DESCRIPTION OF COMMON STOCK
As of December 31, 2020, Teradyne, Inc. (Teradyne or the Company) has its common stock as the only class of securities under Section 12 of the Securities Exchange Act of 1934, as amended.
The following is a description of the material terms and provisions of the Companys common stock and may not contain all the information that is important to you. Please refer to the Companys Restated Articles of Organization (the Articles of Organization) and Amended and Restated Bylaws (the Bylaws) for complete information.
Under the Companys Articles of Organization, it has authority to issue 1,000,000,000 shares of common stock, par value $0.125 per share. As of December 31, 2020, there were 166,297,425 shares of common stock outstanding.
Holders of Teradyne common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. Since holders of Teradyne common stock do not have cumulative voting rights, the holders of more than 50% of Teradyne common stock can elect all the directors if they so choose. Holders of Teradyne common stock are entitled to receive ratably dividends, if any, as may be declared by the Teradyne board of directors out of funds legally available for payment of dividends. Upon the liquidation, dissolution or winding up of Teradyne, holders of Teradyne common stock are entitled to receive ratably the net assets of Teradyne available after the payment of all debts and other liabilities of Teradyne. Holders of Teradyne common stock have no preemptive, subscription, redemption or conversion rights, nor are they entitled to the benefit of any sinking fund. The outstanding shares of common stock are fully paid and non-assessable.
The transfer agent and registrar for the common stock is Broadridge Corporate Issuer Solutions, Inc., P.O. Box 1342, Brentwood, NY 11717. The common stock is listed on the Nasdaq Global Select Market under the trading symbol TER.
Anti-Takeover Effects of Massachusetts Law and Provisions of our Charter Documents
Certain provisions in the Massachusetts General Laws, the Articles of Organization and the Bylaws may have the effect of delaying, deferring or preventing a change in control of Teradyne, including:
Special Meetings of Stockholders. Special meetings of our stockholders may be called only by the Chief Executive Officer, the President, by the directors or by the Secretary, or in case of the death, absence, incapacity or refusal of the Secretary, by any other officer, upon written application of one or more stockholders who hold at least a majority of the shares of our capital stock entitled to vote at such a meeting (or such lesser percentage in interest as shall be the maximum percentage permitted under Massachusetts law).
Advance Notice Procedures. The Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of the Companys 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 written notice of meeting or brought before the meeting by or at the direction of the board of directors, the Chief Executive Officer or the President or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given our Secretary timely written notice, in proper form, of the stockholders intention to bring that business before the meeting, or pursuant to the proxy access nomination procedures in the Bylaws.
Proxy Access Nominations. Under the Bylaws, the Company will include in its proxy statement for an annual meeting the name, together with certain other required information, of any person nominated for the election of to the board of directors in compliance with specified provisions in the Bylaws by a single stockholder that satisfies (or by a group of no more than 20 stockholders that satisfy) various notice and other requirements specified in the Bylaws. Among other requirements in the Bylaws, such stockholder or group of stockholders would need to provide evidence verifying that the stockholder or group owns, and has owned continuously for the preceding three years, at least 3% of the issued and outstanding voting shares of the Company. The Bylaws contain limitations on the maximum number of nominees submitted by stockholders that the Company would be required to include in its proxy statement for an annual meeting.