Description of Securities Registered Pursuant to Section 12 of the Exchange Act
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Maxar Technologies Inc. (we, us, our and Maxar) has two classes of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended: our common stock and our preferred stock.
Description of Capital Stock
The following summary of the terms of our common stock is based upon our certificate of incorporation and bylaws. The summary is not complete, and is qualified in its entirety by reference to our certificate of incorporation and bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our certificate of incorporation, our bylaws and the applicable provisions of the Delaware General Corporation Law for additional information.
Under our certificate of incorporation, the total number of shares of all classes of stock that we have authority to issue is 250,000,000, consisting of 10,000,000 shares of preferred stock, par value $0.0001 per share, and 240,000,000 shares of common stock, par value $0.0001 per share.
Holders of our common stock are entitled to one vote per share on all matters to be voted upon by the shareholders. The holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election. Pursuant to our bylaws, directors in uncontested elections are elected upon the affirmative vote of a majority of the votes cast in favor of or against such nominee at a duly called meeting of stockholders, and directors in contested elections are elected by a plurality of the votes cast. In an uncontested election, any incumbent nominee for director who does not receive an affirmative vote of a majority of the votes cast in favor of or against such nominee must tender his or her resignation after such election. The Nominating and Corporate Governance Committee (the “NCG Committee”) of our board of directors (the “Board”), giving due consideration to the best interests of Maxar and its stockholders, will evaluate the relevant facts and circumstances, and will make a recommendation to the Board, which will act on the recommendation of the NCG Committee and publicly disclose its decision within 90 days after the election on whether to accept the tendered resignation. Any director who tenders a resignation pursuant to this provision will not participate in the Board’s decision.
Subject to limitations under Delaware law and preferences that may apply to any outstanding shares of preferred stock, holders of our common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out of funds legally available therefor.
In the event of our liquidation, dissolution or winding up, whether voluntary or involuntary, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to the liquidation preference of any outstanding preferred stock.
Rights and preferences
The common stock has no preemptive, conversion or other rights to subscribe for additional securities. There are no redemption or sinking fund provisions applicable to our common stock. 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.
Fully paid and nonassessable
The outstanding shares of our common stock are fully paid and nonassessable.
Series A Preferred Stock Purchase Rights
We do not have any shares of preferred stock outstanding, but have designated shares of Series A Junior Participating Preferred Stock in connection with our Tax Benefit Preservation Plan, dated as of May 13, 2019 (the “NOL Plan”). In connection with the NOL Plan, our Board declared a dividend of one preferred stock purchase right, which are referred to as “Rights,” for each outstanding share of Maxar common stock. When exercisable, each Right will entitle the registered holder to purchase from us one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Series A Preferred”), of Maxar at a price of $30.92 per one one-hundredth of a share of Series A Preferred, subject to adjustment (the “Purchase Price”) The dividend was paid to holders of record as of the close of business on May 28, 2019. Any shares of Maxar common stock issued after the record date have been issued together with the Rights.
Transfer, “Flip In” and Exercise of the Rights
The Rights detach from the common stock and become exercisable if: (i) at the close of business on the tenth business day following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 4.9% or more of the common stock (each such person, an “Acquiring Person”) or (ii) at the close of business on the tenth business day (or such later date as may be determined by action of the Board prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement or announcement of an intention to make a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of affiliated or associated persons of shares of common stock equal to or exceeding 4.9% of the outstanding common stock (the earlier of (i) and (ii) being called the “Distribution Date”). The Board may postpone the Distribution Date of the rights under certain circumstances.
The NOL Plan provides that any person who beneficially owned shares of common stock equal to or exceeding 4.9% of the outstanding common stock immediately prior to the first public announcement of the adoption of the NOL Plan, together with any affiliates and associates of that person (each, an “Existing Holder”), shall not be deemed to be an “Acquiring Person” for purposes of the NOL Plan unless the Existing Holder becomes the beneficial owner of one or more additional shares of common stock (other than pursuant to a dividend or distribution paid or made by us on the outstanding common stock in common stock, pursuant to a split or subdivision of the outstanding common stock). However, if upon acquiring beneficial ownership of one or more additional shares of common stock, the Existing Holder does not beneficially own shares of common stock equal to or exceeding 4.9% of the common stock outstanding, the Existing Holder shall not be deemed to be an “Acquiring Person” for purposes of the NOL Plan.
The Rights will be transferred only with the common stock until the Distribution Date (or earlier redemption, exchange, termination or expiration of the Rights). After the Distribution Date, separate rights certificates will be issued evidencing the Rights and become separately transferable apart from the common stock.
Unless redeemed or exchanged earlier by Maxar or terminated, the rights will expire upon the earliest to occur of (i) the close of business on October 5, 2020, (ii) the close of business on November 13, 2019, if stockholder approval of the NOL Plan has not been obtained by that date, (iii) the close of business on the effective date of the repeal of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) if the Board determines that the NOL Plan is no longer necessary or desirable for the preservation of the value of certain deferred tax benefits, including those generated by net operating losses and certain other tax attributes (collectively, the “Tax Benefits”) or (iv) the time at which the Board determines that the Tax Benefits are fully utilized or no longer available under Section 382 of the Code or that an ownership change under Section 382 of the Code would not adversely impact in any material respect the time period in which we could use the Tax Benefits, or materially impair the amount of the Tax Benefits that could be used by us in any particular time period, for applicable tax purposes.
Rights and Preferences of Preferred Stock
Each share of Series A Preferred purchasable upon exercise of the Rights will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of $1.00 per share or, if greater, an aggregate dividend of 100 times the dividend, if any, declared per share of common stock. In the event of liquidation, dissolution or winding up of Maxar, the holders of the Series A Preferred will be entitled to a minimum preferential liquidation payment of $100 per share (plus any accrued but unpaid dividends), provided that such holders of the Series A Preferred will be entitled to an aggregate payment of 100 times the payment made per share of
common stock. Each share of Series A Preferred will have 100 votes and will vote together with the common stock. Finally, in the event of any merger, consolidation or other transaction in which shares of the Common Stock are exchanged, each share of Series A Preferred will be entitled to receive 100 times the amount received per share of common stock. The Series A Preferred will not be redeemable. These rights are protected by customary antidilution provisions. Because of the nature of the Series A Preferred’s dividend, liquidation and voting rights, the value of one one-hundredth of a share of Series A Preferred purchasable upon exercise of each Right should approximate the value of one share of common stock.
The Purchase Price payable, and the number of shares of Series A Preferred or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Series A Preferred, (ii) upon the grant to holders of the Series A Preferred of certain rights or warrants to subscribe for or purchase Series A Preferred or convertible securities at less than the then current market price of the Series A Preferred or (iii) upon the distribution to holders of the Series A Preferred of evidences of indebtedness, cash, securities or assets (excluding regular periodic cash dividends at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the average net income per share for the four quarters ended immediately prior to the payment of such dividend, or dividends payable in shares of Series A Preferred (which dividends will be subject to the adjustment described in clause (i) above)) or of subscription rights or warrants (other than those referred to above).
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of Maxar beyond those as an existing stockholder, including, without limitation, the right to vote or to receive dividends.
Preferred stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board as hereinafter provided. The Board may issue the preferred stock from time to time in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with Delaware law, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the fullest extent now or hereafter permitted by Delaware law. Without limiting the generality of the foregoing, the resolution or resolutions providing for the issuance of any series of preferred stock may provide that such series shall be superior or rank equally or be junior to any other series of preferred stock to the extent permitted by law.
The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of our stock entitled to vote.
Delaware takeover statute
We are subject to Section 203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for three years following the date that the stockholder became an interested stockholder, unless:
prior to the date of the transaction, the Board approved either the business combination or the transaction 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 number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) 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 tendered in a tender or exchange offer; or
on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
Section 203 defines a business combination to include:
any merger or consolidation involving the corporation and the interested stockholder;
any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
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; or
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In general, Section 203 defines an interested stockholder as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person.
Certificate of incorporation and bylaw provisions
Provisions of our certificate of incorporation and bylaws may have the effect of making it more difficult for a third party to acquire, or discourage a third party from attempting to acquire, control of our company by means of a tender offer, a proxy contest or otherwise. These provisions may also make the removal of incumbent officers and directors more difficult. These provisions are intended to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control to first negotiate with us. These provisions could also limit the price that investors might be willing to pay for shares of our common stock. These provisions may make it more difficult for shareholders to take specific corporate actions and could have the effect of delaying or preventing a change in control of Maxar.
In particular, our certificate of incorporation and bylaws provide for the following:
No written consent of shareholders
Any action by our shareholders must be taken at an annual or special meeting of shareholders and may not be taken by written consent. The affirmative vote of the holders of at least 66 2/3% of the total voting power of all outstanding shares of our voting stock is required for the amendment of this provision.
Special meetings of shareholders
Special meetings of our shareholders may be called only by (1) the Chair of the Board or by our Secretary that has been duly designated to do so by our Board pursuant to a resolution adopted by the majority of the Board, or (2) two or more stockholders who, in the aggregate, hold at least 10% of the issued and outstanding shares of our common stock. The affirmative vote of the holders of at least 66 2/3% of the total voting power of all outstanding shares of our voting stock is required for the amendment of this provision.
Amendment of bylaws
The affirmative vote of the holders of at least 66 2/3% of the total voting power of all outstanding shares of our voting stock is required for shareholders to amend our bylaws. This provision makes it more difficult to circumvent the anti-takeover provisions of our bylaws. Our Board is authorized to make, repeal, alter, amend and rescind our bylaws, but at least a majority vote of the directors is required to change the number of directors.
Number of directors; removal; filling vacancies
Our certificate of incorporation:
provides that the number of directors may be fixed exclusively by resolutions adopted by a majority of the number of directors constituting our Board then in office; and
authorizes our Board to fill newly created directorships. This provision could prevent a shareholder from obtaining majority representation on our Board because our Board could enlarge the size of the board and fill the vacancies. A director holds office for the remainder of the full term of the director for which any vacancy was created or occurred until that director’s successor is elected and qualified.
Issuance of undesignated preferred stock
Our Board is authorized to issue, without further action by the shareholders, additional shares of preferred stock with rights and preferences, including voting rights, designated from time to time by the Board. The existence of authorized but unissued shares of preferred stock enables our Board to render more difficult or to discourage an attempt to obtain control of Maxar by means of a merger, tender offer, proxy contest or otherwise.
Our common stock is listed for trading on the New York Stock Exchange and the Toronto Stock Exchange under the symbol “MAXR.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.