Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
þ
Preliminary information statement
o
Definitive information statement
o
Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2))
SUNPOWER CORPORATION
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
þ
No fee required.
o
Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:
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Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
To the stockholders of SunPower Corporation:
This Notice and the accompanying Information Statement are being
furnished to the stockholders of SunPower Corporation, a
Delaware corporation (“we,”“us,”“our” or the “Company”), in connection with
action taken by Cypress Semiconductor Corporation
(“Cypress”), the holder of a majority of the voting
power of the issued and outstanding voting securities of the
Company, approving, by written consent
dated , 2008, an
amendment and restatement of our certificate of incorporation.
The primary purposes of the amendments to our certificate of
incorporation are to facilitate the proposed spin-off by Cypress
to its stockholders of the shares of our Class B common
stock held by Cypress and to protect our public stockholders
following the spin-off by making it more difficult for a
potential acquiror of, or significant investor in, the Company
to take advantage of our capital structure and unfairly
discriminate between classes of our common stock.
Please review the Information Statement included with this
Notice for a more complete description of this matter.
Our board of directors has fixed the close of business
on , 2008 as the record
date for the determination of stockholders entitled to notice of
the action by written consent. Pursuant to
Rule 14c-2
under the Securities Exchange Act of 1934, as amended, the
corporate action authorized by Cypress, which holds all of our
outstanding shares of Class B common stock and a majority
of the combined voting power of our outstanding shares of
Class A and Class B common stock, can be taken no
sooner than 20 calendar days after the accompanying Information
Statement is first sent or given to the Company’s
stockholders. Since the accompanying Information Statement is
first being sent or given to security holders
on ,
2008, the corporate action described therein may be effective on
or
after ,
2008. Following the effectiveness of the above action by written
consent authorizing the transaction described in the
accompanying Information Statement, we expect to cause the
amended and restated certificate of incorporation to take effect
by filing it with the Secretary of State of the State of
Delaware at least five days prior to the distribution date for
the proposed spin-off.
Cypress has announced that it has set a record and distribution
date for the spin-off
of ,
2008. Cypress is not obligated to effect the spin-off and there
can be no assurance that it will occur. If the spin-off does not
occur, we do not expect the changes contemplated by the amended
and restated certificate of incorporation to take effect.
WE ARE
NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
As the matters set forth in this Notice and accompanying
Information Statement have been duly authorized and approved by
the written consent of the holders of a majority of the voting
power of the Company’s issued and outstanding voting
securities, your vote or consent is not requested or required to
approve these matters. The accompanying Information Statement is
provided solely for your information. The accompanying
Information Statement also serves as the notice required by
Section 228 of the General Corporation Law of the State of
Delaware of the taking of a corporate action without a meeting
by less than unanimous written consent of the Company’s
stockholders.
This Information Statement is being furnished by SunPower
Corporation, a Delaware corporation (“we,”“us,”“our” or the “Company”), in
connection with action taken by Cypress Semiconductor
Corporation (“Cypress”), the holder of a majority of
the voting power of the Company’s issued and outstanding
voting securities, approving, by written consent dated
August 29, 2008, an amendment and restatement of our
certificate of incorporation (the “Restated
Certificate”). The written consent approving the Restated
Certificate was given by Cypress in connection with the proposed
spin-off by Cypress to its stockholders of the shares of the
Company’s Class B common stock held by Cypress (the
“spin-off”). The amendments to our certificate of
incorporation to be effected by the Restated Certificate are
principally to:
(i) clarify that, following the spin-off, the shares of our
Class B common stock will remain outstanding as a separate
class from the shares of our Class A common stock and will
be transferable by holders of Class B common stock as a
separate class;
(ii) eliminate the ability of holders of shares of
Class B common stock following the spin-off to voluntarily
convert Class B shares into shares of Class A common
stock;
(iii) restrict the voting power of a holder of more than
15% of outstanding shares of Class B common stock with
respect to the election or removal of directors to 15% of the
outstanding shares of Class B common stock, unless such
holder also holds an equal or greater percentage of outstanding
Class A common stock. This voting restriction will not be
effective until the date (but will automatically be effective as
of such date), if any, that the Internal Revenue Service (the
“IRS”) issues a ruling (the “Supplemental
Ruling”) that the effectiveness of the restriction will not
prevent the favorable rulings received by Cypress with respect
to certain tax issues arising under Section 355 of the
Internal Revenue Code (the “Code”) in connection with
the spin-off from having full force and effect; and
(iv) facilitate the adoption of a stockholder rights plan
by allowing for dividends payable in rights to holders of
Class B common stock that, under certain circumstances,
entitle such holders to purchase shares of Class B common
stock (or shares of our capital stock having voting rights
equivalent to those of the Class B common stock
(“Equivalent Class B Shares”)) and permitting the
issuance of shares of Class B common stock upon exercise of
such rights. Our certificate of incorporation already allows for
the issuance of Class A common stock upon the exercise of
similar rights relating to our Class A common stock.
We are first sending or giving this Information Statement on or
about ,
2008 to our stockholders of record as of the close of business
on August 29, 2008 (the “Record Date”). Under the
General Corporation Law of the State of Delaware (the
“DGCL”), the Restated Certificate will not be
effective until filed with the Secretary of State of the State
of Delaware. We expect to file the Restated Certificate with the
Delaware Secretary of State at least five days prior to the
distribution date for the spin-off. Cypress is not obligated to
effect the spin-off, and there can be no assurance that it will
occur. If the spin-off does not occur, we do not expect the
changes to our certificate of incorporation contemplated by the
Restated Certificate to take effect.
Our principal executive offices are located at 3939 North First
Street, San Jose, California95134, and our main telephone
number is
(408) 240-5500.
On August 12, 2008, acting upon the recommendation of a
special committee of our board of directors independent of
Cypress (the “special committee”), our board of
directors approved, subject to stockholder approval, the
Restated Certificate. A summary of the amendments to our
certificate of incorporation to be effected by the Restated
Certificate is set forth in “Approval of the Restated
Certificate,” and a copy of the form of the Restated
Certificate as approved is attached hereto as Appendix A in
its entirety.
On August 29, 2008, Cypress, the holder of all of our
outstanding shares of Class B common stock, approved by
written consent the Restated Certificate (the “Written
Consent”). The Written Consent will become effective
20 days after this Information Statement is first sent or
given to our stockholders.
Under the DGCL, the Restated Certificate will not be effective
until filed with the Secretary of State of the State of
Delaware. Our board of directors may abandon the Restated
Certificate at any time prior to its filing, without any further
action by our stockholders; however, we have agreed with Cypress
that, if Cypress fixes a record and distribution date for the
spin-off, we will file the Restated Certificate no later than
five days prior to the distribution date. Cypress has announced
that it has set a record and distribution date for the spin-off
of ,
2008. Cypress is not obligated to effect the spin-off and there
can be no assurance that it will occur. If the spin-off does not
occur, we do not expect the changes contemplated by the Restated
Certificate to take effect.
We are not seeking consent, authorizations, or proxies from you.
Section 228 of the DGCL (“Section 228”) and
our certificate of incorporation provide that actions requiring
a vote of the stockholders may be approved by written consent of
the holders of outstanding shares of voting capital stock having
not less than the minimum number of votes which would be
necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. The
approval by at least a majority of the outstanding voting power
of our common stock, voting together as a single class, is
required to approve the Restated Certificate.
As of the Record Date, we
had shares
of Class A common stock
and shares
of Class B common stock issued and outstanding and entitled
to vote on the Restated Certificate. Each share of Class A
common stock is entitled to one vote, and each share of
Class B common stock is entitled to eight votes. As of the
Record Date, Cypress beneficially
owned shares,
or 100%, of our Class B common stock, representing
approximately % of the combined
voting power of our Class A common stock and Class B
common stock. Accordingly, the Written Consent executed by
Cypress pursuant to Section 228 is sufficient to approve
the Restated Certificate and no further stockholder action is
required.
Pursuant to Section 228, we are required to provide prompt
notice of the taking of a corporate action by written consent to
our stockholders who have not consented in writing to such
action. This Information Statement serves as the notice required
by Section 228.
On August 12, 2008, acting upon the recommendation of the
special committee, our board of directors approved, subject to
stockholder approval, the Restated Certificate. The stockholder
action to approve the Restated
Certificate, if not revoked or terminated, will become
effective after the passage of 20 calendar days from the date
this Information Statement is first sent or given to our
stockholders. The Restated Certificate will not be effective
until filed with the Secretary of State of the State of
Delaware. Our board of directors may abandon the Restated
Certificate at any time prior to its filing, without any further
action by our stockholders; however, we have agreed with Cypress
that, if Cypress fixes a record and distribution date for the
spin-off, we will file the Restated Certificate no later than
five days prior to the distribution date. Cypress has announced
that it has set a record and distribution date for the spin-off
of ,
2008. Cypress is not obligated to effect the spin-off and there
can be no assurance that it will occur. If the spin-off does not
occur, we do not expect the changes contemplated by the Restated
Certificate to take effect.
The following summary of the amendments to our certificate of
incorporation to be effected by the Restated Certificate is
qualified in its entirety by reference to the full text of the
form of the Restated Certificate attached hereto as
Annex A. You are encouraged to read the form of the
Restated Certificate in its entirety.
The amendments to our certificate of incorporation to be
effected by the Restated Certificate are principally to:
(i) clarify that, following the spin-off, the shares of our
Class B common stock will remain outstanding as a separate
class from our Class A shares and will be transferable by
holders of Class B common stock as a separate class;
(ii) eliminate the ability of holders of shares of
Class B common stock to voluntarily convert shares of
Class B common stock into shares of Class A common
stock following the spin-off;
(iii) restrict the voting power of a holder of more than
15% of outstanding shares of Class B common stock with
respect to the election or removal of directors to 15% of the
outstanding shares of Class B common stock. However, if
such holder also owns in excess of 15% of outstanding shares of
Class A common stock, then the holder may exercise the
voting power of Class B common stock in excess of 15% to
the extent that such holder has an equivalent percentage of
outstanding Class A common stock. For example, a holder of
20% of our outstanding Class B common stock, and none of
our Class A common stock, would be limited to 15% of the
voting power of our outstanding Class B common stock in the
election or removal of directors. On the other hand, if this
person owned both 20% of our outstanding Class B common
stock and 17% of our outstanding Class A common stock, then
the person would be able to exercise 17% of the voting power of
our outstanding Class B common stock in the election or
removal of directors. Any shares of Class B common stock as
to which voting power is restricted as described above would
automatically be voted in proportion to the shares of
Class B common stock held by holders of less than 15% of
such stock. This voting restriction will not be effective until
the date (but will automatically be effective as of such date),
if any, that the Supplemental Ruling is received; and
(iv) facilitate the adoption of a stockholder rights plan
by allowing for dividends payable in rights to holders of
Class B common stock that, under certain circumstances,
entitle such holders to purchase shares of Class B common
stock or Equivalent Class B Shares and permitting the
issuance of shares of Class B common stock upon exercise of
such rights. Our certificate of incorporation already allows for
the issuance of Class A common stock upon the exercise of
similar rights relating to our Class A common stock.
From time to time, Cypress has discussed with representatives of
the Company possible transactions that would effect a separation
of Cypress’s business from the Company. To consider such
possible transactions, we formed the special committee
consisting of Mr. Pat Wood III and Ms. Betsy Atkins,
members of our board of directors who are independent of
Cypress. The special committee retained the law firm of Skadden,
Arps, Slate, Meagher & Flom LLP as independent counsel.
In early February 2008, Cypress advised representatives of the
Company that it had submitted a request to the IRS for a private
ruling with respect to certain tax issues arising under
Section 355 of the Code in connection with a potential
spin-off to its stockholders of the shares of our Class B
common stock held by Cypress. During February
and March 2008, the special committee held a number of meetings
with its advisors and our management, and in executive session
without management present, to discuss the nature of
Cypress’s private ruling request, the potential timing of
any spin-off and its implications for the Company and the
holders of its Class A common stock. Among the
considerations was the resulting capitalization of the Company,
and whether there would be one or two classes of stock
outstanding following the spin-off.
On April 17, 2008, Cypress announced that it received a
favorable ruling from the IRS. That ruling provides that, based
on the facts and representations submitted by Cypress, no gain
or loss would be recognized by Cypress or its stockholders upon
the distribution by Cypress, and receipt by its stockholders, of
all of Cypress’s shares of our Class B common stock.
On a number of occasions, the special committee met with its
advisors and our management, and in executive session without
management present, to discuss the potential transaction with
particular focus on the treatment of and effect on our public
stockholders holding Class A common stock. In addition, our
management and members of the special committee and its legal
advisors discussed with representatives of Cypress on multiple
occasions a number of issues relating to the potential spin-off,
including various possibilities for eliminating the Class B
common stock, which has eight votes per share, by converting it
into shares of our Class A common stock. Cypress was unable
to accommodate any of the special committee’s requests in
this regard because Cypress’s ruling from the IRS assumes
that shares of our Class B common stock would remain
outstanding as a separate class from the Class A common
stock following the spin-off. In addition, Cypress required as a
condition of the spin-off that certain provisions in our
certificate of incorporation be revised to clarify certain
ambiguities with respect to the effect of the spin-off on the
Class B common stock. As a result, the special committee
and our board of directors understood that maintaining the
Class B common stock after the spin-off is an integral part
of the spin-off planned by Cypress, and our board of directors
has no plan or intention to attempt to eliminate the
Class B common stock.
After much consideration, on July 17, 2008, Cypress
announced that its board of directors had authorized its
management to proceed with the spin-off, with the objective of
having the transaction completed by the end of 2008, or sooner
if possible.
Cypress believes that the separation of Cypress and SunPower
will benefit each company’s business and its stockholders.
The spin-off is expected to provide significant benefits to both
Cypress and SunPower, including the following:
•
facilitate better access by both Cypress and SunPower to the
capital markets;
•
help both companies to more efficiently acquire needed assets
and services;
•
enable Cypress to grant more effective stock-based compensation,
which will provide improved incentives to its employees and
future hires that better and more directly align the incentives
with their performance;
•
allow management of each separated company to focus its
attention on that company by designing and implementing
corporate strategies based primarily on the business
characteristics of that company;
•
increase management’s focus on core business priorities by
enabling management to maximize financial resources and growth
opportunities relevant to their individual operations; and
•
offer each company greater flexibility to form strategic
business alliances within their target markets.
In order to effectuate the spin-off, Cypress required that we:
•
amend our certificate of incorporation to clarify that,
following the spin-off, the shares of our Class B common
stock will remain outstanding as a separate class from our
Class A common stock and will be transferable by holders of
Class B common stock as a separate class;
•
amend our certificate of incorporation to eliminate the ability
of holders of shares of Class B common stock following the
spin-off to voluntarily convert shares of Class B common
stock into shares of Class A common stock; and
•
enter into an amendment to the tax sharing agreement between us
and Cypress that provides for, among other things, our
obligation to indemnify Cypress against any tax resulting from
the spin-off if that tax results from
transactions involving certain acquisitions or dispositions of
our stock. See “Amended Tax Sharing Agreement.”
In addition, in order to protect our public stockholders
following the spin-off by making it more difficult for a
potential acquiror or significant investor of the Company to
take advantage of our capital structure and unfairly
discriminate between classes of our common stock by acquiring
significant voting influence over us without making a
correspondingly significant economic investment, which would not
be possible prior to the spin-off due to Cypress’ ownership
of all the shares of Class B common stock, our special committee
requested that our board of directors:
•
amend our certificate of incorporation to restrict the voting
power of a holder of more than 15% of our outstanding shares of
Class B common stock with respect to the election or
removal of directors to 15% of the outstanding shares of
Class B common stock, unless such holder of Class B
common stock has an equivalent percentage of our outstanding
Class A common stock;
•
amend our certificate of incorporation to facilitate adoption of
a stockholder rights plan by allowing for dividends payable in
rights to holders of Class B shares that, under certain
circumstances, entitle such holders to purchase shares of our
Class B common stock or Equivalent Class B Shares and
permitting the issuance of shares of Class B common stock
upon exercise of such rights; and
•
adopt a stockholder rights plan effective upon the spin-off to
discourage any one person or group from accumulating a
significant percentage of the outstanding shares of our
Class B common stock and thereby gain significant voting
influence over our company without making a correspondingly
significant economic investment (or from accumulating a
significant percentage of the combined outstanding shares of
Class A and Class B common stock).
Because the restriction on the voting power of a holder of more
than 15% of our Class B shares was not contemplated by the
ruling Cypress received from the IRS regarding the spin-off,
this voting restriction will not be effective until such date
(but will automatically be effective as of such date), if any,
that the IRS issues the Supplemental Ruling. In the event that
the Supplemental Ruling is not received, this voting restriction
will not become effective. Cypress has informed us that it has
submitted a request for such Supplemental Ruling on
August 22, 2008, but there can be no assurance that the
Supplemental Ruling will be received in a timely manner, or at
all.
The special committee met on August 6, 2008 to consider the
proposed actions to be taken in relation to the proposed
spin-off transactions in their entirety, including the proposed
amendments to our certificate of incorporation, the amendment to
the tax sharing agreement with Cypress and our adoption of a
stockholder rights plan. In making a determination of whether to
recommend that our board of directors take such actions, the
special committee considered, among other things, the factors
listed below.
•
Greater Ability to Make Independent
Decisions. The special committee considered the
benefits of Cypress no longer controlling us. The spin-off will
allow us to pursue future business initiatives free from the
constraints of having a controlling corporate stockholder whose
policies may restrict actions we believe to be in the best
interests of the Company and our public stockholders. Absent the
separation from Cypress, it is possible that Cypress could
restrict our ability to make investments or pursue strategies
that our management and board of directors believe to be in our
best long-term interests.
•
More Flexibility to Use Equity to Raise Capital, Make
Acquisitions and Compensate Employees. The
special committee considered the benefits of our being able to
use equity to raise cash, make acquisitions or compensate and
incentivize employees without being constrained by Cypress and
its own goals in terms of the ownership of a certain percentage
of voting power or equity in the Company. The special committee
also considered the limitations on our ability to issue equity
contained in the amendment to the tax sharing agreement.
Elimination of Stock Overhang. The special
committee considered the benefits of eliminating the overhang on
the market for our common stock that results from having a
controlling corporate stockholder, thereby potentially
increasing the liquidity and public float of our common stock.
•
The Consequences of Two Classes of Publicly Traded
Stock. The special committee also considered the
consequences of having two classes of common stock being
publicly traded, one having eight votes per share and the other
class having one vote per share, and the experience of other
companies having a two class “high vote — low
vote” common stock structure. The Company’s Class A
common stock currently trades on the NASDAQ Global Select Market
under the symbol “SPWR.”The Company is applying to
have its Class B common stock listed for trading on the NASDAQ
Global Select Market under the symbol “SPWRB,” and
expects to change the trading symbol of its Class A common stock
to “SPWRA” upon the completion of the spin-off. The
special committee considered the experience of other companies
with two publicly traded classes of common stock and the trading
performance of each of the classes. The special committee also
considered the potential for a person to acquire voting
influence in excess of its equity ownership in us by
accumulating shares of our Class B common stock as well as
restrictions on the voting rights of a more than 15% holder of
Class B common stock to be contained in the Restated
Certificate and the limitations on acquiring more than 20% of
the Class B common stock to be contained in the stockholder
rights plan.
•
Change in Control Considerations. The special
committee considered the potential benefits of enabling our
public stockholders to share in any premium associated with a
change in control of us if such an event should occur, subject
to the limitations in the amendment to the tax sharing agreement
and the potential for significant liability to us if certain
transactions did occur. The special committee also considered
the potential that some of the contemplated actions in
connection with the spin-off could deter a takeover bid that
could otherwise provide a premium to our stockholders.
•
Terms of the Tax Sharing Agreement. The
special committee considered our potential liability under the
current and amended tax sharing agreement if certain actions
occur that result in the spin-off failing to qualify as a tax
free distribution. See “Amended Tax Sharing Agreement.”
•
Governance Changes Resulting from the
Spin-Off. The special committee considered the
changes in our governance structure that will become effective
following the spin-off pursuant to the existing terms of our
certificate of incorporation and by-laws, as described under
“Governance Changes Resulting from the
Spin-Off.”
•
Changes in Relationship with Cypress Resulting From the
Spin-Off. The special committee considered the
changes in our relationship with Cypress that would result upon
completion of the spin-off. The Company currently relies on
certain administrative and other resources of Cypress in
connection with the operation of its business. The provision of
many of these services will terminate upon the completion of the
spin-off. We will need to operate our own administrative and
other support systems or contract with third parties to replace
Cypress’ systems. We believe we have sufficient resources,
and have made adequate arrangements for the provision of such
services. However, these services may not be provided at the
same level as when we were a subsidiary of Cypress, and we may
not be able to obtain the same benefits that we received prior
to the spin-off.
After careful consideration of these and other factors, the
special committee recommended at its meeting on August 6,2008 that our board of directors approve the proposed spin-off
transactions in their entirety, including the Restated
Certificate, the amended tax sharing agreement requested by
Cypress and the adoption of a stockholder rights plan.
The board of directors met on August 7, 2008 to consider
the actions for the spin-off recommended by the special
committee in their entirety, including the Restated Certificate,
the amended tax sharing agreement with Cypress and our adoption
of a stockholder rights plan.
After careful consideration of the factors described below and
others, our board of directors approved the Restated
Certificate, the amended tax sharing agreement and the
stockholder rights plan at a meeting on August 12,
2008. In making its determination to approve these actions,
including the Restated Certificate, the amended tax sharing
agreement requested by Cypress and the adoption of the
stockholder rights plan, the board of directors considered:
•
each of the factors separately considered by the special
committee as described above under “Recommendation and
Reasons of the Special Committee;”
•
the recommendation of the special committee, which is comprised
solely of independent directors of SunPower who are also not
affiliated with Cypress or our management;
•
the advice of its legal advisors; and
•
such other factors as the board of directors deemed relevant and
important to the interests of our stockholders.
We and Cypress entered into a tax sharing agreement in November
2004 that provides for each of the party’s obligations
concerning various tax liabilities. In connection with the
spin-off, Cypress has received a favorable ruling from the IRS
with respect to certain tax issues arising under
Section 355 of the Code in connection with the spin-off.
That ruling provides that, based on the facts and
representations submitted by Cypress, no gain or loss would be
recognized by Cypress or its stockholders upon the distribution
by Cypress, and receipt by its stockholders, of all of
Cypress’s shares of our Class B common stock. Despite
such ruling, however, the distribution may nonetheless be
taxable to Cypress under Section 355(e) of the Code if 50%
or more of our voting power or economic value is acquired as
part of a plan or series of related transactions that includes
the distribution of our stock. The tax sharing agreement
addresses our obligation to indemnify Cypress for any liability
incurred as a result of issuances or dispositions of our stock
after a tax-free spin-off by Cypress. On August 12, 2008,
we and Cypress entered into an amendment to the tax sharing
agreement to address certain transactions that may affect the
tax treatment of the spin-off and certain other matters. Under
the amended tax sharing agreement, we are required to provide
notice to Cypress of certain transactions that could give rise
to our indemnification obligation relating to taxes resulting
from the application of Section 355(e) of the Code or
similar provision of other applicable law to the spin-off as a
result of one or more acquisitions (within the meaning of
Section 355(e)) of our stock after the spin-off. An
acquisition for these purposes includes any such acquisition
attributable to a conversion of any or all of our Class B
common stock to Class A common stock or any similar
recapitalization transaction or series of related transactions
(a “Recapitalization”). We are not required to
indemnify Cypress for any taxes which would result solely from
(A) issuances and dispositions of our stock prior to the
spin-off and (B) any acquisition of our stock by Cypress
after the spin-off.
Under the amended tax sharing agreement, we also agreed that,
for a period of 25 months following the spin-off, we will
not (i) effect a Recapitalization or (ii) enter into
or facilitate any other transaction resulting in an acquisition
(within the meaning of Section 355(e) of the Code) of our
stock without first obtaining the written consent of Cypress;
provided, we are not required to obtain Cypress’s consent
unless such transaction (either alone or when taken together
with one or more other transactions entered into or facilitated
by us consummated after August 4, 2008 and during the
25-month
period following the spin-off) would involve the acquisition for
purposes of Section 355(e) of the Code after August 4,2008 of more than 25% of our outstanding shares of common stock.
In addition, the requirement to obtain Cypress’s consent
does not apply to (A) any acquisition of our stock that
will qualify under Treasury Regulation
Section 1.355-7(d)(8)
in connection with the performance of services, (B) any
acquisition of our stock for which we furnish to Cypress prior
to such acquisition an opinion of counsel and supporting
documentation, in form and substance reasonably satisfactory to
Cypress (a “Tax Opinion”), that such acquisition will
qualify under Treasury
Regulation Section 1.355-7(d)(9),
(C) an acquisition of our stock (other than involving a
public offering) for which we furnish to Cypress prior to such
acquisition a Tax Opinion to the effect that such acquisition
will qualify under the so-called “super safe harbor”
contained in Treasury
Regulation Section 1.355-7(b)(2)
or (D) the adoption by us of a standard stockholder rights
plan. We further agreed that we will not (i) effect a
Recapitalization during the 36 month period following the
spin-off without first obtaining a Tax Opinion to the effect
that such Recapitalization (either alone or when taken together
with any other transaction or
transactions) will not cause the spin-off to become taxable
under Section 355(e), or (ii) seek any private ruling,
including any supplemental private ruling, from the IRS with
regard to the spin-off, or any transaction having any bearing on
the tax treatment of the spin-off, without the prior written
consent of Cypress.
Compliance with the tax-free distribution rules addressed in the
tax sharing agreement, and the amendment thereto, could limit
our ability to use our equity to raise capital, pursue
acquisitions, compensate employees or engage in other business
initiatives for a period of time after spin-off will be
restricted if we can only sell or issue a limited amount of our
stock before triggering our obligation to indemnify Cypress for
taxes it incurs under Section 355(e) of the Code.
Following its meeting on August 6, 2008, the special
committee formally recommended to the board of directors at a
meeting on August 7, 2008 that the board adopt a
stockholder rights plan. The rights plan proposed for approval
by the board of directors contained specific features designed
to the address the potential for an acquiror or significant
investor to take advantage of our capital structure and unfairly
discriminate between classes of our common stock. Specifically,
the rights plan is designed to address the inequities that could
result if an investor, by acquiring 20% or more of the
outstanding shares of Class B common stock, were able to
gain significant voting influence over our company without
making a correspondingly significant economic investment, which
would not be possible prior to the spin-off due to Cypress’
ownership of all the shares of Class B common stock.
In addition, like similar rights plans adopted by companies with
only one class of common stock, the stockholder rights plan is
also intended to:
•
reduce our vulnerability to potentially coercive takeover
practices or takeover bids that are inadequate or otherwise
inconsistent with the interests of our stockholders;
•
encourage potential acquirors to negotiate with our board of
directors and to enhance the bargaining position of our board of
directors in any such negotiations; and
•
provide a means by which we may, under appropriate
circumstances, seek to keep a hostile bidder at bay while
pursuing a course of continued independence or developing or
implementing alternatives to provide superior value to
stockholders.
At the meeting of our board of directors on August 7, 2008,
the special committee recommended to the board that it adopt the
proposed rights plan. At the same meeting our board of directors
received advice from Jones Day, our outside legal advisors, on
the legal aspects of the proposed plan and on the fiduciary
duties of the board in considering its adoption. The board also
received advice from outside financial advisors on the financial
aspects of the proposed rights plan.
After considering the recommendation of the special committee
and the advice of its legal and financial advisors, the board of
directors adopted the rights plan at a meeting on
August 12, 2008. The rights plan is designed to take effect
immediately upon the proposed spin-off. If the spin-off does not
occur, the rights plan will be of no force or effect.
The following summarizes the principal terms and operation of
the rights plan as adopted by the board of directors on
August 12, 2008. The following summary of the rights plan
is qualified in its entirety by reference to the full text of
the rights plan, a copy of which was filed as Exhibit 4.1
to our Current Report on
Form 8-K
filed with the Securities and Exchange Commission (the
“SEC”) on August 12, 2008. See “Where You
Can Find More Information.” You are encouraged to read the
rights plan in its entirety.
Dividend Declaration; Subsequent Issuances of
Rights. Effective immediately upon the proposed
spin-off, a committee formed by the board of directors would
authorize and declare a dividend distribution of one right
(each, a
“Right”) for each share of either class of common
stock then outstanding. Each share of either class of common
stock issued thereafter would also be accompanied by a Right.
Initial Characteristics of the Rights. Until
the distribution date (described below), the Rights would be
attached to shares of our common stock, would be represented by
the certificates representing the common stock, would not trade
separately and would not be exercisable. In effect, the Rights
would be completely dormant.
Distribution Date; Exercisability. The
“Distribution Date” would be the earlier to occur of:
(i) the tenth calendar day following the date of our public
announcement (the “Share Acquisition Date”) that a
person or group of persons has acquired beneficial ownership of
(a) 20% or more of the aggregate outstanding Class A
and Class B common stock, or (b) 20% or more of the
outstanding Class B common stock (which, as of the date of
this Information Statement, would represent
approximately %
of the voting power of our aggregate outstanding common stock)
(an “Acquiring Person”); and
(ii) the tenth business day (or such later date as may be
specified by the board) following the commencement by any person
or group of persons of a tender offer or exchange offer, the
consummation of which would result in beneficial ownership by
such person or group of (a) 20% or more of the aggregate
outstanding Class A and Class B common stock, or
(b) 20% or more of the outstanding Class B common
stock (which, as of the date of this Information Statement,
would represent
approximately %
of the voting power of our aggregate outstanding common stock).
Upon the occurrence of a Distribution Date, the Rights would
separate from our common stock, would be represented by separate
rights certificates and would become nominally exercisable to
purchase, prior to the occurrence of a “flip-in” event
or a “flip-over” event, one one-hundredth of a share
of a new series of preferred stock of the Company (the
“Preferred Shares”). Each Preferred Share issued in
respect of Rights attached to a share of Class A common
stock would have economic and voting rights generally equal to
100 shares of Class A common stock, and each Right
issued in respect of a share of Class B common stock would
have economic and voting rights generally equal to
100 shares of Class B common stock. The exercise price
payable for one one-hundredth of a Preferred Share upon any
exercise of a Right is $450.00 (representing a 595% premium over
the closing price of one share of Class A common stock on
Nasdaq on August 11, 2008, the trading day before the
rights plan was adopted). Accordingly, we do not intend that it
would be economical for a holder to exercise the Rights prior to
the occurrence of a “flip-in” event or a
“flip-over” event as described below.
Flip-In Event. The Rights are intended to
provide protection against, among other things, potential abuses
associated with partial tender offers or creeping accumulations
of common stock. If (i) any person or group was to become
an Acquiring Person, (ii) an Acquiring Person was to engage
in a self-dealing transaction involving us, or (iii) during
such time as there is an Acquiring Person, there was any
reclassification of our securities, any recapitalization or any
other transaction resulting in a disproportionate increase in
the Acquiring Person’s ownership of our equity securities,
then, and in each such case, from and after the later of the
Share Acquisition Date and the Distribution Date, each Right,
other than Rights that are or were owned beneficially by an
Acquiring Person (which would be void) would become exercisable
upon payment of the then-current exercise price of the Right to
purchase a number of shares of common stock of the corresponding
class having a market value at the time of such flip-in event of
two times the exercise price of the Right. The Rights therefore
provide protection against, among other things, potential abuses
associated with partial tender offers or creeping accumulations
of common stock.
If there were an insufficient number of authorized shares of
common stock to permit the full exercise of the Rights upon the
occurrence of a flip-in event, we would be required to seek to
authorize additional common stock for issuance upon exercise of
the Rights. If we were unable to authorize additional common
stock, we would be required to deliver the applicable class of
common stock (to the extent available) and then cash having an
aggregate value equal to the excess of the value of the common
stock issuable upon the exercise of the Rights over the exercise
price without requiring payment of the exercise price. To the
extent that any legal or contractual restrictions would prevent
us from paying the full amount of cash payable, we would be
required to pay all amounts which were not then restricted on a
pro rata basis and to continue to make payments on a pro rata
basis as funds became available until the full amount due to
each holder of Rights had been paid.
Flip-Over Event. The Rights are also intended
to provide protection against, among other things, potential
abuses associated with squeeze-out mergers and similar
transactions occurring subsequent to a partial acquisition of
the common stock by an Acquiring Person. If, at any time after
the Share Acquisition Date:
(i) we were to merge with and into any other person and we
were not the surviving corporation;
(ii) any person was to merge with or into us and we were
the surviving corporation, but the common stock was changed or
exchanged; or
(iii) 50% or more of our assets or earning power were sold
or transferred to any other person;
then, and in each such case, from and after the later of the
Share Acquisition Date and the Distribution Date, each Right,
other than Rights owned beneficially by an Acquiring Person
(which would be void), would become exercisable upon payment of
the then-current exercise price of the Right to purchase a
number of common shares of such surviving corporation or other
person having a market value at the time of such flip-over event
of two times the exercise price of the Right.
Exchange. Our board of directors is entitled
to order the exchange of the Rights, in whole or in part, at an
exchange ratio of one share of Class A common stock or
Class B common stock, as the case may be, per Right
(subject to adjustment) at any time after the later of the
Distribution Date and the Share Acquisition Date, but prior to
the acquisition by any person or group of 50% or more of the
then-outstanding common stock. Rights held by any Acquiring
Person would be void, and thus would not be exchanged. This
exchange provision would simplify the mechanics of the exercise
of Rights and would provide additional flexibility to the board
following a Share Acquisition Date.
Redemption. Our board of directors is entitled
to redeem the Rights in whole, but not in part, at the nominal
price of $0.001 per Right at any time prior to the later of the
Share Acquisition Date and the Distribution Date. This
redemption provision is designed to provide flexibility to the
board in determining whether and when to redeem the Rights, and
would permit the board to redeem the Rights in connection with
an acquisition that has been approved by the board. Immediately
upon the effectiveness of the action of the board electing to
redeem the Rights, the Rights would cease to be exercisable and
the only right of the holders of Rights would be to receive the
redemption price.
Expiration. The Rights expire ten years after
the record date for distribution of the Rights, unless earlier
exchanged or redeemed by our board of directors as described
above.
In addition to the amendments to our certificate of
incorporation described above, the completion of the spin-off
will automatically result in a number of changes to our
governance structure pursuant to the existing terms of our
certificate of incorporation and bylaws. Under the existing
terms of our certificate of incorporation and bylaws, certain
changes become automatically effective once Cypress, its
successors in interest and its subsidiaries collectively own
less than 40% of the shares of all classes of our common stock
then outstanding and Cypress is no longer consolidating us for
accounting purposes. The completion of the spin-off will result
in such ownership and accounting changes. As a result, the
automatically effective changes will include the implementation
of a classified board of directors, the elimination of the
ability of our stockholders to act by written consent or to call
special meetings and the elimination of the supermajority board
approval requirements for certain extraordinary events.
Certain of these changes may have the effect of delaying,
deferring or discouraging another party from acquiring control
of us.
Currently, each of our directors is elected by our stockholders
each year at our annual meeting to serve for a one year term.
Pursuant to the terms of our certificate of incorporation, upon
the spin-off, our board of directors will be divided into three
classes of directors, with the classes to be as nearly equal in
number as possible, with the initial term of office of the
Class I directors expiring at the next annual meeting of
stockholders following the spin- off, the
term of office of the Class II directors expiring at the
second annual meeting following the spin-off and the term of
office of the Class III directors expiring at the third
annual meeting following the spin-off. Each class of directors
will have terms of three years following the initial term of
such class. Our by-laws contain a process for determining to
which class our incumbent directors will belong in the event
that our board of directors becomes classified. The then-current
board of directors shall be ranked in the following order:
•
first, directors who are also employees of the Company, followed
by directors who are also employees of Cypress (but not of the
Company), followed by directors who are also members of the
board of directors (but not employees) of Cypress, followed by
other directors. Ties in the rankings of directors made in
accordance with the preceding sentence shall be settled as
follows: (i) first, the board member having served on the
Company’s board of directors longer shall be given
priority, and (ii) second, the board member whose last name
appears first alphabetically shall receive priority; and
•
the directors, ranked in accordance with the preceding bullet,
shall be designated to the director classifications in
descending order of class (Class III, Class II,
Class I), such that the director ranked first shall be the
first Class III director, and so forth.
In accordance with this process, following the spin-off,
Class I will be composed of Dr. Uwe-Ernst Bufe (an
independent director) and Mr. Pat Wood (an independent
director), Class II will be composed of Ms. Betsy
Atkins (an independent director) and Mr. Steve Albrecht (an
independent director and also a director of Cypress), and
Class III will be composed of Mr. Thomas H. Werner
(our Chief Executive Officer) and Mr. T.J. Rodgers (our
Chairman, and President and Chief Executive Officer, and a
director, of Cypress).
Currently, any of our directors or our entire board of directors
may be removed from office at any time, with or without cause,
by the holders of a majority of the voting power of the shares
then entitled to vote at an election of directors. Under the
DGCL, in the case of a corporation with a classified board,
unless the corporation’s certificate of incorporation
otherwise provides, any director or the entire board of
directors of such corporation may be removed from office at any
time, but only for cause and only by the affirmative vote of the
holders of a majority of the voting power of the shares then
entitled to vote at an election of directors. Following the
spin-off and the classification of our board of directors, the
removal of our directors will be governed by the DGCL.
Currently, our stockholders may act without a meeting by written
consent. Following the spin-off, no action will be able to be
taken by stockholders except at an annual or special meeting of
the stockholders called in accordance with the Company’s
by-laws, and stockholders may not act by written consent.
Currently, special meetings of our stockholders may be called by
Cypress, our board of directors, the chairman of our board or
our chief executive officer. Following the spin-off, no
stockholder will have the right to call a special meeting.
Currently, the affirmative vote of at least 75% of the members
of our board of directors are required to: (a) amend our
certificate of incorporation or adopt, amend or repeal our
by-laws; (b) appoint or remove our chief executive officer;
(c) designate, appoint or allow for the nomination or
recommendation for election by our stockholders of an individual
to our board of directors; (d) change the size of our board
of directors to be other than in the range of five to seven
members; (e) form a committee of our board of directors or
establish or change a charter, committee responsibilities or
committee membership of any committee of our board of directors;
(f) adopt any stockholder rights plan, “poison
pill” or other similar arrangement; or (g) 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. Following the spin-off, these
super-majority requirements shall expire and be of no further
force or effect.
Currently, our by-laws provide that a representative
specifically designated by Cypress shall serve on each committee
of our board of directors unless otherwise prohibited by the
rules of The Nasdaq Stock Market or applicable law. Following
the spin-off, Cypress shall no longer have this right.
On July 17, 2008, Cypress publicly announced that its board
of directors had authorized its management to proceed with a
spin-off of its shares in the Company to its stockholders.
Cypress has informed the Company that it intends the proposed
spin-off to qualify for tax-free treatment under the Internal
Revenue Code. Cypress has further informed the Company of its
belief that certain amendments to be contained in the Restated
Certificate, particularly the clarification regarding the status
of the Class B common stock following the spin-off and the
elimination of the ability of holders of shares of Class B
common stock following the spin-off to voluntarily convert
Class B common stock into shares of our Class A common
stock, were required in order for Cypress to effect the spin-off
on a tax free basis. Thus, to the extent that these amendments
enabled a tax-free spin-off by Cypress, Cypress and its
stockholders will benefit from the adoption of the Restated
Certificate.
One of the Company’s directors, Mr. Steven Albrecht,
is also a director of Cypress, and the Company’s Chairman
of the Board, Mr. T.J. Rodgers, also serves as President
and Chief Executive Officer, and a director, of Cypress.
Mr. Albrecht and Mr. Rodgers thus may be considered to
have an interest in this matter to the extent that their
interests derive from their positions with Cypress. As of
July 31, 2008, Messrs. Albrecht and Rodgers
beneficially owned 70,890 and 3,528,259 shares of Cypress
common stock, respectively, including 57,990 shares and
2,858,947 shares, respectively, issuable upon currently
vested stock options and shares issuable within 60 days of
July 31, 2008 upon the vesting of outstanding awards for
Cypress common stock.
The following table sets forth certain information regarding
beneficial ownership of our Class A and Class B common
stock as of August 12, 2008 (except as described below) by:
•
each of our directors;
•
our Chief Executive Officer, Chief Financial Officer, and each
of the three other most highly compensated individuals who
served as our executive officers at fiscal year-end, who we
collectively refer to as our named executive officers;
•
our directors and executive officers as a group; and
•
each person (including any “group” as that term is
used in Section 13(d)(3) of the Securities Exchange Act of
1934) who is known by us to beneficially own more than 5%
of any class of our common stock.
Applicable beneficial ownership percentages listed below are
based on 41,045,559 shares of Class A common stock and
44,533,287 shares of Class B common stock outstanding
as of August 12, 2008. Subsequent to August 12, 2008,
Cypress sold 2,500,000 shares, which shares were
automatically converted from Class B common stock into an
equivalent number of shares of Class A common stock in
connection with such sale.
The business address for each of our directors and executive
officers is our corporate headquarters at 3939 North First
Street, San Jose, California95134.
Shares Beneficially Owned(1)
Class A
Class B
% Total
Directors and Named Executive
Common Stock
Common Stock
Voting
Officers
Shares
%
Shares
%
Power(2)
W. Steve Albrecht(3)
16,602
*
44,533,287
100
89.7
Betsy S. Atkins(4)
2,600
*
—
*
*
Uwe-Ernst Bufe
—
*
—
*
*
Thomas L. Dinwoodie(5)
1,617,999
3.9
—
*
*
Emmanuel T. Hernandez(6)
106,166
*
—
*
*
Bruce R. Ledesma(7)
45,264
*
—
*
*
T.J. Rodgers(8)
20,000
*
44,533,287
100
89.7
Howard J. Wenger(9)
80,243
*
—
*
*
Thomas H. Werner(10)
499,692
1.2
—
*
*
Pat Wood III(11)
31,102
*
—
*
*
All directors and executive officers as a group
(13 persons)(12)
972,407
2.3
44,533,287
100
89.7
Other Persons
BlackRock, Inc., BlackRock Investment
Management LLC, BlackRock (Channel Islands) Ltd, and BlackRock
Investment Management
UK Ltd.(13)
Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power
with respect to the securities. In computing the number of
shares beneficially owned by a
person and the percentage ownership of that person, shares
underlying options held by that person that will be exercisable
within 60 days of August 12, 2008, are deemed to be
outstanding. Such shares, however, are not deemed to be
outstanding for the purpose of computing the percentage
ownership of any other person.
(2)
Percentage total voting power represents voting power with
respect to all shares of our Class A common stock and
Class B common stock, voting as a single class. Each holder
of Class B common stock is entitled to eight votes per
share of Class B common stock and each holder of Class A
common stock is entitled to one vote per share of Class A
common stock on all matters to be submitted to stockholders for
vote. The Class A and Class B common stock vote
together as a single class on all matters submitted to a vote of
our stockholders, except as otherwise may be required by law.
The Class B common stock is convertible at any time by the
holder into shares of Class A common stock on a one-for-one
basis.
(3)
Includes 5,000 shares of Class A common stock held
directly by Mr. Albrecht, and 11,602 shares of
Class A common stock issuable to him upon exercise of
options exercisable within 60 days of August 12, 2008.
Also includes 44,533,287 shares of Class B common
stock held by Cypress. Mr. Albrecht is a director of
Cypress.
(4)
Includes 1,000 shares of Class A common stock held
directly by Ms. Atkins and 1,600 shares of
Class A common stock issuable to Ms. Atkins upon
exercise of options exercisable within 60 days of
August 12, 2008.
(5)
Includes 1,593,305 shares of Class A common stock held
directly by Mr. Dinwoodie, 12,347 shares of
Class A common stock held by the Jaelyn Wolf Irrevocable
Trust UAD May 5, 2005, of which Mr. Dinwoodie is the
Trustee, and 12,347 shares of Class A common stock
held by the Ariel Wolf Irrevocable Trust UAD May 5,2005, of which Mr. Dinwoodie is the Trustee.
Mr. Dinwoodie disclaims beneficial ownership of the shares
held in these trusts. 263,911 of the 1,593,305 shares held
directly by Mr. Dinwoodie are currently subject to an
equity restriction agreement with the Company, pursuant to which
the shares are subject to certain transfer and repurchase
restrictions. The restrictions lapse semi-annually during the
two-year restriction period ending January 10, 2009, so
long as Mr. Dinwoodie remains employed by the Company. In
connection with the sale of PowerLight Corporation to the
Company, Mr. Dinwoodie also contributed a number of his
individually held unrestricted shares and the shares he controls
in his capacity as Trustee into an escrow account for the
benefit of the Company to secure certain representations,
warranties, covenants and other matters made to the Company as
part of the terms of sale. As of August 12, 2008, 218,896
of the shares owned by him and 2,360 of the shares held by the
trusts remain in escrow.
(6)
Includes 678 shares of Class A common stock held
directly by Mr. Hernandez, 101,738 shares of Class A
common stock issuable to Mr. Hernandez upon exercise of
options exercisable within 60 days of August 12, 2008,
and 3,750 shares of restricted Class A common stock
held by him.
(7)
Includes 6,471 shares of Class A common stock held
directly by Mr. Ledesma, 7,719 shares of Class A
common stock issuable to him upon exercise of options
exercisable within 60 days of August 12, 2008, and
31,074 shares of restricted Class A common stock held
by him.
(8)
Includes 20,000 shares of Class A common stock held
directly by Mr. Rodgers. Also includes
44,533,287 shares of Class B common stock held by
Cypress. Mr. Rodgers is the President and Chief Executive
Officer, and a director, of Cypress.
(9)
Includes 11,927 shares of Class A common stock held
directly by Mr. Wenger, 12,382 shares of Class A
common stock issuable to him upon exercise of an option
exercisable within 60 days of August 12, 2008, and
55,934 shares of restricted Class A common stock held
by him.
(10)
Includes 45,425 shares of Class A common stock held
directly by Mr. Werner, and 454,267 shares of
Class A common stock issuable to him upon exercise of
options exercisable within 60 days of August 12, 2008.
(11)
Includes 5,000 shares of Class A common stock held
directly by Mr. Wood, and 26,102 shares of
Class A common stock issuable to him upon exercise of
options exercisable within 60 days of August 12, 2008.
(12)
Includes 136,876 shares of Class A common stock held
directly by the directors and officers as a group,
742,523 shares of Class A common stock issuable to
them upon exercise of options exercisable within 60 days of
August 12, 2008, and 93,008 shares of restricted
Class A common stock held by them. Also includes
44,533,287 shares of Class B common stock held by
Cypress. Mr. Rodgers is President and Chief Executive
Officer and a director of Cypress, and Mr. Albrecht is a
director of Cypress.
(13)
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G, filed
with the SEC on or about November 9, 2007 by BlackRock Inc.
on behalf of the investment advisory subsidiaries BlackRock
Investment Management LLC, BlackRock (Channel Islands)
Ltd, and BlackRock Investment Management UK Ltd., which
indicated that such parties have beneficial ownership of
2,084,506 shares of Class A common stock, with shared
voting and dispositive power with respect to said shares. The
business address of BlackRock Inc. is 40 East
52nd
Street, New York, NY10022.
(14)
The business address of Cypress is 198 Champion Court, San Jose,
California95134. On August 20, 2008, Cypress filed a
statement on Schedule 13G indicating that, on
August 18, 2008, Cypress sold 2,500,000 shares, which
shares were automatically converted from Class B common
stock into an equivalent number of shares of Class A common
stock in connection with such sale.
(15)
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G, filed
with the SEC on or about February 14, 2008 by FMR LLC, or
FMR, which indicated that it has beneficial ownership of
5,272,912 shares of Class A common stock, and sole
voting power with respect to 81,300 shares of Class A
common stock. FMR’s beneficial ownership includes holdings
of Fidelity Management & Research Company, or
Fidelity, which is a wholly-owned subsidiary of FMR. Fidelity
has indicated it has beneficial ownership of
5,178,812 shares of Class A common stock, including
193,833 shares of Class A common stock resulting from
the assumed conversion of $11.0 million principal amount of
our 1.25% convertible debentures due February 15, 2027.
Edward D. Johnson 3d and FMR, through their control of Fidelity,
and the funds each has sole power to dispose of
5,178,812 shares of Class A common stock. FMR’s
beneficial ownership also includes holdings of Strategic
Advisers, Inc., or Strategic Advisors, a wholly-owned subsidiary
of FMR. Strategic Advisors has indicated it has beneficial
ownership of 1,000 shares of Class A common stock.
FMR’s beneficial ownership also includes holdings of
Pyramis Global Advisors Trust Company, or Pyramis, which is
an indirect wholly-owned subsidiary of FMR. Pyramis has
indicated it has beneficial ownership of 76,300 shares of
Class A common stock. Edward C. Johnson 3d and FMR,
through their control of Pyramis, each has sole dispositive
power over 76,300 shares of Class A common stock and
sole power to vote or to direct the voting of 63,500 shares
of Class A common stock. FMR’s beneficial ownership
also includes holdings of Fidelity International Limited, or
FIL. Partnerships controlled predominantly by members of the
family of Edward C. Johnson 3d, or trusts for their benefit, own
shares of FIL voting stock with the right to cast approximately
47% of the total votes which may be cast by all holders of FIL
voting stock. FMR and FIL are of the view that they are not
acting as a “group” for purposes of Section 13(d)
under the Securities Exchange Act of 1934 and that they are not
otherwise required to attribute to each other the
“beneficial ownership” of securities
“beneficially owned” by the other corporation.
Therefore, they are of the view that the shares held by the
other corporation need not be aggregated for purposes of
Section 13(d). However, FMR voluntarily made its
Schedule 13G filing as if all of the shares are
beneficially owned by FMR and FIL on a joint basis, The business
address of FMR is 82 Devonshire Street, Boston, MA02109.
(16)
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G, filed
with the SEC on or about February 1, 2008 by Ivy Investment
Management Company, or IICO, Waddell & Reed Investment
Management Company, or WRIMCO, Waddell & Reed, Inc.,
or WRI, Waddell & Reed Financial Services, Inc., or
WRFSI, and Waddell & Reed Financial, Inc., or WDR,
which indicated they collectively have beneficial ownership of
2,070,769 shares of Class A common stock. They also
indicated that IICO has beneficial ownership of and sole to
power to vote or direct the vote, as well as sole power to
dispose or direct the disposition, with respect to
1,343,941 shares of Class A common stock, WRIMCO has
beneficial ownership of and sole power to vote or direct the
vote, as well as sole power to dispose or direct the
disposition, with respect to 726,828 shares of Class A
common stock, WRI has beneficial ownership of and sole power to
vote or direct the vote, as well as sole power to dispose or
direct the disposition, with respect to 726,828 shares of
Class A common stock, WRFSI has beneficial ownership of and
sole power to vote or direct the vote, as well as sole power to
dispose or direct the disposition, with respect to
726,828 shares of Class A common stock, WDR has
beneficial ownership of and sole power to vote or direct the
vote, as well as sole power to dispose or direct the
disposition, with respect to 2,070,769 shares of
Class A common stock. IICO, WRIMCO, WRI, WRFSI and WDR are
of the view that they are not acting as a “group” for
purposes of Section 13(d) under the Securities Exchange Act
of 1934. Indirect “beneficial ownership” is attributed
to the respective parent companies solely because of the parent
companies’ control relationship to WRIMCO and IICO. The
business address of each beneficial owners is 6300 Lamar Avenue,
Overland Park, KS66202.
The following table sets forth certain information with respect
to the expected beneficial ownership of our Class A and
Class B common stock after giving effect to the completion
of the spin-off. The information in the table
below is based on available information regarding the
beneficial ownership of our Class A and Class B common stock,
and Cypress common stock, as of August 12, 2008, by the
following:
•
each of our directors and named executive officers;
•
our directors and executive officers as a group;
•
each person (including any “group” as that term is
used in Section 13(d)(3) of the Securities Exchange Act of
1934) who is known by us to beneficially own more than 5%
of any class of our common stock;
•
each of Cypress’ directors and the named executive officers
in Cypress’ proxy statement relating to its 2008 annual
meeting of stockholders (except for Messrs. Rodgers and
Albrecht, who are included above); and
•
each person known by Cypress to beneficially own more than 5% of
the outstanding common stock of Cypress.
Beneficial ownership is determined in accordance with the rules
of the SEC. Applicable beneficial ownership percentages listed
below are based on 41,045,559 shares of Class A common
stock and 44,533,287 shares of Class B common stock
outstanding as of August 12, 2008. Subsequent to
August 12, 2008, Cypress sold 2,500,000 shares, which
shares were automatically converted from Class B common
stock into an equivalent number of shares of Class A common
stock in connection with such sale.
The information in the table below has been based on an assumed
pro rata distribution ratio
of shares
of our Class B common stock for each share of Cypress
common stock held by Cypress stockholders as of the record date
for such distribution to be set by Cypress (the “assumed
distribution ratio”). We cannot provide any assurances that
Cypress will complete the spin-off in accordance with the
assumed distribution
ratio, or at all. Further, we cannot predict what the actual
ownership of our or Cypress common stock will be at the record
date to be set for such distribution by Cypress.
Shares Beneficially Owned
Class A
Class B
% Total
Common Stock
Common Stock
Voting
Shares
%
Shares
%
Power
Directors and Named Executive
Officers of SunPower
W. Steve Albrecht
Betsy S. Atkins
Uwe-Ernst Bufe
Thomas L. Dinwoodie
Emmanuel T. Hernandez
Bruce R. Ledesma
T.J. Rodgers
Howard J. Wenger
Thomas H. Werner
Pat Wood III
All directors and executive officers of SunPower as a group
(13 persons)
Directors and Named Executive
Officers of Cypress (except as included above)
Eric A. Benhamou
Lloyd Carney
James R. Long
J. Daniel McCranie
Evert van de Ven
Brad W. Buss
Ahmad R. Chatila
Paul D. Keswick
Christopher A. Seams
All directors and executive officers of Cypress as a group
(15 persons)
Other Persons
BlackRock, Inc., BlackRock Investment Management LLC, BlackRock
(Channel Islands) Ltd, and BlackRock Investment Management
UK Ltd.
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G/A
filed on February 14, 2008 with the SEC by FMR LLC. See
also note 15 to the immediately preceding table.
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G filed
on February 14, 2008 with the SEC by Janus Capital
Management LLC.
(3)
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G filed on
April 4, 2008 with the SEC by Eminence Capital, LLC.
(4)
The ownership information set forth in the table is based on
information contained in a statement on Schedule 13G filed on
July 7, 2008 with the SEC by Mason Capital Management LLC.
To reduce the expenses of delivering duplicate materials to our
stockholders, we are taking advantage of householding rules that
permit us to deliver only one Information Statement to
stockholders who share the same address unless otherwise
requested.
If you share an address with another stockholder and have
received only one Information Statement, you may write or call
us to request a separate copy at no cost to you. For future
mailings, you may request separate materials or, if you are
receiving multiple copies you may request that we only send one
set of materials, by writing to us at SunPower Corporation, 3939
North First Street, San Jose, California95134, Attention:
Corporate Secretary, or by calling us at
(408) 240-5500.
This Information Statement contains forward-looking statements
regarding future events as well as assumptions underlying or
relating to such statements, all of which are
“forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934. We use
words and phrases such as “expect,”“intend,”“potential,”“proposed,”“will,”“designed,”“anticipated,”
and similar expressions to identify forward-looking statements.
Forward-looking statements in this Information Statement
include, but are not limited to, statements regarding the
occurrence, timing and effects of the proposed spin-off and the
related actions approved by our board of directors, including
the Restated Certificate, the amended tax sharing agreement and
the stockholder rights plan. These forward-looking statements
are based on information available to us as of the date of this
Information Statement and our current expectations and
assumptions, and involve a number of risks and uncertainties
that could cause actual events to differ materially from those
anticipated by the forward-looking statements.
Such risks and uncertainties include a variety of factors, some
of which are beyond our control. In particular, risks and
uncertainties that could cause actual events to differ include:
decisions made by Cypress regarding the desirability, timing and
structure of the proposed spin-off; any delays in Cypress
receiving, or its inability to receive, the Supplemental Ruling;
actions of investors following the spin-off, potentially
including actions resulting in a change in control of, or
influence over, our company despite the measures described in
this Information Statement; legal risks related to the actions
described in this Information Statement; the potential for some
of the actions described in this Information Statement to deter
a takeover bid that could provide a premium to our stockholders;
potential tax liabilities in connection with the proposed
spin-off, including under the amended tax sharing agreement; the
potential for the presence of two publicly traded classes of our
common stock to impair the liquidity of either class; and other
risks described in our Quarterly Report on
Form 10-Q
for the quarter ended June 29, 2008 and our other filings
with the SEC. These forward-looking statements should not be
relied upon as representing the our views as of any subsequent
date, and we are under no obligation to, and expressly disclaim
any responsibility to, update or alter our forward-looking
statements, whether as a result of new information, future
events or otherwise.
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read or copy any
document we file at the public reference room maintained by the
SEC at Station Place, 100 F Street, N.E.,
Washington, D.C. 20549. Copies of this information may also
be obtained by mail from the SEC’s Public Reference Branch
at Station Place, 100 F Street, N.E.,
Washington, D.C. 20549. In addition, our
Copies of material filed by us with the SEC may also be obtained
by writing to us at our corporate headquarters, SunPower
Corporation, Attention: Investor Relations, 3939 North First
Street, San Jose, California95134, or by calling
(408) 240-5500.
SunPower Corporation, a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
FIRST: The original Certificate of
Incorporation of the corporation was filed with the Secretary of
State of Delaware on May 25, 2004 under the name SPR
Acquisition Corporation.
SECOND: Pursuant to an action of the Board of
Directors and a written consent of stockholders of the
Corporation, this Restated Certificate of Incorporation has been
duly adopted in accordance with Sections 242, 245 and 228
of the General Corporation Law of the State of Delaware.
THIRD: This Restated Certificate of
Incorporation restates, integrates and further amends the
provisions of the Restated Certificate of Incorporation of the
corporation, as heretofore in effect.
FOURTH: The Restated Certificate of
Incorporation of the corporation shall be amended and restated
to read in full as follows:
ARTICLE I
The name of the corporation is SunPower Corporation (the
“Corporation”)
ARTICLE II
A. The registered agent and the address of the registered
office in the State of Delaware are:
The
Corporation Trust Company
1209 Orange Street Wilmington, Delaware19801
County of New Castle
B. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the
“DGCL”).
ARTICLE III
A. The total number of shares that the Corporation shall
have authority to issue is 377,542,490, consisting of
367,500,000 shares designated as common stock, par value
$0.001 per share (the “Common Stock”),
and 10,042,490 shares designated as preferred stock, par
value $0.001 per share (the “Preferred
Stock”).
B. The Common Stock shall consist of two series designated
as “Class A Common Stock” and
“Class B Common Stock”, and
sometimes referred to herein as a
“Class” or
“Classes” of Common Stock. The
authorized number of shares of Class A Common Stock shall
be 217,500,000 and the authorized number of shares of
Class B Common Stock shall be 150,000,000.
C. The Board of Directors is hereby authorized, subject to
limitations prescribed by law and the provisions of this
Part C of this Article III, by resolution to
provide for the issuance of the remaining authorized shares of
Preferred Stock in one or more series, and to establish from
time to time the number of shares to be included in each such
series, and to fix the designation, powers, privileges,
preferences, and relative participating, optional or other
rights, if any, of the shares of each such series and the
qualifications, limitations or restrictions thereof.
Subject to limitations prescribed by law and the provisions of
this Part C of this Article III, the authority
of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
1. The number of shares constituting that series (including
an increase or decrease in the number of shares of any such
series (but not below the number of shares in any such series
then outstanding)) and the distinctive designation of that
series;
2. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment
of dividends on shares of that series;
3. Whether that series shall have voting rights (including
multiple or fractional votes per share) in addition to the
voting rights provided by law, and, if so, the terms of such
voting rights;
4. Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such privileges,
including provision for adjustment of the conversion rate in
such events as the Board of Directors shall determine;
5. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and
at different redemption rates;
6. Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and the amount of such sinking funds;
7. The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, and the relative rights of priority, if any,
of payment of shares of that series; and
8. Any other relative rights, preferences and limitations
of that series.
No holders of shares of the Corporation of any class or series,
now or hereafter authorized, shall have any preferential or
preemptive rights to subscribe for, purchase or receive any
shares of the Corporation of any class, now or hereafter
authorized, or any options or warrants for such shares, or any
rights to subscribe for, purchase or receive any securities
convertible into or exchangeable for such shares, which may at
any time be issued, sold or offered for sale by the Corporation,
except in the case of any shares of Preferred Stock to which
such rights are specifically granted by any resolution or
resolutions of the Board of Directors adopted pursuant to
Part C of this Article III or in the case of
any shares of Common Stock to which such rights are specifically
granted by Section 5 of Part D of
Article III.
D. The powers, preferences, rights, restrictions and other
matters relating to the Common Stock are as follows:
1. Voting Rights.
(a) All shares of Common Stock will be identical in all
respects and will entitle the holders thereof to the same rights
and privileges, except as expressly provided otherwise in this
Restated Certificate of Incorporation (this
“Certificate of Incorporation”). Except
as expressly provided otherwise herein or as otherwise provided
by law, all series of Common Stock shall vote together as a
single Class on all matters submitted to a vote of the
stockholders.
(b) The Class B Common Stock shall be issuable only to
Cypress Semiconductor Corporation or any Successor in Interest
(as defined below) thereto (“Cypress”),
or any Subsidiary (as defined below) of Cypress;
provided, however, that nothing herein will
prevent (i) the distribution of such shares by Cypress to
the stockholders of Cypress in connection with a Tax-Free
Spin-Off (as defined below), (ii) the transfer of such
shares by holders thereof following a Tax-Free Spin-Off or
(iii) the issuance of shares of Class B Common Stock
by the Corporation to holders thereof following a Tax-Free
Spin-Off if such issuance is in connection with a dividend or
distribution pursuant to Section 2 of this Part D
of Article III or in connection with an exercise of an
option, warrant or right issued pursuant to Section 2(c)
of this Part D of Article III.
(c) The holders of shares of Common Stock shall have the
following voting rights:
(i) Except as provided in Section 1(c)(iii) of this
Part D of Article III, each holder of a share of
Class A Common Stock shall be entitled to cast one vote on
all matters submitted to a vote of the stockholders of the
Corporation for each share of Class A Common Stock held by
such holder.
(ii) (1) Until such date, if any, on which both
(A) a Tax-Free Spin-Off has been effected and (B) the
Internal Revenue Service has issued or granted a supplemental
ruling that the effectiveness of the provisions in
Section 1(c)(ii)(2) of this Part D of
Article III will not affect the rulings contained in
the private letter ruling, dated April 16, 2008
(PLR-103725-08) and will not prevent those rulings from having
full force and effect (such date, the “Threshold
Ruling Date”), each holder of a share of
Class B Common Stock shall be entitled to cast eight votes
on all matters submitted to a vote of the stockholders of the
Corporation for each share of Class B Common Stock held by
such holder.
(2) Effective as of the Threshold Ruling Date, except as
provided in the last sentence of this
Section 1(c)(ii)(2) of this Part D of
Article III, for so long as any Person or entity or
group of Persons or entities acting in concert beneficially owns
15% (the “Threshold Amount”) or more of
the then outstanding shares of Class B Common Stock, then
in any election of directors or other exercise of voting rights
with respect to the election or removal of directors, such
Person, entity or group shall only be entitled, as to the
Class B shares beneficially owned by such Person, entity or
group, to vote (or otherwise exercise voting rights with respect
to) a number of shares of Class B Common Stock that equals
the product of (A) the total number of shares of
Class B Common Stock then outstanding multiplied by
(B) the greater of (i) the Threshold Amount (expressed
as a percentage) and (ii) such Person, entity or
group’s Entitled Voting Percentage (as defined below) (such
product, the “Voting Class B
Shares”). For the purposes hereof, a Person, entity
or group’s “Entitled Voting
Percentage” at any time shall mean the lesser of
(x) the percentage of the then outstanding shares of
Class A Common Stock beneficially owned by such Person,
entity or group at such time and (y) the percentage of the
then outstanding shares of Class B Common Stock
beneficially owned by such Person, entity or group at such time.
Any shares of Class B Common Stock beneficially owned by
such Person, entity or group in excess of the Voting
Class B Shares shall automatically be voted in proportion
to the aggregate votes of the shares of Class B Common
Stock held by holders of Class B Common Stock who
beneficially own less than 15% of the Class B Common Stock
(ignoring abstentions and any shares that were not present in
Person or represented by proxy at the meeting at which the
applicable vote is taken). For purposes of this Section
1(c)(ii)(2) of this Part D of Article III, a
“beneficial owner” of Common Stock includes any Person
or entity or group of Persons or entities who, directly or
indirectly, including through any contract, arrangement,
understanding, relationship or otherwise, written or oral,
formal or informal, control the voting power (which includes the
power to vote or to direct the voting) of such Common Stock
within the meaning of
Rule 13d-3(a)(1)
under the U.S. Securities Exchange Act of 1934, as amended
(the “Exchange Act”) provided,
however, that a Person shall not be deemed the
“beneficial owner” of, or to “beneficially
own,” any security under this Section 1(c)(ii)(2)
of this Part D of Article III as a result of a
contract, arrangement, understanding or relationship to vote
such security if such contract, arrangement, understanding or
relationship: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and
(B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report).
(iii) Notwithstanding any other provision of this
Certificate of Incorporation to the contrary, holders of
Class A Common Stock shall not be eligible to vote on any
alteration or change in the powers, preferences, or special
rights of the Class B Common Stock that would not adversely
affect the rights of the Class A Common Stock. For the
foregoing purposes, the addition of any provision for the
voluntary, mandatory or other conversion or exchange of the
Class B Common Stock into or for Class A Common Stock
on a one-for-one basis shall be deemed not to adversely affect
the rights of the Class A Common Stock.
(a) Subject to the preferences applicable to any Preferred
Stock outstanding at any time, and except as otherwise provided
in this Section 2 of this Part D of
Article III, the holders of shares of Common Stock
shall be entitled to receive such dividends and other
distributions in cash, property or shares of stock of the
Corporation as may be declared thereon by the Board of Directors
from time to time out of assets or funds of the Corporation
legally available therefor. Subject to the provisions of
Sections 2(b), 2(c) and 5(a) of this Part D of
Article III, no dividend shall be paid on the
Class A Common Stock in any year unless an equal dividend
for such year is simultaneously paid on the Class B Common
Stock.
(b) In the case of a dividend or other distribution payable
in Class A Common Stock or Class B Common Stock
(including any distribution pursuant to a stock split or
division of Class A Common Stock or Class B Common
Stock), only shares of Class A Common Stock shall be
distributed with respect to Class A Common Stock and only
shares of Class B Common Stock shall be distributed with
respect to Class B Common Stock. In the case of any such
dividend or other distribution payable in shares of Class A
Common Stock or Class B Common Stock, the number of shares
of each Class of Common Stock payable per share of such Class of
Common Stock shall be equal.
(c) In the case of a dividend or other distribution payable
in rights, warrants or options to purchase shares of the capital
stock of the Corporation (a “rights dividend”) that
entitle the holder thereof to purchase shares of Class A
Common Stock (or shares of capital stock of the Corporation
having voting rights equivalent to those of the Class A
Common Stock (“Equivalent Class A
Shares”)) or Class B Common Stock (or shares
of capital stock of the Corporation having voting rights
equivalent to those of the Class B Common Stock
(“Equivalent Class B Shares”))
(whether initially or upon any adjustment thereunder), then only
rights to acquire Class A Common Stock or Equivalent
Class A Shares may be paid to holders of Class A
Common Stock and only rights to acquire Class B Common
Stock or Equivalent Class B Shares may be paid to holders
of Class B Common Stock. Equivalent Class A Shares and
Equivalent Class B Shares refer to the issuance of
(i) rights to acquire preferred stock with equivalent
voting rights to Class A Shares or Class B Shares, as
the case may be, and (ii) shares of such preferred stock,
in each case pursuant to a shareholder rights plan adopted by
the Corporation.
3. Conversion and Exchange Rights.
(a) Voluntary Conversion of Class B Common Stock
into Class A Common Stock Prior to a Tax-Free
Spin-Off. Prior to the occurrence of a Tax-Free
Spin-Off, the holders of Class B Common Stock shall be
entitled to convert, at any time and from time to time, any
share of Class B Common Stock into one (1) fully paid
and non-assessable share of Class A Common Stock. Such
right shall be exercised by the surrender to the Corporation of
the certificate or certificates representing the shares of
Class B Common Stock to be converted at any time during
normal business hours at the principal executive offices of the
Corporation or at the office of the Corporation’s transfer
agent (the “Transfer Agent”), accompanied by a
written notice from the holder of such shares stating that such
holder desires to convert such shares, or a stated number of the
shares represented by such certificate or certificates, into an
equal number of shares of Class A Common Stock, and (if so
required by the Corporation or the Transfer Agent) by
instruments of transfer, in form satisfactory to the Corporation
and to the Transfer Agent, duly executed by such holder or such
holder’s duly authorized attorney, and transfer tax stamps
or funds therefor if required pursuant to
Section 3(c)(v) of this Part D of
Article III. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the
date of the giving of the required written notice and surrender
of any certificate or certificates representing shares of
Class B Common Stock. Upon the date any such conversion is
made or effected, all rights of the holder of such shares of
Class B Common Stock as such holder shall cease, and the
Person or Persons in whose name or names the certificate or
certificates representing the shares of Class A Common
Stock are to be issued shall be treated for all purposes as
having become the record holder or holders of such shares of
Class A Common Stock. The rights of holders of Class B
Common Stock to convert shares of Class B Common Stock into
Class A Common Stock pursuant to this Section 3(a)
of this Part D of Article III shall expire and
this Section 3(a) of this Part D of
Article III shall be of no further force or effect upon
the occurrence of a Tax-Free Spin-Off.
(b) Mandatory Conversion of Class B Common Stock
into Class A Common Stock.
(i) Upon Transfer Prior to a Tax-Free
Spin-Off. Upon any transfer prior to the
occurrence of a Tax-Free Spin-Off (for purposes of clarity,
other than the original issuance or a transfer in the form of a
distribution by Cypress to the stockholders of Cypress in
connection with a Tax-Free Spin-Off) of any share of
Class B Common Stock to any Person other than the original
holder thereof, such share shall immediately and automatically
(and without any action on the part of the holder or the
Corporation or any other Person) convert into one (1) fully
paid and non-assessable share of Class A Common Stock;
provided, however, that no such conversion shall
occur solely as a result of the pledge or hypothecation of, or
existence of any other lien or encumbrance on, any share(s) of
Class B Common Stock, and no such conversion shall occur
solely as a result of a transfer by the original holder thereof
or one of its Subsidiaries or its Parent to the original holder
thereof or one of its Subsidiaries or its Parent;
providedfurther, that such share of Class B
Common Stock shall immediately and automatically (and without
any action on the part of the holder or the Corporation or any
other Person) convert into one (1) fully paid and
non-assessable share of Class A Common Stock if at any time
prior to the occurrence of a Tax-Free Spin-Off such holder is no
longer the original holder or a Subsidiary or the Parent of the
original holder of such share of Class B Common Stock. Any
such conversion shall be deemed to have been effected at the
close of business on the date of the transfer. Upon the date any
such conversion is effected, all rights of the holder of such
shares of Class B Common Stock as such holder shall cease
as to the shares so converted, and the Person or Persons
entitled to receive Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record
holder or holders of shares of Class A common stock on such
date. Until certificates for such shares of Class B Common
Stock that have been converted have been delivered to the
Corporation for exchange for certificates representing
Class A Common Stock, such certificates shall be deemed to
represent the shares of Class A Common Stock into which
such Class B Common Stock has been converted. A transfer of
a share of Class B Common Stock following a Tax-Free Spin
Off or pursuant to a Tax-Free Spin-Off shall not cause an
automatic conversion of such share into a share of Class A
Common Stock.
(ii) Upon a Plurality Triggering Event Prior to a
Tax-Free Spin-Off. If at any time prior to
the occurrence of a Tax-Free Spin-Off Cypress and its
Subsidiaries collectively own less than 40% of the shares of all
Classes of the Corporation’s Common Stock then outstanding
(calculated without regard to the difference in voting rights
between the Classes of Common Stock) (a “Plurality
Triggering Event”), then each outstanding share of
Class B Common Stock shall be automatically (and without
any action on the part of the holder or the Corporation or any
other Person) converted into one (1) fully paid and
non-assessable share of Class A Common Stock. Such
conversion shall be deemed to have been made at the close of
business on the date of the Plurality Triggering Event, and the
Person or Persons entitled to receive Class A Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder or holders of shares of Class A Common
Stock on such date. Until certificates for such shares of
Class B Common Stock that have been converted have been
delivered to the Corporation for exchange for certificates
representing Class A Common Stock, such certificates shall
be deemed to represent the shares of Class A Common Stock
into which such Class B Common Stock has been converted.
For the avoidance of doubt, Cypress and its Subsidiaries’
ceasing to own 40% or more of the shares of all Classes of the
Corporation’s Common Stock then outstanding as a result of
a Tax-Free Spin-Off shall not cause a Plurality Triggering Event
to occur.
(c) Certain Provisions Relating to Stock Conversion,
Exchange and Transfer.
(i) The Corporation will provide notice of any conversion
pursuant to Section 3(b)(ii) of this Part D of
Article III to holders of record of Common Stock as
soon as practicable following such conversion; provided,
however, that the Corporation may satisfy such notice
requirement by providing such notice prior to any such
conversion. Such notice shall be provided by mailing notice of
such conversion, first class postage prepaid, to each holder of
record of the Common Stock, at such holder’s address as it
appears on the transfer books of the Corporation;
provided, however, that neither the failure to
give such notice nor any defect therein shall affect the
validity of any such conversion. Each notice shall state, as
appropriate, the following:
(1) the effective date of the conversion;
(2) that all outstanding shares of Class B Common
Stock are converted into Class A Common Stock;
(3) the place or places at which certificates for such
shares of Class B Common Stock are to be surrendered for
certificates for an equivalent number of shares of Class A
Common Stock; and
(4) that no dividends will be declared on the shares of
Class B Common Stock after such conversion.
(ii) As promptly as practicable following the surrender of
a certificate representing shares of Class B Common Stock
for voluntary conversion in the manner provided in
Section 3(a) of this Part D of Article III
or for exchange following any event of mandatory conversion as
provided in Section 3(b) of this Part D of
Article III, as applicable, and the payment in cash of
any amount required by Section 3(c)(v) of this
Part D of Article III, the Corporation shall
deliver or cause to be delivered at the office of the Transfer
Agent, a certificate or certificates representing the number of
full shares of Class A Common Stock issuable upon such
conversion or exchange, issued in such name or names as such
holder may direct.
(iii) In the event of a reclassification or other similar
transaction as a result of which the shares of Class A
Common Stock are converted into another security, then the
holders of any outstanding shares of Class B Common Stock
shall be entitled to receive upon a conversion to Class A
Common Stock thereof pursuant hereto, the amount of such
security that such holder would have received if it had effected
such conversion immediately prior to the record date of such
reclassification or other similar transaction. Except as set
forth in the preceding sentence, no adjustments in respect of
dividends or other distributions shall be made upon the
conversion of any share of Class B Common Stock to
Class A Common Stock; provided, however, that
if a share of Class B Common Stock shall be converted into
a share of Class A Common Stock after the record date for
the payment of a dividend or other distribution on shares of
Class B Common Stock, but prior to such payment, then the
registered holder of such share at the close of business on such
record date shall be entitled to receive the dividend or other
distribution payable on such share on such date notwithstanding
the conversion thereof.
(iv) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of
Class A Common Stock, solely for the purpose of issuance
upon conversion, exchange or transfer of outstanding shares of
Class B Common Stock, such number of shares of Class A
Common Stock that shall be issuable upon the conversion or
exchange of all such outstanding shares of Class B Common
Stock. The Corporation covenants and warrants that all shares of
Class A Common Stock issued upon conversion of shares of
Class B Common Stock will, upon issuance in accordance with
the terms of Sections 3(a) and 3(b) of this Part D
of Article III, be validly issued, fully paid and
non-assessable.
(v) The issuance of certificates for shares of Class A
Common Stock upon conversion of shares of Class B Common
Stock shall be made without charge to the holders of such shares
for any stamp or other similar tax in respect of such issuance;
provided, however, that if any such certificate is
to be issued in a name other than that of the holder of the
share or shares of Class B Common Stock converted, then the
Person or Persons requesting the issuance thereof shall pay to
the Corporation the amount of any tax that may be payable in
respect of any transfer involved in such issuance or shall
establish to the satisfaction of the Corporation that such tax
has been paid or is not payable.
4. Stock Splits. Without the
approval of the holders holding at least two-thirds of the
outstanding shares of the Class A Common Stock and
Class B Common Stock, each voting as a separate series, the
Corporation shall not in any manner subdivide (by any stock
split, stock dividend, reclassification, recapitalization or
otherwise) or combine (by reverse stock split, reclassification,
recapitalization or otherwise) the outstanding shares of one
Class of Common Stock unless the outstanding shares of all
series of Common Stock shall be proportionately subdivided or
combined.
5. Options, Rights or Warrants.
(a) Subject to the following sentence, if the Corporation
issues or makes an offering or distribution to all holders of a
Class of Common Stock of shares of any class or series of its
capital stock or options, rights or warrants to subscribe for
such shares, then the Corporation shall simultaneously issue or
make a similar offering or distribution of the same number of
shares, options, rights, or warrants per share to all holders of
the other outstanding Classes of Common Stock, except that it
need not issue or make such offering or distribution to any such
Class of Common Stock in the event that the holders of a
majority of the shares of such Class of
Common Stock, voting as a separate class, determine that such
offering or distribution need not be made to such Class.
However, notwithstanding anything in this Section 5(a)
of this Part D of Article III to the contrary, in
the event that the Corporation issues or makes an offering or
distribution to all holders of any Class of Common Stock of
shares of that Class of Common Stock or options, rights or
warrants to subscribe for such shares, then the similar offering
or distribution to be made to any holder of the other Class of
Common Stock pursuant to this Section 5(a) of this
Part D of Article III, shall be for options,
warrants or rights which entitle such holder, upon exercise
thereof, to purchase the Class or Classes of Common Stock then
held by such holder.
(b) Subject to Section 5(a) of this Part D of
Article III, the Corporation shall have the power to
create and issue, whether or not in connection with the issuance
and sale of any shares of stock or other securities of the
Corporation, rights, options or warrants entitling the holders
thereof to purchase from the Corporation any shares of its
capital stock of any class or series at the time authorized,
such rights, options or warrants to have such terms and
conditions, and to be evidenced by or in such instrument or
instruments, as shall be approved by the Board of Directors.
6. No Preemptive Rights. The
holders of shares of Common Stock are not entitled to any
preemptive right to subscribe for, purchase or receive any part
of any new or additional issue of stock of any class or series
of the Corporation, whether now or hereafter authorized, or of
bonds, debentures or other securities convertible into or
exchangeable for stock of the Corporation.
7. No Reissuance. No share or
shares of Class B Common Stock acquired by the Corporation
by reason of redemption, purchase, conversion, exchange or
otherwise shall be reissued and all such shares shall be
cancelled, retired and eliminated from the shares that the
Corporation is authorized to issue.
8. Certain Definitions.
(a) “Affiliate” means as to any Person,
any other Person who controls, is controlled by, or is under
common control with such Person.
(b) “Code” means the Internal Revenue Code
of 1986, as amended.
(c) “Parent” means, with respect to any
Person, any other Person that owns, directly or indirectly, more
than 50% of the capital stock (or other voting interests) the
holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such first
Person or who is a Successor in Interest to such first Person.
(d) “Person” means any individual,
partnership, joint venture, limited liability company, firm,
corporation, trust or other entity, including governmental
authorities.
(e) “Subsidiary” means, with respect to
any Person, any other Person in which such first Person owns,
directly or indirectly, more than 50% of the capital stock (or
other voting interests) the holders of which are generally
entitled to vote for the election of the board of directors or
other governing body of such Person.
(f) “Successor in interest” means, with
respect to any Person, any other Person who, together with its
Affiliates, acquires (whether by acquisition of new or existing
securities, repurchase or cancellation of existing securities,
merger, consolidation, business combination, sale, lease,
exchange, transfer, license or acquisition of assets or
otherwise) beneficial ownership of 50% or more of the total
outstanding voting securities or all or substantially all of the
assets of such first Person.
(g) “Tax-Free Spin-Off” means a
distribution (whether by dividend, exchange or otherwise) of
Common Stock (and Preferred Stock, if any) of the Corporation or
common stock (and preferred stock, if any) of a Person that is a
successor to the Corporation to holders of common stock of
Cypress intended to qualify as a tax-free distribution under
Section 355 of the Code, or any successor thereto.
A. Number of Directors. Subject to
Section 4 of Article VII, and except as
otherwise provided for or fixed pursuant to the provisions of
Article III hereof relating to the rights of the holders of
any one or more series of Preferred Stock to elect additional
directors, the authorized number of directors of the corporation
shall be determined from time to time by resolution adopted by
the affirmative vote of the majority of the entire Board of
Directors at any regular or special meeting of such Board.
B. Classes of Directors. From and
after such date, if any, on which (i) a Tax-Free Spin-Off
is effected or (ii) a Plurality Triggering Event has
previously occurred and Cypress is no longer consolidating the
Corporation for accounting purposes (provided that, if on any
such date following the occurrence of a Plurality Triggering
Event, Cypress would not be consolidating the Corporation for
accounting purposes but for the existence of the provisions of
this Restated Certificate of Incorporation which expire upon the
occurrence of a Consolidation Triggering Event, then for
purposes of this definition, Cypress shall be deemed not to be
consolidating the Corporation for accounting purposes on such
date) (any such event specified in clause (i) or (ii), an
“Consolidation Triggering Event”), the
Board of Directors, other than those directors elected by the
holders of any one or more series of Preferred Stock as provided
for or fixed pursuant to the provisions of Article III
hereof, shall be divided into three classes, designated
Class I, Class II and Class III, as nearly equal
in number as possible. The initial designees for each class of
directors shall be determined as set forth in the By-laws as in
effect on the date of this Certificate of Incorporation.
Additional directorships resulting from an increase in number of
directors shall be apportioned among the classes as equally as
possible. The initial term of office of directors of
Class I shall expire at the next annual meeting of
stockholders following a Consolidation Triggering Event, the
initial term of office of directors of Class II shall
expire at the second annual meeting of stockholders following a
Consolidation Triggering Event, and the initial term of office
of directors of Class III shall expire at the third annual
meeting of stockholders following a Consolidation Triggering
Event, and in all cases as to each director until his or her
successor shall be elected and shall qualify or until his or her
earlier resignation, removal from office, death or incapacity.
Following the occurrence of a Consolidation Triggering Event, at
each annual meeting of stockholders the number of directors
equal to the number of directors of the class whose term expires
at the time of such meeting (or, if less, the number of
directors properly nominated and qualified for election) shall
be elected to hold office until the third succeeding annual
meeting of stockholders after their election.
C. Vacancies and Removal. Subject
to the provisions hereof, newly created directorships resulting
from any increase in the authorized number of directors, any
vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other cause, may be
filled only by the affirmative vote of a majority of the
remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the
remainder of the full term of the class, if any, of directors in
which the new directorship was created or in which the vacancy
occurred, and until such director’s successor shall have
been duly elected and qualified or until his or her earlier
resignation, removal from office, death or incapacity. Subject
to the provisions of this Certificate of Incorporation, no
decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Prior to the occurrence of a Consolidation Triggering Event, any
director or the entire Board of Directors of the Corporation may
be removed from office at any time, with or without cause, by
the holders of a majority of the voting power of the shares then
entitled to vote at an election of directors. Following the
occurrence of a Consolidation Triggering Event and the
classification of the Board of Directors as set forth in
Section A of this Article IV, the ability of
stockholders to remove directors will be as provided by
Section 141(k)(1) of the DGCL (or any successor to such
statue).
ARTICLE V
A. Power of Stockholders to Act by Written
Consent. Until the occurrence of a
Consolidation Triggering Event, all actions required to be taken
at any annual or special meeting may be taken without a meeting,
without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to
vote thereon were present and voted, and shall be delivered to
the Corporation by delivery to its registered office, its
principal place of business, or an officer
or agent of the corporation having custody of the book in which
proceedings of meetings or stockholders are recorded. Following
the occurrence of a Consolidation Triggering Event, no action
required or permitted to be taken at any annual or special
meeting of the stockholders of the corporation may be taken
without a meeting and the power of the stockholders to consent
in writing, without a meeting, to the taking of any action is
specifically denied.
B. Special Meetings of
Stockholders. Until the occurrence of a
Consolidation Triggering Event, special meetings of the
stockholders of the Corporation may be called for any purpose or
purposes in accordance with the provisions set forth in the
By-laws of the Corporation by Cypress as well as any other
Person specified in the
By-laws.
Following the occurrence of a Consolidation Triggering Event,
special meetings of the stockholders of the Corporation may be
called for any purpose or purposes in accordance with the
provisions set forth in the By-laws of the Corporation.
C.Cumulative Voting. The
stockholders of the Corporation shall not have cumulative voting.
ARTICLE VI
A. This Article VI anticipates the possibility
(1) that Cypress may be a majority or significant
stockholder of the Corporation, (2) that certain officers
and/or
directors of the Corporation may also serve as officers
and/or
directors of Cypress, (3) that the Corporation and Cypress,
either directly or through their subsidiaries, may engage in the
same or similar activities or lines of business and have an
interest in the same areas of corporate opportunities, and
(4) that benefits may be derived by the Corporation through
its continued contractual, corporate and business relations with
Cypress and its subsidiaries. The provisions of this
Article VI shall, to the fullest extent permitted by
law, define the conduct of certain affairs of the Corporation
and its subsidiaries as they may involve Cypress and its
subsidiaries, and its officers and directors, and the powers,
rights, duties and liabilities of the Corporation and its
officers, directors and stockholders in connection therewith.
B. Except as may be otherwise provided in a written
agreement between the Corporation and Cypress, the Corporation
shall not be deemed to have an interest or expectancy in any
business opportunity, transaction, or other matter in which
Cypress or any of its officers, directors, employees or agents
engages or seeks to engage other than opportunities that are
specifically applicable to the solar energy business and not
applicable to or reasonably related to any business conducted by
Cypress. Neither Cypress nor any officer, director, employee or
agent thereof shall be deemed to have acted in bad faith or in a
manner inconsistent with the best interests of the Corporation
or its stockholders or to have acted in a manner inconsistent
with or opposed to any fiduciary duty to the Corporation or its
stockholders by reason of Cypress or any officer, director,
employee or agent thereof exercising its right to engage in any
activities or lines of business, or to pursue (or fail to offer
or communicate to the Corporation) any business opportunity,
transaction or other matter other than opportunities that are
specifically applicable to the solar energy business and not
applicable to or reasonably related to any business conducted by
Cypress.
C. For purposes of this Article VI only:
(i) The term “Corporation” shall
mean the Corporation and all corporations, partnerships, joint
ventures, associations and other entities in which the
Corporation beneficially owns (directly or indirectly) 50% or
more of the outstanding voting stock, voting power, partnership
interests or similar voting interests, and (ii) the term
“Cypress” shall mean Cypress and all
corporations, partnerships, joint ventures, associations and
other entities in which Cypress beneficially owns (directly or
indirectly) 50% or more of the outstanding voting stock, voting
power, partnership interests or similar voting interests (other
than the Corporation, defined in accordance with
clause (i) of this Section C of
Article VI).
ARTICLE VII
In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
1. Except as provided Section 4 of this
Article VII (which expires upon the occurrence of a
Consolidation Triggering Event), the Board of Directors is
expressly authorized to adopt, amend or repeal the By-laws of
the Corporation by vote of at least a majority of the members of
the Board of Directors.
2. Elections of directors need not be by written ballot
unless the By-laws of the Corporation shall so provide.
3. The books of the Corporation may be kept at such place
within or without the State of Delaware as the By-laws of the
Corporation may provide or as may be designated from time to
time by the Board of Directors.
4. Until the occurrence of a Consolidation Triggering
Event, a vote of at least 75% of the then-authorized number of
the members of the Board of Directors shall be required to:
(a) adopt, amend or repeal the By-laws of the Corporation;
(b) amend the Certificate of Incorporation of the
Corporation (including by way of a Certificate of Designations
or otherwise);
(c) appoint or remove the Chief Executive Officer of the
Corporation;
(d) designate or appoint, or allow the Corporation to
nominate or recommend for election by stockholders of the
Corporation, an individual to the Board of Directors of the
Corporation;
(e) change the size of the Board of Directors of the
Corporation to be other than in the range of five (5) to
seven (7) members;
(f) form a committee of the Board of Directors of the
Corporation or establish or change a charter, committee
responsibilities or committee membership of any committee of the
Board of Directors of the Corporation;
(g) adopt any stockholder rights plan, “poison
pill” or other similar arrangement; or
(h) approve any transaction or series of related
transactions which would involve a merger, consolidation,
restructuring, sale of substantially all of the assets of the
Corporation or any of its Subsidiaries or otherwise result in
any Person or entity obtaining control over the Corporation or
any of its Subsidiaries;
provided, however, that the
requirement to obtain any such supermajority vote of the Board
of Directors of the Corporation as set forth in this
Section 4 of Article VII may be waived at any
time by Cypress in its capacity as a stockholder of the
Corporation, in its sole discretion. This Section 4 of
Article VII shall expire and be of no further force or
effect upon the occurrence of a Consolidation Triggering Event.
ARTICLE VIII
A. Limitation of Liability. To the
fullest extent permitted by the DGCL, as the same exists or as
may hereafter be amended, a director of the Corporation shall
not be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director.
If the Delaware Corporation Law hereafter is amended to further
eliminate or limit the liability of directors, then the
liability of a director of the Corporation, in addition to the
limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended DGCL. Any
repeal or modification of this paragraph by the stockholders of
the Corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal
or modification.
B. 1. Right to
Indemnification. Each Person who was or is
made a party or is threatened to be made a party to or is
otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative, investigative or otherwise
(hereinafter a “proceeding”), by reason of the fact
that he or she is or was a director or officer of the
Corporation or, while serving as a director or officer of the
Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan
(hereinafter an “indemnitee”), whether the basis of
such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to the
fullest extent authorized by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment,
except as may be prohibited by applicable law, only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including
attorneys’ fees, judgments, fines, ERISA excise taxes or
penalties and
amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the
benefit of the indemnitee’s heirs, executors and
administrators; provided, however, that, except as provided in
paragraph 3 of this Section B of
Article VIII with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any
such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding
(or part thereof) was authorized by the board of directors of
the Corporation.
2. Right to Advancement of
Expenses. The right to indemnification
conferred in paragraph 1 of this Section B of
Article VIII shall include the right to be paid by the
Corporation the expenses incurred in defending any proceeding
for which such right to indemnification is applicable in advance
of its final disposition (hereinafter an “advancement of
expenses”); provided, however, that, if the
DGCL requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking (hereinafter an
“undertaking”), by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no
further right to appeal (hereinafter a “final
adjudication”) that such indemnitee is not entitled to be
indemnified for such expenses under this Section or otherwise.
3. Right of Indemnitee to Bring
Suit. The rights to indemnification and to
the advancement of expenses conferred in paragraphs 1
and 2 of this Section B of Article VIII shall be
contract rights. If a claim under paragraph 1 or 2 of
this Section B of Article VIII is not paid in full
by the Corporation within sixty (60) days after a written
claim has been received by the Corporation, except in the case
of a claim for an advancement of expenses, in which case the
applicable period shall be twenty (20) days, the indemnitee
may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole
or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the indemnitee shall be entitled to
be paid also the expense of prosecuting or defending such suit.
In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right to an advancement of expenses)
it shall be a defense that, and (ii) any suit by the
Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the Corporation shall be entitled
to recover such expenses upon a final adjudication that, the
indemnitee has not met any applicable standard for
indemnification set forth in the DGCL. Neither the failure of
the Corporation (including its board of directors, independent
legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth
in the DGCL, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel or
its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a
defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking,
the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this
Section B of Article VIII or otherwise shall be
on the Corporation.
4. Non-Exclusivity of Rights. The
rights to indemnification and to the advancement of expenses
conferred in this Section B of Article VIII
shall not be exclusive of any other right which any Person may
have or hereafter acquire under any statute, the
Corporation’s certificate of incorporation, bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise.
5. Insurance. The Corporation may
maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such
Person against such expense, liability or loss under the DGCL.
6. Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the
extent authorized from time to time by the board of directors,
grant rights to indemnification, and to the advancement of
expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Section B of
Article VIII with respect to the indemnification and
advancement of expenses of directors and officers of the
Corporation.
C. Amendment. The duties of the
Corporation to indemnify and to advance expenses to any Person
as provided in this Article VIII shall be in the
nature of a contract between the Corporation and each such
Person, and neither any amendment nor repeal of this
Article VIII, nor the adoption of any provision of
the Corporation’s Certificate of Incorporation inconsistent
with this Article VIII, shall eliminate or reduce
the effect of this Article VIII in respect of any
matter occurring, or action or proceeding accruing or arising or
that, but for this Article VIII, would accrue or
arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
ARTICLE IX
Except as otherwise provided in this Certificate of
Incorporation, the Corporation reserves the right to amend or
repeal any provision, rescind or amend in any respect any
provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights
conferred upon a stockholder herein are granted subject to this
reservation.
