Restoration Hardware 2014 Annual Report Download - page 35

Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition
attempts for us that you might consider favorable.
Our certificate of incorporation and bylaws contain provisions that may make the acquisition of our
Company more difficult without the approval of our board of directors. These provisions:
• establish a classified board of directors so that not all members of our board of directors are elected at
one time;
• authorize the issuance of undesignated preferred stock, the terms of which may be established and the
shares of which may be issued without stockholder approval, and which may include super voting,
special approval, dividend or other rights or preferences superior to the rights of the holders of
common stock;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a
meeting of our stockholders;
• provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; and
• establish advance notice requirements for nominations for elections to our board of directors or for
proposing matters that can be acted upon by stockholders at stockholder meetings.
Our certificate of incorporation also contains a provision that provides us with protections similar to
Section 203 of the Delaware General Corporation Law (“DGCL”), and prevents us from engaging in a business
combination with a person who acquires at least 15% of our common stock for a period of three years from the
date such person acquired such common stock unless board or stockholder approval is obtained prior to the
acquisition, subject to certain exceptions. These anti-takeover provisions and other provisions under Delaware
law could discourage, delay or prevent a transaction involving a change in control of our Company, even if doing
so would benefit our stockholders. These provisions could also discourage proxy contests and make it more
difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate
actions you desire.
We do not expect to pay any cash dividends for the foreseeable future.
We do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable
future. Any determination to pay dividends in the future will be at the discretion of our board of directors and
will depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by
applicable law and other factors our board of directors deems relevant. Accordingly, realization of a gain on your
investment will depend on the appreciation of the price of our common stock, which may never occur. Investors
seeking cash dividends in the foreseeable future should not purchase our common stock.
We are required to comply with the New York Stock Exchange (“NYSE”) listing requirements, including its
independence requirements. Failure by us to comply with the NYSE listing requirements could result in us
receiving a deficiency or delisting notice from the NYSE.
We are required to comply with the NYSE listing requirements, including its requirement that the board of
directors of a listed company be comprised of a majority of independent directors. While we are currently in
compliance with this requirement, we may in the future temporarily fail to comply with it due to factors that are
outside of our control. Failure by us to comply with the NYSE listing requirements could result in us receiving a
deficiency or delisting notice from the NYSE.
On November 12, 2014, we notified the New York Stock Exchange (the “NYSE”) that, due to the
resignation of an independent director from our board of directors effective November 7, 2014, we had only four
independent directors serving on our then eight-member board of directors. Accordingly, effective November 7,
2014, our board of directors did not satisfy Section 303A.01 of the NYSE Listed Company Manual, which
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