LifeLock 2013 Annual Report Download - page 33

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Our directors, executive officers, and holders of more than 5% of our common stock, together with their affiliates, beneficially own or control a
majority of our outstanding common stock. As a result, these stockholders, acting together, will be able to exerci se significant influence over all matters
requiring stockholder approval, including the election of directors and the approval of significant corporate transactions, such as a merger or other sale of our
company or its assets. This concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or
preventing a third party from acquiring control over us.
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Certain provisions of our certificate of incorporation and bylaws and applicable provisions of Delaware law may have the effect of rendering more
difficult, delaying, or preventing an acquisition of our company, even when this would be in the best interest of our stockholders.
Our certificate of incorporation and bylaws include provisions that provide for the following:
•authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock;
•require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
•specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, our chief
executive officer, or our president (in the absence of a chief executive officer);
•establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of
persons for election to our board of directors;
•establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving three-year staggered
terms;
•prohibit cumulative voting in the election of directors;
•provide that our directors may be removed only for cause;
•provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
•require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws
and certain provisions of our certificate of incorporation.
In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in
any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an
interested stockholder, unless such transactions are approved by our board of directors. This provision could have the effect of delaying or preventing a
change of control of our company, whether or not it is desired by or beneficial to our stockholders. In addition, other provisions of Delaware law may also
discourage, delay, or prevent someone from acquiring us or merging with us.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. Any provision of
our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our
stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common
stock.
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The trading market for our common stock will be influenced by the research and reports that securities or industry analysts may publish about us, our
business, our market, or our competitors. If adequate research coverage is not established or maintained on our company or if any of the analysts who may
cover us downgrade our stock or publish inaccurate or unfavorable research about our business or provide relatively more favorable recommendations about
our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish
reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
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We have never declared or paid any cash dividends on our capital stock and do not anticipate declaring or paying any cash dividends in the foreseeable
future. In addition, our new senior credit facility with Bank of America restricts our ability to pay cash dividends. We plan to retain any future earnings to
finance our operations and growth plans discussed elsewhere in this Annual Report
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