value of their shares  as determined by the Delaware Court of Chancery.  Stockholders’ Derivative Actions  Under the DGCL, any of our stockholders may bring an action in our name to procure a judgment in our  favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of our shares at  the time of the transaction to which the action relates or such stockholder’s stock thereafter devolved by operation of  law.      Exclusive Forum  Our Certificate of Incorporation provides that unless we consent to the selection of an alternative forum, the  Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive  forum for any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting a claim of  breach of a fiduciary duty owed by any director or officer of our Company to the Company or the Company’s  stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or  officer of the Company arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our  Bylaws or (iv) action asserting a claim against the Company or any director or officer of the Company governed by  the internal affairs doctrine; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses  any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the  State of Delaware, or if no state court of the State of Delaware has jurisdiction, the federal district court for the  District of Delaware, unless we consent in writing to the selection of an alternative forum. Additionally, our  Certificate of Incorporation states that the foregoing provision will not apply to claims arising under the Securities  Act of 1933, as amended, (the “Securities Act”), the Exchange Act or other federal securities laws for which there is  exclusive federal or concurrent federal and state jurisdiction. Unless we consent in writing to the selection of an  alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the  resolution of any complaint asserting a cause of action arising under the Securities Act. The exclusive forum  provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes  with us or any of our directors, officers or stockholders, which may discourage lawsuits with respect to such claims.  





 






7    Doc#: US1:14586845v3  Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules  and regulations thereunder as a result of our exclusive forum provisions.   Conflicts of Interest  Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain  opportunities that are presented to the corporation or its officers, directors or stockholders. Our Certificate of  Incorporation, to the maximum extent permitted from time to time by Delaware law, renounces any interest or  expectancy that we have in, or right to be offered an opportunity to participate in, specified business opportunities  that are from time to time presented to our officers, directors or stockholders or their respective affiliates, other than  those officers, directors, stockholders or affiliates who are our or our subsidiaries’ employees. Our Certificate of  Incorporation provides that, to the fullest extent permitted by law, each of our Principal Stockholders or any of their  affiliates or any director who is not employed by us (including any non-employee director who serves as one of our  officers in both his director and officer capacities) or his or her affiliates has no duty to refrain from (i) engaging in a  corporate opportunity in the same or similar lines of business in which we or our affiliates now engage or propose to  engage or (ii) otherwise competing with us or our affiliates. In addition, to the fullest extent permitted by law, in the  event that our Principal Stockholders or any of their affiliates or any non-employee director acquires knowledge of a  potential transaction or other business opportunity which may be a corporate opportunity for itself or himself or its  or his affiliates or for us or our affiliates, such person has no duty to communicate or offer such transaction or  business opportunity to us or any of our affiliates and they may take any such opportunity for themselves or offer it  to another person or entity. Our Certificate of Incorporation does not renounce our interest in any business  opportunity that is expressly offered to a non-employee director solely in his or her capacity as a director or officer  of the Company. To the fullest extent permitted by law, no business opportunity is deemed to be a potential  corporate opportunity for us unless we would be permitted to undertake the opportunity under our Certificate of  Incorporation, we have sufficient financial resources to undertake the opportunity and the opportunity would be in  line with our business.       Limitations on Liability and Indemnification of Officers and Directors  The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and  their stockholders for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions.  Our Certificate of Incorporation includes a provision that eliminates the personal liability of directors for monetary  damages for any breach of fiduciary duty as a director, except to the extent such exemption from liability or  limitation thereof is not permitted under the DGCL. The effect of these provisions is to eliminate the rights of us and  our stockholders, through stockholders’ derivative suits on our behalf, to recover monetary damages from a director  for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However,  exculpation does not apply to any director if the director has acted in bad faith, knowingly or intentionally violated  the law, authorized illegal dividends, repurchases or redemptions or derived an improper benefit from his or her  actions as a director.  Our Bylaws provide that we must generally indemnify, and advance expenses to, our directors and officers to  the fullest extent authorized by the DGCL. We also are expressly authorized to carry directors’ and officers’ liability  insurance providing indemnification for our directors, officers and certain employees for some liabilities. We  believe that these indemnification and advancement provisions and insurance are useful to attract and retain  qualified directors and executive officers.  The limitation of liability, indemnification and advancement provisions in our Certificate of Incorporation and  Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty.  These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and  officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition,  shareholders may be adversely affected to the extent we pay the costs of settlement and damage awards against  directors and officers pursuant to these indemnification provisions.  There is currently no pending material litigation or proceeding involving any of our directors, officers or  employees for which indemnification is sought.