Document:

advm-ex43_598.htm

Exhibit 4.3

ADVERUM BIOTECHNOLOGIES, INC.

DESCRIPTION OF CAPITAL STOCK 

Our authorized capital stock consists of 300,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of preferred stock, $0.0001 par value per share. A description of material terms and provisions of our certificate of incorporation and bylaws affecting the rights of holders of our common stock is set forth below. The description is intended as a summary, and is qualified in its entirety by reference to our certificate of incorporation and the bylaws. 

Common Stock 

Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. In the election of directors, a plurality of the votes cast at a meeting of stockholders is sufficient to elect a director. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect all of the directors. In all other matters, except as noted below under “—Amendment of our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws” and “—Election and Removal of Directors” and except where a higher threshold is required by law, a majority of the votes cast affirmatively or negatively (excluding abstentions and broker non-votes) will decide such matters. 

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. 

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock. 

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

Anti-takeover Effects of Provisions of our Certificate of Incorporation and Bylaws and Delaware Law 

Delaware law and our restated certificate of incorporation and our amended and restated bylaws contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. 

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Undesignated Preferred Stock 

The ability to authorize 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 control of us. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of our company. 

Stockholder Meetings 

Our charter documents provide that a special meeting of stockholders may be called only by the secretary of our company at the direction of the board of directors. 

Requirements for Advance Notification of Stockholder Nominations and Proposals 

Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors. 

Elimination of Stockholder Action by Written Consent 

Our amended and restated certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting. 

Election and Removal of Directors 

Our board of directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected each year by our stockholders. This system of electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors. Our charter documents provide that directors may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our voting stock entitled to vote at an election of directors or (ii) without cause by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then outstanding shares of our voting stock entitled to vote at an election of directors. 

Delaware Anti-Takeover Statute 

We are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in a business combination with any interested stockholder for a period of three years following the date the person became an interested stockholder, with the following exceptions: 

					
	
 
	
•
	
 
	
before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested holder; 

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•
	
 
	
upon completion of the transaction that resulted in the 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 began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (a) by persons who are directors and also officers and (b) pursuant to 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; and 

	
 
	
•
	
 
	
on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. 

In general, Section 203 of the DGCL defines business combination to include the following: 

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

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

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

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

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

Section 203 of the DGCL defines an “interested stockholder” as an entity or person who, together with the entity’s or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. A Delaware corporation may “opt out” of these provisions with an express provision in its certificate of incorporation. We have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of control attempts of us. 

Amendment of our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws 

The amendment of any of the above provisions in our amended and restated certificate of incorporation, except for the provision making it possible for our board of directors to issue preferred stock, or the amendment of any provision in our amended and restated bylaws (other than by action of the board of directors), would require approval by holders of at least 66 2/3% 

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of our then outstanding voting stock 

The provisions of the Delaware General Corporation Law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests. 

Delaware as Sole and Exclusive Forum 

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Adverum, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Adverum to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. This provision does not apply to actions arising under the Securities Act or the Exchange Act, or any claim for which the federal courts have exclusive jurisdiction.

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Exhibit 10.36

Adverum Biotechnologies, Inc.

Non-Employee Director Compensation Policy

Adopted by the Board:  December 13, 2019

Each member of the board of directors (the “Board”) of Adverum Biotechnologies, Inc. (the “Company”) who is a Non-Employee Director (as defined in the Adverum Biotechnologies, Inc. 2014 Equity Incentive Award Plan (the “Plan”)) will be eligible to receive cash and equity compensation as set forth in this Adverum Biotechnologies, Inc. Non-Employee Director Compensation Policy (this “Policy”). The cash and equity compensation described in this Policy will be paid or granted, as applicable, automatically and without further action of the Board to each Non-Employee Director who is 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 prior to the time period for which compensation is paid. This Policy, as adopted on December 13, 2019, will become effective immediately and will remain in effect until it is revised or rescinded by further action of the Board or the Compensation Committee of the Board. Capitalized terms not explicitly defined in this Policy but defined in the Plan will have the same definitions as in the Plan.

1. Cash Compensation.

(a)Annual Retainers.  Each Non-Employee Director will be eligible to receive the following annual retainers for service as (i) a member and/or chair of the Board and (ii) a member or chair/co-chair of a committee of the Board (“Committee”) set forth below, as applicable.

	
Board or Committee
	
Type of Retainer*
	
Amount (Per Year)

	
Board
	
Chair
	
$35,000

	
Member
	
$40,000

	
Audit Committee
	
Chair
	
$20,000

	
Member (Non-Chair)
	
$10,000

	
Compensation Committee
	
Chair
	
$15,000

	
Member (Non-Chair)
	
$7,500

	
Nominating and Corporate Governance Committee
	
Chair
	
$10,000

	
Member (Non-Chair)
	
$5,000

	
Research and Development Committee
	
Chair/Co-Chair
	
$15,000

	
Member (Non-Chair/Co-Chair)
	
$7,500

	
*
	
The chair of the Board is eligible to receive a retainer for service as the chair and an additional retainer for service as a member of the Board.  The chair/co-chair of each Committee is eligible to receive a retainer for service as the chair/co-chair, but not an additional retainer for service as a member of the Committee.

The annual retainers will be paid on the last day of the quarter and partial service for that quarter will receive pro rata treatment. 

 (b)Expenses.  Each Non-Employee Director will be eligible for reimbursement from the Company for all reasonable out-of-pocket expenses incurred by the Non-Employee Director in connection with his or her attendance at Board and Committee meetings.

 

 

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To the extent that any taxable reimbursements are provided to a Non-Employee Director, they will be provided in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance thereunder and any state law of similar effect, including, but not limited to, the following provisions: (i) the amount of any such expenses eligible for reimbursement during the Non-Employee Director’s taxable year may not affect the expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense must be made no later than the last day of the Non-Employee Director’s taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any reimbursement may not be subject to liquidation or exchange for another benefit.

2. Equity Compensation.  The options described in this Policy will be granted under the Plan and will be subject to the terms and conditions of (i) this Policy, (ii) the Plan and (iii) the form of Option Agreement approved by the Board for the grant of options to Non-Employee Directors under the Plan.

(a) Initial Grants.  Each person who first becomes a Non-Employee Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy, automatically will be granted a Nonstatutory Stock Option to purchase 70,000 shares of Common Stock (an “Initial Option”) on the date of his or her initial election or appointment to be a Non-Employee Director.  

(b) Annual Grants.  On the date of each annual meeting of the Company’s stockholders:  (i) each person who is then a Non-Employee Director and will be continuing as a Non-Employee Director following the date of such annual meeting (other than any Non-Employee Director receiving an Initial Option on the date of such annual meeting) automatically will be granted a Nonstatutory Stock Option to purchase 45,000 shares of Common Stock; and (ii) the Chair of the Board automatically will be granted an additional Nonstatutory Stock Option to purchase 10,000 shares of Common Stock.  Each of the options granted pursuant to (i) and (ii), is referred to as an “Annual Option”.  The foregoing notwithstanding, the first Annual Option to be granted pursuant to (ii) above (the “First Chair Grant”) shall be granted on January 1, 2020, and shall be for 15,000 shares rather than 10,000 shares, and no grant pursuant to (ii) above shall be made at the 2020 annual meeting of the Company’s stockholders.

(c) Terms of Options.

(i)Exercise Price.  The exercise price of each Initial Option and Annual Option will be equal to 100% of the Fair Market Value of the Common Stock subject to such option (as determined in accordance with the Plan) on the date such option is granted.

(ii) Vesting.  Each Initial Option and Annual Option will vest and become exercisable as follows: 

(A) Each Initial Option will vest and become exercisable in equal annual installments on each of the first three anniversaries of the date of grant of such option, provided that the Non-Employee Director has not had a Termination of Service prior to each such date; provided, however, that the vesting shall accelerate, and the Initial Option shall become fully vested and exercisable, upon the consummation of a Change in Control.

(B)Each Annual Option will vest and become exercisable on the earlier of (i) the date of the next annual meeting of the Company’s stockholders (the 2021 annual meeting of the Company’s stockholders in the case of the First Chair Grant), or (ii) the first anniversary of the date of grant of such option (18 months following the grant date in the case of the First Chair Grant), provided that the Non-Employee Director has not had a Termination of Service prior to such date; provided, however, that 

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the vesting shall accelerate, and each Annual Option shall become fully vested and exercisable, upon the consummation of a Change in Control.  

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