Description of the Company's Securities
EX-4.6 2 exhibit46-descriptionofs.htm EX-4.6 exhibit46-descriptionofs
Exhibit 4.6 EMERGENT BIOSOLUTIONS INC. DESCRIPTION OF SECURITIES The following description of our capital stock and debt securities is intended as a summary only and therefore is not a complete description. This description is based upon, and is qualified by reference to, our certificate of incorporation, our by-laws and applicable provisions of Delaware corporate law and the indenture governing our debt securities. You should read our certificate of incorporation and by-laws, which are filed as exhibits to the Annual Report on Form 10-K to which this exhibit is attached. Our authorized capital stock consists of 200,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, $0.001 par value per share, of which 100,000 shares have been designated as series A junior participating preferred stock. As of December 31, 2020, no shares of preferred stock were outstanding. Common Stock Voting Rights. The holders of our common stock are entitled to one vote per share with respect to each matter presented to our stockholders on which the holders of common stock are entitled to vote and do not have cumulative voting rights. An election of directors by our stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Dividends. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our Board of Directors, subject to any preferential dividend rights of outstanding preferred stock. Liquidation and Dissolution. In the event of our liquidation or dissolution, the holders of common stock are entitled to receive ratably all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Other Rights. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of 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 and issue in the future. Listing. Our common stock is listed on the New York Stock Exchange under the symbol “EBS.” Transfer Agent and Registrar. The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc. Preferred Stock Under the terms of our certificate of incorporation, our Board of Directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our Board of Directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Authorizing our Board of Directors to issue preferred stock and determine its rights and preferences has the effect of eliminating delays associated with a stockholder vote on specific issuances. Currently, we have no shares of preferred stock outstanding. If we decide to issue any preferred stock, we will describe in a prospectus or supplement thereto the specific terms of the preferred stock, including, if applicable, the following: • the title and stated value; • the number of shares we are offering; • the liquidation preference per share; • the purchase price; • the dividend rate, period and payment date, and method of calculation for dividends;
• whether dividends will be cumulative and, if cumulative, the date from which dividends will accumulate; • the relative ranking and preference of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; • the procedures for any auction and remarketing; • the provisions for a sinking fund; • the provisions for redemption or repurchase and any restrictions on our ability to exercise those redemption and repurchase rights; • the listing of the preferred stock on any securities exchange or market; • whether the preferred stock will be convertible into our common stock and, if convertible, the conversion price, or how it will be calculated, and the conversion period; • whether the preferred stock will be exchangeable into debt securities and, if exchangeable, the exchange price, or how it will be calculated, and the exchange period; • voting rights of the preferred stock; • preemptive rights; • restrictions on transfer, sale or other assignment; • whether interests in the preferred stock will be represented by depositary shares; • a discussion of any material U.S. federal income tax considerations applicable to the preferred stock; • any limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and • any other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock. The preferred stock could have other rights, including economic rights that are senior to our common stock that could adversely affect the market value of our common stock. The issuance of the preferred stock may also have the effect of delaying, deferring or preventing a change in control of us without any action by the shareholders. 3.875% Senior Unsecured Notes due 2028 On August 7, 2020, we completed an offering of $450 million aggregate principal amount of 3.875% Senior Unsecured Notes due 2028 (the Notes). The Notes were issued pursuant to an indenture, dated as of August 7, 2020 (the Indenture), by and among us, certain of our subsidiaries party thereto as guarantors and U.S. Bank National Association, as trustee. The Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of our direct and indirect subsidiaries that guarantee debt under our credit facilities. The Notes are senior unsecured obligations of us, and the Notes and their guarantees rank equally in right of payment with all of our and the guarantors’ existing and future unsubordinated indebtedness, but are effectively junior to all of our and the guarantors’ existing and future secured indebtedness (including our credit facilities), to the extent of the value of the assets securing that indebtedness. In addition, the Notes are structurally subordinated to all of the existing and future obligations of our subsidiaries that do not guarantee the Notes. Interest on the Notes is payable on February 15 and August 15 of each year until maturity, commencing on February 15, 2021. The Notes will mature on August 15, 2028. On or after August 15, 2023, we may, at our option, redeem the Notes, in whole or in part, at the applicable redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Prior to August 15, 2023, we may redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus a “make-whole” premium described in the Indenture, plus accrued
and unpaid interest, if any, to, but excluding, the date of redemption. Prior to August 15, 2023, we may redeem up to 40% of the aggregate principal amount of the Notes using the net cash proceeds of certain equity offerings at the redemption price set forth in the Indenture. Upon the occurrence of a “change of control” (as defined in the Indenture), we must offer to repurchase the Notes at a purchase price of 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. Subject to certain qualifications and exceptions, the Indenture restricts our and our restricted subsidiaries’ ability to, among other things: (i) incur or guarantee additional debt or issue certain preferred stock; (ii) make certain investments; (iii) create restrictions on the payment of dividends or other amounts from certain of our restricted subsidiaries; (iv) enter into certain transactions with affiliates; (v) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of our assets; (vi) sell certain assets, including capital stock of our subsidiaries; (vii) designate our subsidiaries as unrestricted subsidiaries; (viii) pay dividends, redeem or repurchase capital stock or make other restricted payments; and (ix) incur certain liens. The Indenture provides for events of default that, if certain events occur, would permit the trustee or holders of at least 25% in aggregate principal amount of the Notes then outstanding to declare the principal of and unpaid interest on the Notes to be immediately due and payable. Stockholder Rights Plan Our Board of Directors may implement a stockholder rights plan without stockholder approval, which may have anti-takeover effects. We previously implemented a stockholder rights plan, which expired on November 14, 2016. Under our prior stockholder rights plan, we issued to each of our stockholders one preferred stock purchase right for each outstanding share of our common stock. Each right, when exercisable, would have entitled its holder to purchase from us a unit consisting of one one-thousandth of a share of series A junior participating preferred stock at a purchase price of $150 in cash, subject to adjustments. Our stockholder rights plan was intended to protect stockholders in the event of an unfair or coercive offer to acquire us and to provide our Board of Directors with adequate time to evaluate unsolicited offers. Provisions of Our Certificate of Incorporation and By-laws and Delaware Law That May Have Anti-Takeover Effects Our certificate of incorporation and by-laws and Delaware law 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. As of January 31, 2021, Fuad El-Hibri, our executive chairman, was the beneficial owner of approximately 9% of our outstanding common stock. As a result, Mr. El-Hibri has significant influence over the election of the members of our Board of Directors. This control could discourage others from initiating a potential merger, takeover or other change of control transaction that other stockholders may view as beneficial. Number of Directors. Subject to the rights of holders of any series of preferred stock to elect directors, our Board of Directors will establish the number of directors. Staggered Board; Removal of Directors. Our certificate of incorporation and our by-laws divide our directors into three classes with staggered three-year terms. Our directors may be removed from office only for cause and only by the affirmative vote of holders of our capital stock representing at least 75% of the voting power of all outstanding stock entitled to vote. Any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors, may be filled only by the affirmative vote of a majority of our directors present at a meeting duly held at which a quorum is present.
The classification of our Board of Directors and the limitations on the removal of directors and filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company. Stockholder Action by Written Consent; Special Meetings. Our certificate of incorporation and our by-laws provide that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Our certificate of incorporation and our by-laws also provide that, except as otherwise required by law, special meetings of our stockholders can only be called by our Board of Directors, our chairman of the board or our president. Advance Notice Requirements. Our by-laws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to the Board of Directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the Board of Directors or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder's intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. Delaware Business Combination Statute. Section 203 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL, is applicable to us. Section 203 of the DGCL restricts some types of transactions and business combinations between a corporation and a 15% stockholder. A 15% stockholder is generally considered by Section 203 to be a person owning 15% or more of the corporation's outstanding voting stock. Section 203 refers to a 15% stockholder as an “interested stockholder.” Section 203 restricts these transactions for a period of three years from the date the stockholder acquires 15% or more of our outstanding voting stock. With some exceptions, unless the transaction is approved by the board of directors and the holders of at least two-thirds of the outstanding voting stock of the corporation, Section 203 prohibits significant business transactions such as: • a merger with, disposition of significant assets to or receipt of disproportionate financial benefits by the interested stockholder, and • any other transaction that would increase the interested stockholder's proportionate ownership of any class or series of our capital stock. The shares held by the interested stockholder are not counted as outstanding when calculating the two-thirds of the outstanding voting stock needed for approval. The prohibition against these transactions does not apply if: • prior to the time that any stockholder became an interested stockholder, the board of directors approved either the business combination or the transaction in which such stockholder acquired 15% or more of our outstanding voting stock, or • the interested stockholder owns at least 85% of our outstanding voting stock as a result of a transaction in which such stockholder acquired 15% or more of our outstanding voting stock. Shares held by persons who are both directors and officers or by some types of employee stock plans are not counted as outstanding when making this calculation. Super-Majority Voting. The DGCL provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or by-laws, unless a corporation's certificate of incorporation or by-laws, as the case may be, requires a greater percentage. The affirmative vote of holders of our capital stock representing at least 75% of the voting power of all outstanding stock entitled to vote is required to amend or repeal the provisions of our certificate of incorporation described in this section entitled "Provisions of Our Certificate of Incorporation and By-laws and Delaware Law That May Have Anti-Takeover Effects." The affirmative vote of either a majority of the directors present at a meeting of our board of directors or
holders of our capital stock representing at least 75% of the voting power of all outstanding stock entitled to vote is required to amend or repeal our by-laws. Limitation of Liability and Indemnification of Officers and Directors Our certificate of incorporation contains provisions permitted under the DGCL relating to the liability of directors. The provisions eliminate a director's liability for monetary damages for a breach of fiduciary duty, except in circumstances involving wrongful acts, such as the breach of a director's duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. Further, our certificate of incorporation contains provisions to indemnify our directors and officers to the fullest extent permitted by the DGCL. We have entered into agreements to indemnify our directors and executive officers. These agreements, among other things, provide that we will indemnify the director or executive officer to the fullest extent permitted by law for claims arising in his or her capacity as a director, officer, manager, employee, agent or representative of us. The indemnification agreements also establish the procedures that will apply in the event a director or officer makes a claim for indemnification. Registration Rights Holders of an aggregate of approximately 6 million shares of our common stock as of December 31, 2020 and have the right to require us to register these shares of common stock under the Securities Act under specified circumstances, including any additional shares issued or distributed by way of a dividend, stock split or other distribution in respect of these shares. Demand Registration Rights. Subject to specified limitations, holders of these registrations rights may require that we register all or part of our common stock subject to the registration rights for sale under the Securities Act. These holders may demand registration of our common stock so long as the offering price to the public of the shares requested to be registered is at least $25,000,000. We are required to effect only one demand registration, subject to specified exceptions. Incidental Registration Rights. If we propose to file a registration statement under the Securities Act either for our own account or for the account of other stockholders (other than in connection with a registration statement on Form S-8 or Form S-4 or to cover securities proposed to be issued in exchange for securities or assets of another corporation), the holders of registrable shares will be entitled to notice of the registration and we will be required to use our commercially reasonable efforts to register all or a portion of any registrable shares then held by such holders that they request that we register. In the event that any registration in which the holders of registrable shares participate pursuant to our stockholders agreement is an underwritten public offering, we agree to enter into an underwriting agreement containing such terms as are customary. Limitations and Expenses. With specified exceptions, the right to include shares in a registration is subject to the right of underwriters for the offering to limit the number of shares included in the offering. We are required to pay one-half of all fees, costs and expenses of any demand registration, other than underwriting discounts and commissions.