VMware 2007 Annual Report Download - page 34

Table of Contents
Until such time as EMC or its successor-in-interest ceases to beneficially own 20% or more of the outstanding shares of our common
stock, the affirmative vote or written consent of the holders of a majority of the outstanding shares of the Class B common stock will be required
to:
In addition, we have elected to apply the provisions of Section 203 of the Delaware General Corporation Law. These provisions may
prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us. These
provisions in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce
the price that investors might be willing to pay for shares of our common stock.
As a public company we incur costs and face demands on our management in addition to the costs and demands we faced prior to our initial
public offering .
As a public company, we incur significant legal, accounting and other expenses that we did not directly incur as a private company. In
addition, the Sarbanes-Oxley Act of 2002, as well as the rules subsequently implemented by the SEC and the New York Stock Exchange, have
required changes in corporate governance practices of public companies. These rules and regulations have increased and will continue to
increase our legal and financial compliance costs and to make some activities more time-consuming and costly. For example, in connection with
becoming a public company, we have added independent directors and may add more, created additional board committees and adopted certain
policies regarding internal controls and disclosure controls and procedures and may expand those procedures. In addition, we will incur
additional costs associated with our public company reporting requirements. We are currently evaluating and monitoring developments with
respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. Furthermore,
our management will have increased demands on its time in order to ensure we comply with public company reporting requirements and the
compliance requirements of the Sarbanes-Oxley Act of 2002, as well as the rules subsequently implemented by the SEC and the applicable
requirements of the New York Stock Exchange.
None.
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•
the ability of the board of directors to issue, without stockholder approval, up to 100,000,000 shares of preferred stock with terms set
by the board of directors, which rights could be senior to those of common stock; and
• in the event that EMC or its successor-in-interest no longer owns shares of our common stock representing at least a majority of the
votes entitled to be cast in the election of directors, stockholders may not act by written consent and may not call special meetings of
the stockholders.
•
amend certain provisions of our bylaws or certificate of incorporation;
•
make certain acquisitions or dispositions;
•
declare dividends, or undertake a recapitalization or liquidation;
•
adopt any stockholder rights plan,
“
poison pill
”
or other similar arrangement;
•
approve any transactions that would involve a merger, consolidation, restructuring, sale of substantially all of our assets or any of our
subsidiaries or otherwise result in any person or entity obtaining control of us or any of our subsidiaries; or
•
undertake certain other actions.
ITEM 1B.
UNRESOLVED STAFF COMMENTS