DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
The following description of the capital stock of Clover Health Investments, Corp. (the Company, we, us, and our) and certain provisions of our certificate of incorporation (the charter), bylaws (the bylaws), and Warrant Agreement, dated as of April 24, 2020, between Continental Stock Transfer & Trust Company and Social Capital Hedosophia Holdings Corp III., a Delaware corporation (the Warrant Agreement), are summaries and are qualified in their entirety by reference to the full text of the charter, bylaws, and Warrant Agreement, copies of which have been filed with the Securities and Exchange Commission, and applicable provisions of the General Corporation Law of the State of Delaware (the DGCL).
As of December 31, 2020, we had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act): Class A common stock, $0.0001 par value per share (Class A common stock) and warrants to purchase shares of Class A common stock. All shares of our Class A common stock outstanding are fully paid and non-assessable.
The total amount of authorized capital stock of Clover Health Investments, Corp. consists of 2,500,000,000 shares of our Class A common stock, par value $0.0001 per share; 500,000,000 shares of our Class B common stock, par value $0.0001 per share; and 25,000,000 shares of our preferred stock, par value $0.0001 per share.
Our board of directors has authority to issue shares of our preferred stock in one or more series, to fix for each such series such voting powers, designations, preferences, qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, redemption privileges and liquidation preferences for the issue of such series all to the fullest extent permitted by the Delaware General Corporation Law. The issuance of our preferred stock could have the effect of decreasing the trading price of our common stock, restricting dividends on our capital stock, diluting the voting power of our common stock, impairing the liquidation rights of our capital stock, or delaying or preventing a change in control of the Company.
We have two classes of authorized common stock, Class A common stock and Class B common stock. Unless our board of directors determines otherwise, all of our capital stock will be issued in uncertificated form.
Holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to ten votes per share, on each matter submitted to a vote of stockholders, as provided by the charter. The holders of Class A common stock and Class B common stock will generally vote together as a single class on all matters (including the election of directors) submitted to a vote of our stockholders, unless otherwise required by Delaware law or the charter. Delaware law could require either holders of Class A common stock or Class B common stock to vote separately as a single class in the following circumstances:
| || || || |
if we were to seek to amend the charter to increase or decrease the par value of a class of our capital stock, then that class would be required to vote separately to approve the proposed amendment; and
| || || || |
if we were to seek to amend the charter in a manner that alters or changes the powers, preferences, or special rights of a class of our capital stock in a manner that affected such holders adversely, then that class would be required to vote separately to approve the proposed amendment.
The charter and bylaws provide for a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class will be subject to election by a plurality of the votes cast at each annual meeting of Clover Healths stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms.