Pandora 2016 Annual Report Download - page 46

• a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to
change the membership of a majority of our board of directors;
• no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director
candidates;
• the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of
those shares, including preferences and voting rights, without stockholder approval, which could be used to
significantly dilute the ownership of a hostile acquiror;
• the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our
board of directors or the resignation, death or removal of a director, which prevents stockholders from being able
to fill vacancies on our board of directors;
• a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or
special meeting of our stockholders;
• the requirement that a special meeting of stockholders may be called only by the chairman of our board of
directors, our president, our secretary, or a majority vote of our board of directors, which could delay the ability of
our stockholders to force consideration of a proposal or to take action, including the removal of directors;
• the requirement for the affirmative vote of holders of at least 66 2⁄3% of the voting power of all of the then
outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our certificate
of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which
may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt;
• the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of
directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to
amend the bylaws to facilitate an unsolicited takeover attempt; and
• advance notice procedures with which stockholders must comply to nominate candidates to our board of directors
or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential
acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise
attempting to obtain control of us.
Section 203 of the Delaware General Corporation Law governs us. These provisions may prohibit large stockholders, in
particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period
of time. In addition, if we are acquired, certain terms of our music licensing arrangements, including favorable royalty rates that
currently apply to us, may not be available to an acquiror. These terms may discourage a potential acquiror from making an
offer to buy us or may reduce the price such a party may be willing to offer.
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