Description of Registrants Securities
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
References to Translate Bio and the Company herein are, unless the context otherwise indicates, only to Translate Bio, Inc. and not to any of its subsidiaries.
The following description of the Companys capital stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Companys Restated Certificate of Incorporation (the Certificate of Incorporation) and the Companys Amended and Restated Bylaws (the Bylaws), each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.[X] is a part.
The Companys authorized capital stock consists of 200,000,000 shares of common stock, $0.001 par value per share (the Common Stock), and 10,000,000 shares of preferred stock, $0.001 par value per share (the Preferred Stock).
Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Each election of directors by the Companys stockholders will be determined by a plurality of the votes cast by the stockholders entitled to vote on the election, and all other questions will be decided by a majority of the votes cast by stockholders entitled to vote thereon. Holders of Common Stock are entitled to receive proportionately any dividends as may be declared by the Companys board of directors, subject to any preferential dividend rights of outstanding Preferred Stock.
In the event of the Companys liquidation or dissolution, the holders of Common Stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any of the Companys outstanding Preferred Stock. Holders of Common Stock have no preemptive, subscription, redemption or conversion rights. 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 may be designated and issued in the future.
Under the terms of the Certificate of Incorporation, the Companys board of directors is authorized to issue shares of Preferred Stock in one or more series without stockholder approval. The board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of Preferred Stock.
The purpose of authorizing the Companys board of directors to issue Preferred Stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of the Companys outstanding voting stock.
Delaware Anti-Takeover Law and Certain Charter and Bylaw Provisions
The Company is subject to Section 203 of the Delaware General Corporation Law (the DGCL). Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a business combination with any interested stockholder for three years following the date that the person became an interested stockholder, unless either the interested stockholder attained such status with the approval of the Companys board of directors, the business combination is approved by the Companys board of directors and stockholders in a prescribed manner or the interested stockholder acquired at least 85% of the Companys outstanding voting stock in the transaction in which it became an interested stockholder. A business combination includes, among other things, a merger or consolidation involving the Company and the interested stockholder and the sale of more than 10% of the Companys assets. In general, an interested stockholder is any entity or person beneficially owning 15% or more of the Companys outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.
Staggered Board; Removal of Directors
The Certificate of Incorporation and Bylaws divide the Companys board of directors into three classes with staggered three-year terms. In addition, the Certificate of Incorporation and Bylaws provide that the Companys directors may be removed only for cause and only by the affirmative vote of the holders of at least 75% of the Companys shares of capital stock present in person or by proxy and entitled to vote. Under the Certificate of Incorporation and Bylaws, any vacancy on the board of directors, including a vacancy resulting from an enlargement of the board of directors, may be filled only by vote of a majority of the directors then in office. Furthermore, the Certificate of Incorporation provides that the authorized number of directors may be changed only by resolution of the Companys board of directors. The classification of the board of directors and the limitations on the ability of the stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of the Company.
Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations
The Certificate of Incorporation and Bylaws provide that any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. The Certificate of Incorporation and Bylaws also provide that, special meetings of the stockholders can only be called by the board of directors. In addition, the Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to the board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to the Companys secretary of the stockholders intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of the outstanding voting securities. These provisions also could discourage a third party from making a tender offer for the Companys Common Stock because even if the third party acquired a majority of the Companys outstanding voting stock, it would be able to take action as a stockholder, such as electing new directors or approving a merger, only at a duly called stockholders meeting and not by written consent.
The DGCL provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporations certificate of incorporation or bylaws unless a corporations certificate of incorporation or bylaws, as the case may be, requires a greater percentage. The Companys Bylaws
may be amended or repealed by a majority vote of the board of directors or the affirmative vote of the holders of at least 75% of the votes that all stockholders would be entitled to cast in any annual election of directors. In addition, the affirmative vote of the holders of at least 75% of the votes that all stockholders would be entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of the Certificate of Incorporation described above.
Exclusive Forum Selection
The Certificate of Incorporation provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of breach of a fiduciary duty owed by any of the directors, officers, employees or stockholders to the Company or its stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (4) any action asserting a claim arising pursuant to any provision of the Certificate of Incorporation or Bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine. We do not expect this choice of forum provision will apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, the Exchange Act of 1934, as amended, or any other claim for which federal courts have exclusive jurisdiction. Although the Certificate of Incorporation contains the choice of forum provision described above, it is possible that a court could rule that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.