Etsy 2015 Annual Report Download - page 36


held by our affiliates as defined in Rule 144 under the Securities Act. Sales of securities by any of these stockholders could adversely affect the trading price
of our common stock.


We may issue additional common stock, convertible securities or other equity in the future. We also issue common stock to our employees, directors and
other service providers pursuant to our equity incentive plans. Such issuances could be dilutive to investors and could cause the price of our common stock
to decline. New investors in such issuances could also receive rights senior to those of current stockholders.

We currently intend to use our cash resources for working capital and general corporate purposes, including continued investments in the growth of our
business. Our management has broad discretion in the allocation and use of our cash resources. The failure by our management to allocate or use these funds
effectively could harm our business. Pending their use, we may invest these funds in a manner that does not produce income or that loses value. Our ultimate
use of the net proceeds from our initial public offering may vary substantially from their original intended use.


Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change in control of our company or limiting
changes in our management. Among other things, these provisions:
• provide for a classified board of directors so that not all members of our board of directors are elected at one time;
• permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships;
• provide that directors may only be removed for cause;
• require super-majority voting to amend some provisions in our certificate of incorporation and bylaws;
• authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
• eliminate the ability of our stockholders to call special meetings of stockholders;
• prohibit stockholder action by written consent, which means all stockholder actions must be taken at a meeting of our stockholders;
• provide that our board of directors is expressly authorized to amend or repeal any provision of our bylaws;
• restrict the forum for certain litigation against us to Delaware; and
• require advance notice for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual
stockholder meetings.
These provisions may delay or prevent attempts by our stockholders to replace members of our management by making it more difficult for stockholders to
replace members of our board of directors, which is responsible for appointing the members of our management. In addition, Section 203 of the Delaware
General Corporation Law may delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business
combinations and other transactions between us and holders of 15% or more of our common stock. Anti-takeover provisions could depress the price of our
common stock by acting to delay or prevent a change in control of our company.
32