Document:

Exhibit 4.2

 

DESCRIPTION OF SECURITIES

 

The following is a description
of the material provisions of our capital stock, as well as other material terms of our Amended and Restated Articles of Incorporation
and Amended and Restated Bylaws. We refer you to our Amended and Restated Articles of Incorporation, as amended, and Amended and Restated
Bylaws, copies of which have been filed as exhibits to this report.

 

Common Stock

 

We are authorized, subject
to limitations prescribed by Nevada law, to issue up to 300,000,000 shares of common stock with a nominal par value of $0.001.

 

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 issue dividends and only
then 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.  Under our articles
of incorporation, stockholders do not have the right to cumulate votes for the election of directors.

 

No Preemptive or Similar Rights

 

Our common stock is not entitled
to preemptive rights and is not subject to conversion, redemption or sinking fund provisions.

 

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.

 

Preferred Stock

 

We are authorized to issue
up to 10,000,000 shares of preferred stock with a nominal par value of $0.001.  We may amend our Amended Articles of Incorporation
in the future to allow our board of directors to 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 or preventing a change in control of our company and may adversely affect the market price of our common stock and the voting
and other rights of the holders of common stock.  We have no current plan to issue any shares of preferred stock.

 

Anti-takeover Provisions

 

Some of the provisions of
Nevada law, our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws may have the effect of delaying, deferring
or discouraging another person from acquiring control of our company or removing our incumbent officers and directors. These provisions,
summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids.  These
provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. 
We believe that the benefits of increased protection against an unfriendly or unsolicited proposal to acquire or restructure us outweigh
the disadvantages of discouraging such proposals. Among other things, negotiation of such proposals could result in an improvement of
their terms.

 

 

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Our Amended Articles of Incorporation or Amended
and Restated Bylaws provide that:

 

	 	·	Board of Directors Vacancies. Our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws authorize only our board of directors to fill vacant directorships, including newly created seats (unless a vacancy created by the removal of a director by the shareholders shall be filled by the shareholders at the meeting at which the removal was effected). In addition, the number of directors constituting our board of directors is permitted to be set only by a resolution adopted by a majority vote of our entire board of directors. These provisions would prevent a stockholder from increasing the size of our board of directors and then gaining control of our board of directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our board of directors but promotes continuity of management.

 

	 	·	Director Removals. Our Amended and Restated Bylaws provide that directors can be removed with or without cause by holders holding in the aggregate at least two-thirds (2/3) of the outstanding shares of the Corporation and may be removed for cause by the Board. This makes it more difficult to change the composition of the Board. 

 

	 	·	Stockholder Action; Special Meeting of Stockholders. Our bylaws provide that special meetings of our stockholders may be called by the President or the Secretary at the written request holders or more than fifty percent (50%) of the shares entitled to vote at a meeting of stockholders, a majority of our board of directors, or the President.

 

	 	·	No Cumulative Voting.  Our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws do not provide for cumulative voting. 

 

	 	·	Issuance of “Blank Check” Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of “blank check” preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest, or otherwise; 

 

	 	·	Bylaws Amendments Without Stockholder Approval. Our Amended and Restated Bylaws provide that a majority of the authorized number of directors will generally have the power to adopt, amend or repeal our bylaws without stockholder approval;
	 	 	 
	 	·	Broad Indemnity. We are permitted to indemnify directors and officers against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures. This provision may make it more difficult to remove directors and officers and delay a change in control of our management.

 

These provisions of our Amended Articles of Incorporation
and Bylaws may have the effect of delaying, deferring or discouraging another person or entity from acquiring control of us.

 

The amendment to our Articles
of Incorporation to elect not to be governed by the Interested Shareholder Combination Statutes will not have any immediate effect on
the rights of existing stockholders. To the extent that we qualify as a resident domestic corporation in the future, the Board will be
able to enter into acquisitions and combinations with entities affiliated with its executive officer, directors and control shareholders
with greater ease, including without limitation, without the requirement of obtaining the approval of the stockholders in certain instances.

 

 

 

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Anti-Takeover Provisions
of the NRS

 

NRS Sections 78.411 to 78.444
inclusive apply to combinations between resident domestic corporations (defined as a Nevada domestic corporation that has 200 or more
stockholders of record) and certain affiliated stockholders (collectively, the “Interested Shareholder Combination Statutes”).
The Nevada Interested Shareholder Combination Statutes generally prohibit a Nevada corporation, with shares registered under section 12
of the Exchange Act and with 200 or more stockholders of record, from engaging in a combination (defined in the statute to include a variety
of transactions, including mergers, asset sales, issuance of stock and other actions resulting in a financial benefit to the Interested
Stockholder) with an Interested Stockholder (defined in the statute generally as a person that is the beneficial owner of 10% or more
of the voting power of the outstanding voting shares), for a period of three years following the date that such person became an Interested
Stockholder unless the board of directors of the corporation first approved either the combination or the transaction that resulted in
the stockholder's becoming an Interested Stockholder. If this approval is not obtained, the combination may be consummated after the three
year period expires if either (a) (1) the board of directors of the corporation approved the combination or the purchase of the shares
by the Interested Stockholder before the date that the person became an Interested Stockholder, (2) the transaction by which the person
became an Interested Stockholder was approved by the board of directors of the corporation before the person became an interested stockholder,
or (3) the combination is approved by the affirmative vote of holders of a majority of voting power not beneficially owned by the Interested
Stockholder at a meeting called no earlier than three years after the date the Interested Stockholder became such; or (b) the aggregate
amount of cash and the market value of consideration other than cash to be received by all holders of common stock and holders of any
other class or series of shares not beneficially owned by an Interested Stockholder meets the minimum requirements set forth in NRS Sections
78.441 through 78.444.

 

A Nevada corporation may adopt
an amendment to its articles of incorporation expressly electing not to be governed by these provisions of the NRS, if such amendment
is approved by the affirmative vote of a majority of the disinterested shares entitled to vote; provided, however, such vote by disinterested
stockholders is not required to the extent the Nevada corporation is not subject to such provisions. Such an amendment to the articles
of incorporation does not become effective until 18 months after the vote of the disinterested stockholders and does not apply to any
combination with an Interested Stockholder whose date of acquiring shares is on or before the effective date of the amendment. We intend
to amend our Articles of Incorporation to elect NOT to be governed by NRS Sections 78.411 to 78.444 inclusive.

  

Sections 78.378-78.3793 of
the NRS also limits the acquisition of a controlling interest in a Nevada corporation with 200 or more stockholders of record, at least
100 of who have Nevada addresses appearing on the stock ledger of the corporation, and that does business in Nevada directly or through
an affiliated corporation. According to the NRS, an acquiring person who acquires a controlling interest in an issuing corporation may
not exercise voting rights on any control shares unless such voting rights are conferred by a majority vote of the disinterested stockholders
of the issuing corporation at a special or annual meeting of the stockholders. In the event that the control shares are accorded full
voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any stockholder, other
than the acquiring person, who does not vote in favor of authorizing voting rights for the control shares is entitled to demand payment
for the fair value of such person's shares.

 

Under the NRS, a controlling
interest means the ownership of outstanding voting shares of an issuing corporation sufficient to enable the acquiring person, individually
or in association with others, directly or indirectly, to exercise (1) one-fifth or more but less than one-third, (2) one-third or more
but less than a majority, or (3) a majority or more of the voting power of the issuing corporation in the election of directors. Outstanding
voting shares of an issuing corporation that an acquiring person acquires or offers to acquire in an acquisition and acquires within 90
days immediately preceding the date when the acquiring person became an acquiring person are referred to as control shares.

 

The control share provisions
of the NRS do not apply if the corporation opts-out of such provisions in the articles of incorporation or bylaws of the corporation in
effect on the tenth day following the acquisition of a controlling interest by an acquiring person. We intend to amend our Articles of
Incorporation to elect NOT to be governed by NRS Sections 78.378-78.3793 inclusive.

 

Options

 

As of the date of this Report,
we had no outstanding options to purchase shares of our common stock.

 

Transfer Agent and Registrar

 

Our transfer agent Transfer
Online located 512 SE Salmon Street Portland, OR 97214-3444 2nd Floor, telephone number (503-227-2950.

 

 

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Exhibit 4.1

As of December 31, 2021, Bright Health Group, Inc., a Delaware corporation (the “Company,” “we,” “our,” or “us”), had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: common stock, par value $0.0001 per share. The following summary includes a brief description of the common stock, as well as certain related additional information. The summary is not complete and is qualified in its entirety by reference to our ninth amended and restated certificate of incorporation (“amended and restated certificate of incorporation”) and amended and restated bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein.

Capitalization

Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 3,000,000,000 shares of common stock, par value $0.0001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share. 

Common Stock

Holders of our common stock are entitled to one vote for each share held of record on all matters on 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. Holders of our common stock do not have preemptive, subscription, redemption sinking fund or conversion rights. The common stock is not subject to further calls or assessment by us. All shares of our common stock outstanding are fully paid 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 or any series or class of stock we may authorize and issue in the future.

Preferred Stock

Our amended and restated certificate of incorporation authorizes our board of directors to establish one or more series of preferred stock. Unless required by law or by the NYSE rules, the authorized shares of preferred stock are available for issuance without further action by holders of our common stock. Our board of directors is authorized to determine, with respect to any series of preferred stock, the powers (including voting powers), preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof. The issuance of preferred stock may adversely affect the holders of our common stock, including, without limitation, by restricting dividends on the common stock, diluting the voting power of the common stock or subordinating the liquidation rights of the common stock. 

On January 3, 2022, we issued our Series A Convertible Perpetual Preferred Stock (the “Preferred Stock”). The Preferred Stock ranks senior to our shares of common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock is convertible into common stock and is entitled to an initial liquidation preference. Further, holders of Preferred Stock are entitled to vote with the holders of common stock on an as-converted basis with respect to certain corporate transactions.  

Liquidation Rights

Upon our liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and subject to the rights of the holders of one or more outstanding series of preferred stock having liquidation preferences, if any, or the right to participate with the common stock, the holders of our common stock are entitled to receive pro rata our remaining assets available for distribution. 

Dividends

Holders of our common stock are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to the rights of the holders or one or more outstanding series of our preferred stock.

Certain Anti-Takeover Effects

Certain provisions of the Delaware General Corporation Law (“DGCL”), our amended and restated certificate of incorporation and our amended and restated bylaws summarized in the paragraphs above and in the following paragraphs may have an anti-takeover effect. In other words, such provisions could delay, defer or prevent a tender 

offer or takeover attempt that a stockholder might consider in its best interests, including those attempts that might result in a premium over the market price for the shares held by such stockholder.

Authorized but Unissued Capital Stock

Our board of directors may generally issue one or more series of preferred shares on terms that could discourage, delay or prevent a change of control of our company or the removal of our management. DGCL does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NYSE 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. 

Classified Board of Directors

Our amended and restated certificate of incorporation provides that, subject to the right of holders of any series of preferred stock, our board of directors will initially be classified and will transition to an annually elected board through a gradual phase-out that will take place over the first three years following our initial public offering (“IPO”). Our board of directors is currently divided into three classes of directors, with the classes as nearly equal in number as possible, and with the directors initially serving staggered terms, with successors to the class of directors whose term expires at the first and second annual meetings of stockholders following the IPO, as applicable, elected for a term expiring at the third annual meeting of stockholders following the IPO. 

At our 2024 annual meeting of stockholders and each annual meeting of stockholders thereafter, all directors shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders. Pursuant to such procedures, effective as of the conclusion of our 2024 annual meeting of stockholders, the board of directors will no longer be classified under Section 141(d) of the DGCL, and directors will no longer be divided into three classes. Our amended and restated certificate of incorporation provides that the total number of directors shall be determined from time to time exclusively by resolution adopted by the board of directors. 

Additionally, our amended and restated certificate of incorporation and amended and restated bylaws provide that, subject to any rights of holders of preferred stock to elect additional directors under specified circumstances, the number of directors will be fixed from time to time by a resolution adopted by the board of directors.

Business Combinations

We are subject to Section 203 of the DGCL, which prohibits persons deemed to be “interested stockholders” from engaging in a “business combination” with a publicly held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies.

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 outstanding voting stock. For purposes of this section only, “voting stock” has the meaning given to it in Section 203 of the DGCL.

Removal of Directors; Vacancies

Our amended and restated certificate of incorporation provides that, until our board of directors is declassified and other than with respect to directors elected by holders of our preferred stock, if any, 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 our Company entitled to vote thereon, voting together as a single class. From and after the declassification of our board of directors, any director (other than a director elected by holders of our preferred stock, if any) may be removed with or without cause, and 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 our Company entitled to vote thereon, voting together as a single class. 

In addition, our amended and restated certificate of incorporation also provides that, subject to the rights granted to one or more series of preferred stock then outstanding, 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 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 the stockholders). Our amended and restated certificate of incorporation provides that the board of directors may increase the number of directors by the affirmative vote of a majority of the directors.

No Cumulative Voting

Our amended and restated certificate of incorporation does not authorize cumulative voting. Therefore, stockholders holding a majority in voting power of the then-outstanding shares of our stock entitled to vote generally in the election of directors will be able to elect all of our directors.

Special Stockholder Meetings

Our amended and restated 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. Our amended and restated bylaws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. 

Requirements for Advance Notification of Director Nominations and Stockholder Proposals

Our amended and restated 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. 

Stockholder Action by Written Consent

Our amended and restated certificate of incorporation precludes stockholder action by written consent, other than certain rights that holders of our preferred stock may have to act by consent.

Supermajority Provisions

Our amended and restated certificate of incorporation and our amended and restated 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 amended and restated bylaws without a stockholder vote in any matter not inconsistent with Delaware law or our amended and restated certificate of incorporation. Any amendment, alteration, rescission, change, addition or repeal of our amended and restated bylaws by our stockholders will require the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of our Company entitled to vote thereon, voting together as a single class.

Our amended and restated certificate of incorporation provides that certain provisions in our amended and restated 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 our company entitled to vote thereon, voting together as a single class. 

Exclusive Forum

Our amended and restated certificate of incorporation provides that unless we consent in writing 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 current or former director, officer, employee or stockholder of our company to our company or our company’s stockholders, (iii) action asserting a claim against our company or any current or former director, officer, employee or stockholder of our company arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended from time to time) or (iv) action asserting a claim governed by the internal affairs doctrine of the State of Delaware. Unless the Company consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, 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 federal securities laws of the United States of America. However, it is possible that a court could find our forum selection provisions to be inapplicable or unenforceable.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc.

NYSE Listing

Our common stock is listed on the NYSE under the symbol “BHG.”

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