Document:

znga-ex44_511.htm

 

Exhibit 4.4

DESCRIPTION OF THE COMPANY’S SECURITIES

The following description of the capital stock of Zynga Inc. (“us,” “our,” “we” or the “Company”) is a summary of the rights of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws currently in effect. This summary does not purport to be complete and is qualified in its entirety by the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which were previously filed and concurrently filed, respectively, with the Securities and Exchange Commission and incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.2 is a part, as well as to the applicable provisions of the Delaware General Corporation Law (the “DGCL”). For a complete description of our capital stock, we encourage you to read our certificate of incorporation, bylaws and the applicable portions of the DGCL carefully.

Our classes of common stock previously consisted of Class A, Class B and Class C common stock. On May 2, 2018, our founder, Mark Pincus, elected to convert certain outstanding shares of Class B common stock and all outstanding shares of Class C common stock, in each case, controlled by Mr. Pincus and an affiliated investment entity, into an equivalent number of shares of Class A common stock (hereinafter, the “common stock”). As a result of Mr. Pincus’ conversion, the remaining shares of Class B common stock represented less than 10 percent of the total voting power of all Zynga stockholders and, accordingly, each remaining outstanding share of Class B common stock automatically converted into one share of common stock. Following the conversion, no shares of Class B or Class C common stock were outstanding.

Our authorized capital stock consists of 2,020,517,472 shares of common stock, $0.00000625 par value and 2,000,000 shares of undesignated preferred stock, $0.00000625 par value. As of December 31, 2019, there were 950,042,400 shares of our common stock outstanding and no shares of preferred stock outstanding. As of December 31, 2019, there were approximately 567 stockholders of record of our common stock. The number of record holders does not include beneficial holders who hold their shares in “street name,” meaning that the shares are held for their accounts by a broker or other nominee.

Common Stock

The following are the rights and privileges of our common stock:

Dividends. The holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts which our board of directors may determine.

Voting Rights. Holders of our common stock are entitled to one vote per share.

Liquidation. Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock.

Preemptive or Similar Rights. Our common stock has no preemptive or redemption rights.

Conversion. Our common stock is not convertible into any other shares of our capital stock. 

Preferred Stock

Under our amended and restated certificate of incorporation, our board of directors, without further action by our stockholders, is authorized to issue shares of preferred stock in one or more series. Our board of directors may designate the powers, designations, preferences and relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, including without limitation dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including any sinking fund provisions), redemption price or prices and liquidation preferences. The issuance of preferred stock could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, or delaying or preventing a change in control. The ability to issue preferred stock could delay or impede a change in control. As of the date of this offering memorandum, no shares of preferred stock were outstanding, and we currently have no plan to issue any shares of preferred stock.

 

 

Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws

Some provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws may have the effect of delaying, deterring or discouraging another party from acquiring control of us.

Delaware Law

We are subject to Section 203 of the DGCL, which regulates, subject to some exceptions, acquisitions of publicly-held Delaware corporations. In general, Section 203 prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person becomes an interested stockholder, unless:

	
 
	
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our board of directors approves the business combination or the transaction in which the person became an interested stockholder prior to the date the person attained this status;

	
 
	
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upon consummation of the transaction that results in the person becoming an interested stockholder, the person owned at least 85 percent of our voting stock outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and shares owned by employee stock plans under 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 subsequent to the date the person became an interested stockholder, our board of directors approves the business combination and the stockholders other than the interested stockholder authorize the transaction at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding stock not owned by the interested stockholder.

In general, Section 203 defines a “business combination” to include:

	
 
	
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any merger or consolidation involving us and the interested stockholder;

	
 
	
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any sale, transfer, pledge or other disposition involving the interested stockholder of 10 percent or more of either the aggregate market value of our assets or the aggregate market value of our outstanding stock;

	
 
	
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any transaction that results in the issuance or transfer by us of any of our stock to the interested stockholder;

	
 
	
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any transaction involving us that has the effect of increasing the proportionate share of our stock owned by the interested stockholder; and

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

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

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions, among other things, include:

	
 
	
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authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

	
 
	
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limiting the liability of, and providing indemnification to, our directors and officers;

	
 
	
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limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;

 

 

	
 
	
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requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; and

	
 
	
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controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings.

Transfer Agent and Registrar

American Stock Transfer & Trust Company is the transfer agent and registrar for our common stock.

Exchange Listing

Our common stock is listed on The Nasdaq Global Select Market under the symbol “ZNGA.”znga-ex1011_394.htm

Exhibit 10.11

 

Zynga Inc. 

Non-Employee Director Compensation Policy

As Amended August 20, 2019

On August 20, 2019, the Compensation Committee of the Board of Directors (the “Board”) of Zynga Inc. (the “Company”) approved this amended and restated compensation policy (the “Policy”) for non-employee directors of the Company.

The Policy will become effective as of the amendment date (set forth above).

For purposes of this Policy, a “Non-Employee Director” is a director who is not serving as an employee or executive officer of the Company or its affiliates (even if such individual may be otherwise be providing services to the Company or its affiliates in a capacity other than as a director).

Each Non-Employee Director will be eligible to receive compensatory equity awards under the Company’s 2011 Equity Incentive Plan (the “Plan”) as consideration for service on the Board. All compensation payable under this policy (such compensation, “Board Compensation”), including cash payments, grants of restricted stock units of Class A Common Stock of the Company (“ZSUs”) or deferred equity grants will be made automatically in accordance with the terms of this Policy and the Plan, without the need for any additional corporate action by the Board or the Compensation Committee. Vesting of all ZSUs granted under this Policy is subject to the Non-Employee Director’s Continuous Service (as defined in the Plan) from the date of grant through each applicable vesting date. Each ZSU granted under this Policy will be subject to the Company’s standard form of Restricted Stock Unit Agreement, as most recently adopted by the Board for use under this Policy. Each Non-Employee Director will be eligible to defer all or part of his or her Board Compensation in accordance with Section 4 and forgo all or part of his or her Board Compensation in accordance with Section 5.

1.Base Annual Retainer. Each year, subject to Section 3, Section 4 and Section 5, each Non-Employee Director will be paid an annual retainer of $250,000 (as may be adjusted pursuant to Section 3, the “Base Annual Retainer”).  The Base Annual Retainer will be paid 20% in cash and 80% in ZSUs. Subject to Section 4 and Section 5, the ZSU portion of the Base Annual Retainer will be granted on the date that such Non-Employee Director is elected or appointed to the Board (the “Base Annual Retainer Vesting Start Date”).  The number of ZSUs granted will be calculated using the Fair Market Value (as defined in the Plan) of the Class A common stock of the Company as of the Base Annual Retainer Vesting Start Date, rounded down to the nearest whole ZSU.  Subject to Section 3, the ZSU portion of the Base Annual Retainer will vest as follows:  25% of the granted ZSUs will vest every three months from the Base Annual Retainer Vesting Start Date, with the remainder vesting upon the earlier of (i) the one-year anniversary of the date of the most recent regular annual meeting of the Company’s stockholders (the “Annual Meeting”) or (ii) the date of the next Annual Meeting, subject to the applicable Non-Employee Director’s Continuous Service through each vesting date. The cash portion of the Base Annual Retainer will be paid on a quarterly basis in accordance with the vesting schedule of the ZSU portion of the Base Annual Retainer and shall also be subject to the applicable Non-Employee Director’s Continuous Service through each vesting date.

2.Additional Annual Retainers. 

(a)Each year, subject to Section 3, Section 4 and Section 5, each Non-Employee Director who serves in one of the following roles will be paid the applicable additional annual retainer set forth below:

 

		
	
Role of Non-Employee Director
	
Amount

	
Chairperson of the Audit Committee
	
$50,000

	
Chairperson of the Compensation Committee
	
$35,000

	
Chairperson of the Nominating and Corporate Governance Committee
	
$15,000

	
Lead Independent Director
	
$50,000

	
Chairperson of the Board
	
$100,000

	
Non-Chair Member of the Audit Committee
	
$20,000

	
Non-Chair Member of the Compensation Committee
	
$15,000

	
Non-Chair Member of the Nominating and Corporate Governance Committee
	
$5,000

(b)Each of the additional annual retainers set forth above will be paid 100% in cash.  Subject to Section 3, each of the additional annual retainers set forth above will be paid on a quarterly basis as follows:  25% of the annual retainer will be paid every three months from the date that such Non-Employee Director is appointed, with the remainder be paid upon the earlier of (i) the one-year anniversary of the date of the most recent Annual Meeting or (ii) the date of the next Annual Meeting, subject to the applicable Non-Employee Director’s Continuous Service through each date.

 

 

(c)Notwithstanding the foregoing, the Compensation Committee will have the discretion to provide additional compensation to Non-Employee Directors who may be appointed from time to time to serve on any special/non-standing committee of the Board in amounts and form, and on such other terms, as reasonably determined and approved by the Compensation Committee of the Board.

3.Pro-Ration of Retainers.  

(a)Base Annual Retainer.  If a Non-Employee Director is elected or appointed to the Board at any time other than at an Annual Meeting, the Base Annual Retainer for the initial term that lasts from the date of election or appointment until the first Annual Meeting to occur thereafter will be reduced on a pro-rata basis, such that the amount payable will be equal to the Base Annual Retainer multiplied by a fraction, the numerator of which is 12 minus the whole number of months from the date of the preceding Annual Meeting until the date of election or appointment and the denominator of which is 12.  Subject to Section 4 and Section 5, the ZSU portion of the prorated Base Annual Retainer will be granted on the Base Annual Retainer Vesting Start Date.  The number of ZSUs granted will be calculated using the Fair Market Value (as defined in the Plan) of the Class A common stock of the Company as of the Base Annual Retainer Vesting Start Date, rounded down to the nearest whole ZSU.

(b)Additional Annual Retainers.  If a Non-Employee Director is first appointed to serve in any of the roles set forth in Section 2 at any time other than at an Annual Meeting, the applicable annual retainer for the initial term that lasts from the date of appointment until the first Annual Meeting to occur thereafter will be reduced on a pro-rata basis, such that the amount payable will be equal to the applicable additional annual retainer multiplied by a fraction, the numerator of which is 12 minus the whole number of months from the date of the preceding Annual Meeting until the date of appointment and the denominator of which is 12.  

(c)Vesting Schedule.  

(i)The ZSU portion of any pro-rated Base Annual Retainer and other pro-rated annual retainer that is subject to vesting requirements (each, a “Vesting Retainer”) will vest as follows.  First, calculate the number of ZSUs subject to each “ZSU Vesting Installment”.  The ZSU Vesting Installment for a grant of ZSUs for the ZSU portion of a pro-rated Base Annual Retainer to a given Non-Employee Director shall be equal to 25% of the number of ZSUs (rounded down to the nearest whole ZSU) that would have been granted to the Non-Employee Director if such Non-Employee Director had been eligible to receive a non-prorated Base Annual Retainer, using the Fair Market Value (as defined in the Plan) of the Class A common stock of the Company as of such Non-Employee Director’s Base Annual Retainer Vesting Start Date.  A number of ZSUs equal to the ZSU Vesting Installment shall vest on each date that the ZSU portion of a non-prorated Base Annual Retainer vests under Section 1 above during the period commencing on the date of the Non-Employee Director’s election or appointment to the Board and ending on the date of the earlier of (i) the one-year anniversary of the most recent Annual Meeting, or (ii) the next Annual Meeting; provided however, that if the period between the date of election or appointment and the first vesting date is less than 3 months, the number of ZSUs that vest on such first vesting date will be equal to the total number of ZSUs granted minus the total number of ZSUs that will vest for each subsequent vesting date until (and including) the earlier of (i) the one-year anniversary of the most recent Annual Meeting, or (ii) the next Annual Meeting.  

(ii)The cash portion of any Vesting Retainer will be paid as follows:  25% of the value of the portion of the full Vesting Retainer paid in cash will be paid on each date that the cash portion of the Vesting Retainer would have been paid if the Vesting Retainer had not been prorated; provided however, that if the period between the date of election or appointment and the first vesting date is less than 3 months, the amount of cash paid on such first vesting date will be equal to the full amount of the cash portion of the Vesting Retainer minus the aggregate amount of cash that will be paid for each full three month vesting period until (and including) the earlier of (i) the one-year anniversary of the most recent Annual Meeting, or (ii) the next Annual Meeting. 

(d)Notwithstanding the foregoing, the Compensation Committee will have the discretion to adjust the amount of any pro-rated retainer up to the full value of such retainer if it determines that such adjustment is in the best interest of the Company and its stockholders.

4.Deferred Compensation. Each Non-Employee Director will be eligible to defer all or a portion of his or her Board Compensation for any term that begins on the date of election or appointment, as applicable, and ends on the first Annual Meeting thereafter (a “Term”).  Elections with respect to any Term must be made in writing to the Company prior to the December 31st preceding the beginning of such Term and all such elections will be irrevocable.  Notwithstanding the foregoing, if a Non-Employee Director is elected or appointed to the Board at any time other than at an Annual Meeting, he or she may make an initial irrevocable election to defer the Base Annual Retainer or any Additional Annual Retainers during the first 30 days of eligibility to participate hereunder and such election shall apply only to the Non-Employee Director’s Base Annual Retainer or Additional Annual Retainers earned following the date of the election.  If a Non-Employee Director elects to defer all or a portion of his or 

 

 

her Board Compensation, the deferred compensation will be held by the Company on such Non-Employee Director’s behalf in the form of deferred stock units (“DSUs”).  DSUs will be granted (i) with respect to the Base Annual Retainer and Product Committee Retainer, on the date that the ZSU portion of the Base Annual Retainer and Product Committee Retainer, as applicable, is granted, and (ii) with respect to any additional annual retainer set forth in Section 2 (other than the Product Committee Retainer), on the date that such additional annual retainer is paid.  DSUs granted under (i) will vest in accordance with the standard vesting criteria described in Section 1 and DSUs granted under (ii) will be fully vested upon grant. Vested DSUs will be distributed to a Non-Employee Director on the earliest of (i) the third anniversary of the date of grant, (ii) such Non-Employee Director’s separation from service as a director, or (iii) upon a Change in Control of the Company (as defined in the Plan). Notwithstanding the foregoing, if so elected by the Non-Employee Director in writing to the Company prior to December 31st of the calendar year prior to the calendar year in which any such DSUs are granted to satisfy such Non-Employee Director’s Board Compensation, the distribution of such DSUs may be deferred until the Non-Employee Director is no longer providing services as a director of the Company that constitutes a “separation from service” under Section 409A of the Internal Revenue Code of 1986, as amended.

5.Forgo Compensation.  Each Non-Employee Director will be eligible to forgo all or a portion of his or her Board Compensation for any Term. Elections with respect to any Term must be made in writing to the Company prior to the start of such Term and all such elections will be irrevocable.  

6.Expense Reimbursement. All Non-Employee Directors will be entitled to reimbursement from the Company for their reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof. The Company will also reimburse directors for attendance at director continuing education programs that are relevant to their service on the Board and which attendance is pre-approved by the Chairperson of the Nominating and Corporate Governance Committee or Chairperson of the Board. The Company will make reimbursement to a Non-Employee Director in accordance with the foregoing within a reasonable amount of time, but not more than 12 months, following submission by the Non-Employee Director of reasonable written substantiation for the expenses consistent with the Company’s reimbursement policy.

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