Document:

tcon-ex49_1187.htm

Exhibit 4.9

DESCRIPTION OF COMMON STOCK

 

The following summary description of the common stock of TRACON Pharmaceuticals, Inc., or we, our or us, is based on the provisions of our amended and restated certificate of incorporation, as amended (“Certificate of Incorporation”), as well as our amended and restated bylaws, and the applicable provisions of the Delaware General Corporation Law. This information is qualified entirely by reference to the applicable provisions of our Certificate of Incorporation, amended and restated bylaws, and the Delaware General Corporation Law. Our Certificate of Incorporation and amended and restated bylaws, have previously been filed as exhibits with the Securities and Exchange Commission.

 

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 the stockholders, including the election of directors. Our Certificate of Incorporation and amended and restated bylaws do not provide for cumulative voting rights. Accordingly, the holders of a majority of our outstanding shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose. 

 

Dividends

 

Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of our common stock are entitled to receive ratably such dividends as may be declared by our board of directors out of legally available funds.

 

Liquidation, Dissolution or Winding Up

 

Upon our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any then outstanding shares of preferred stock.

 

Rights and Preferences

 

Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future. 

 

Fully Paid and Non-assessable

 

All of our outstanding shares of common stock are fully paid and non-assessable.

 

 Anti-takeover Effects of Provisions of Delaware Law and Charter Documents

 

Delaware Anti-Takeover Law

 

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

 

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

 

	
 
	
•
	
 
	
the interested stockholder owned at least 85% of the voting stock of the corporation outstanding upon consummation of the transaction, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock 

plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

 

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

 

Section 203 defines a business combination to include:

 

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

 

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

 

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

 

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

 

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

 

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

 

Certificate of Incorporation and Amended and Restated Bylaws

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

 

	
 
	
•
	
 
	
permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as it may designate (including the right to approve an acquisition or other change in our control);

 

	
 
	
•
	
 
	
provide that the authorized number of directors may be changed only by resolution adopted by a majority of the board of directors;

 

	
 
	
•
	
 
	
provide that the board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least 66 2/3% of the voting power of all of our then outstanding common stock;

 

	
 
	
•
	
 
	
provide that all vacancies, including newly created directorships, may, except as otherwise required by law or subject to the rights of holders of preferred stock as designated from time to time, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

 

	
 
	
•
	
 
	
divide our board of directors into three classes;

 

	
 
	
•
	
 
	
require that any action to be taken by our stockholders must be effected at a duly called annual or special 

meeting of stockholders and not be taken by written consent;

 

	
 
	
•
	
 
	
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder's notice;

 

	
 
	
•
	
 
	
do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); and

 

	
 
	
•
	
 
	
provide that special meetings of our stockholders may be called only by the chairman of the board, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies).

 

The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of our then outstanding common stock.

 

Forum for Disputes

 

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law or our Certificate of Incorporation or amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine. This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. This choice of forum provision may limit a stockholder’s ability to bring certain claims in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. If a court were to find this choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

 

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent and registrar’s address is 6201 15th Avenue, Brooklyn, New York 11219. 

 

Listing on The Nasdaq Capital Market

Our common stock is listed on The Nasdaq Capital Market under the symbol “TCON.”tcon-ex104_387.htm

Exhibit 10.4

TRACON Pharmaceuticals, Inc.

Non-Employee Director Compensation Policy

 

 

Each member of the Board of Directors (the “Board”) who is not also serving as an employee of TRACON Pharmaceuticals, Inc. (the “Company”) or any of its subsidiaries (each such member, a “Non-Employee Director”) will receive the compensation described in this Non-Employee Director Compensation Policy (the “Director Compensation Policy”) for his or her Board service.

The Director Compensation Policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.

 

A Non-Employee Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be.  

 

Annual Cash Compensation

Each Non-Employee Director will receive the cash compensation set forth below for service on the Board.  The annual cash compensation amounts will be payable in equal quarterly installments, in arrears following the end of each quarter in which the service occurred, pro-rated for any partial months of service.  All annual cash fees are vested upon payment. 

 

	
1.
	
Annual Board Service Retainer: 

a.All Eligible Directors: $35,000

b.Chairman/Lead Independent Director (as applicable): $60,000 (in lieu of above) 

 

2.Annual Committee Member Service Retainer:

a.Member of the Audit Committee: $7,500

b.Member of the Compensation Committee: $5,000

c.Member of the Nominating and Corporate Governance Committee: $3,750

 

	
3.
	
Annual Committee Chair Service Retainer (in lieu of Committee Member Service Retainer):

a.Chairman of the Audit Committee: $15,000

b.Chairman of the Compensation Committee: $10,000

c.Chairman of the Nominating and Corporate Governance Committee: $7,500

 

Equity Compensation

Equity awards will be granted under the Company’s 2015 Equity Incentive Plan or any successor equity incentive plan (the “Plan”).  All stock options granted under this policy will be Nonqualified Stock Options (as defined in the Plan), with a term of ten years from the date of grant 

1.

 

 

112497429 v3 

 

and an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying common stock of the Company on the date of grant.  

(a)Automatic Equity Grants.  

(i)Initial Grant for New Directors.  Without any further action of the Board, on the date of the Non-Employee Director’s initial election to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Non-Employee Director will automatically be granted a Nonstatutory Stock Option to purchase 6,000 shares of common stock (the “Initial Grant”).  Each Initial Grant will vest in a series of 3 successive equal annual installments over the 3-year period measured from the date of grant.  

(ii)Annual Grant.  Without any further action of the Board, at the close of business on the date of each annual meeting of the Company’s stockholders, each person who is then a Non-Employee Director will automatically be granted either (A) a Nonstatutory Stock Option to purchase 4,500 shares of common stock or (B) a restricted stock unit (“RSU”) covering 2,250 shares of common stock ((A) or (B) as applicable, the “Annual Grant”).  Whether the Annual Grant for any particular year takes the form of a Nonstatutory Stock Option or an RSU shall be determined prior to each annual meeting of the Company’s stockholders by the Board or the Compensation Committee; provided that absent a determination for any given year, the Annual Grant shall take the form of a Nonstatutory Stock Option.  Each Annual Grant will vest in full on the earlier of the one-year anniversary of date of grant, or the date of the next annual meeting of the Company’s stockholders.

(b)Vesting; Change in Control.  All vesting is subject to the Non-Employee Director’s “Continuous Service” (as defined in the Plan) on each applicable vesting date.  Notwithstanding the foregoing vesting schedules, for each Non-Employee Director who remains in Continuous Service with the Company until immediately prior to the closing of a “Change in Control” (as defined in the Plan), the shares subject to his or her then-outstanding equity awards that were granted pursuant to this policy will become fully vested immediately prior to the closing of such Change in Control.

(c)Remaining Terms.  The remaining terms and conditions of each stock option, including transferability, will be as set forth in the Company’s standard Option Agreement, in the form adopted from time to time by the Board.  The remaining terms and conditions of each RSU, including transferability, will be as set forth in the Company’s standard Restricted Stock Unit Award Agreement, in the form adopted from time to time by the Board. 

Expenses

 

The Company will reimburse Non-Employee Director for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in Board and committee meetings; provided, that the Non-Employee Director timely submit to the Company appropriate documentation substantiating such expenses in accordance with the Company’s travel and expense policy, as in effect from time to time.

.

 

2.

112497429 v3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}]]