GNC 2012 Annual Report Download - page 39

Table of Contents
their best interests. In addition, our governance documents do not contain any provisions applicable to deadlocks among the members of the Board, and as a
result we may be precluded from taking advantage of opportunities due to disagreements among the Sponsors and their respective board designees. So long as
the Sponsors continue to own a significant amount of the outstanding shares of our common stock, they will continue to be able to strongly influence or
effectively control our decisions.
Our amended and restated certificate of incorporation and our amended and restated bylaws, as amended, contain anti-takeover protections, which may
discourage or prevent a takeover of our company, even if an acquisition would be beneficial to our stockholders.
Provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as amended, as well as provisions of the
Delaware General Corporation Law (the "DGCL"), could delay or make it more difficult to remove incumbent directors or for a third-party to acquire us, even
if a takeover would benefit our stockholders. These provisions include:
a classified Board;
the sole power of a majority of the Board to fix the number of directors;
limitations on the removal of directors upon the Sponsors holding less than a majority of our outstanding common stock;
the sole power of the Board or the Sponsors, in the case of a vacancy of a Sponsor board designee, to fill any vacancy on the Board, whether such
vacancy occurs as a result of an increase in the number of directors or otherwise;
the ability of the Board to designate one or more series of preferred stock and issue shares of preferred stock without stockholder approval;
the inability of stockholders to act by written consent if the Sponsors own less than 50% of our outstanding common stock; and
the inability of stockholders to call special meetings.
Our issuance of shares of preferred stock could delay or prevent a change of control of our company. The Board has the authority to cause us to issue,
without any further vote or action by our stockholders, up to 60,000,000 shares of preferred stock, par value $0.001 per share, in one or more series, to
designate the number of shares constituting any series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting
rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of preferred stock may
have the effect of delaying, deferring or preventing a change in control of our company without further action by our stockholders, even where stockholders
are offered a premium for their shares.
In addition, the issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting
stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such
preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of
voting stock. We currently do not anticipate issuing any shares of preferred stock for the foreseeable future.
Our incorporation under Delaware law, the ability of the Board to create and issue a new series of preferred stock or a stockholder rights plan and certain
other provisions that are contained in our amended and restated certificate of incorporation and amended and restated bylaws could impede a merger, takeover
or other business combination involving us or the replacement of our management or discourage a potential investor from making a tender offer for our
common stock, which, under certain circumstances, could reduce the market value of our common stock.
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