Shutterfly 2014 Annual Report Download - page 37
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• introduction of technologies or product enhancements that reduce the need for our products;
• the loss of key personnel;
• lawsuits threatened or filed against us;
• business disruptions and costs related to shareholder activism;
• future sales of our common stock by our executive officers, directors and significant
stockholders; and
• other events or factors, including those resulting from war, incidents of terrorism or responses
to these events.
Provisions of our restated certificate of incorporation and restated bylaws and Delaware law may deter third parties
from acquiring us.
Our restated certificate of incorporation and restated bylaws contain provisions that may make the
acquisition of our company more difficult without the approval of our board of directors, including the
following:
• our board is classified into three classes of directors, each with staggered three-year terms;
• only our chairman, our chief executive officer, our president, or a majority of our board of
directors is authorized to call a special meeting of stockholders;
• our stockholders may take action only at a meeting of stockholders and not by written
consent;
• vacancies on our board of directors may be filled only by our board of directors and not by
stockholders;
• our certificate of incorporation authorizes undesignated preferred stock, the terms of which
may be established and shares of which may be issued without stockholder approval; and
• advance notice procedures apply for stockholders to nominate candidates for election as
directors or to bring matters before an annual meeting of stockholders.
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.
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