Document:

Exhibit 10.4

 

STOCKHOLDERS’
AGREEMENT

 

This
STOCKHOLDERS’ AGREEMENT (this “Agreement”) is made and entered into effective as of March
3, 2020, among AMRE Asset Management Inc., a Nevada corporation (the “Company”) and its initial stockholders
AMRE TENNESSEE, LLC, a Delaware limited liability company, and LIQUIDVALUE ASSET MANAGEMENT PTE LTD., and DSS SECURITIES, INC.,
New York corporation (individually, a “Stockholder” and collectively, the “Stockholders”).

 

PRELIMINARY
STATEMENTS

 

A.
Each Stockholder owns shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”
or “Stock”) in such amounts as of the date hereof as are set forth hereto:

 

DSS
Securities, Inc. (“DSS”): 5250

 

LiquidValue
Asset Management Pte Ltd. (“LVAM”): 3500

 

AMRE
Tennessee, LLC (“AMRE Tennessee”): 1250

 

B.
The Stockholders and the Company desire to enter into this Agreement for the purpose of regulating certain aspects of the relationship
between the Stockholders as stockholders of the Company and to provide for certain rights and obligations with respect thereto
as hereinafter provided.

 

C.
The Company entered into that Management Agreement with American Medical REIT, Inc., a Maryland corporation, whereby the Company
will provide management and strategic advice and other services. In return for these services, American Medical REIT will pay
a Management Fee, as further described and calculated in the Management Agreement, to the Company. In the event of certain circumstances,
American Medical REIT may be required to pay an Incentive Fee to the Company. In the event the Company wishes to make a distribution
or dividend (hereinafter collectively referred to as a “Distribution”) in accordance with Nevada law, Distributions
shall be made pursuant to this Agreement.

 

NOW,
THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

		1.	Distributions.
                                         Any Distributions to Stockholders shall be approved by the Board of Directors of the
                                         Company and issued to the Stockholders in the percentage of their ownership.

 

		2.	Share
                                         Restrictions.

 

		a.	AMRE
                                         Tennessee. The Company Stock issued to AMRE Tennessee is subject to forfeit. Should David
                                         Young be separated from employment with American Medical REIT, Inc. within three (3)
                                         years from the anniversary of the execution of this Agreement, the ownership of the Company
                                         Stock shall be returned to the Company treasury. Upon the anniversary of three (3) years
                                         of David Young’s continued employment with American Medical REIT, Inc., the Company
                                         Stock owned by AMRE Tennessee shall not be subject to forfeiture.

 

    	 	 	 

     

    

 

		b.	LVAM.
                                         The Company Stock issued to LVAM shall not be subject to forfeit.

 

		c.	DSS.
                                         The Company Stock issued to DSS shall not be subject to forfeit.

 

		3.	Distributions
                                         Allocation. In the event of a Distribution:

 

		a.	Incentive
                                         Pool. A pool of Distributions representing 12.5% of the total Distribution issued by
                                         the Company (“Incentive Pool”) shall be further set aside as incentives to
                                         employees and management of the Company or American Medical REIT, to be distributed as
                                         follows:

 

		i.	Allocation.
                                         David Young, as President of AMRE Tennessee, will recommend an allocation of the Incentive
                                         Pool, which shall be subject to approval by the Board of Directors of the Company. If
                                         David Young is separated from employment with American Medical REIT, Inc., this allocation
                                         shall be performed by the Board of Directors of the Company.

 

		ii.	Vesting;
                                         Forfeiture. Distributions allocated under the Incentive Pool shall have a three (3) year
                                         vesting period. The vesting period shall begin on the date of the award. Upon the vesting
                                         of the Distributions awarded from the Incentive Pool, recipients will immediately be
                                         paid the Distributions allocated to them. Should the recipient of the Distributions from
                                         the Incentive Pool be terminated from employment with the Company or American Medical
                                         REIT prior to the vesting of their award from the Incentive Pool, the recipient shall
                                         forfeit the award from the Incentive Pool. All forfeited awards from the Incentive Pool
                                         shall be reallocated to the Incentive Pool. Terminations of employment by the American
                                         Medical REIT without cause, or due to Changes in Control of American Medical REIT, or
                                         due to disability or due to hardship (disability and hardship shall be determined by
                                         the Board of American Medical REIT) shall not result in forfeiture of the Distributions
                                         from the Incentive Pool. “Change in Control” shall mean: the acquisition,
                                         either directly or indirectly, of more than 50% of either (i) the then outstanding shares
                                         of such company’s common stock or ownership equivalent, taking into account as
                                         outstanding for this purpose such shares of common stock issuable upon the exercise of
                                         options or warrants, the conversion of convertible shares or debt, and the exercise of
                                         any similar right to acquire such common stock or (ii) the combined voting power of the
                                         then outstanding voting securities of such company entitled to vote generally in the
                                         election of directors) or managers in the case of AMRE Tennessee) or (iii) the direct
                                         or indirect sale, transfer, conveyance or other disposition (other than by way of merger
                                         or consolidation), in one or a series of related transactions, of all or substantially
                                         all of the properties or assets of American Medical REIT and its subsidiaries, taken
                                         as a whole, to any person or entity that is not a subsidiary of American Medical REIT;
                                         provided, however, that an initial public offering of the American Medical REIT’s
                                         common stock shall not constitute a Change in Control.

 

    	 	 	 

     

    

 

		iii.	The
                                         Company shall maintain these allocated but unvested Distributions in a separate account.

 

		b.	Remaining
                                         Distribution Pool. The remaining distribution shall be a pool representing 87.5% of the
                                         Distribution (the “Remaining Distribution Pool”) and allocated in the following
                                         way:

 

		i.	AMRE
                                         Tennessee shall be entitled to 12.5% of the Remaining Distribution Pool , and shall not
                                         be restricted in any way.

 

		ii.	DSS
                                         shall be entitled to 52.5% of the Remaining Distribution Pool, and shall not be restricted
                                         in any way.

 

		iii.	LVAM
                                         shall be entitled to 35% of the Remaining Distribution Pool, and shall not be restricted
                                         in any way.

 

		4.	Agreement
                                         regarding Corporate Opportunities. Each Stockholder hereby agrees that notwithstanding
                                         anything expressed or implied herein to the contrary, each of DSS and LVAM and their
                                         respective affiliates, owners, officers, directors, and employees may engage in or possess
                                         interests in other business ventures of any kind and description (including but not limited
                                         to business ventures including the development, management or sale of real estate), independently
                                         or with others, for their own accounts; the fact that either DSS or LVAM and their respective
                                         affiliates, owners, officers, directors, and employees may avail itself of any opportunities,
                                         either by itself or with other persons, and not offer such opportunities to the Company,
                                         shall not subject either DSS or LVAM and their respective affiliates, owners, officers,
                                         directors, and employees to liability to the Company or to any Stockholder on account
                                         of a lost Company opportunity; and no Stockholder shall have any right by virtue of this
                                         Agreement in or to any such opportunities described above or to the income or profits
                                         derived therefrom, and the pursuit of such opportunities, even though competitive with
                                         the Company, shall not be deemed wrongful or improper or in violation of this Agreement.
                                         All parties hereto agree to execute and deliver such waiver, or to adopt such policies
                                         and procedures, to the fullest extent of the applicable law, as may be necessary to effectuate
                                         the intent hereof.

 

    	 	 	 

     

    

 

		5.	Confidentiality.

 

		a.	Non-Disclosure.
                                         In connection with each Stockholder’s rights hereunder, the Company and its advisors
                                         and agents may make available to such Stockholder certain information that is non-public,
                                         confidential or proprietary in nature (the “Confidential Information”). Each
                                         Stockholder agrees to keep the Confidential Information confidential and will not disclose
                                         the Confidential Information to any third party without the Company’s prior written
                                         consent. Each Stockholder recognizes and acknowledges the value and confidential nature
                                         of the Confidential Information and the damage that could result to the Company if any
                                         information contained therein is disclosed to a third party. The Confidential Information
                                         will be used by such Stockholder solely as necessary for provision of such Stockholder’s
                                         rights hereunder. Stockholder further agrees to reimburse, indemnify and hold harmless
                                         the Company and its employees, affiliates, officers, directors, managers, partners, agents,
                                         advisors and representatives (collectively, “Company Representatives”) from
                                         any damage, loss or expense incurred as a result of the use of the Confidential Information
                                         by such Stockholder or other recipients contrary to the terms of this Agreement. Nothing
                                         in this Section III shall prohibit any Stockholder from disclosing any Confidential Information
                                         to authorities or regulators in compliance with any law or regulation the Stockholder
                                         is subject to.

 

		b.	Confidential
                                         Information. Confidential Information includes: (i) information transferred or transmitted
                                         in writing, orally, visually, electronically or by any other means, whether prior to,
                                         on or after the date hereof; (ii) information provided to the Stockholder by third parties
                                         under circumstances where such Stockholder has an obligation not to disclose that information;
                                         and (iii) any memoranda, reports, analyses, extracts or notes such Stockholder produces
                                         that are based on, reflect or contain any of the Confidential Information (the items
                                         referred to in this clause (iii) collectively referred to as “Notes”). Confidential
                                         Information does not include any information that: (A) becomes generally available to
                                         the public other than as a result of a disclosure by the Stockholder in violation of
                                         this Agreement; (B) was in such Stockholder’s possession prior to the disclosure
                                         of the Confidential Information pursuant to this Agreement, provided that such Stockholder
                                         did not know, or have reason to believe, after reasonable investigation, that such source
                                         was subject to an obligation not to disclose such information; and/or (C) becomes available
                                         to such Stockholder on a non-confidential basis from a source other than the Company
                                         or any Company Representative; provided that such Stockholder did not know, or have reason
                                         to believe, after reasonable investigation, that such source was subject to an obligation
                                         not to disclose such information.

 

    	 	 	 

     

    

 

		c.	Required
                                         Disclosure. If a Stockholder is requested to disclose any Confidential Information (including,
                                         but not limited to, any Notes) in connection with any legal or administrative proceeding
                                         or investigation, such Stockholder will notify the Company immediately in writing of
                                         the existence, terms and circumstances surrounding such a request so that the Company
                                         may, in its sole discretion, seek a protective order or other appropriate remedy and/or
                                         take steps to resist or narrow the scope of the disclosure sought by such request. The
                                         Stockholder agrees to assist the Company in seeking a protective order or other remedy,
                                         if requested by the Company. If a protective order or other remedy is not obtained and,
                                         in the written opinion of Stockholder’s counsel, disclosure is required, such Stockholder
                                         may make such disclosure without liability under this Agreement, provided that such Stockholder
                                         furnishes only that portion of the Confidential Information that is legally required
                                         to be disclosed, the Stockholder gives the Company notice of the information to be disclosed
                                         as far in advance of its disclosure as practicable and the Stockholder uses its best
                                         efforts to ensure that confidential treatment will be accorded to all such disclosed
                                         information.

 

		d.	Return
                                         of Confidential Information. Promptly after sale or other Transfer of all of a Stockholder’s
                                         Stock (except to a successor entity with a substantially similar ownership) such Stockholder
                                         will promptly delete all Confidential Information from any computer and backup storage
                                         system in which the Confidential Information has been stored and will turn over to the
                                         Company: (a) all documents and other materials (including without limitation all copies
                                         or reproductions of such documents or materials, tapes, floppy disks, backup copies and
                                         other forms of electronic storage media) that constitute, contain or are derived from
                                         the Confidential Information and (b) all other documents, Notes and other materials connected
                                         with or arising out of the Stockholder’s ownership, and no copy thereof will be
                                         retained by such Stockholder. The Stockholder will deliver to the Company a certificate
                                         that such Stockholder has complied with the requirements of this Section 3.2. Notwithstanding
                                         the return, deletion or destruction of the Confidential Information, the Stockholder
                                         will continue to be bound by the obligations of confidentiality and other obligations
                                         under this Article III.

 

		e.	Remedies.
                                         Each Stockholder acknowledges and agrees that the Company would be damaged irreparably
                                         if any provision of this Article III were not performed in accordance with its specific
                                         terms or were otherwise breached. Accordingly, the Company will be entitled to equitable
                                         relief, including, without limitation, an injunction or injunctions to prevent breaches
                                         of the provisions of this Article III and to enforce specifically this Article III and
                                         its provisions in addition to any other remedy to which the Company may be entitled,
                                         at law or in equity.

 

    	 	 	 

     

    

 

		f.	Permitted
                                         Disclosures. Each Stockholder shall be allowed to disclose Confidential Information to
                                         its agents and advisors as is proper, with the understanding that they shall keep the
                                         information confidential as set forth herein

 

		6.	Termination.
                                         This Agreement will terminate (a) upon the dissolution and winding up of the Company
                                         or (b) on the date as of which the parties hereto terminate this Agreement by unanimous
                                         written consent.

 

		7.	Entire
                                         Agreement. This Agreement contains the entire agreement, and supersedes all prior agreements
                                         and understandings and arrangements, oral or written, among the parties hereto with respect
                                         to the subject matter hereof.

 

		8.	Amendments
                                         and Modifications. Any amendment, modification or change to this Agreement must be approved
                                         by written consent of (a) the Stockholders who are a party hereto, or any successor to
                                         the Stockholders and (b) the Company; provided that the Company may, without the consent
                                         of any of the Stockholders, amend this Agreement at any time or from time to time: (i)
                                         to cure any ambiguity, to correct or supplement any provisions herein that may be inconsistent
                                         with any other provision herein or to add other provisions with respect to matters arising
                                         under this Agreement that will not be inconsistent with the provisions of this Agreement,
                                         (ii) to amend this Agreement to reflect any action that the Company is authorized to
                                         take under the Agreement if such action requires amendment of this Agreement, or (iii)
                                         to delete or add any provision to this Agreement required to be so deleted or added by
                                         any federal or state agency deemed to be for the benefit or protection of the Stockholders;
                                         provided, further, however, that (A) any amendment that enlarges or adversely affects
                                         the obligations of any Stockholder, including requiring any additional capital contribution,
                                         assessment or payment by such Stockholder, shall require the written consent of each
                                         Stockholder so affected; (B) no amendment shall adversely discriminate against a Stockholder
                                         as opposed to other Stockholders without written consent of such adversely affected Stockholder;
                                         and (C) no amendment shall be adopted by the Company that adversely affects the limited
                                         liability of any Stockholder.

 

		9.	Binding
                                         Effect; Benefits. No Stockholder may assign either this Agreement or any of its rights,
                                         interests or obligations hereunder without the prior written approval of the other Stockholder.
                                         Any purported transfer in violation of any provision of this Agreement will be void and
                                         ineffectual and will not operate to transfer any interest or title to the purported transferee.
                                         All of the terms and provisions of this Agreement shall be binding upon and shall inure
                                         to the benefit of the parties hereto and their respective legal representatives, successors
                                         and permitted assigns.

 

		10.	Severability.
                                         Whenever possible, each provision of this Agreement shall be interpreted in such manner
                                         as to be effective and valid under applicable law, but if any provision of this Agreement
                                         shall be unenforceable or invalid under applicable law, such provision shall be ineffective
                                         only to the extent of such unenforceability or invalidity, and the remaining provisions
                                         of this Agreement shall continue to be binding and in full force and effect.

 

    	 	 	 

     

    

 

		11.	Headings.
                                         The section and other headings contained in this Agreement are for convenience only and
                                         shall not be deemed to limit, characterize or interpret any provisions of this Agreement.

 

		12.	No
                                         Strict Construction. The parties hereto jointly participated in the negotiation and drafting
                                         of this Agreement. The language used in this Agreement shall be deemed to be the language
                                         chosen by the parties hereto to express their collective mutual intent, this Agreement
                                         shall be construed as if drafted jointly by the parties hereto, and no rule of strict
                                         construction shall be applied against any Person.

 

		13.	Governing
                                         Law. This Agreement and the rights of the parties hereunder shall be construed and interpreted
                                         in accordance with the laws of the State of Nevada applicable to agreements made and
                                         to the performance wholly within that jurisdiction.

 

		14.	Arbitration.
                                         Any controversy or claim arising out of or relating to this Agreement, or any breach
                                         of this Agreement, will be settled by arbitration in Nashville Tennessee, in accordance
                                         with the Commercial Arbitration Rules of the American Arbitration Association. Any decision
                                         made pursuant to such arbitration will be binding on the parties and judgment upon the
                                         award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

 

		15.	Necessary
                                         Approvals. All parties hereto hereby acknowledge and agree that the effectiveness of
                                         this Agreement is subject to approval by the Board of Directors of Singapore eDevelopment,
                                         Ltd, a Singapore limited company and the parent company of LVAM. Should such approval
                                         not be granted within twenty (20) calendar days of the date hereof, this Agreement shall
                                         be null and void.

 

[signature
page follows]

 

    	 	 	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	STOCKHOLDERS:

        DSS
        SECURITIES, INC.
	 	LIQUIDVALUE ASSET MANAGEMENT

                                                                                PTE LTD.

	 	 	 	 	 
	By:	                           	 	By:	                       
    
	Name:	 	 	Name:	 
	Title:	 	 	Title:	 
	 	 	 	 	 
	 	 	 	AMRE
    TENNESSEE, LLC
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 	 	 	 	 
	 	 	 	COMPANY:
	 	 	 	 	 
	 	 	 	AMRE
    ASSET MANAGEMENT, INC.
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:aspn-ex43_89.htm

Exhibit 4.3

 

DESCRIPTION OF SECURITIES

As of December 31, 2019, Aspen Aerogels, Inc. had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (i) our common stock, $0.00001 par value per share (“Common Stock”).

Unless the context otherwise requires, all references to “we”, “us”, the “Company”, or “Aspen” in this Exhibit 4.3 refer to Aspen Aerogels, Inc.

DESCRIPTION OF COMMON STOCK

We are authorized to issue 125,000,000 shares of common stock, par value $0.00001 per share. 

The following summary of certain provisions of our common stock does not purport to be complete. You should refer to our restated certificate of incorporation and our restated bylaws, both of which are included as exhibits to the registration statement. The summary below is also qualified by provisions of applicable law.

General

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, and do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for dividend payments. All shares of common stock outstanding as of the date hereof are fully paid and nonassessable. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of then outstanding preferred stock.

Registration Rights

Pursuant to our registration rights agreement to which certain of our principal stockholders, directors and executive officers are parties, including GKFF Ventures I, LLC; Donald R. Young, our President, Chief Executive Officer and one of our directors; and John F. Fairbanks, our Vice President, Chief Financial Officer and Treasurer, are entitled to registration rights with respect to the shares of common stock held by them. These shares include substantially all of the shares held by GKFF Ventures I, LLC; and certain shares held by Donald R. Young, our President, Chief Executive Officer and one of our directors; and John F. Fairbanks, our Vice President, Chief Financial Officer and Treasurer. We are generally required to pay all expenses incurred in connection with registrations effected in connection with the following rights, excluding underwriting discounts. All registration rights described below will terminate at the earlier of (1) the seventh anniversary of the completion of our initial public offering, or June 18, 2021, (2) such shares have been registered under the Securities Act, such registration statement has been declared effective and the shares have been disposed of pursuant to such effective registration statement, and (3) with respect to any holder of registrable shares that (together with its affiliates) holds less than 1% of our common stock (on an as-if-converted to common stock basis), when such holder can sell all of such shares without limitation under Rule 144 promulgated under the Securities Act during any 90 day period.

Demand rights. Subject to specified limitations, the holders representing at least a majority of these registrable shares then outstanding may require that we register all or a portion of these securities for sale under the Securities Act, which we refer to as a demand registration, if the anticipated aggregate offering price of such securities is at least $10,000,000. We may be required to effect up to two such registrations at our expense and up to two such 

registrations at the holders’ expense. Stockholders with these registration rights who are not part of an initial registration demand are entitled to notice and are entitled to include their shares of common stock in the registration. Under certain circumstances, the underwriters, if any, may limit the number of shares included in any such registration.

Piggyback rights. If we propose to register any of our equity securities under the Securities Act, other than in connection with (i) a registration relating solely to our employee benefit plans, or (ii) a registration relating solely to a business combination or merger involving us, the holders of these registrable shares are entitled to notice of such registration and are entitled to include their shares of common stock in the registration. Under certain circumstances, the underwriters, if any, may limit the number of shares included in any such registration.

Form S-3 rights. If we become eligible to file registration statements on Form S-3, subject to specified limitations, the holders of these registrable shares may require us to register all or a portion of their registrable shares on Form S-3, if the anticipated aggregate offering price of such securities is at least $2,000,000. Such requests for registration will not be considered a demand registration pursuant to the “— Demand rights” section above. We are not required to (i) effect more than two such registrations in any 12-month period or (ii) keep effective at any one time more than one registration statement on Form S-3 with respect to the registrable shares. Stockholders with these registration rights who are not part of an initial registration demand are entitled to notice and are entitled to include their shares of common stock in the registration. Under certain circumstances, the underwriters, if any, may limit the number of shares included in any such registration.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A., P.O. Box 505005, Louisville, Kentucky 40233-5005.

Stock Exchange Listing

Our common stock is listed for trading on New York Stock Exchange under the symbol “ASPN.”

CERTAIN PROVISIONS OF DELAWARE LAW AND OF THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION AND RESTATED BYLAWS

Anti-Takeover Provisions

The provisions of Delaware law, our restated certificate of incorporation and our restated bylaws discussed below could discourage or make it more difficult to accomplish a proxy contest or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or in our best interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. Such provisions also may have the effect of preventing changes in our management.

Delaware Statutory Business Combinations Provision

We are subject to Section 203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for three years following the date that the stockholder 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;

 

	
 
	
•
	
upon completion of the transaction that resulted in the interested 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 commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers, and (b) 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 date of the transaction, the business combination is approved by the board of directors 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.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is any person who, together with such person’s affiliates and associates (i) owns 15% or more of a corporation’s voting securities or (ii) is an affiliate or associate of a corporation and was the owner of 15% or more of the corporation’s voting securities at any time within the three year period immediately preceding a business combination of the corporation governed by Section 203. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage takeover attempts that might result in a premium over the market price for the shares of Common Stock held by our stockholders.

Classified Board of Directors; Removal of Directors for Cause

Our restated certificate of incorporation and restated bylaws provide that our board of directors will be divided into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders following the initial classification of directors, the term of office of the second class to expire at the second annual meeting of stockholders following the initial classification of directors and the term of office of the third class to expire at the third annual meeting of stockholders following the initial classification of directors. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire will be elected for a three-year term of office. All directors elected to our classified board of directors will serve until the election and qualification of their respective successors or their earlier resignation or removal. The board of directors is authorized to create new directorships and to fill such positions so created and is permitted to specify the class to which any such new position is assigned. The person filling such position would serve for the term applicable to that class. The board of directors, or its remaining members, even if less than a quorum, is also empowered to fill vacancies on the board of directors occurring for any reason for the remainder of the term of the class of directors in which the vacancy occurred. Members of the board of directors may only be removed for cause and only by the affirmative vote of 75% of our outstanding voting stock. These provisions are likely to increase the time required for stockholders to change the composition of the board of directors. For example, at least two annual meetings will be necessary for stockholders to effect a change in a majority of the members of the board of directors.

Advance Notice Provisions for Stockholder Proposals and Stockholder Nominations of Directors

Our restated bylaws provide that, for nominations to the board of directors or for other business to be properly brought by a stockholder before a meeting of stockholders, the stockholder must first have given timely notice of the proposal in writing to our Secretary. For an annual meeting, a stockholder’s notice generally must be delivered not less than 90 days nor more than 120 days prior to the anniversary of the previous year’s annual meeting. For a special meeting, the notice must generally be delivered not earlier than the 90th day prior to the meeting and not later than the later of (1) the 60th day prior to the meeting or (2) the 10th day following the day on which public announcement of the meeting is first made. Detailed requirements as to the form of the notice and information required in the notice are specified in the restated bylaws. If it is determined that business was not properly brought before a meeting in accordance with our bylaw provisions, such business will not be conducted at the meeting.

 

Special Meetings of Stockholders

Special meetings of the stockholders may be called only by our board of directors pursuant to a resolution adopted by a majority of the total number of directors.

No Stockholder Action by Written Consent

Our restated certificate of incorporation and restated bylaws do not permit our stockholders to act by written consent. As a result, any action to be effected by our stockholders must be effected at a duly called annual or special meeting of the stockholders.

Super Majority Stockholder Vote Required for Certain Actions

The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws, unless the corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our restated certificate of incorporation requires the affirmative vote of the holders of at least 75% of our outstanding voting stock to amend or repeal any of the provisions discussed in this section entitled “—Anti-Takeover Provisions” or to reduce the number of authorized shares of common stock or preferred stock. This 75% stockholder vote would be in addition to any separate class vote that might in the future be required pursuant to the terms of any preferred stock that might then be outstanding. In addition, a 75% vote is also required for any amendment to, or repeal of, our restated bylaws by the stockholders. Our restated bylaws may be amended or repealed by a simple majority vote of the board of directors.

 

Exclusive Forum

Our restated certificate of incorporation provides that, subject to limited exceptions, a state or federal court located within 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, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our restated certificate of incorporation described above. Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or unenforceable.

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