Series A Preferred Stock
Our board of directors previously established a series of preferred stock designated as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”), comprising 152,250 shares of preferred stock, par value $0.0001 per share. Each share of Series A Preferred Stock has the powers, designations, preferences, and other rights of the Series A Preferred Stock as are set forth in the Certificate of Designations of the Series A Preferred Stock filed by the Company with the Delaware Secretary of State on April 21, 2020 (the “Certificate of Designations”).
The Series A Preferred Stock ranks senior to our Class A common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Holders of shares of Series A Preferred Stock are entitled to cumulative, paid-in-kind dividends, which are payable semi-annually in arrears by increasing the liquidation preference for each outstanding share of Series A Preferred Stock. Holders of Series A Preferred Stock are also entitled to participate in and receive any dividends declared or paid on the Class A Common Stock on an as-converted basis, and no dividends may be paid to holders of Class A Common Stock unless full participating dividends are concurrently paid to holders of Series A Preferred Stock.
The holders of the Series A Preferred Stock are generally entitled to vote with the holders of the shares of Class A common stock on all matters submitted for a vote to the Class A common stockholders (voting together with the holders of shares of Class A common stock as one class) on an as-converted basis, subject to certain limitations. Additionally, certain matters will require the approval of the holders of two-thirds of the outstanding Series A Preferred Stock, voting as a separate class, including (1) the authorization, creation, increase in the authorized amount of, or issuance of any class or series of senior or parity equity securities or any security convertible into, or exchangeable or exercisable for, shares of senior or parity equity securities, (2) amendments, modifications or repeal of any provision of the Company’s certificate of incorporation or of the Certificate of Designations that would adversely affect the rights, preferences or voting powers of the Series A Preferred Stock, and (3) certain business combinations and binding or statutory share exchanges or reclassification involving the Series A Preferred Stock unless such events do not adversely affect the rights, preferences or voting powers of the Series A Preferred Stock.
Anti-takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws
The provisions of the DGCL, and our certificate of incorporation and bylaws, could have the effect of discouraging others from attempting an unsolicited offer to acquire our company. Such provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that our stockholders may otherwise deem to be in their best interests.
Election and Removal of Directors. Our board of directors is divided into three classes, with one class subject to reelection in a given year. Our directors may be removed only by the affirmative vote of at least 662/3% of all classes of our then-outstanding common stock, voting together as a single class, and only for cause. This system of electing and removing directors generally makes it more difficult for stockholders to replace a majority of our directors.
Authorized but Unissued Capital Stock. The authorized but unissued shares of our Class A common stock, Class B common stock, Class C common stock, Class D common stock and preferred stock will be available for future issuance without any further vote or action by our stockholders. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of our common stock and our preferred stock could render more difficult or discourage an attempt to obtain control over us by means of a proxy contest, tender offer, merger or otherwise.