Document:

Exhibit 10.19

    

     

        

    
      	
              KALTURA, INC.

               

              2021 INCENTIVE AWARD PLAN

            

    

    
      

      

      RESTRICTED STOCK UNIT GRANT NOTICE

       

      (For Israeli Participants – 102 Awards)

       

      Capitalized terms not specifically defined in this Restricted Stock Unit Grant Notice (the “Grant Notice”) have the meanings given to them in the 2021 Incentive Award Plan and the Israeli Sub-Plan (as amended from time to time, together is the “Plan”) of Kaltura, Inc. (the “Company”).

       

      The Company hereby grants to the Israeli Participant listed below (“Participant”) the Restricted Stock Units described in this Grant Notice (the “RSUs”), subject to the terms
        and conditions of the Plan, the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), each of which are incorporated into this Grant Notice by reference.

       

      	
              Participant:

            	 
	
              Participant I.D

            	 
	
              Grant Date:

            	 
	
              Number of RSUs:

            	 
	
              Vesting Commencement Date:

            	 
	
              Vesting Schedule:

            	
              Subject to Participant’s continued employment with, or services to, the Company or any of its parents or Subsidiaries on the
                relevant “Vesting Date” set forth below, the Award shall vest with respect to the number of Restricted Stock Units listed in Column “A” on the corresponding Vesting Date listed in Column “B.”

            

      

      

      
        	 	
                Column “A”

                 

                Number of RSUs

              	
                Column “B”

                 

                Vesting Date

              
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

      

      

      

      	
              Tax Track:

            	
              Trustee 102 Awards - Capital Gains Track

            

      

      

      
        
          

      

      By Participant’s signature below or electronic acceptance or authentication in a form authorized by the Company,
        Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to
        executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. By Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon
        any questions arising under the Plan, the Grant Notice and the Agreement.

       

      	
              KALTURA, INC.

            	 	
              PARTICIPANT

               

              

            	 
	
              By:

            	 	 	
              By:

            	 	 
	
              Print Name:

            	 	 	
              Print Name:

            	 	 
	
              Title:

            	 	 	 	 	 

      

      

      
        
          

      

       

      Exhibit A

      TO RESTRICTED STOCK UNIT GRANT NOTICE

       

      RESTRICTED STOCK UNIT AWARD AGREEMENT

       

      (For Israeli Participants – 102 Awards)

       

      Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number
        of RSUs set forth in the Grant Notice.

       

      ARTICLE I.

      

        GENERAL

       

      

      Section 1.1          Defined Terms.  Capitalized terms not
          specifically defined herein shall have the meanings specified in the Plan or the Grant Notice. For purposes of this Agreement,

       

      (a)          [“Cause” shall mean, unless such term or an equivalent term is otherwise defined by any employment agreement or offer letter between a Participant and a
          Participating Company, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s
          material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use,
          misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s
          confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business or which brings the Participant into widespread public disrepute;
          (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the
          Participant of any employment or service agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s commission or conviction (including any plea of
          guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company. For purposes of this
          Agreement, whether or not an event giving rise to “Cause” occurs will be determined by the Board in its sole discretion.]1

       

      (b)          [“CIC Qualifying Termination” shall mean Termination of Service of Participant by any Participating Company without Cause or by Participant for Good Reason
          during the twelve (12) month period immediately following a Change in Control.]2

       

      
        
 

      
        1 NTD: To be added in awards that provide for “double trigger” vesting.

        

        

        2 NTD: To be added in awards that provide for “double trigger” vesting.

        

        

      

      
        
          

      

      (c)          [“Good Reason” shall mean, unless such term or an equivalent term is
          otherwise defined by any employment agreement or offer letter between a Participant and a Participating Company, the occurrence of any of the following without the Participant’s voluntary written consent: (i) a material breach by the Company of
          any material provision of this Agreement; (ii) a reduction resulting in the value of the Participant’s salary and/or the monetary value of Participant’s benefits, of more than 12.5%, unless such reductions are made in the same proportion as part
          of across-the-board salary reductions for substantially all other employees with a similar level; (iii) the Company’s relocation of the Company office to which the Participant primarily reports (the “Office”) to a location that increases the distance from the Participant’s principal residence to the Office by more than fifty (50) miles; or (iv) a substantial diminution in the nature or status
          of Participant’s responsibilities, duties, titles or reporting level (unless otherwise agreed to by Participant’s), provided, however, that notwithstanding the foregoing, for purposes of this subsection (iv), a substantial diminution in such
          nature or status shall not exist in the event that due to a Change in Control the Participant has authority and responsibility over a division, subsidiary or entity that is substantially similar in size to the division, subsidiary or entity over
          which the Participant had authority and responsibility immediately prior to such Change in Control; provided, in each case, that the Participant first provided notice to the applicable Participating Company of the existence of the condition
          described above within fifteen (15) days of the initial existence of the condition, upon the notice of which such Participating Company shall have thirty (30) days during which it may remedy the condition, and provided further that the separation
          of service must occur within fifteen (15) days following the end of such 30-day cure period.]3

       

      (d)          “Participating Company” shall mean the Company or any of its Affiliates.

       

      Section 1.2          Incorporation of Terms of Plan.  The RSUs and the shares of
            Common Stock issued to Participant hereunder (“Shares”) are subject
            to the terms and conditions set forth in this Agreement, and the Plan which is incorporated herein by reference. In the event of any inconsistency between the
            Plan and this Agreement, the terms of the Plan shall control.

       

      ARTICLE II.

      

        AWARD OF RESTRICTED STOCK UNITS

       

          

      Section 2.1          Award of RSUs

       

      (a)          In
          consideration of Participant’s past and/or continued employment with or service to a Participating Company and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and
          this Agreement, subject to adjustment as provided in Article VIII of the Plan. Each RSU represents the right to receive one Share at the times and subject to the conditions set forth herein.  However, unless and until the RSUs have vested,
          Participant will have no right to the payment of any Shares subject thereto.  Prior to the actual delivery of any Shares, the RSUs will represent an unsecured obligation of the Company, payable only from the general assets of the Company.

       

      Section 2.2          Vesting of RSUs

       

      (a)          Subject
          to Participant’s continued employment with or service to a Participating Company on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest in such amounts and at such times as are set forth in the Grant
          Notice.

       

      (b)           In
          the event Participant incurs a Termination of Service, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediately forfeit any and all RSUs
          granted under this Agreement that have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs that are not so vested shall lapse and expire.

       

      
        
 

      
        3 NTD: To be added in awards that provide for “double trigger” vesting.

        

        

      

      
        
          

      

      (c)          [Notwithstanding
          the Grant Notice or the provisions of Section 2.2(a) and Section 2.2(b),
          in the event of a CIC Qualifying Termination, the RSUs shall become vested in full on the date of such CIC Qualifying Termination.]4

       

      Section 2.3          

       

      (a)          Distribution or Payment of RSUs.  Participant’s RSUs shall be distributed in Shares (either in book-entry form or otherwise) within 60 days following the
          vesting of the applicable RSU pursuant to Section 2.2, and, in any event, no later than March 15th of the calendar year following the year in
          which such vesting occurred (for the avoidance of doubt, this deadline is intended to comply with the “short-term deferral” exemption from Section 409A).  Notwithstanding the foregoing, the Company may delay a distribution or payment in
          settlement of RSUs if it reasonably determines that such payment or distribution will violate federal securities laws or any other Applicable Law, provided
          that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section
          1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.3(a) if such delay will result in a violation of Section 409A.

       

      (b)          All
          distributions shall be made by the Company in the form of whole Shares.

       

      Section 2.4          Conditions to Issuance of Certificates.  The Company shall not be required to issue or deliver any certificate or certificates for any
          Shares or to cause any Shares to be held in book-entry form prior to the fulfillment of all of the following conditions:  (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (b) the completion
          of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its
          absolute discretion, deem necessary or advisable, (c) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable,
          and (d) the receipt of full payment of any applicable withholding tax in accordance with Section 2.5 by the Participating Company with respect to which
          the applicable withholding obligation arises.

       

      Section 2.5          Tax Withholding.  Notwithstanding any other provision of this Agreement:

       

      (a)          The
          Participating Companies or the Trustee shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Participating Companies, an amount sufficient to satisfy all applicable federal, state and local
          taxes required by law to be withheld with respect to any taxable event arising in connection with the RSUs. With respect to RSUs which are 102 Awards )other than Trustee 102 Awards( the Participating Companies may withhold or the Participant may
          make such payment of the tax required to be withheld to the Participating Company by cash or check made or any other reasonable method determined by the Participating Company;

       

      
        
 

      
        4 NTD: To be added in awards that provide for “double trigger” vesting.

      

      
        
          

      

      (b)          The
          Participants undertake to indemnify the Participating Companies and/or the Trustee, immediately upon their request, for any Tax for which the Participant is liable under any Applicable law, under the Plan and/or under this Agreement, and which
          was paid by the Participating Companies or the Trustee, or which the Participating Companies or the Trustee are required to pay. The Participating Companies may exercise their right to such indemnification by deducting the tax subject to
          indemnification from Participant’s salary or remuneration.

       

      (c)          With
          respect to any withholding taxes arising in connection with the RSUs, in the event Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a),
          the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.5(a). The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to, or to cause any such Shares to be held in
          book-entry form by, Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable
          with respect to the taxable income of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs.

       

      (d)          Participant
          is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any other Participating Company takes with respect to any tax withholding obligations that arise in connection with the
          RSUs. No Participating Company makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Participating Companies do
          not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

       

      Section 2.6          Section 102.

       

      (a)          By
          signing this Agreement the Participant hereby confirms that he/she has been notified that the receipt of the 102 Awards and specifically Trustee 102 Awards, and the disposition of 102  Awards and specifically Trustee 102 Awards and/or 102 Shares
          (including the RSUs) may result in tax consequences to the Participant and that he/she has been advised by the Company to consult a tax adviser with respect to the tax consequences of receiving any102  Awards and specifically Trustee 102 Awards,
          their vesting or disposing of any102  Awards and specifically Trustee 102 Awards/102 Shares (including the RSUs);

       

      (b)          With
          respect to Trustee 102 Awards granted pursuant hereto, the Participant declares and acknowledges that: (i) the Participant fully understands that the provision of Section 102 apply to the RSUs granted under this Agreement; (ii) the Participant
          understands the provisions of Section 102, the tax track chosen and the implications thereof; (iii) the Participant shall comply with the requirements of Section 102; and that he/she has read the provisions of the Plan , a copy of which is
          attached hereto as Appendix A and the trust agreement signed between the Participating Companies and the Trustee (the “Trust Agreement”), a copy of which
          is attached hereto as Appendix B and that he/she accepts and agrees, to be bound by, and comply with the provisions of the Plan and the Trust Agreement..

       

      (c)          The
          Participant further agrees with respect to Trustee 102 Awards and undertakes NOT to release (or instruct to release) from trust, nor sell, transfer, assign, pledge, encumber or otherwise willfully hypothecated or disposed of, any of 102 Shares
          until the full payment of all tax liabilities arising from the 102 Shares.

       

      
        
          

      

      (d)          Without
          derogating from the foregoing, the Participant is aware that if any such sale or release does occur during the Holding Period applicable to such Trustee 102 Awards (which shall be referred to as a “Violation”), the sanctions under Section 102,
          and taxes otherwise associated with such Violation (including, for the avoidance of doubt, payments on account of national insurance and health tax), shall apply to the Participant and shall be borne solely by the Participant. The Participant
          will indemnify the Participating Company and/or the Trustee and any other party which incurs any liability as a result of such Violation.

       

      Section 2.7          Rights as Stockholder.  Neither Participant nor any Person claiming under or through Participant will have any of the rights or privileges
          of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in
          book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic delivery to a brokerage account).  Except as otherwise provided
          herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such
          Shares.

       

      Section 2.8          Restrictive Covenants; Forfeiture.  The Participant hereby acknowledges and agrees that any restrictive covenants or similar written
          agreements (the “Restrictive Covenant Agreements”) between such Participant and the Company or any other Participating Company are incorporated herein by
          reference, and that such agreements, as applicable, remain in full force and effect. In the event the Participant materially breaches the Restrictive Covenant Agreements or any other written covenants between such Participant and any
          Participating Company, the Participant shall immediately forfeit any and all RSUs granted under this Agreement (whether or not vested), and Participant’s rights in any such RSUs shall lapse and expire.

       

      ARTICLE III.

       

      

      OTHER PROVISIONS

       

      

      Section 3.1          Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules
          for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations
          made by the Administrator will be final and binding upon Participant, the Company and all other interested Persons.  To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any
          action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

       

      Section 3.2          RSUs Not Transferable.  The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent
          and distribution, unless and until the Shares underlying the RSUs have been issued, and all restrictions applicable to such Shares have lapsed and all the required taxes have been paid.  No RSUs or any interest or right therein or part thereof
          shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
          disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no
          effect, except to the extent that such disposition is permitted by the preceding sentence.  Notwithstanding the foregoing, with the consent of the Administrator, the RSUs may be transferred to Permitted Transferees, pursuant to any such
          conditions and procedures the Administrator may require.

       

      
        
          

      

      Section 3.3          Adjustments.  The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole
          discretion, may determine.  Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Article VIII of
          the Plan.

       

      Section 3.4          Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary
          of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 3.4, either party may hereafter designate a different address for notices to be given to that party.  Any notice shall be deemed duly given when sent
          via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service or similar foreign entity.

       

      Section 3.5          Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this
          Agreement.

       

      Section 3.6          Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the
          extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state
          securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law.  To the extent permitted by Applicable Law, the
          Plan, the Grant Notice and this Agreement, shall be deemed amended to the extent necessary to conform to Applicable Law.

       

      Section 3.7          Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise
          modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise
          be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

       

      Section 3.8          Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement
          shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in Section 3.2 and the Plan,
          this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

       

      Section 3.9          Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject
          to Section 16 of the Exchange Act, the Plan, the RSUs, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
          Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive
          rule.

       

      
        
          

      

      Section 3.10          Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an
          employee or other service provider of any Participating Company or shall interfere with or restrict in any way the rights of any Participating Company, which rights are hereby expressly reserved, to discharge or terminate the services of
          Participant at any time for any reason whatsoever, with or without cause, except to the extent (i) expressly provided otherwise in a written agreement between a Participating Company and Participant or (ii) where such provisions are not
          consistent with applicable foreign or local laws, in which case such applicable foreign or local laws shall control.

       

      Section 3.11          Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the
          parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

       

      Section 3.12          Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision
          will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

       

      Section 3.13          Section 409A.  This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A.  However,
          notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in
          its sole discretion (without any obligation to do so or to indemnify Participant or any other Person for failure to do so) to adopt such amendments to the
          Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for
          this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

       

      Section 3.14          Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement
          creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only
          the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs.

       

      Section 3.15          Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to
          Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

       

      Section 3.15          Reservation of rights. The Company reserves the right to impose other requirements on this Agreement, the RSUs and the Shares issued upon
          settlement of the RSUs, to the extent the Company determines it is necessary or advisable in order to comply with applicable foreign or local laws or facilitate the administration of the Plan, and to require the Participant to sign any additional
          agreements or undertakings that may be necessary to accomplish the foregoing.

       

      
        
          

      

      

      Appendix A

      The Plan (including the Israeli Sub Plan)

      

      

      
        
          

      

       

      Appendix B

      Trust AgreementEX-4.18

  Exhibit 4.18

  DESCRIPTION OF SECURITIES

  REGISTERED UNDER SECTION 12 OF THE

  SECURITIES EXCHANGE ACT OF 1934

    

  The following description summarizes the material provisions of our common stock registered pursuant to Section 12 of the Securities Exchange Act of 1934.  This description is not complete and is subject to, and is qualified in its entirety by reference to our charter and our bylaws and applicable provisions of the Maryland General Corporation Law (“MGCL”).

  AUTHORIZED CAPITAL STOCK 

   

  General 

   

  Our capital stock consists of: 

  •200 million authorized shares of common stock, par value $0.01 per share, of which 83,565,710 were outstanding on December 31, 2021; and

  •10 million authorized shares of preferred stock, par value $0.01 per share, including the following series designated by our board of directors as of December 31, 2021:

  •250,000 shares of Series A Preferred Stock, none of which were outstanding on December 31, 2021.

   

  COMMON STOCK

   

  General 

   

  Subject to the preferential rights of any other shares or series of stock, holders of shares of common stock are entitled to receive dividends on those shares if, as and when authorized by our board of directors and declared by us out of assets legally available therefor and to share ratably in the assets legally available for distribution to stockholders in the event of our liquidation, dissolution or winding up after payment of, or adequate provision for, all of our known debts and liabilities. 

   

  Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of members of our board of directors. Except as otherwise required by law or except as provided with respect to any other class or series of stock, the holders of shares of our common stock possess the exclusive voting power. There is no cumulative voting in the election of members of our board of directors, which means that the holders of a majority of the shares of our outstanding common stock can elect all of the members of our board of directors then standing for election, and the holders of the remaining shares of our common stock will not be able to elect any members of our board of directors. 

   

  Holders of shares of our common stock have no conversion, sinking fund or redemption rights, or preemptive rights to subscribe for any of our securities. 

   

  We furnish stockholders with annual reports containing audited consolidated financial statements and an opinion thereon expressed by an independent registered public accounting firm and quarterly reports for the first three quarters of each fiscal year containing unaudited financial information. 

   

  All shares of our common stock have equal dividend, distribution, liquidation and other rights, and will have no preference, or exchange rights and generally have no appraisal rights. 

   

  Pursuant to the MGCL a corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business unless the action is advised by its board of directors approved by the affirmative vote of holders of at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage, but not less than a 

  - 1 -

  

  majority of all of the votes entitled to be cast on the matter, is set forth in the corporation’s charter. Our charter does not provide for a lesser percentage in those situations. 

   

  The transfer agent and registrar for our common stock is American Stock Transfer and Trust Company. 

   

  PREFERRED STOCK 

   

  We are authorized to issue up to 10,000,000 shares of preferred stock, 9,750,000 of which are currently unclassified. We may issue shares of preferred stock from time-to-time, in one or more series, as authorized by our board of directors. Prior to issuance of shares of each series, the board of directors is required by the MGCL and our charter to fix for each series, as permitted by Maryland law, the 

  •Preferences,

  •Conversion or other rights,

  •Voting powers,

  •Restrictions,

  •Limitations as to dividends or other distributions,

  •Qualifications, and

  •Terms or conditions of redemption.

    

  RESTRICTIONS ON TRANSFER/OWNERSHIP LIMITS

    

  For us to qualify as a Real Estate Investment Trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), not more than 50% in value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals, which is defined in the Code to include some entities, during the last half of a taxable year. We refer to this requirement as the “five or fewer test.” Also, our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. Our charter contains restrictions on the ownership and transfer of shares of our stock intended, among other purposes, to ensure compliance with these requirements. Subject to exceptions described below, no holder may own, or be deemed to own by virtue of the attribution provisions of the Code, shares of our stock in excess of 9.8% of the aggregate value of our outstanding stock. We refer to this limit as the “ownership limit.” Under the Code, some entities will be disregarded for purposes of the five or fewer test, and the beneficial owners of those entities will be counted as holders of our stock. Those entities include pension trusts qualifying under Section 401(a) of the Code, United States investment companies registered under the Investment Company Act of 1940, corporations, trusts and partnerships. Our charter limits these entities to holdings of no more than 15% of the aggregate value of our shares of stock. We refer to this limit as the “look-through ownership limit.” Any transfer of shares of our stock or any security convertible into shares of our stock that would create a direct or indirect ownership of shares of our stock in excess of the ownership limit or the look-through ownership limit or that would result in our disqualification as a REIT, including any transfer that results in the shares of stock being owned by fewer than 100 persons or results in us being “closely held” within the meaning of Section 856(h) of the Code, is deemed to be null and void, and the intended transferee will acquire no rights to the shares of our stock. These restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests to continue to qualify as a REIT. Our board of directors may, in its sole discretion, exempt a person from the ownership limit or the look-through ownership limit if the board receives such representations and undertakings that are reasonably necessary to ascertain that no individual’s ownership of our outstanding stock will violate the ownership limit or look through ownership limit and such person agrees that any violation or attempted violation will result in such shares being designated as shares in trust, as described below. Prior to granting any exceptions, board of directors may require an opinion of counsel or IRS ruling satisfactory to our board of directors as the board may deem necessary or advisable to determine or ensure our status as a REIT and may impose such other conditions or restrictions as the board deems appropriate. Waivers have been granted to the former holders of our Series C preferred stock, FMR Corporation, Cohen & Steers, Inc. and Invesco Advisers, Inc. 

   

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  Stock owned, or deemed to be owned, or transferred to a shareholder in excess of the ownership limit or the look-through ownership limit or that causes us to be treated as “closely-held” under Section 856(h) of the Code or is otherwise not permitted as provided above, will be designated shares in trust. Shares in trust will be transferred, by operation of law, to a person unaffiliated with us that is designated by our board of directors as trustee of a trust for the benefit of one or more charitable organizations. We refer to this trust as the “share trust.” While shares in trust are held in the share trust 

  •The shares in trust will remain issued and outstanding shares of our common or preferred stock and will be entitled to the same rights and privileges as all other shares of the same class or series, 

  •The trustee will receive all dividends and distributions on the shares in trust for the share trust and will hold those dividends or distributions in trust for the benefit of one or more designated charitable beneficiaries, and

  •The trustee will vote all shares in trust.

   

  Any vote cast by the proposed transferee in respect of the shares in trust prior to our discovery that those shares have been transferred to the share trust will, subject to applicable law, be rescinded and void. Any dividend or distribution paid to a proposed transferee or owner of shares in trust prior to our discovery that those shares have been transferred to the share trust will be required to be repaid upon demand to the trustee for the benefit of one or more charitable beneficiaries. 

    

  The trustee may, at any time the shares in trust are held in the share trust, transfer the interest in the share trust representing the shares in trust to any person whose ownership of the shares of stock designated as shares in trust would not cause the shares in trust to be transferred to a share trust and redesignated as shares in trust, and provided that the permitted transferee purchases those shares for valuable consideration. Upon that sale, the proposed original transferee will receive the lesser of 

  •The price paid by the original transferee shareholder for the shares of stock that were transferred to the share trust, or if the original transferee shareholder did not give value for those shares, the average closing price for the five consecutive trading days ending on the date of the transfer causing the shares to be held in trust, and 

  •The price received by the trustee from that sale. 

    

  Any amounts received by the trustee in excess of the amounts paid to the proposed transferee will be distributed to one or more charitable beneficiaries of the share trust. 

   

  If the transfer restrictions are determined to be void or invalid by virtue of any legal decision, statute, rule or regulation, then the intended transferee of shares held in the share trust may be deemed, at our option, to have acted as our agent in acquiring the shares in trust and to hold the shares in trust on our behalf. 

   

  In addition, we have the right, for a period of 90 days during the time any shares of shares in trust are held by the trustee, to purchase all or any portion of the shares in trust from the share trust at the lesser of 

  •The price initially paid for those shares by the original transferee-shareholder, or if the original transferee-shareholder did not give value for those shares, the average closing price for the five consecutive trading days ending on the date of the transfer causing the shares to be held in trust, and 

  •The average closing price of the class of shares of those shares in trust for the five consecutive trading days ending on the date we elect to purchase those shares. 

    

  The 90-day period begins on the date of the violative transfer if the original transferee-shareholder gives notice to us of the transfer or, if no notice is given, the date our board of directors determines that a violative transfer has been made. 

   

  All certificates representing shares of our stock bear a legend referring to the restrictions described above. 

   

  Each person who owns, or is deemed to own, more than 5% of the value or number of shares of our outstanding stock must give written notice to us of the name and address of the owner, the number of shares of 

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  outstanding stock owned and a description of how those shares are held. Also, each shareholder must upon demand disclose to us in writing any information with respect to the direct, indirect and constructive ownership of stock as our board of directors deems necessary to comply with the provisions of the Code applicable to REITs, to comply with the requirements of any taxing authority or governmental agency or to determine such compliance and ensure compliance with the ownership limit. 

   

  The ownership limit, the look-through ownership limit and the other restrictions on ownership and transfer could delay, defer or prevent a transaction or change in control of our company that might involve a premium price for our common stock or otherwise be in the best interest of our shareholders. 

    

   

  CERTAIN PROVISIONS OF MARYLAND LAW AND OF 

  OUR CHARTER AND BYLAWS 

   

  The following description of the terms of our stock and of certain provisions of Maryland law is only a summary. For a complete description, we refer you to the MGCL, our charter, and our Bylaws. 

   

  Removal of Directors

    

  Our charter provides that a director may be removed only for cause (as defined in the charter) and only by the affirmative vote of not less than two-thirds of the votes entitled to be cast in the election of directors. 

   

  Business Combinations 

   

  Under the Maryland Business Combination Act, certain “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as: 

    

  •any person who beneficially owns ten percent or more of the voting power of the corporation’s shares; or 

  •an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the then outstanding voting stock of the corporation. 

    

  A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board. 

   

  After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: 

  •80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

  •two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. 

   

  These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under the Maryland Business Combination Act, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. 

   

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  The Maryland Business Combination Act permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination involving the initial purchasers of our Series C preferred stock and any affiliate or associate of an initial purchaser being the beneficial owner of not more than 12% of the outstanding common stock of the Company at any time issued and outstanding (determined in accordance with the Maryland Business Combination Act), provided that such beneficial ownership is not with a purpose or effect of changing or influencing control of the Company or in connection with or as a participant in any transaction having that purpose or effect which, as a result thereof would require a filing of a Schedule 13D under the Exchange Act. 

   

  Control Share Acquisitions 

   

  Maryland law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by the affirmative vote of holders of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: 

    

  •one-tenth or more but less than one-third;

  •one-third or more but less than a majority; or

  •a majority or more of all voting power. 

   

  Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions. 

   

  A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. 

   

  If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

    

  The control share acquisition statute does not apply: (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction; or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. 

   

  Our Bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. This provision may be amended or eliminated at any time in the future. 

    

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  Amendment to the Charter 

   

  Our charter may be amended only if advised by our board of directors and approved by the affirmative vote of the holders of not less than two-thirds of all of the votes entitled to be cast on the matter. 

   

  Dissolution of the Company 

   

  The dissolution of our Company must be advised by our board of directors and approved by the affirmative vote of the holders of not less than two-thirds of all of the votes entitled to be cast on the matter. 

   

  Advance Notice of Director Nominations and New Business 

   

  Our Bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors and the proposal of business to be considered by stockholders may be made only (i) pursuant to the Company’s notice of meeting, (ii) by or at the direction of the board of directors, or (iii) by a stockholder who was a stockholder of record both at the time of giving of notice by the stockholder as provided for in the Bylaws and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any other such business and who has complied with the advance notice procedures of the Bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting at which directors are to be elected may be brought before the meeting. Nominations of individuals for election to the board of directors at a special meeting at which directors are to be elected may be made only (i) by or at the direction of the board of directors, (ii) by a stockholder that has requested that a special meeting be called for the purpose of electing directors in compliance with the Bylaws and that has supplied the information required by the Bylaws about each individual whom the stockholder proposes to nominate for election as director, or (iii) provided that the special meeting has been called in accordance with the Bylaws for the purpose of electing directors, by any stockholder who is a stockholder of record both at the time of giving of notice provided for in the Bylaws and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice procedures of the Bylaws.

    

  Subtitle 8

    

  Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act of 1934 and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions: 

    

  •a classified board, 

  •a two-thirds vote requirement for removing a director, 

  •a requirement that the number of directors be fixed only by vote of the directors,

  •a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred, and 

  •a provision that a special meeting of stockholders must be called upon stockholder request only on the written request of stockholders entitled to cast a majority of the votes entitled to be cast at the meeting.

    

  Through provisions in our charter and Bylaws unrelated to Subtitle 8, we already (a) require a two-thirds vote for the removal of any director from the board, (b) vest in the board the exclusive power to fix the number of directorships, and (c) require, unless called by our Chairman of the Board, CEO, President or Board of Directors, the request of holders entitled to cast a majority of the votes entitled to be cast at the meeting to call a special meeting. 

    

  Anti-takeover Effect of Certain Provisions of Maryland Law and of our Charter and Bylaws 

   

  The business combination provisions and, if the applicable provision in our Bylaws is rescinded, the control share acquisition provisions of Maryland law, the provisions of our charter regarding removal of directors, the votes required to approve extraordinary actions and the advance notice provisions of our Bylaws could delay, defer or 

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  prevent a transaction or a change in control of Life Storage that might involve a premium price for holders of our common stock or otherwise be in their best interest. 

   

   Listing

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

  - 7 -

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