EX-4.7 2 hear-ex47_299.htm EX-4.7 hear-ex47_299.htm
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Turtle Beach Corporation (the “Corporation,” “we,” or “our”) has authorized capital stock consisting of 25,000,000 shares of Common Stock, par value $0.001 per share (the “Common Stock”) and 1,000,000 shares of Preferred Stock, par value $0.001 (the “Preferred Stock”). It has outstanding one class of Common Stock registered pursuant to the Securities Exchange Act of 1934, as amended. The following summary describes the rights of holders of shares of the Common Stock as set forth in our Articles of Incorporation (the “Articles of Incorporation”), and our Bylaws (the “Bylaws”), (which are incorporated by reference as Exhibits 3.1 and 3.2, respectively, to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019). Holders of shares of Common Stock have the rights set forth in the Articles of Incorporation, the Bylaws and Nevada law.
The holders of our Common Stock are entitled to one vote per share on all matters to be voted upon by our stockholders. Unless otherwise required by applicable law, the vote required to take action is a majority of the votes of the stockholders represented in person or by proxy at a meeting and entitled to vote, except that directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
The holders of our Common Stock are entitled to receive ratably dividends, if any, as may be declared from time to time by our board of directors of the Corporation (the “Board of Directors”) out of funds legally available for that purpose.
In the event of our liquidation, dissolution or winding-up, the holders of our Common Stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of Preferred Stock, if any, then outstanding.
Other Rights and Preferences
The shares of Common Stock are not convertible into other securities. We have no obligation or right to redeem our Common Stock. The holders of our Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our Common Stock.
Anti-Takeover Effects of Certain Provisions of Nevada Law and Our Charter Documents
The following is a summary of certain provisions of Nevada law, our Articles of Incorporation and our Bylaws. This summary does not purport to be complete and is qualified in its entirety by reference to the corporate law of Nevada and our Articles of Incorporation and Bylaws.
The Nevada Revised Statutes contain a “Control Share Statute” which provides generally that any person or entity that acquires a “controlling interest” in an applicable Nevada corporation may be denied voting rights with respect to the acquired shares and any other shares acquired within the preceding 90 days, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights. The Control Share Statute provides that a person or entity acquires a “controlling interest” whenever it acquires shares that, but for the operation of the Control Share Statute, would bring its voting power within any of the following three ranges: (1) one-fifth or more but less than one-third, (2) one-third or more but less than a majority, or (3) a majority or more, of the outstanding voting power in the election of directors. The Control Share Statute is applicable to an “issuing corporation,” which the statute defines as a Nevada corporation that: (a) has 200 or more stockholders of record, at least 100 of whom have addresses in Nevada appearing on the corporation’s stock ledger; and (b) does business in Nevada directly or through an affiliated corporation.
The stockholders or board of directors of a corporation may elect to opt out of the provisions of the Control Share Statute through adoption of a provision to that effect in the Articles of Incorporation or Bylaws of the corporation. Our current Bylaws provide that the Control Share Statute does not apply to us or to an acquisition of our shares. If we chose to amend our Bylaws in the future so that the Control Share Statute does apply to us, the provisions of the statute may discourage companies or persons interested in acquiring a significant interest in or control of our company, regardless of whether such acquisition may be in the interest of our stockholders.
The Nevada “Combination with Interested Stockholders Statute” may also have an effect of delaying or making it more difficult to effect a change in control of our company. This statute prevents an “interested stockholder” and an applicable Nevada corporation from entering into a “combination,” unless certain conditions are met. The statute defines “combination” to include any merger or consolidation with an “interested stockholder,” or any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions with an “interested stockholder”: (1) having an aggregate market value equal to more than 5 percent of the aggregate market value of the assets of the corporation; (2) having an aggregate market value equal to more than 5 percent of the aggregate market value of all outstanding shares of the corporation; or (3) representing more than 10 percent of the earning power or net income of the corporation. An “interested stockholder” means the beneficial owner of 10 percent or more of the voting shares of the corporation, or an affiliate or associate of the corporation who at any time within two years immediately prior to the date in question was the beneficial owner of 10 percent or more of the voting shares of the corporation. A corporation covered by the statute may not engage in a “combination” within two years after the interested stockholder acquires its shares unless the combination or purchase is approved by the board of directors before the interested stockholder acquired such shares or the combination is approved by the board of directors and, at or after that time, the combination is approved at an annual or special meeting of the stockholders of the corporation (and not by written consent) by at least 60% of the outstanding voting power of the corporation not beneficially owned by interested stockholders. If such approval is not obtained, then after the expiration of the two-year period, the business combination may be consummated (1) if the combination or the transaction in which the person became an interested stockholder was approved by the board of directors before the person became an interested stockholder, (2) if the combination is approved at an annual or special meeting of the stockholders of the corporation held no earlier than two years after the date the person became an interested stockholder (and not by written consent) by a majority of the voting power held by disinterested stockholders, or (3) if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share of such stock paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which the person became an interested stockholder, whichever is higher, plus interest from that date through the date of consummation of the combination and less any dividends paid during the same period; (b) the market value per share of such stock on the date of the announcement of the combination or the date the interested stockholder acquired the shares, whichever is higher, plus interest from that date through the date of consummation of the combination and less any dividends paid during the same period; or (c) for the holders of Preferred Stock, the amount specified in the corporation’s Articles of Incorporation, including in any certificate of designation for the class or series, to which holders of shares of that class or series are entitled upon the consummation of a transaction of a type encompassing the combination.
Nevada law does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. One of the effects of the existence of unissued and unreserved common stock or Preferred Stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of the Corporation by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.
Articles of Incorporation; Bylaws
Our Articles of Incorporation and Bylaws contain provisions that could make more difficult the acquisition of our company by means of a tender offer, a proxy contest or otherwise. These provisions are summarized below.
Undesignated Preferred Stock. The authorization of our undesignated Preferred Stock makes it possible for our board of directors to issue our Preferred Stock with voting or other rights or preferences that could impede the success of any attempt to acquire control of the Corporation. These and other provisions may have the effect of deferring hostile takeovers or delaying changes of control of our Board of Directors and management.
Size of Board and Vacancies. (1) Newly created directorships resulting from any increase in our authorized number of directors, (2) any vacancies on our board of directors resulting from death, resignation, disqualification, removal or other causes and (3) any newly created directorships resulting from any increase in the number of directors, may be filled by the affirmative vote of a majority of the directors then in office (even though less than a quorum of our Bboard of Directors) unless our Board of Directors determines that any such vacancies or newly created directorships are to be filled by stockholder vote.
No Cumulative Voting. Our Articles of Incorporation and Bylaws do not provide for cumulative voting in the election of directors.
Stockholder Meetings. Our Bylaws provide that special meetings of the stockholders may be called only by our chairman, our chief executive officer or at the direction of our Board of Directors.
Stock Exchange Listing
Our common stock is traded on the Nasdaq Stock Market under the symbol “HEAR.”
Transfer Agent and Registrar
Our transfer agent and registrar is Interwest Transfer Company, Inc., 1981 Murray Holladay Road, Suite 100, Salt Lake City, UT 84117