of the Board in a relatively short period of time. The classification provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of the Company. In addition, because Section 141(k)(1) of the Delaware General Corporation Law provides that a director serving on a classified board of directors may be removed only for cause, a classified Board could delay stockholders who do not agree with the policies of the Board from replacing a majority of the Board for two years unless they can demonstrate that the directors should be removed for cause and obtain the requisite vote.
Special Meetings of Stockholders and Action by Written Consent
The By-laws provide that special meetings of stockholders of the Company may be called only by the Chairman of the Board, the President or the Board. The Certificate of Incorporation also requires that stockholder action be taken at a meeting of stockholders and prohibits action by written consent.
Advance Notice Provisions
The Companys Bylaws generally require that for a stockholder to nominate a director or bring other business before an annual meeting, the stockholder must deliver written notice to the Secretary of the Company not less than 60 nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders.
Certain Business Combinations
The Certificate of Incorporation generally provides that, whether or not a vote of the stockholders is otherwise required, the affirmative vote of the holders of not less than 80% of the outstanding voting shares of the Company shall be required for the approval or authorization of any Business Combination with an Interested Stockholder or any affiliate or associate of an Interested Stockholder. However, a Business Combination will not be subject to such voting threshold if the Business Combination was approved by two-thirds of the Board or the consideration satisfies pricing levels specified in the Certificate of Incorporation.
The term Business Combination is generally defined to include (a) any merger or consolidation of the Company or any subsidiary; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition or any security arrangement, investment, loan advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other similar arrangement (in one transaction or a series of related transactions), involving substantial part, as further described in the Certificate of Incorporation, of any assets, securities or commitments of the Company or any subsidiary; (c) the adoption of any plan or proposal for the liquidation or dissolution of the Company or for any amendment to the By-Laws or to the Certificate of Incorporation proposed by or on behalf of any Interested Stockholder or an affiliate or associate of any Interested Stockholder, (d) any reclassification of securities (including any reverse stock split), or recapitalization of the Company or any similar transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series of capital stock, or any securities convertible into capital stock or equity securities of any subsidiary, which is beneficially owned by any Interested Stockholder or any affiliate or associate of any Interested Stockholder; or (e) or any agreement, contract or arrangement providing for any one or more of such actions.
The term Interested Stockholder is generally defined as (a) a person having, or having publicly announced an intention to acquire, beneficial ownership of the Companys voting shares; or (b) an affiliate or associate of the Company that within the two prior years was the beneficial owner of 10% or more of the voting shares.
Amendments to the Certificate of Incorporation
Certain articles of the Certificate of Incorporation, including the articles containing the classified board and business combination provisions described above and the article governing amendments to the Certificate of Incorporation, require the affirmative vote of the holders of not less than 80% of the outstanding voting shares of the Company.