Shutterfly 2013 Annual Report Download - page 44

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These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in
control of our company. These provisions could also discourage proxy contests and make it more difficult
for stockholders to elect directors of their choosing and to cause us to take other corporate actions they
desire.
In addition, we are subject to Section 203 of the Delaware General Corporation Law, which, subject to
some exceptions, prohibits ‘‘business combinations’’ between a Delaware corporation and an ‘‘interested
stockholder,’’ which is generally defined as a stockholder who becomes a beneficial owner of 15% or more
of a Delaware corporation’s voting stock, for a three-year period following the date that the stockholder
became an interested stockholder. Section 203 could have the effect of delaying, deferring or preventing a
change in control that our stockholders might consider to be in their best interests.
We do not intend to pay dividends on our common stock for the foreseeable future.
We have never declared or paid cash dividends on our common stock. In addition, we must comply
with the covenants in our credit facilities if we want to pay cash dividends. We currently intend to retain
our future earnings, if any, to finance the further development and expansion of our business and do not
intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at
the discretion of our board of directors and will depend upon our financial condition, results of operations,
capital requirements, restrictions contained in current or future financing instruments and such other
factors as our board of directors deems relevant.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
42