Document:

Exhibit 10.1

  

   

  

  
    STOCK YARDS BANCORP, INC.

    

    

    PERFORMANCE-VESTED STOCK UNIT

    GRANT AGREEMENT

    

    

    This is a Performance-Vested Stock Unit ("PSU")

      Grant Agreement (this "Agreement" or "Award") dated as of ____________, 20__ (the "Grant Date"), is between Stock Yards Bancorp, Inc. (the "Company")

      and _______ (the "Grantee").

    

    

    RECITALS

    

    

    
      
        	A.	
                The Company adopted the Stock Yards Bancorp, Inc. 2015 Omnibus Equity Compensation Plan (the "Plan").  The Plan is administered by the Compensation Committee of the Board of Directors (the "Committee").

              

      

    

    

    

    
      
        	B.	
                The Committee has designated the Grantee as a Participant in the Plan, and wishes to set forth in this Agreement the Grantee's right to receive up to that number of
                  PSUs set forth herein.  Each PSU represents the right to receive one share of the Company's Stock, subject to the terms and conditions set forth in this Agreement and the Plan.

              

      

    

    

    

    AGREEMENTS

    

    

    The Grantee and the Company agree as follows:

    

    

    1.                    Grant

            of PSUs.  The Company grants to the Grantee _____ PSUs (the "Maximum Number") on the terms and conditions set forth below and in the Plan.

    

    

    2.             Transfer

            Restriction on PSUs. Until the delivery of shares of Company Stock with respect to the PSUs in accordance with the terms of this Award, the PSUs may not be sold, transferred, pledged, exchanged, hypothecated or otherwise disposed of,
        other than by will or pursuant to the applicable laws of descent and distribution.  Any attempted sale, transfer, pledge, exchange, hypothecation or other disposition of the PSUs not specifically permitted by the Plan or this Award shall be null
        and void and without effect.

    

    

    3.             Performance

            Restrictions; Vesting and Payment.  Except as provided in Sections 4 or 5 below, if and to the extent that the performance criteria set forth on Exhibit A attached hereto are met as of the end of the Performance Period, as determined by the Committee, the resulting Applicable Percentage of the Maximum Number of PSUs shall vest and
        become nonforfeitable.  Any PSUs that do not vest in accordance with the foregoing provisions of this Section 3 shall terminate as of the end of the Performance Period.  The Applicable Percentage shall be determined by the Committee in March
        following the end of the Performance Period and applied to the Maximum Number then rounded down to a whole number of shares, and the resulting number of shares of Company Stock will be issued in satisfaction of the Award before the end of that
        month.  Any such determination by the Committee shall be final and binding.

    

    

    4.              Separation

            from Service Prior to the End of the Performance Period.  In the event of the Grantee's Separation from Service prior to the end of the Performance Period, the following provisions shall apply:

    

    

    4.1            Except as expressly provided below in Sections 4.2 or 5, in the event of the Grantee's Separation for any reason prior to the end of the Performance Period, the PSUs held by the
        Grantee shall be automatically forfeited by the Grantee as of the date of Grantee's Separation.  Neither the Grantee nor any of the Grantee's successors, heirs, assigns or personal representatives shall have any rights or interests in any PSUs that
        are so forfeited.

    

    

    4.2            Notwithstanding Section 4.1, if the Grantee experiences a Separation as the result of (i) the Grantee's death, (ii) Disability, or (iii) on or after age 60 when the Grantee has
        at least 10 years of service (a "Qualifying Termination"), a pro rata portion of the Company Stock with respect to the PSUs
        shall be issued at the time set forth in Section 3 above, as set forth below:

     

    

    
      
        

    

    
    

    

    4.2.1            In the event of a Qualifying Termination prior to completion of the Performance Period, the Applicable Percentage of PSUs shall be determined through the end of the Performance
        Period in the same manner as it would for a Participant who is still in service on that date, but that percentage shall be subject to further adjustment equal to (i) the number of PSUs subject to the Award that would have vested in accordance with
        Section 3 above (assuming no Separation from Service had occurred), multiplied by (ii) a service fraction, the numerator of which is the number of full months the Grantee was employed or rendering services following the Grant Date through the date
        of the Grantee's Separation, and the denominator of which is the number of months in the Performance Period. Any PSUs that do not vest in accordance with the foregoing provisions of this Section 4.2.1 shall terminate and be forfeited as of the end
        of the Performance Period.

    

    

    4.2.2            Notwithstanding Section 4.2.1, if a 409A Change (as defined below) occurs after a Qualifying Termination and prior to completion of the Performance Period, upon the date of the
        409A Change, the Grantee shall vest in a prorated number of PSUs determined as described in Section 5 below, but multiplied by a service fraction, the numerator of which is the number of full months the Grantee was rendering services following the
        Grant Date through the date of the Grantee's Separation, and the denominator of which is the number of months in the Performance Period that expired between the Grant Date and the 409A Change.  Such number of PSUs shall be paid in cash or by
        delivery of shares of stock as provided in Section 5 below.  Any PSUs that do not vest under this provision shall terminate and be forfeited as of the date of the Change of Control.

    

    

    5.               Change of Control.  In the event a Change of Control which also constitutes a
        change in ownership or effective control or a change in ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of the Code (a "409A Change") occurs prior to both completion of the Performance Period and a Separation from Service (other than a Qualifying Termination, which shall be governed by Section 4.2.2 above), a number
        of PSUs shall become fully vested on the date of such 409A Change as if all performance were at the Target performance level set out on Exhibit A for the Performance Period. Absent a decision by the Committee consistent with Section 16.2 of the Plan to have the securities of the surviving entity resulting from the Change of Control substituted for the
        number of shares of Company Stock that would otherwise have been issued based on such vesting, each vested PSU shall be converted to cash based on the Fair Market Value received by shareholders of record for Company Stock in the Change of Control. 
        Within 5 days after the 409A Change, such cash amount or the surviving company's stock (as the case may be) shall be paid or delivered to the Grantee. Any PSUs that do not vest under this provision shall terminate and be forfeited as of the date of
        the Change of Control.

     

    

    6.                  Tax Withholding.  The Company (or Stock Yards Bank & Trust, as the employer) shall
        withhold from wages otherwise due, or retain from any payment to the Grantee in respect of the PSUs, or take such other action which Company deems necessary to satisfy any income or other tax withholding requirements as a result of the vesting of
        PSUs and issuance of Company Stock related thereto.  Unless an affirmative election is made by the Participant before the end of the Performance Period (or Change of Control, if earlier) to (i) remit already-owned shares of Company Stock, (ii)
        remit a cash payment, (iii) to have amounts debited from other wages due, or (iv) some combination thereof, the Grantee shall be deemed to have elected to satisfy any federal and state tax withholding requirements through a reduction in the number
        of shares of Company Stock issuable upon vesting, equal to their Fair Market Value based on the amount of withholding taxes reasonably estimated by the Company to be due upon vesting.

    

    

    7.              Delay in Payment to Specified Employees.  Notwithstanding anything herein to the
        contrary, the date of delivery of Company Stock (or cash in lieu thereof if required hereby) to the Grantee shall be delayed if payment would otherwise be required hereunder after Separation from Service (other than on account of Death) and before
        6 months have elapsed from the date of the Separation from Service, if the Grantee is a Specified Employee and the circumstances of payment require delay under 409A of the Code. "Specified Employee" shall have the meaning given in Treas. Reg. § 1.409A-1(i) (or any successor thereto) using the prior calendar year as the determination period.

     

    

    
      2

      
        

    

     

    

    8.         Definitions.

    

    

    8.1            "Separation from Service" or simply "Separation" as used herein shall mean the date the Company and the Grantee reasonably anticipate that the Grantee will not
        perform any further services for the Company or any other entity considered a single employer with the Company under Section 414(b) or (c) of the Code (inserting in lieu of 80% each time it is used thereunder with 50%) (together referred to herein
        as the "Controlled Group"). A Grantee shall not be considered to have incurred a Separation if the Grantee changes to
        part-time status, or serves as both member of the Board of Directors and as an employee, and only one of those two service arrangements ends, such that vesting of PSUs will continue as long as one or the other service arrangement continues during a
        Performance Period.  The Grantee will not be treated as having a Separation from Service while on military leave, sick leave or other bona fide leave of absence if the leave does not exceed six months or, if longer, the period during which the
        Grantee has a reemployment right with the corporation by statute or contract.  If a bona fide leave of absence extends beyond six months, a Separation from Service will be deemed to occur on the first day after the end of such six-month period, or
        on the day after the Grantee's statutory or contractual reemployment right lapses, if later.

    

    

    8.2            Capitalized terms used in this Agreement and not defined herein shall have the meanings given in the Plan.

    

    

    9.          Restrictions Imposed by Law.  Notwithstanding any other provision of this Agreement, the Grantee agrees that the Company will not be obligated to deliver any shares of Company
        Stock if counsel to the Company determines that such exercise, delivery or payment would violate any law or regulation of any governmental authority or any agreement between the Company and any national securities exchange upon which the Company
        Stock is listed.

    

    

    10.       No Shareholder Status; No Dividends.  The Grantee shall have no rights as a shareholder with respect to any PSUs or shares of Company Stock under this Agreement until such shares
        have been duly issued and delivered to the Grantee.  No adjustment shall be made for dividends of any kind or description whatsoever or for distributions of other rights of any kind or description whatsoever respecting the shares prior to such
        issuance. Grantee shall have no Dividend Equivalent rights hereunder.

    

    

    
      11.        Modification, Amendment and Cancellation.  The Committee or Board of Directors of the Company shall have the right unilaterally to modify, amend or cancel this Award in
          accordance with the terms of the Plan.  This Award shall be subject to adjustment for changes in the Company's capitalization as provided in the Plan.

    

    

    12.       Provisions Consistent with Plan.  This Agreement is intended to be construed to be consistent with, and is subject to, all applicable provisions of the Plan, including Section 8
        thereof, and the Plan is incorporated herein by reference.  In the event of a conflict between the provisions of this Agreement and the Plan, the provisions of the Plan shall prevail.

    

    

    13.       Clawback. By accepting the grant made under this Agreement, the Grantee agrees that the Company may recover some or all of the Company Stock transferred to the Grantee under this
        Agreement, or recoup some or all of the value thereof via offset from other amounts owed to the Grantee by the Company or its affiliate bank, at any time in the three calendar years following such Company Stock's delivery to the Grantee, if and to
        the extent that the Company's compensation committee concludes that (i) federal or state law or the listing requirements of the exchange on which the Company's stock is listed for trading so require, (ii) the performance criteria required herein
        were not met, or not met to the extent necessary to support delivery of the same number of shares, or (iii) as required by Section 304 of the Sarbanes-Oxley Act of 2002, after a restatement of the Company's financial results as reported to the
        Securities and Exchange Commission. The Grantee agrees to promptly comply with any Company demand for recovery or recoupment.

     

    

    
      3

      
        

    

    

    

    14.              Post-Vesting Holding Requirement.  By accepting delivery of any Company Stock (net of
        such shares withheld for taxes as provided in Section 6 above) at vesting of a PSU hereunder, the Grantee accepts and agrees to the following restriction on transfer of that Company Stock, for a period of 12 months following its issuance hereunder,
        or, if earlier, until the date that the Grantee incurs a Separation from Service (the "Holding Period").  During the Holding Period, the Grantee may not sell, assign, gift or otherwise transfer the Company Stock delivered hereunder, other than in
        connection with a Change of Control.  The Company may hold the Grantee's issued Company Stock in escrow during this Holding Period, or may place a legend on such certificates, as it deems necessary or appropriate to enforce this holding
        requirement.

     

    

    
      	
               

            	STOCK YARDS BANCORP, INC.	 
	
               

            	
               

            	
               

            	 
	
               

            	By:

            	
               

            	 
	
               

            	
               

            	
               

            	 
	
               

            	Title:

            	
               

            	 
	
               

            	
               

            	
               

            	 
	
               

            	Date:

            	
               

            	 
	
               

            	
               

            	
               

            	 
	
               

            	GRANTEE:	 
	
               

            	
               

            	
               

            	 
	
               

            	
               

            	
               

            	 
	
               

            	Signature

            	 
	
               

            	
               

            	
               

            	 
	
               

            	Printed Name:

            	 	 
	
               

            	
               

            	
               

            	 
	
               

            	
              (acknowledging receipt and conditions set out above) 

            	 
	
               

            	
               

            	
               

            	 
	
               

            	Date:

            	
               

            	 

    

     

    

     

    

    
      4

      
        

    

     

    

    EXHIBIT A

    

    

    PERFORMANCE-BASED VESTING

    

    

    Subject to Sections 4 and 5 of this Grant Agreement, the PSUs shall vest and become nonforfeitable in the Applicable Percentage of the Maximum Number of
      PSUs. The Applicable Percentage shall range from 0-100% and shall be determined based on the Company's actual Three-Year Aggregate EPS for the Performance Period, plus the Company's Percentile ROAA Ranking for the Performance Period, with the portion of the Applicable Percentage related to each performance measure as set forth in the charts below:

    

    

    
      	
               

            	Percentile ROAA Ranking

              	Applicable Percentage
	
               

            	Maximum: __th or higher

              	50%
	
               

            	Target: __th – __th

              	__%
	
               

            	Threshold: __th – __th	__%
	
               

            	__th or below

              	 0%

    

                                                                                                    

    

    Plus

    

    

    
      	
               

            	Three-Year Aggregate EPS

              	Applicable Percentage
	
               

            	Maximum: $____ or higher	50%
	
               

            	Target: $____ to $____ 

              	__%
	
               

            	Threshold: $____ to $____	__%
	
               

            	Below $____	0%

    

    
      

      

                                                                                                                    

    

    

  
    For example, if at the end of the Performance Period the Committee determined that the Company ranked above the __th percentile to peers in
      ROAA, and had Three-Year Aggregate EPS of $____, the Applicable Percentage would be 100% and the Maximum Number of PSUs would be converted to and paid in shares of Company Stock.

    

    

    Any PSUs that do not vest based on the performance requirements set forth in this Exhibit A (and which have not previously terminated pursuant to the terms of the Grant Agreement) will automatically terminate as of the last day of the Performance Period.

    

    

    For purposes of the Award, the following definitions shall apply:

    

    

    
      	
              •

            	
              "EPS" means the
                diluted earnings per share of the Company as determined for financial reporting purposes consistent with Financial Accounting Standard 128 (now ASC 260), (i) excluding any unbudgeted acquisition costs and restructuring adjustments made to
                EPS as a result of a business combination that occurs during the Performance Period in accordance with Financial Accounting Standard 141 (revised; now ASC 805), (ii) using all income tax rates generally in effect on the first day of the
                performance period for income tax financial statement provisions (including adjustments in provisions of deferred tax assets and deferred tax liabilities), without regard to any amendment to such rates that may take effect during the
                performance period.

            

    

    

    

    
      	
              •

            	
              "Three-Year Aggregate EPS"
                means the total of the Company's EPS in each of the years in the Performance Period.

            

    

    

    

    
      	
              •

            	
              "Percentile Ranking"
                means the percentile ranking of the simple average of the Company's Return on Average Assets (ROAA) for the years in the Performance Period, as compared to the simple average ROAA of all public banks with between $1.5 billion and $7.0
                billion in total assets, as measured and published by S&P Global Market Intelligence or its successor.

            

    

    

    

    
      	
              •

            	
              "Performance Period"
                means the period commencing on the January 1 immediately prior to the Grant Date and ending three years thereafter.

            

    

    

    

    
      	
              •

            	
              "ROAA" or Return on Average Assets" means the Company's (or peer companies') net income divided by average assets for a calendar
                year, with average assets determined based on assets as of the same reporting periods for the Company as is used in determining average assets in S&P Global Market Intelligence’s rankings each year.

            

    

    

    

    
      5

      
        

    

     

    

    The Committee shall make all determinations regarding the achievement of Percentile ROAA Ranking and Three-Year Aggregate EPS based on Company financial
      statements as filed with the Securities and Exchange Commission, and the peer group rankings based on publicly available information, and the determination of the Committee shall be final and binding on all parties.

    

    

    If the number of shares outstanding changes during the year as a result of a stock dividend or split, the aggregate EPS targets set out above will be
      adjusted to the same extent and in the same fashion as Generally Accepted Accounting Principles require EPS measures be adjusted.

    

    

    *            *            *            *            *tlry-ex43_145.htm

Exhibit 4.3

DESCRIPTION OF SECURITIES REGISTERED

UNDER SECTION 12(b) OF THE EXCHANGE ACT OF 1934

 

Tilray, Inc. (“Tilray,” “we,” “us,” “our”) has one class of securities registered under Section 12(b) of the Securities Exchange Act of 1934, as amended: our Class 2 common stock.

 

The following summary of the terms of the capital stock of Tilray is not meant to be complete and is qualified entirely by reference to the relevant provisions of the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”) and the complete text of Tilray’s Amended and Restated Certificate of Incorporation (the “amended and restated certificate of incorporation”) and Amended and Restated By-Laws (the “by-laws”). Both our certificate of incorporation and by-laws are exhibits to our Annual Report on Form 10-K, of which this Exhibit 4.1 is a part.

Except as otherwise specified below, references to voting by our stockholders contained in this “Description of Capital Stock” are references to voting by holders of capital stock entitled to attend and vote generally at general meetings of our stockholders.

Capital Stock

Our authorized capital stock is divided into:

 

	
 
	
•
	
 
	
250,000,000 shares of Class 1 common stock with a par value of $0.0001 per share;

 

	
 
	
•
	
 
	
500,000,000 shares of Class 2 common stock with a par value of $0.0001 per share; and

 

	
 
	
•
	
 
	
10,000,000 undesignated shares of preferred stock with a par value of $0.0001 per share.

The rights and restrictions to which the Class 1 common stock and Class 2 common stock are prescribed in our amended and restated certificate of incorporation. Our amended and restated certificate of incorporation entitles our board of directors, without stockholder approval, to determine the terms of the undesignated shares of preferred stock issued by us.

Common Stock

Voting Rights

Holders of our Class 1 common stock and Class 2 common stock have identical rights, provided that, except as otherwise expressly provided in our amended and restated certificate of incorporation or required by applicable law, on any matter that is submitted to a vote of our stockholders, each holder of Class 1 common stock is entitled to 10 votes for each share of Class 1 common stock held by such holder and each holder of Class 2 common stock is entitled to one vote for each share of Class 2 common stock held by such holder.

Holders of shares of Class 1 common stock and Class 2 common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, except that there will be a separate vote of our Class 1 common stock and Class 2 common stock in the following circumstances:

 

	
 
	
•
	
 
	
if we propose to treat the shares of a class of our common stock differently with respect to any dividend or distribution of cash, property or shares of our stock paid or distributed by us;

 

	
 
	
•
	
 
	
if we propose to treat the shares of a class of our common stock differently with respect to any subdivision or combination of the shares of a class of our common stock; or

 

	
 
	
•
	
 
	
if we propose to treat the shares of a class of our common stock differently in connection with a liquidation, dissolution or change in control (by merger, asset sale or other similar transaction) with respect to any consideration into which the shares are converted or any consideration paid or otherwise distributed to our stockholders.

 

In addition, there will be a separate vote of and approval requirement for our Class 1 common stock in order for us to, directly or indirectly, take action in the following circumstances:

 

	
 
	
•
	
 
	
if we propose to amend, waive, alter or repeal any provision of our amended and restated certificate of incorporation or our bylaws in a manner that modifies the voting, conversion or other powers, preferences or other special rights or privileges or restrictions of the Class 1 common stock; or

 

	
 
	
•
	
 
	
if we reclassify any outstanding shares of Class 2 common stock into shares having rights as to dividends or liquidation that are senior to the Class 1 common stock or the right to more than one vote for each share thereof.

Cumulative voting for the election of directors is not provided for in our amended and restated certificate of incorporation, which means that the holder of our Class 1 common stock can elect all of the directors then standing for election as long as it holds approximately 10.01% of all outstanding shares of our capital stock.

Dividends and Distributions

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of Class 1 common stock and Class 2 common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine. We do not anticipate paying any cash dividends in the foreseeable future.

Liquidation Rights

Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, on any outstanding shares of preferred stock and payment of other claims of creditors.

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

Conversion Rights

Each share of Class 1 common stock is convertible at any time at the option of the holder into one share of Class 2 Common stock. In addition, each share of Class 1 common stock will automatically convert into one share of Class 2 common stock upon any transfer, whether or not for value and whether voluntary or involuntary or by operation of law, except for certain transfers described in our amended and restated certificate of incorporation, including certain transfers for tax and estate planning purposes. The amended and restated certificate of incorporation eliminated the exception for transfers among the Founders (as defined therein), including the exception for the entry into certain voting arrangements among the Founders.  In addition, upon the date on which the outstanding shares of Class 1 common stock represent less than 10% of the aggregate number of shares of Class 1 common stock and Class 2 common stock then outstanding, all outstanding shares of Class 1 common stock shall convert automatically into Class 2 common stock, and no additional shares of Class 1 common stock will be issued.

Rights of Repurchase

We currently have no rights to repurchase shares of our common stock, except as described in “—Options and Restricted Stock Units” below.     

Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights and is not subject to redemption.

 

 

 

Preferred Stock

Pursuant to our amended and restated certificate of incorporation, our board of directors has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series. Our board of directors also has the authority to determine or alter the designation, rights, preferences, privileges and restrictions granted to or imposed upon any unissued series of preferred stock, any or all of which may be greater than the rights of the Class 1 common stock and Class 2 common stock. Our board of directors, without stockholder approval, may issue preferred stock with voting, conversion or other rights that are superior to the voting and other rights of the holders of Class 1 common stock and Class 2 common stock. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change of control of Tilray without further action by the stockholders, and may have the effect of delaying or preventing changes in management of Tilray. In addition, the issuance of preferred stock may have the effect of decreasing the market price of the Class 2 common stock and may adversely affect the voting power of holders of Class 1 common stock and Class 2 common stock and reduce the likelihood that Class 1 common stock and Class 2 common stockholders will receive dividend payments and payments upon liquidation.

Our board of directors will determine the rights, preferences, privileges and restrictions of the preferred stock of each series.  This description will include:

 

	
 
	
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the title and stated value;

 

	
 
	
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the number of shares we are offering;

 

	
 
	
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the liquidation preference per share;

 

	
 
	
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the purchase price per share;

 

	
 
	
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the dividend rate per share, dividend period and payment dates and method of calculation for dividends;

 

	
 
	
•
	
 
	
whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;

 

	
 
	
•
	
 
	
our right, if any, to defer payment of dividends and the maximum length of any such deferral period;

 

	
 
	
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the procedures for any auction and remarketing, if any;

 

	
 
	
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the provisions for a sinking fund, if any;

 

	
 
	
•
	
 
	
the provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights;

 

	
 
	
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any listing of the preferred stock on any securities exchange or market;

 

	
 
	
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whether the preferred stock will be convertible into our Class 2 common stock or other securities of ours, including warrants, and, if applicable, the conversion period, the conversion price, or how it will be calculated, and under what circumstances it may be adjusted;

 

	
 
	
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whether the preferred stock will be exchangeable for debt securities, and, if applicable, the exchange period, the exchange price, or how it will be calculated, and under what circumstances it may be adjusted;

 

	
 
	
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voting rights, if any, of the preferred stock;

 

	
 
	
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preemption rights, if any;

 

	
 
	
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restrictions on transfer, sale or other assignment, if any;

 

	
 
	
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a discussion of any material or special U.S. federal income tax considerations applicable to the preferred stock;

 

	
 
	
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the relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs;

 

	
 
	
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any limitations on issuances of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock being issued as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and

 

	
 
	
•
	
 
	
any other specific terms, rights, preferences, privileges, qualifications or restrictions of the preferred stock.

When we issue shares of preferred stock, the shares will be fully paid and nonassessable.

Unless we specify otherwise, the preferred stock will rank, with respect to dividends and upon our liquidation, dissolution or winding up:

 

	
 
	
•
	
 
	
senior to all classes or series of our common stock and to all of our equity securities ranking junior to the preferred stock;

 

	
 
	
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on a parity with all of our equity securities the terms of which specifically provide that the equity securities rank on a parity with the preferred stock; and

 

	
 
	
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junior to all of our equity securities the terms of which specifically provide that the equity securities rank senior to the preferred stock.

The term “equity securities” does not include convertible debt securities.

The General Corporation Law of the State of Delaware, the state of our incorporation, provides that the holders of preferred stock will have the right to vote separately as a class on any proposal involving fundamental changes in the rights of holders of that preferred stock. This right is in addition to any voting rights that may be provided for in the applicable certificate of designation.

Anti-Takeover Provisions

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:

 

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

 

	
 
	
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provides that the authorized number of directors may be changed only by resolution of our board of directors;

 

	
 
	
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provides that, subject to the rights of any series of preferred stock to elect directors, directors may be removed with or without cause, by the holders of a majority of our then-outstanding shares of capital stock entitled to vote generally at an election of directors for so long as key holders (including Privateer Holdings, Brendan Kennedy, Michael Blue, or Christian Groh or their permitted entities or transferees) holds a majority of our then-outstanding shares of capital stock entitled to vote generally at an election of directors, or otherwise by the holders of at least 66 2/3% of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors;

 

	
 
	
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provides that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

 

	
 
	
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provides that any action to be taken by our stockholders may be taken by written consent or electronic transmission pursuant to Section 228 of the Delaware General Corporation Law, so long as the key holders hold a majority of our then-outstanding capital stock entitled to vote generally at an election of directors;

 

	
 
	
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provides 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 advance notice in writing and also specify requirements as to the form and content of a stockholder’s notice;

 

	
 
	
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provides that special meetings of our stockholders may be called by the chairperson of our board of directors, our chief executive officer, by our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors or, for so long as the key holders hold a majority of our then-outstanding capital stock entitled to vote generally at an election of directors, one or more stockholders that in the aggregate represent at least 50% of the total votes entitled to be cast at the meeting;

 

	
 
	
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provides that our board of directors will be divided into three classes of directors, with the classes to be as nearly equal as possible and with the directors serving three-year terms, therefore making it more difficult for stockholders to change the composition of our board of directors; and

 

	
 
	
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does not provide for cumulative voting rights, unless required by law, 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. For so long as Privateer Holdings holds a majority of our then-outstanding capital stock entitled to vote generally at an election of directors, the amendment of any of these provisions would require approval of the holders of a majority of all of our then-outstanding capital stock entitled to vote generally in the election of directors; otherwise, the amendment of any of these provisions would require approval by the holders of at least 66 2/3% of all of our then-outstanding capital stock entitled to vote generally in the election of directors.

The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock.

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