Go Daddy 2015 Annual Report Download - page 51

Table of Contents
assets, whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the TRAs, and whether and when GoDaddy Inc.
should terminate the TRAs and accelerate its obligations thereunder; provided that any decision to terminate the TRAs and accelerate the obligation thereunder
would also require the approval of a majority of the directors of GoDaddy Inc., other than directors designated or nominated by stockholders affiliated with the
Sponsors or Bob Parsons. In addition, the structuring of future transactions may take into consideration these Continuing LLC Owners’ tax or other considerations
even where no similar benefit would accrue to us.
Further, our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, the doctrine of "corporate opportunity" will
not apply to the Sponsors, Bob Parsons or their respective affiliates, the directors they nominate or our other non-employee directors in a manner that would
prohibit them from investing in competing businesses or doing business with our partners or customers.
In addition, under the terms of the TRAs, we may not elect an early termination of the TRAs without the consent of each of certain affiliates of the Sponsors
and Bob Parsons until such affiliate has exchanged all of its LLC Units (and Class B common stock) for shares of Class A common stock. Accordingly, we may be
prevented from terminating the TRAs in circumstances where we determine it would be beneficial for us to do so, including potentially in connection with future
strategic transactions.
We are a "controlled company" within the meaning of the NYSE listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate
governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
Certain of our pre-IPO owners continue to control a majority of the combined voting power of our Class A and Class B common stock. As a result, we are a
"controlled company" within the meaning of the NYSE listing standards. Under these rules, a company of which more than 50% of the voting power is held by an
individual, a group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements of the NYSE,
including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a nominating and corporate
governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (3) the
requirement that we have a compensation committee composed entirely of independent directors with a written charter addressing the committee’s purpose and
responsibilities. We intend to rely on some or all of these exemptions. As a result, we do not have a majority of independent directors and our compensation and
nominating and corporate governance committees do not consist entirely of independent directors. Accordingly, you will not have the same protections afforded to
stockholders of companies subject to all of the corporate governance requirements of the NYSE.
Our substantial leverage could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our
business, our ability to react to changes in the economy or our industry, divert our cash flow from operations for debt payments and prevent us from meeting
our debt obligations.
As of December 31, 2015 , our total indebtedness was $ 1,083.5 million . Our substantial leverage could have a material adverse effect on our business and
financial condition, including:
• requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby
reducing our ability to use our cash flow to fund our operations, capital expenditures and pursue future business opportunities;
• increasing our vulnerability to adverse economic, industry or competitive developments;
• exposing us to increased interest expense, as our degree of leverage may cause the interest rates of any future indebtedness, whether fixed or floating
rate interest, to be higher than they would be otherwise;
• exposing us to the risk of increased interest rates because certain of our indebtedness bears interest at variable rates;
• making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our
debt instruments, including restrictive covenants, could result in an event of default accelerating our obligation to repay indebtedness;
•restricting us from making strategic acquisitions;
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