Document:

Exhibit

Exhibit 4.2

DESCRIPTION OF CAPITAL STOCK

General 

NeoPhotonics Corporation, or the Company, is authorized to issue up to 100,000,000 shares of common stock, $0.0025 par value per share, or common stock, and 10,000,000 shares of preferred stock, $0.0025 par value per share, or preferred stock. 

The following summary description is based on the provisions of our certificate of incorporation, our amended and restated bylaws and the applicable provisions of the Delaware General Corporation Law. This information may not be complete in all respects and is qualified entirely by reference to the provisions of our certificate of incorporation, our amended and restated bylaws and the Delaware General Corporation Law.  Our certificate of incorporation and our amended and restated bylaws are filed as exhibits to this Annual Report on Form 10-K to which this Description of Capital Stock is an exhibit. 

Common Stock 

The following is a description of our common stock, which is the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Dividend rights. Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to declare dividends and then only at the times and in the amounts that our board of directors may determine.

Voting rights. Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Our certificate of incorporation does not provide for the right of stockholders to cumulate votes for the election of directors. Our certificate of incorporation establishes a classified board of directors, which is divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. These provisions in our amended and restated certificate of incorporation could discourage potential takeover attempts. See “Anti-Takeover Effects of Delaware Law and Our Charter Documents” below.

No preemptive or similar rights. Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption provisions. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of our preferred stock that we may designate and issue in the future.

Right to receive liquidation distributions. Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

The rights of the holders of our common stock are subject to, and may be adversely affected by, the rights of holders of shares of any preferred stock that we may designate and issue in the future.

Preferred Stock 

We are authorized, subject to limitations prescribed by Delaware law, to issue up to 10,000,000 shares of preferred stock in one or more series established by our board of directors. Our board of directors is authorized to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors can also increase or decrease the number of shares of any series, but not below the number of shares of 

that series then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring, discouraging or preventing a change in control of the Company and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock.

Anti-Takeover Effects of Delaware Law and Our Charter Documents 

Some of the provisions of Delaware law may have the effect of delaying, deferring, discouraging or preventing another person from acquiring control of the Company.

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

	
		
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	before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

	
		
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	upon closing of the transaction that 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 began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (1) persons who are directors and also officers and (2) 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

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

In general, Section 203 defines business combination to include the following:

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

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

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

	
		
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	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

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

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

A Delaware corporation may “opt out” of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from a stockholders’ amendment approved by at least a majority of the outstanding voting shares. We have not elected to “opt out” of these provisions. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us. Certain provisions in our certificate of incorporation and our amended and restated bylaws could have an effect of delaying, deferring or preventing a change in control. 

Choice of Forum

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty owed by any director, officer or employee to us or our stockholders, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law or any action asserting a claim against us that is governed by the internal affairs doctrine. However, several lawsuits involving other companies have been brought challenging the validity of choice of forum provisions in certificates of incorporation, and it is possible that a court could rule that such provision is inapplicable or unenforceable.cday-ex43_397.htm

 

EXHIBIT 4.3

 

Description of the Registrant’s Securities 
Registered Pursuant to Section 12 of the
Securities Exchange Act of 1934

 

As of December 31, 2019, Ceridian HCM Holding Inc. (the “Company”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): Common Stock. 

 

Description of Common Stock

 

The following description of the Company’s Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Company’s third amended and restated certificate of incorporation (the “Certificate of Incorporation”) and amended and restated bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K to which this description is also an exhibit. 

 

Authorized Capitalization

 

The Company’s authorized capital stock consists of (i) 500,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”) and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share. 

 

Voting Rights

 

Directors are elected by a plurality of the votes entitled to be cast except as set forth below with respect to directors to be elected by the holders of Common Stock. The Company’s stockholders do not have cumulative voting rights. Except as otherwise provided in the Company’s Certificate of Incorporation or as required by law, all matters to be voted on by the Company’s stockholders other than matters relating to the election and removal of directors must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter or by a written resolution of the stockholders representing the number of affirmative votes required for such matter at a meeting.

 

Dividend Rights

 

Holders of Common Stock share equally in any dividend declared by the Company’s board of directors (the “Board”), subject to the rights of the holders of any outstanding preferred stock.

 

Liquidation Rights

 

In the event of any voluntary or involuntary liquidation, dissolution, distribution of assets, or winding up of the Company’s affairs, holders of Common Stock would be entitled to share ratably in the Company’s assets that are legally available for distribution to stockholders after payment of liabilities. If the Company has any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such case, the Company must pay the applicable distribution to the holders of preferred stock before the Company may pay distributions to the holders of Common Stock.

 

Other Rights

 

The Company’s stockholders have no preemptive or other rights to subscribe for additional shares. The Common Stock has no sinking fund or redemption provisions or conversion or exchange rights. All holders of Common Stock are entitled to share equally on a share-for-share basis in any assets available for distribution to holders of the Common Stock upon liquidation, dissolution, or winding up. All outstanding shares are validly issued, fully paid and nonassessable.

 

 

 

Listing

 

The Common Stock is listed on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”) under the symbol “CDAY.” The shares of Common Stock trade in U.S. dollars on the NYSE and in Canadian dollars on the TSX.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for the Common Stock is American Stock Transfer & Trust Company, LLC.

 

Other Information

 

Registration Rights Agreement

 

In connection with the Company’s initial public offering (“IPO”), the Company entered into a registration rights agreement with the affiliates and co-investors of Thomas H. Lee Partners, L.P. and Cannae Holdings, Inc. (together with Thomas H. Lee Partners, L.P., the “Sponsors”), David D. Ossip, Alon Ossip, the brother of David D. Ossip, and entities controlled by each of David D. Ossip and Alon Ossip in respect of the shares of Common Stock and exchangeable shares of the Company’s subsidiary, Ceridian AcquisitionCo ULC (the “Exchangeable Shares”) held by such holder immediately following the IPO. This agreement provides these holders (and their permitted transferees) with the right to require the Company, at its expense, to register shares of Common Stock that they hold. The agreement also provides that the Company will pay certain expenses of these electing holders relating to such registrations and indemnify them against certain liabilities that may arise under the Securities Act of 1933, as amended. 

 

Voting Agreement

 

In connection with the IPO, the Company entered into a voting agreement with the Sponsors, pursuant to which the Company is required to take all necessary action to cause the Board to include individuals designated by the Sponsors. The voting agreement also requires the Sponsors to consult with one another regarding the transfer of their equity securities in the Company.

 

Preferred Stock

 

The Board is authorized to provide for the issuance of preferred stock in one or more series and to fix the preferences, powers, and relative, participating, optional, or other special rights and qualifications, limitations, or restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights, and liquidation preference and to fix the number of shares to be included in any such series without any further vote or action by the Company’s stockholders. Any preferred stock so issued may rank senior to the Common Stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up, or both. In addition, any such shares of preferred stock may have class or series voting rights. The issuance of preferred stock may have the effect of delaying, deferring, or preventing a change in control of the company without further action by the stockholders and may adversely affect the voting and other rights of the holders of the Common Stock. The Board has not authorized the issuance of any shares of preferred stock, and the Company has no agreements or plans for the issuance of any shares of preferred stock.

 

The Board has authorized the issuance of one share of special voting preferred stock, par value $0.01 per share (the “Special Voting Share”), in the amended and restated certificate of incorporation. The holder of the Special Voting Share is entitled to vote on all matters that a holder of the Common Stock is entitled to vote on and is generally entitled to cast a number of votes equal to the number of shares of Common Stock issuable upon exchange of the Exchangeable Shares then outstanding. The holder of the Special Voting Share is not entitled to receive dividends.

 

 

 

Anti-takeover Provisions

 

The Certificate of Incorporation and Bylaws contain provisions that delay, defer, or discourage transactions involving an actual or potential change in control of the Company or change in the Company’s management. The Company expects that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are designed to encourage persons seeking to acquire control of the Company to first negotiate with the Board, which may result in an improvement of the terms of any such acquisition in favor of the Company’s stockholders. However, they also give the Board the power to discourage transactions that some stockholders may favor, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that the Company’s stockholders might otherwise deem to be in their best interests. Accordingly, these provisions could adversely affect the price of the Common Stock.

 

Classified Board of Directors

 

The Certificate of Incorporation provides that the Board is be divided into three classes of directors, designated Class I, Class II, and Class III, and that each class contains approximately one-third of the total number of directors serving staggered three-year terms. As a result, approximately one third of the Board is elected each year. This classified board provision prevents a third party who acquires control of a majority of the Company’s outstanding voting stock from obtaining control of the Board until the second annual meeting of stockholders following the date the acquirer obtains the controlling interest.

 

Removal of Directors

 

The Certificate of Incorporation provides that any director or the entire Board may be removed from office at any time, only for cause, and only by the vote of the holders of a majority of the shares entitled to vote at an election of directors. “Cause” means, with respect to any director, (x) the willful failure by such director to perform, or the gross negligence of such director in performing, the duties of a director, (y) the engaging by such director in willful or serious misconduct that is injurious to the Company, or (z) the conviction of such director of, or the entering by such director of a plea of nolo contendere to, a crime that constitutes a felony. This provision is likely to make it more difficult for stockholders to change the composition of the Board.

 

Requirements for Advance Notification of Stockholder Meetings, Nominations, and Proposals

 

The Bylaws provide that special meetings of the stockholders may be called only upon the request of a majority of the Board or upon the request of the Chief Executive Officer. The 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 the Company.

 

The 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 or a committee of the Board. In order for any matter to be “properly brought” before a meeting, a stockholder must comply with the advance notice requirements of directors, which may be filled only by a vote of a majority of directors then in office, even though less than a quorum, and not by the stockholders. The Bylaws allow the presiding officer 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 obtain control of the Company.

 

Stockholder Action by Written Consent

 

 

 

The Certificate of Incorporation provides that, at any time when the Sponsors beneficially own, in the aggregate, more than 50% of the voting power of the Company’s stock entitled to vote generally in the election of directors, any action required or permitted to be taken by the stockholders of the Company at any meeting of stockholders may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by stockholders holding 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 entitled to vote thereon were present and voted. At any time when the Sponsors beneficially own, in the aggregate, less than 50% of the voting power of the Company’s stock entitled to vote generally in the election of directors, the Certificate of Incorporation provides that, subject to the rights of any holders of preferred stock to act by written consent instead of a meeting, stockholder action may be taken only at an annual meeting or special meeting of stockholders and may not be taken by written consent instead of a meeting. Failure to satisfy any of the requirements for a stockholder meeting could delay, prevent, or invalidate stockholder action.

 

Section 203 of the Delaware General Corporation Law (“DGCL”)

 

The Certificate of Incorporation provides that the provisions of Section 203 of the DGCL, which relate to business combinations with interested stockholders, do not apply to the Company. Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a business combination transaction with an interested stockholder (a stockholder who owns more than 15% of the Common Stock) for a period of three years after the interested stockholder became such unless the transaction fits within an applicable exemption, such as board approval of the business combination or the transaction that resulted in such stockholder becoming an interested stockholder. These provisions will apply even if the business combination could be considered beneficial by some stockholders. The Certificate of Incorporation contains provisions that have the same effect as Section 203 of the DGCL. Although the Company has elected to opt out of the statute’s provisions, the Company could elect to be subject to Section 203 in the future.

 

Amendment to Bylaws and Certificate of Incorporation

 

The Certificate of Incorporation and the Bylaws provide that, subject to the affirmative vote of the holders of any series of preferred stock required by law, the provisions (i) of the Bylaws may be adopted, amended, or repealed if approved by a majority of the Board then in office or approved by holders of the Common Stock and (ii) of the Certificate of Incorporation may be adopted, amended, or repealed as provided by the DGCL.

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