Document:

amrx-ex42_12.htm

Exhibit 4.2

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES 

REGISTERED PURSUANT TO SECTION 12 OF THE 

SECURITIES EXCHANGE ACT OF 1934 

Amneal Pharmaceuticals, Inc. has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: Class A common stock.

The following is a summary of some of the general terms and provisions of our Class A common stock, including certain provisions of our amended and restated certificate of incorporation (the “Charter”), our amended and restated bylaws (the “Bylaws”) and the Delaware General Corporation Law (the “DGCL”). This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Charter and the Bylaws, which are exhibits to our Annual Report on Form 10-K to which this description is an exhibit. References to the “Company,” “we,” “us” and “our” refer to Amneal Pharmaceuticals, Inc. and not to any of our subsidiaries.

Authorized Capital Stock

The Charter authorizes us to issue 1,220,000,000 shares of stock, consisting of (i) 1,218,000,000 shares of common stock, $0.01 par value per share, of which 900,000,000 are designated as Class A common stock, 300,000,000 are designated as Class B common stock and 18,000,000 are designated as Class B-1 common stock, and (ii) 2,000,000 shares of blank check preferred stock, $0.01 par value per share.

Class A Common Stock

Voting Rights

Holders of Class A common stock are entitled to one vote for each share of Class A common stock held.  Holders of Class A common stock and Class B common stock vote together as a single class on each matter submitted to a stockholder vote. Holders of Class A common stock and Class B common stock are not entitled to vote on any Charter amendment that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote on such terms pursuant to the Charter or the DGCL. Holders of our Class A Common Stock do not have cumulative voting rights.

The Bylaws provide that the directors will be elected by the affirmative vote of the majority of the votes cast with respect to such director’s election (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) at any meeting for the election of directors at which a quorum is present; provided that each director will be elected by a plurality of the votes cast (instead of by votes cast for or against a nominee) at any meeting at which a quorum in present for which the Board of Directors determines that the number of nominees exceeds the number of directors to be elected at such election and such determination has not been rescinded on or prior to the tenth day preceding the date the Company first mails its notice of meeting for such meeting to the stockholders.  The Board of Directors is not classified.

The Bylaws provide that, in all matters other than the election of directors, the affirmative vote of the majority in voting power of shares of stock will be the act of the stockholders unless a different or minimum vote is required by the Charter, the Bylaws or the rules and regulations of any stock exchange applicable to the Company or its securities, in which case such different or minimum vote will be the applicable vote on the matter.

Dividend Rights

The holders of Class A common stock are entitled to receive dividends, if any, payable in cash, property, or securities of the Company, as may be declared by the Board of Directors, out of funds legally available for the payment of dividends, subject to any preferential or other rights of the holders of any outstanding shares of preferred stock.

 

Liquidation Rights

On the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Class A common stock and Class B-1 common stock are entitled to share equally in all assets of the Company available for distribution 

among the stockholders after payment to all creditors and subject to any preferential or other rights of the holders of any outstanding shares of preferred stock.

Participation Rights

Under the Charter, the holders of common stock have no participation rights. However, the Second Amended and Restated Stockholders Agreement, dated December 16, 2017 (as amended, the “Stockholders Agreement”) provides that if the Company proposes to issue any securities, other than in certain issuances, the Company’s parent entity will have the right to purchase its pro rata share of such securities, based on the number of shares of common stock owned thereby before such issuance. 

Charter and Bylaw Amendments

The affirmative vote of the holders of a majority of the voting power of the issued and outstanding shares of capital stock of the Company entitled to vote is required to amend the Charter. The Bylaws provide that, without the approval of the Board of Directors, stockholders may only amend, alter or repeal the Bylaws by an affirmative vote of the holders of a majority in voting power of the issued and outstanding shares entitled to vote; provided, however, any amendment to or repeal of the Bylaws sections regarding annual meetings, special meetings, voting, notice of stockholder proposals, number of directors, term of directors, qualifications of directors, notice of nominations for directors, removal of directors, vacancies and newly created directorships, dividends, and legal relationship between the Bylaws and the Charter requires an affirmative vote of the holders of not less than two-thirds of the voting power of the issued and outstanding shares entitled to vote at a duly called and convened annual or special meeting of stockholders. Further, the Bylaws and the Charter also provide that, subject to the Stockholders Agreement, the Board of Directors may, in its discretion, make, alter, amend or repeal the Bylaws by the affirmative vote of not less than a majority of the Board or by unanimous written consent, except as such power may be restricted or limited by the DGCL.

Blank Check Preferred Stock

Under the Charter, the Board of Directors has the authority to issue preferred stock in one or more series, and to fix for each series the voting powers and the distinctive designations, preferences and relative, participation, optional or other special rights and such qualifications, limitations or restrictions, as may be stated and expressed in the resolution or resolutions adopted by the Board providing for the issuance of such series as may be permitted by the DGCL, including dividend rates, conversion rights, terms of redemption and liquidation preferences and the number of shares constituting each such series, without any further vote or action by the Company’s stockholders.

Exclusive Forum

The Charter requires, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on the Company’s behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors or officers to the Company or its stockholders, (iii) any action asserting a claim against the Company arising pursuant to any provision of the DGCL, the Charter, or the Bylaws or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware. 

Other Anti-Takeover Effects of Provisions of the Charter, the Bylaws, and the DGCL

The Charter, the Bylaws and the DGCL contain provisions that, in addition to being applicable in other contexts, could delay or discourage some transactions involving an actual or potential change in control of the Company or its management. For example, under Section 203 of the DGCL a stockholder holding 15% or more of our outstanding voting stock could not acquire us without consent of our Board of Directors for at least three years after the date the stockholder first held 15% or more of the voting stock. Our governing corporate documents also, among other things, do not allow stockholders to call special meetings and require stockholders who wish to bring business before an annual meeting or nominate directors to comply certain advanced notice and duration of ownership requirements. The Bylaws also require a supermajority vote to amend certain provisions thereof.  In addition, our Board of Directors could, without stockholder approval, implement other anti-takeover defenses, such as a stockholder rights plan.

 

 

 

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Exhibit 10.12

Amneal Pharmaceuticals, Inc.

Non-Employee Director Compensation Policy

As amended and restated on December 14, 2019

Non-employee members of the board of directors (the “Board”) of Amneal Pharmaceuticals, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (this “Policy”).  The cash and equity compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”) who may be eligible to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company.  This Policy shall become effective as of the date set forth above and shall remain in effect until it is revised or rescinded by further action of the Board. This Policy may be amended, modified or terminated by the Board at any time in its sole discretion.  The terms and conditions of this Policy shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors and between any subsidiary of the Company and any of its non-employee directors.  No Non-Employee Director shall have any rights hereunder, except with respect to equity awards granted pursuant to this Policy.  

1.Cash Compensation.

(a)Annual Retainers.  Each Non-Employee Director shall receive an annual retainer of $75,000 for service on the Board.  

(b)Additional Annual Retainers.  In addition, a Non-Employee Director shall receive the following annual retainers:

(i)Audit Committee.   A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer of $25,000 for such service.  A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer of $15,000 for such service.

(ii)Compensation Committee.  A Non-Employee Director serving as Chairperson of the Compensation Committee shall receive an additional annual retainer of $20,000 for such service.  A Non-Employee Director serving as a member of the Compensation Committee (other than the Chairperson) shall receive an additional annual retainer of $10,000 for such service.

(iii) Nominating and Corporate Governance Committee.   A Non-Employee Director serving as Chairperson of the Nominating and Corporate Governance Committee shall receive an additional annual retainer of $15,000 for such service.  A Non-

 

Employee Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

(iv)Conflicts Committee.  A Non-Employee Director serving as Chairperson of the Conflicts Committee shall receive an additional annual retainer of $15,000 for such service. A Non-Employee Director serving as a member of the Conflicts Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

(c)Payment of Retainers.  The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter.  In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Section 1(b), for an entire calendar quarter, such Non-Employee Director shall receive a prorated portion of the retainer(s) otherwise payable to such Non-Employee Director for such calendar quarter pursuant to Section 1(b), with such prorated portion determined by multiplying such otherwise payable retainer(s) by a fraction, the numerator of which is the number of days during which the Non-Employee Director serves as a Non-Employee Director or in the applicable positions described in Section 1(b) during the applicable calendar quarter and the denominator of which is the number of days in the applicable calendar quarter.

2.Equity Compensation.  Non-Employee Directors shall be granted the equity awards described below.  The awards described below shall be granted under and shall be subject to the terms and provisions of the Company’s 2018 Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (such plan, as may be amended from time to time, the “Equity Plan”) and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the forms previously approved by the Board.  All applicable terms of the Equity Plan apply to this Policy as if fully set forth herein, and all equity grants hereunder are subject in all respects to the terms of the Equity Plan.  

(a)Annual Awards.  Each Non-Employee Director who (i) serves on the Board as of the date of any annual meeting of the Company’s stockholders (an “Annual Meeting”) and (ii) will continue to serve as a Non-Employee Director immediately following such Annual Meeting shall be automatically granted, on the date of such Annual Meeting, (1) an option to purchase the number of shares of the Company’s common stock (at a per-share exercise price equal to the closing price per share of the Company’s common stock on the date of such Annual Meeting (or on the last preceding trading day if the date of the Annual Meeting is not a trading day)) having an aggregate fair value on the date of the Annual Meeting of $184,250 (as determined in accordance with FASB Accounting Codification Topic 718 (“ASC 718”) and subject to adjustment as provided in the Equity Plan) and (2) an award of restricted stock units having an aggregate fair value on the date of the Annual Meeting of $90,750 (as determined in accordance with ASC 718 and subject to adjustment as provided in the Equity Plan).  The awards described in this Section 2(a) shall be referred to as the “Annual Awards.”  For the avoidance of doubt, a Non-Employee Director elected for the first time to the Board at an Annual Meeting shall receive only an Annual Award in connection with such election, and shall not receive any Initial Award on the date of such Annual Meeting as well.

 

(b)Initial Awards.  Except as otherwise determined by the Board, each Non-Employee Director who is initially elected or appointed to the Board, on any date other than the date of an Annual Meeting, shall be automatically granted, on the date of such Non-Employee Director’s initial election or appointment (such Non-Employee Director’s “Start Date”), (1) an option to purchase the number of shares of the Company’s common stock (at a per-share exercise price equal to the closing price per share of the Company’s common stock on such date (or on the last preceding trading day if such date is not a trading day)) having an aggregate fair value on such Non-Employee Director’s Start Date equal to $184,250 multiplied by the Applicable Percentage (as defined below) (as determined in accordance with ASC 718 and subject to adjustment as provided in the Equity Plan) and (2) an award of restricted stock units having an aggregate fair value on such Non-Employee Director’s Start Date equal to $90,750 multiplied by the Applicable Percentage (as determined in accordance with ASC 718 and subject to adjustment as provided in the Equity Plan).  The awards described in this Section 2(b) shall be referred to as “Initial Awards.”  For the avoidance of doubt, no Non-Employee Director shall be granted more than one Initial Award.  "Applicable Percentage" shall mean a fraction, the numerator of which is the number of days from the Start Date until the first anniversary of the Company's most recently held Annual Meeting and the denominator of which is the number of days in the applicable calendar year.

(c)Termination of Employment of Employee Directors.  Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Award pursuant to Section 2(b) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from service with the Company and any parent or subsidiary of the Company, Annual Awards as described in Section 2(a) above.

(d)Vesting of Awards Granted to Non-Employee Directors.  Each Annual Award and Initial Award shall vest (and, in the case of options, become exercisable) on the later of (x) the day immediately preceding the date of the first Annual Meeting following the date of grant and (y) the day immediately following the first anniversary of the date of grant, subject to the Non-Employee Director continuing in service through the applicable vesting date.  No portion of an Annual Award or Initial Award that is unvested or unexercisable at the time of a Non-Employee Director’s Termination of Service (as defined in the Equity Plan) shall become vested and exercisable thereafter.

 

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