El Pollo Loco 2015 Annual Report Download - page 37

Table of Contents
Delaware law, our organizational documents, and our existing and future debt agreements may impede or discourage a takeover, depriving
our investors of the opportunity to receive a premium for their shares.
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to
acquire control of us, even if a change of control would be beneficial to our existing stockholders. In addition, provisions of our amended and
restated certificate of incorporation and by-laws may make it difficult for, or prevent, a third party from acquiring control of us without the
approval of our board of directors. Among other things, these provisions:
In addition, our secured revolving credit facility imposes, and we anticipate that documents governing our future indebtedness may impose,
limitations on our ability to enter into change of control transactions. Under our secured revolving credit facility, the occurrence of a change of
control transaction can constitute an event of default permitting acceleration of the debt, thereby impeding our ability to enter into change of
control transactions.
The foregoing factors, as well as significant common stock ownership by Trimaran and Freeman Spogli, could impede a merger, takeover, or
other business combination, or discourage a potential investor from making a tender offer for our common stock, which, under certain
circumstances, could reduce the market value of our common stock.
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•
provide for a classified board of directors with staggered three
-
year terms;
•
do not permit cumulative voting in the election of directors, which would allow a minority of stockholders to elect director candidates;
•
delegate the sole power to a majority of the board of directors to fix the number of directors;
• provide the power to our board of directors to fill any vacancy on our board of directors, whether such vacancy occurs as a result of an
increase in the number of directors or otherwise;
•
authorize the issuance of
“
blank check
”
preferred stock without any need for action by stockholders;
•
eliminate the ability of stockholders to call special meetings of stockholders;
• establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on
by stockholders at stockholder meetings; and
• provide that, on or after the date that LLC ceases to beneficially own at least 40% of the total votes eligible to be cast in the election of
directors, a 75% supermajority vote will be required to amend or repeal provisions relating to, among other things, the classification of the
board of directors, the filling of vacancies on the board of directors, and the advance notice requirements for stockholder proposals and
director nominations.