Undesignated Preferred Stock. Our board of directors has the ability to designate and issue Preferred Stock with voting or other rights or preferences that could deter hostile takeovers or delay changes in our control or management. Our certificate of incorporation provides that our stockholders may not act by written consent. This limit on the ability of stockholders to act by written consent may lengthen the amount of time required to take stockholder actions. As a result, the holders of a majority of our capital stock are not able to amend the amended and restated bylaws or remove directors without holding a meeting of stockholders called in accordance with the amended and restated bylaws. In addition, our certificate of incorporation and amended and restated bylaws provide that special meetings of the stockholders may be called only by our board of directors, the chairperson of our board of directors, our chief executive officer or our president. A stockholder may not call a special meeting, which may delay the ability of our stockholders to force consideration of a proposal or for holders controlling a majority of our capital stock to take any action, including the removal of directors. Our amended and restated bylaws contain 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 our board of directors or a committee of the board of directors. These advance notice procedures may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed and may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempt to obtain control of our company. Our board of directors is divided into three classes. The directors in each class serve for a three-year term, one class being elected each year by our stockholders. This system of electing and removing directors may 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. We are subject to the provisions of Section 203 of the Delaware General Corporation Law (the "DGCL") regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless: • prior to prior to the date of the transaction, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; • 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 commenced, excluding for purposes of determining the voting stock outstanding but n the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tender in a tender or exchange offer; or • at or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting 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. Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, owned 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage attempts that might result in a premium over the market price for the shares of Common Stock held by stockholders. The provisions of Delaware law and the provisions of our certificate of incorporation and amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and as a consequence, they might also inhibit temporary fluctuations in the market price of our Common Stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is also possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. The transfer agent and registrar for our Common Stock is Continental Stock Transfer & Trust Company, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000. Our Common Stock is traded on the Nasdaq Capital Market under the symbol “PHUN.”
Appears in 3 contracts
Samples: At Market Issuance Sales Agreement, At Market Issuance Sales Agreement, At Market Issuance Sales Agreement
Undesignated Preferred Stock. Our board of directors has the ability to designate and issue Preferred Stock with voting or other rights or preferences that could deter hostile takeovers or delay changes in our control or management. Our certificate of incorporation provides for 10,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of our stockholders may not act by written consentstockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. This limit on In this regard, our certificate of incorporation grants our board of directors broad power to establish the ability rights and preferences of stockholders to act by written consent may lengthen authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of time required earnings and assets available for distribution to take stockholder actions. As a result, the holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a majority change in control of our capital stock are not able to amend the us. Our amended and restated bylaws provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or remove directors without holding proceeding brought on our behalf, (ii) any action asserting a meeting claim of or based on a breach of a fiduciary duty owed by any of our current or former directors, officers and employees to us or our stockholders, (iii) any action asserting a claim against us or any of our current or former directors, officers, employees or stockholders called in accordance with arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Our amended and restated bylaws further provide that, unless we consent in writing to an alternative forum, the United States District Court for the Northern District of Illinois will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. In addition, our certificate of incorporation and amended and restated bylaws provide that special meetings any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions. We have chosen the United States District Court for the Northern District of Illinois as the exclusive forum for such causes of action because our principal executive offices are located in Evanston, Illinois. Some companies that have adopted similar federal district court forum selection provisions are currently subject to a suit in the Court of Chancery of the State of Delaware brought by stockholders may be called only by our board of directorswho assert that the federal district court forum selection provision is not enforceable. On December 19, 2018, the chairperson Court of Chancery of the State of Delaware issued a decision declaring that such federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are ineffective and invalid under Delaware law. On January 17, 2019, the decision was appealed to the Delaware Supreme Court. While the Delaware Supreme Court recently dismissed the appeal on jurisdictional grounds, we expect that the appeal will be re-filed after the Court of Chancery issues a final judgment. Unless and until the Court of Chancery’s decision is reversed by the Delaware Supreme Court or otherwise abrogated, we do not intend to enforce our board federal forum selection provision. In the event that the Delaware Supreme Court affirms the Court of directorsChancery’s decision or otherwise determines that federal forum selection provisions are invalid, our chief executive officer or Board of Directors intends to amend promptly our president. A stockholder may not call a special meeting, which may delay the ability of our stockholders to force consideration of a proposal or for holders controlling a majority of our capital stock to take any action, including the removal of directors. Our amended and restated bylaws contain advance notice procedures with respect to stockholder proposals and remove our federal forum selection bylaw provision. As a result of the nomination Court of candidates for election as directors, other than nominations made by or at the direction of our board of directors Chancery’s decision or a committee decision by the Supreme Court of Delaware affirming the board Court of directorsChancery’s decision, we may incur additional costs associated with our federal forum selection bylaw provision, which could have an adverse effect on our business, financial condition and results of operations. These advance notice procedures Additionally, the forum selection clauses in our amended and restated bylaws may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. The United States District Court for the Northern District of Illinois may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed discouraging lawsuits against our directors and may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempt to obtain control of our company. Our board of directors is divided into three classes. The directors in each class serve for a three-year term, one class being elected each year by our stockholders. This system of electing and removing directors may 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 directorsofficers. We are subject to the provisions of Section 203 of the Delaware General Corporation Law (the "DGCL") regulating corporate takeoversLaw. In general, Section 203 prohibits a publicly held Delaware corporation from engagingengaging in a “business combination” with an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, under certain circumstancesunless the business combination is approved in a prescribed manner. Under Section 203, in a business combination with between a corporation and an interested stockholder for a period is prohibited unless it satisfies one of three years the following the date the person became an interested stockholder unlessconditions: • prior to prior to before the date of the transactionstockholder became interested, our board of directors approved either the business combination or the transaction that which resulted in the stockholder becoming an interested stockholder; • upon completion consummation of the transaction that which 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 commenced, excluding for purposes of determining the voting stock outstanding outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but n not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tender in a tender or exchange offer; or • at or subsequent to after the date of time the transactionstockholder became interested, the business combination is was approved by our board of directors and authorized at an annual or special meeting stockholders, and not by written consent, of the stockholders by the affirmative vote of at least 66 2/3% two-thirds of the outstanding voting stock that which is not owned by the interested stockholder. Generally, Section 203 defines a business combination includes a merger, asset to include: • any merger or stock consolidation involving the corporation and the interested stockholder; • any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; • subject to exceptions, any transaction resulting that results in a financial benefit the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder. An ; • subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and • the receipt by the interested stockholder is a person whoof the benefit of any loans, together with affiliates and associatesadvances, owns orguarantees, within three years prior to pledges or other financial benefits provided by or through the determination of corporation. In general, Section 203 defines an interested stockholder status, owned as any entity or person beneficially owning 15% or more of a corporation’s the outstanding voting stock. We expect stock of the existence of this provision to have an anti-takeover effect corporation and any entity or person affiliated with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage attempts that might result in a premium over or controlling or controlled by the market price for the shares of Common Stock held by stockholders. The provisions of Delaware law and the provisions of our certificate of incorporation and amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and as a consequence, they might also inhibit temporary fluctuations in the market price of our Common Stock that often result from actual entity or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is also possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. The transfer agent and registrar for our Common Stock is Continental Stock Transfer & Trust Company, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000. Our Common Stock is traded on the Nasdaq Capital Market under the symbol “PHUNperson.”
Appears in 1 contract
Samples: Sales Agreement
