PALANTIR TECHNOLOGIES INC.
1200 17th Street, Floor 15
NOTICE OF
SPECIALANNUAL MEETING OF STOCKHOLDERS
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| Time and Date | | 8:00 a.m., Mountain time, on Thursday, December 22, 2022Tuesday, June 6, 2023. |
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| Place | | The specialannual meeting will be conducted virtually via webcast. You will be able to attend the specialannual meeting virtually by visiting www.virtualshareholdermeeting.com/PLTR2022SM,PLTR2023, where you will be able to listen to the meeting, submit questions in advance, and vote online during the meeting. |
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| Items of Business | | •To elect seven directors to hold office until our next annual meeting of stockholders and until their respective successors are elected and qualified. •To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023. •To approve, on an advisory basis, the amendment and restatement of our certificate of incorporation.named executive officer compensation. •To transact other business that may properly come before the specialannual meeting or any adjournments or postponements thereof. |
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| Record Date | | November 2, 2022.
April 12, 2023. Only stockholders of record as of the close of business on November 2, 2022April 12, 2023 are entitled to notice of and to vote at the specialannual meeting. A list of the stockholders of record entitled to vote at the specialannual meeting will be available for examination, for any purpose germane to the specialannual meeting, during ordinary business hours for ten days prior to the specialannual meeting at our corporate headquarters located at 1200 17th Street, Floor 15, Denver, CO 80202. The stockholder list will also be available online at www.virtualshareholdermeeting.com/PLTR2022SMPLTR2023 during the specialannual meeting. |
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| Availability of Proxy Materials | | The Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement, notice of specialannual meeting, and form of proxy, and our annual report is first being sent or given on or about November 10, 2022April 26, 2023 to all stockholders entitled to notice of and to vote at the specialannual meeting. The proxy materials and our annual report can be accessed as of November 10, 2022April 26, 2023 by visiting www.proxyvote.com. |
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| Voting | | Whether or not you plan to attend the specialannual meeting, we urge you to submit your proxy or voting instructions via the Internet, telephone, or mail as soon as possible. |
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| By order of the Board of Directors, |
|
 |
Alexander Karp | |
| Alexander Karp |
| Chief Executive Officer, Co-Founder and Director |
| Denver, Colorado |
November 10, 2022 | April 26, 2023 |
PALANTIR TECHNOLOGIES INC.
FOR
THE SPECIAL2023 ANNUAL MEETING OF STOCKHOLDERS
To be held at 8:00 a.m., Mountain time, on Thursday, December 22Tuesday, June 6, 20222023 The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this Proxy Statement. You should read this entire Proxy Statement carefully.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR
SPECIALANNUAL MEETING
Why am I receiving these materials?
This Proxy Statement and the form of proxy are furnished in connection with the solicitation of proxies by our Board of Directors for use at the
special2023 annual meeting of stockholders of Palantir Technologies Inc., a Delaware corporation, and any postponements, adjournments, or continuations thereof. The
specialannual meeting will be held on
Thursday, December 22, 2022Tuesday, June 6, 2023 at 8:00 a.m., Mountain time. The
specialannual meeting will be conducted virtually via webcast. You will be able to attend the
specialannual meeting virtually by visiting www.virtualshareholdermeeting.com/
PLTR2022SM,PLTR2023, where you will be able to listen to the meeting, submit questions
in advance, and vote online during the meeting.
The Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) containing instructions on how to access this Proxy Statement,
and the accompanying notice of
specialannual meeting and form of proxy,
and our annual report is first being sent or given on or about
November 10, 2022April 26, 2023 to all stockholders of record as of the close of business on
November 2, 2022.April 12, 2023. The proxy materials
and our annual report can be accessed as of
November 10, 2022April 26, 2023 by visiting www.proxyvote.com. If you receive a Notice of Internet Availability, then you will not receive a printed copy of the proxy materials
or our annual report in the mail unless you specifically request these materials. Instructions for requesting a printed copy of the proxy materials
and our annual report are set forth in the Notice of Internet Availability.
What
proposalproposals will be voted on at the
specialannual meeting?
The sole proposal tofollowing proposals will be voted on at the specialannual meeting:
•the election of seven directors to hold office until our next annual meeting is of stockholders and until their respective successors are elected and qualified;
•the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and
•the approval, on an advisory basis, of the amendment and restatement of our certificate of incorporation. named executive officer compensation.
As of the date of this Proxy Statement, our management and Board of Directors were not aware of any other matters to be presented at the
specialannual meeting.
How does the Board of Directors recommend that I vote on
this proposal?these proposals?
Our Board of Directors recommends that you vote your shares “FOR”shares:
•“FOR” the election of each director nominee named in this Proxy Statement;
•“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and
•“FOR” the approval, on an advisory basis, of the amendment and restatement of our certificate of incorporation.named executive officer compensation.
Who is entitled to vote at the
specialannual meeting?
You can vote at the specialannual meeting if you were a holder of our common stock as of the close of business on November 2, 2022,April 12, 2023, the “record date.” Each share of Class A common stock is entitled to one vote per share as of the record date. Each share of Class B common stock is entitled to ten votes per share as of the record date and is convertible at any time, at the option of the holder thereof, into one share of Class A common stock. Each share of Class F common stock has the number of votes
described below. As of the close of business on November 2, 2022,April 12, 2023, we had 2,080,194,9452,117,974,168 shares of common stock outstanding and entitled to vote on any matter, consisting of 1,979,328,4422,013,288,274 shares of Class A common stock, 99,861,503103,680,894 shares of Class B common stock, and 1,005,000 shares of Class F common Stock.stock. The holders of the shares of Class A common stock, Class B common stock, and Class F common stock will vote as a single class on the matterall matters described in this Proxy Statement for which your vote is being solicited. Stockholders are not permitted to cumulate votes with respect to the election of directors.
Stockholders of Record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., then you are considered the stockholder of record with respect to those shares, and the Notice of Internet Availability was sent directly to you by us. As a stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote on your own behalf at the specialannual meeting. Throughout this Proxy Statement, we refer to these holders as “stockholders of record.”
Street Name Stockholders. If your shares are held in a brokerage account or by a broker, bank, or other nominee, then you are considered the beneficial owner of shares held in street name, and the Notice of Internet Availability was forwarded to you by your broker, bank, or other nominee, which is considered the stockholder of record with respect to those shares. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares held in your account by following the instructions that your broker, bank, or other nominee sent to you. As a beneficial owner, you are also invited to attend the specialannual meeting. However, because you are not the stockholder of record, you may not vote these shares at the specialannual meeting unless you obtain a signed legal proxy from your broker, bank, or other nominee giving you the right to vote the shares. Throughout this Proxy Statement, we refer to these holders as “street name stockholders.” Are there any voting agreements or arrangements among Palantir’s Founders?
We have three series of common stock, Class A common stock, Class B common stock, and Class F common stock, which have different voting rights as set forth below. All shares of our Class F common stock are held in a voting trust (the “Founder Voting Trust”), established by Stephen Cohen, Alexander Karp, and Peter Thiel (our “Founders”) pursuant to a voting trust agreement (the “Founder Voting Trust Agreement”) with Wilmington Trust, National Association as trustee (the “Trustee”). Our Founders are also currently party to a voting agreement (the “Founder Voting Agreement”) with Wilmington Trust, National Association as the grantee of certain proxies and powers of attorney contemplated therein (the “Grantee”). Pursuant to the terms of the Founder Voting Agreement, our Founders and certain of their affiliates have granted a proxy and power of attorney to the Grantee to vote shares of our Class A common stock and Class B common stock held by our Founders and such affiliates other than certain designated shares (the “Designated Founders’ Excluded Shares” or “DFES”). For a description of the voting rights of our common stock and the voting arrangements of our Founders, please see the section titled “Board of Directors and Corporate Governance—Voting Structure and Arrangements.” How many shares are outstanding and entitled to vote as of the record date?
As of the close of business on the record date, there were:
1,979,328,442•2,013,288,274 shares of Class A common stock outstanding, of which 27,166,475 shares were held by our Founders and their affiliates and subject to the Founder Voting Agreement and 109,937,306 shares were held by Mr. Thiel’s affiliates as DFES.
99,861,503•103,680,894 shares of Class B common stock outstanding, of which 83,738,23187,178,912 shares were held by our Founders and their affiliates and subject to the Founder Voting Agreement and 6,293,765 shares were held by Mr. Thiel’s affiliates as DFES; and
•1,005,000 shares of Class F common stock outstanding, all of which were held in the Founder Voting Trust.
How many votes is each share entitled to for
theeach proposal at the
specialannual meeting?
Class A common stock is entitled to one vote per share and Class B common stock is entitled to ten votes per share for
theeach proposal.
As of the close of business on the record date, the aggregate voting power of all outstanding shares of Class A common stock and Class B common stock was 2,977,943,4723,050,097,214 votes. Of these, the shares of Class A common stock and Class B common stock held by our Founders and their affiliates and subject to the Founder Voting
Agreement represented 864,548,785
898,955,595 votes, the Designated Founders’ Excluded Shares held by Mr. Thiel’s affiliates represented 172,874,956 votes, and the shares of Class A common stock and Class B common stock held by all other stockholders represented
1,940,519,7311,978,266,663 votes.
For the proposal,Proposal 1, the voting power of the Class F common stock shall equal 49.999999% of the voting power of all of the outstanding shares of our capital stock entitled to vote on such proposalproposals (including the Class F common stock), less the voting power of the shares of Class A common stock and Class B common stock subject to the Founder Voting Agreement and the Designated Founders’ Excluded Shares (but if such subtraction had resulted in a figure less than zero, then the Class F common stock would have had zero votes). Accordingly, for the proposal,Proposal 1, shares of Class F common stock, all of which are held in the Founder Voting Trust, will have 903,095,912906,436,032 votes in the aggregate, or approximately 898.603901.926 votes per share, representing 23.27%22.91% of the voting power for Proposal 1.
For Proposal 2 and 3, the voting power of the Class F common stock shall equal 49.999999% of the voting power of the shares present in person (including virtually) or represented by proxy and entitled to vote on Proposal 2 and 3 (including the Class F common stock), respectively, less the voting power of the shares of Class A common stock and Class B common stock subject to the Founder Voting Agreement and the Designated Founders’ Excluded Shares (but if such subtraction results in a figure less than zero, then the Class F common stock shall have zero votes). Accordingly, shares of Class F common stock, all of which are held in the Founder Voting Trust, will have between zero and 906,436,032 votes in the aggregate, or between zero and approximately 901.926 votes per share for Proposal 2 and 3, respectively. The precise voting power of the Class F common stock with respect to Proposal 2 and 3 will be ascertained at the annual meeting when shares present in person (including virtually) or represented by proxy and entitled to vote on Proposal 2 and 3 will be determined.
Because broker non-votes are not considered to represent shares entitled to vote on non-routine matters (even if otherwise represented by proxy at the annual meeting), the voting power of the Class F common stock with respect to Proposal 3 could or would be reduced (but not below zero votes) compared to its voting power with respect to Proposal 2 in the event we receive broker non-votes for such proposal. For more information on broker non-votes, please see the section titled “
Questions and Answers about the Proxy Materials and our Annual Meeting—What if I do not specify how my shares are to be voted or fail to provide timely directions to my broker, bank, or other nominee?”
For information regarding shares of our Class A common stock, Class B common stock, and Class F common stock outstanding as of the close of business on the record date, please see the section titled “Board of Directors and Corporate Governance—Voting Structure and Arrangements.”How many votes are needed for the proposal to pass?
The approval of the proposal will require the affirmative vote of a majority of the voting power of all shares of our outstanding capital stock.
What is the quorum requirement for the
specialannual meeting?
A quorum is the minimum number of shares required to be present or represented at the
specialannual meeting for the meeting to be properly held under our amended and restated bylaws and Delaware law. The presence, in person (including virtually) or by proxy, of a majority of the voting power of the shares of our capital stock issued and outstanding and entitled to vote as of the record date will constitute a quorum to transact business at the
specialannual meeting. Stockholders who log in to the
specialannual meeting using the control number included on their Notice of Internet Availability or proxy card will be considered present in person (including virtually) at the
specialannual meeting. Abstentions,
withhold votes and broker non-votes will be counted as present and entitled to vote for purposes of determining a quorum.
Because the sole proposal to be voted on at the special meeting is not considered a routine matter, we do not expect any broker non-votes to be received in connection with the special meeting.How do I vote and what are the voting deadlines?
Stockholder of Record. If you are a stockholder of record, you may vote in one of the following ways: •by Internet at www.proxyvote.com, 24 hours a day, 7 days a week, until 11:59 p.m. Eastern time, on December 21, 2022June 5, 2023 (have your Notice of Internet Availability or proxy card in hand when you visit the website);
•by toll-free telephone at +1-800-690-6903,+1-800-690-6903, 24 hours a day, 7 days a week, until 11:59 p.m. Eastern time, on December 21, 2022June 5, 2023 (have your Notice of Internet Availability or proxy card in hand when you call);
•by completing, signing, and mailing your proxy card, which must be received prior to the specialannual meeting; or
•by attending the specialannual meeting virtually by visiting www.virtualshareholdermeeting.com/PLTR2022SM,PLTR2023, where you may vote during the meeting (have your Notice of Internet Availability or proxy card in hand when you visit the website).
Street Name Stockholders. Stockholders. If you are a street name stockholder, then you will receive voting instructions from your broker, bank, or other nominee. You must follow the instructions provided by your broker, bank, or other
nominee in order to instruct them on how to vote your shares. The availability of Internet and telephone voting options will depend on the voting process of your broker, bank, or other nominee. As discussed above, if you are a street name stockholder, then you may not vote your shares at the specialannual meeting unless you obtain a legal proxy from your broker, bank, or other nominee.
What if I do not specify how my shares are to be voted or fail to provide timely directions to my broker, bank, or other nominee?
Stockholder of Record. If you are a stockholder of record and you submit a proxy but you do not provide voting instructions, your shares will be voted “FOR”voted:
•“FOR” the election of each director nominee named in this Proxy Statement;
•“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and
•“FOR” the approval, on an advisory basis, of the amendment and restatement of our certificate of incorporation. named executive officer compensation.
In addition, if any other matters are properly brought before the specialannual meeting, the persons named as proxies will be authorized to vote or otherwise act on those matters in accordance with their judgment.
If you are a stockholder of record and you do not submit a proxy or otherwise vote your shares using one of the methods above, then your shares will not be voted.
Street Name Stockholders. Brokers, banks, and other nominees holding shares of common stock in street name for customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker, bank, or other nominee will have discretion to vote your shares on our sole routine matter: the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023. Because that proposal is routine, we do not expect any broker non-votes regarding it. Your broker, bank, or other nominee will not have discretion to vote on our sole proposal,other proposals, which isare considered a non-routine matter, matters, absent direction from you. In the event that your broker, bank, or other nominee votes your shares on our sole routine matter but is not able to vote your shares on our sole matter,non-routine matters, then those shares will have the same effectbe treated as votes “AGAINST” the proposal.broker non-votes with respect to our non-routine matters. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee how to vote to ensure that your shares are counted.counted on each of the proposals.
Can I change my vote or revoke my proxy?
Stockholder of Record. If you are a stockholder of record, you can change your vote or revoke your proxy before the specialannual meeting by: •entering a new vote by Internet or telephone (subject to the applicable deadlines for each method as set forth above);
•completing and returning a later-dated proxy card, which must be received prior to the specialannual meeting;
•delivering a written notice of revocation to our corporate secretary at 1200 17th Street, Floor 15, Denver, Colorado 80202, Attention: Corporate Secretary, which must be received prior to the specialannual meeting; or
•attending and voting at the specialannual meeting (although attendance at the specialannual meeting will not, by itself, revoke a proxy).
Street Name Stockholders. If you are a street name stockholder, then your broker, bank, or other nominee can provide you with instructions on how to change or revoke your proxy. What do I need to do to attend the
specialannual meeting?
We will be hosting the specialannual meeting via webcast only. You will be able to attend the specialannual meeting virtually, submit your questions duringin advance of the meeting, and vote your shares electronically during the meeting by visiting www.virtualshareholdermeeting.com/PLTR2022SM.PLTR2023. To participate in the specialannual meeting, you will need the control number included on your Notice of Internet Availability or proxy card. The specialannual meeting webcast will begin promptly at 8:00
a.m., Mountain time. We encourage you to access the meeting prior to the start time. Online
check-in will begin at 7:45 a.m. Mountain time, and you should allow ample time for the
check-in procedures.
How can I get help if I have trouble checking in or listening to the
specialannual meeting online?
If you encounter difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log-in page.
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our Board of Directors. David Glazer, our Chief Financial Officer
(“CFO”) and Treasurer, and Ryan Taylor, our Chief
Revenue Officer and Chief Legal
Officer (“CRO and
Business Affairs Officer,CLO”), and each of them, with full power of substitution and
re-substitution, have been designated as proxy holders for the
specialannual meeting by our Board of Directors. When proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted at the
specialannual meeting in accordance with the instructions of the stockholder. If, however, a proxy is dated, executed, and returned, but no specific instructions are given, the shares will be voted in accordance with the recommendations of our Board of Directors on the
proposalproposals as described above. If any other matters are properly brought before the
specialannual meeting, then the proxy holders will use their own judgment to determine how to vote shares with respect to which they hold a proxy. If you have granted a proxy and the
specialannual meeting is postponed or adjourned, then the proxy holders can vote your shares on the new meeting date, unless you have properly revoked your proxy, as described above.
How can I contact Palantir’s transfer agent?
You may contact our transfer agent, Computershare Trust Company, N.A., by telephone at
+1-781-575-3105,+1-781-575-3105, or by writing Computershare Trust Company, N.A., at 150 Royall Street, Suite 101, Canton, Massachusetts 02021. You may also access instructions with respect to certain stockholder matters (e.g., change of address) via the Internet at www.computershare.com/investor.
How are proxies solicited for the
specialannual meeting and who is paying for such solicitation?
Our Board of Directors is soliciting proxies for use at the
specialannual meeting by means of the proxy materials. We will bear the entire cost of proxy solicitation, including the preparation, assembly, printing, mailing, and distribution of the proxy materials. Copies of solicitation materials will also be made available upon request to brokers, banks, and other nominees to forward to the beneficial owners of the shares held of record by such brokers, banks, or other nominees. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic communications, or other means by our directors, officers, or employees. No additional compensation will be paid to these individuals for any such services, although we may reimburse such individuals for their reasonable
out-of-pocket expenses in connection with such solicitation.
Where can I find the voting results of the
specialannual meeting?
We anticipate announcing preliminary voting results at the
specialannual meeting. We will also disclose voting results on a Current Report on Form
8-K (a “Form
8-K”) that we will file with the U.S. Securities and Exchange Commission (the “SEC”) within four business days after the meeting. If final voting results are not available to us in time to timely file a Form
8-K, we will file a Form
8-K to publish preliminary results and will provide the final results in an amendment to the Form
8-K as soon as they become available.
Why did I receive a Notice of Internet Availability instead of a full set of proxy materials?
In accordance with the rules of the SEC, we have elected to furnish our proxy materials, including this Proxy Statement
and our annual report, primarily via the Internet. As a result, we are mailing to our stockholders a Notice of Internet Availability instead of a paper copy of the proxy materials. The Notice of Internet Availability contains instructions on how to access our proxy materials on the Internet, how to vote on the
proposal,proposals, how to request printed copies of the proxy materials
and our annual report, and how to request to receive all future proxy materials in printed form by mail or electronically by
e-mail. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce our costs and the environmental impact of our
stockholderannual meetings.
What does it mean if I receive more than one Notice of Internet Availability or more than one set of printed proxy materials?
If you receive more than one Notice of Internet Availability or more than one set of printed proxy materials, then your shares may be registered in more than one name and/or are registered in different accounts. Please follow
the voting instructions on each Notice of Internet Availability or each set of printed proxy materials, as applicable, to ensure that all of your shares are voted.
I share an address with another stockholder, and we received only one paper copy of the Notice of Internet Availability or Proxy
Statement.Statement and annual report. How may I obtain an additional copy of the Notice of Internet Availability or Proxy
Statement?Statement and annual report?
We have adopted a procedure approved by the SEC called “householding,” under which we can deliver a single copy of the Notice of Internet Availability and, if applicable, the Proxy Statement
and annual report, to multiple stockholders who share the same address unless we receive contrary instructions from one or more stockholders. This procedure reduces our printing and mailing costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice of Internet Availability and, if applicable, the Proxy Statement
and annual report, to any stockholder at a shared address to which we delivered a single copy of these documents. To receive a separate copy, or, if you are receiving multiple copies, to request that we only send a single copy of
future Noticesnext year’s Notice of Internet Availability
or Proxy Statement
orand annual
reports,report, as applicable, you may contact us as follows:
Palantir Technologies Inc.
Attention: Investor Relations
1200 17th Street, Floor 15
Street name stockholders may contact their broker, bank, or other nominee to request information about householding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are all statements (and their underlying assumptions) included in this Proxy Statement that refer, directly or indirectly, to future events or outcomes and, as such, are inherently not factual, but rather reflect only our current projections for the future. Consequently, forward-looking statements usually include words such as “estimate,” “intend,” “plan,” “predict,” “seek,” “may,” “will,” “should,” “would,“expect,” “plan,” “anticipate,” “could,” “anticipate,“can,” “expect,“would,” “intend,” “target,” “goal,” “outlook,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “future,” or “continue” or the negative of these words or similar words, in each case, intended to refer to future events or circumstances. Our future results may differ materially from our past results and from those projected in the forward-looking statements due to various uncertainties and risks, including, but not limited to, those included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,2022, as filed with the SEC on February 24, 2022 and our other filings with the SEC.21, 2023. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based upon information available to us at this time. These statements are not guarantees of future performance. We disclaim any obligation to update information in any forward-looking statement. Actual results could vary from our forward-looking statements due to the factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as other important factors.
BOARD OF DIRECTORS AND
ARRANGEMENTSCORPORATE GOVERNANCE
Composition of our Board of Directors
Our Board of Directors currently consists of seven directors, four of whom are independent under the listing standards of the New York Stock Exchange (the “NYSE”). At each annual meeting of stockholders, directors will be elected for a one-year term and until their successors are duly elected and qualified, until such time as all Class F common stock has been converted to Class B common stock (the “Class F Conversion”). After the Class F Conversion, the directors shall be divided into three classes as nearly equal in size as is practicable, designated Class I, Class II, and Class III, each serving staggered three-year terms.
The following table sets forth the names, ages, and certain other information for each of our directors and director nominees as of April 12, 2023:
| | | | | | | | | | | | | | | | | | | | |
| Name | | Age | | Position(s) | | Director Since |
| Directors | | | | | | |
| Alexander Karp | | 55 | | Co-Founder, Chief Executive Officer, and Director | | 2003 |
| Stephen Cohen | | 40 | | Co-Founder, President, Secretary, and Director | | 2005 |
| Peter Thiel | | 55 | | Co-Founder and Chairman | | 2003 |
Alexander Moore(1)(2) | | 40 | | Director | | 2020 |
Alexandra Schiff(2) | | 42 | | Director | | 2020 |
Lauren Friedman Stat(1) | | 39 | | Director | | 2021 |
Eric Woersching(1) | | 39 | | Director | | 2022 |
_______________
(1)Member of Audit Committee
(2)Member of Compensation, Nominating & Governance Committee
Nominees for Director
Alexander Karp. Mr. Karp is one of our co-founders and has served in various positions with us since co-founding Palantir, most recently as our Chief Executive Officer (“CEO”), and has served as a member of our Board of Directors since 2003. Mr. Karp holds a B.A. from Haverford College, a J.D. from Stanford Law School, and a Ph.D. from Goethe University in Frankfurt, Germany.
Mr. Karp has been selected to serve on our Board of Directors because of the perspective and experience he brings as our CEO and as one of our co-founders.
Stephen Cohen. Mr. Cohen is one of our co-founders and has served in various positions with us since co-founding Palantir, most recently as our President and Secretary, and as a member of our Board of Directors since 2005. Mr. Cohen holds a B.S. in Computer Science from Stanford University.
Mr. Cohen has been selected to serve on our Board of Directors because of the perspective and experience he brings as an officer and as one of our co-founders.
Peter Thiel. Mr. Thiel is one of our co-founders and has served as the Chairman of our Board of Directors since 2003. He has served as president of Thiel Capital, an investment firm, since 2011 and as a partner of Founders Fund, a venture capital firm, since 2005. In 1998, Mr. Thiel co-founded PayPal, Inc., an online payment company, where he served as Chief Executive Officer, President, and Chairman of its Board of Directors from 2000 until its acquisition by eBay in 2002. Mr. Thiel has served on the board of directors of AbCellera Biologics Inc., a biotechnology company, since 2020, and previously served on the board of directors of Meta Platforms, Inc., a technology company, from 2005 to 2022. Mr. Thiel holds a B.A. in Philosophy from Stanford University and a J.D. from Stanford Law School.
Mr. Thiel has been selected to serve on our Board of Directors due to his leadership and experience as an entrepreneur and venture capitalist and as one of our co-founders.
Alexander Moore. Mr. Moore has served as a member of our Board of Directors since July 2020. Mr. Moore initially joined us in February 2005 as one of the founding employees and served as our director of operations until March 2010. In February 2013, Mr. Moore co-founded NodePrime, a cloud automation company, where he served as Chief Operating Officer until its acquisition by Ericsson in April 2016. In May 2017, he joined 8VC, a venture capital fund, where he currently serves as partner. Mr. Moore holds a B.A. in Economics from Stanford University.
Mr. Moore has been selected to serve on our Board of Directors due to the perspective and experience he brings as an entrepreneur and venture capitalist and as one of our founding employees.
Alexandra Schiff. Ms. Schiff has served as a member of our Board of Directors since July 2020. Ms. Schiff worked as a reporter for The Wall Street Journal from June 2004 to March 2005 and April 2013 to June 2020. From 2006 to 2009, she served as a staff writer and then contributing editor at Condé Nast Portfolio, a magazine that was formerly part of Condé Nast, a global media company. She has written for publications including The New York Times, Vanity Fair, and Bloomberg Businessweek. She is currently working on her second book for Simon & Schuster. Ms. Schiff holds a B.A. in English from Duke University.
Ms. Schiff has been selected to serve on our Board of Directors due to her business acumen and the unique perspectives she brings as a journalist.
Lauren Friedman Stat. Ms. Stat has served as a member of our Board of Directors since January 2021. Ms. Stat brings a wide range of business and leadership experience, including 15 years of experience at Accenture, from October 2005 to January 2021, where she served as a senior advisor to Fortune 100 companies, helping her clients develop new strategies, optimize operations, and manage large-scale change. During her tenure at Accenture, she developed deep healthcare expertise and held multiple roles, including leadership of sales pursuits, management of global operations, and responsibility for the growth and profitability of a segment of business.
Ms. Stat has served on the board of directors of The Lorelton, a non-profit retirement and assisted living facility since December 2021 and Tree3, a startup empowering influencers to curate a storefront from millions of products across stores and allow their followers to purchase from a single shopping cart since January 2022, and has served as Chairwoman of the board of directors of Valkyrie, a company that builds AI solutions since September 2022. Ms. Stat served as an Executive in Residence for Notley, a social impact community and venture organization, from June 2021 to June 2022, and has served as Fractional Chief Administration Officer and Advisor at Friendly Force, a satellite communications technology company, since December 2021, and Managing Member and Chief Executive Officer of Figa Jewelry since July 2022. She holds a B.S. in Science, Technology, and Society with a dual concentration in Math and Chemistry from Stanford University.
Ms. Stat has been selected to serve on our Board of Directors due to her wide range of business and leadership experience, including leadership of sales pursuits, management of global operations, and responsibility for the growth and profitability of a segment of business.
Eric Woersching. Mr. Woersching has served as a member of our Board of Directors since June 2022. Mr. Woersching currently serves as a private consultant for early stage software companies, where he focuses on corporate strategy, FP&A, analytics, operations and executive recruiting. From 2020 to 2022, Mr. Woersching served as the Vice President of Revenue Operations at EasyPost, where he was responsible for analytics, operations and corporate strategy, and Senior Advisor to the CEO, where he focused on corporate development, M&A and fundraising. From 2017 to 2019, Mr. Woersching was a general partner at Initialized Capital, a venture capital firm, where he served on the board of directors of several private technology companies. He holds both a B.S. and M.S. in Electrical Engineering from Stanford University and is a Chartered Financial Analyst.
Mr. Woersching has been selected to serve on our Board of Directors due to his financial expertise and his experience as a venture capitalist, his experience as a director of private technology companies, and his operational experience at multiple technology companies.
Director Independence
Our Class A common stock is listed on the NYSE. As a company listed on the NYSE, we are required under NYSE listing rules to maintain a board consisting of a majority of independent directors as determined affirmatively by our Board of Directors. Under NYSE listing rules, a director will only qualify as an independent director if that listed company’s board
of directors affirmatively determines that the director has no material relationship with such listed company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with such listed company). In addition, the NYSE listing rules require that, subject to specified exceptions, each member of our Audit and Compensation, Nominating & Governance Committees be independent.
Audit Committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Exchange Act and NYSE listing rules applicable to Audit Committee members. Compensation, Nominating & Governance Committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and NYSE listing rules applicable to members of compensation committees.
Our Board of Directors has undertaken a review of the independence of our directors. Based on information provided by each director concerning his or her background, employment, and affiliations, our Board of Directors has determined that each of Messrs. Moore and Woersching and Mses. Schiff and Stat do not have any material relationship with us (either directly or as a partner, stockholder, or officer of an organization that has a relationship with us) and that each of these directors is “independent” as that term is defined under the listing standards of the NYSE.
In making these determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with Palantir and all other facts and circumstances that our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”
There are no family relationships among any of our directors or executive officers.
Leadership Structure of our Board of Directors
Our corporate governance framework provides our Board of Directors flexibility to determine the appropriate leadership structure for Palantir, and whether the roles of chairperson and CEO should be separated or combined. In making this determination, our Board of Directors considers many factors, including the needs of the business, our Board of Directors’ assessment of its leadership needs from time to time, and the best interests of our stockholders. If the role of chairperson is filled by a director who does not qualify as an independent director, then our corporate governance guidelines provide that one of our independent directors may serve as our lead independent director.
Our Board of Directors believes that it is currently appropriate to separate the roles of chairperson and CEO. The CEO is responsible for day-to-day leadership, while our chairperson ensures that our Board of Directors’ time and attention is focused on providing oversight of management and matters critical to Palantir. Our Board of Directors believes that Mr. Thiel’s deep knowledge of Palantir and Palantir’s industry, as well as strong leadership and governance experience, enable Mr. Thiel to lead our Board of Directors effectively.
Role of Board of Directors in Risk Oversight Process
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day management of risks we face, while our Board of Directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. Our Board of Directors reviews strategic and operational risk, including cybersecurity risk, in the context of discussions, question and answer sessions, and reports from the management team at each regular Board of Directors meeting, receives reports on all significant committee activities at each regular Board of Directors meeting, and evaluates the risks inherent in significant transactions. Our Board of Directors and its committees also regularly consult with outside advisors, including our independent auditors, legal counsel and our compensation consultant regarding market risk trends and potential operational risks.
In addition, our Board of Directors has tasked designated standing committees with oversight of certain categories of risk management. Our Audit Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance, and also, among other things, discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our Compensation, Nominating & Governance Committee assesses risks relating to our executive compensation plans and arrangements and assesses risks relating to our corporate governance practices, the performance of our Board of Directors, and the composition of our Board of Directors.
Our Board of Directors believes its current leadership structure supports the risk oversight function of the Board of Directors.
Committees of our Board of Directors
Our Board of Directors has established the following standing committees: Audit Committee and Compensation, Nominating & Governance Committee. The composition and responsibilities of each of the committees of our Board of Directors is described below.
Audit Committee
The current members of our Audit Committee are Messrs. Moore and Woersching and Ms. Stat. Mr. Woersching is the chairperson of our Audit Committee. Our Board of Directors has determined that each member of our Audit Committee meets the requirements for independence of Audit Committee members under the rules and regulations of the SEC and the listing standards of the NYSE, and also meets the financial literacy requirements of the listing standards of the NYSE. Our Board of Directors has determined that Mr. Woersching is an Audit Committee financial expert within the meaning of Item 407(d) of Regulation S-K. Our Audit Committee is responsible for, among other things:
•selecting the independent registered public accounting firm to audit our financial statements;
•supervising and evaluating the performance of our independent registered public accounting firm;
•ensuring the independence of the independent registered public accounting firm;
•discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and that firm, our interim and year-end operating results;
•developing procedures to enable submission of anonymous concerns about accounting or auditing matters;
•considering the adequacy of our internal accounting controls and audit procedures;
•reviewing related party transactions;
•reviewing our program for promoting and monitoring compliance with applicable legal and regulatory requirements;
•overseeing our major risk exposures and the steps management has taken to monitor and control such exposures, and assisting our Board of Directors in overseeing the risk management of Palantir;
•pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm; and
•overseeing our internal audit function.
Our Audit Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our Audit Committee is available on our website at https://investors.palantir.com/governance/governance-documents. During 2022, our Audit Committee held five meetings.
Compensation, Nominating & Governance Committee
The current members of our Compensation, Nominating & Governance Committee are Mr. Moore and Ms. Schiff. Our Board of Directors has determined that each member of our Compensation, Nominating & Governance Committee meets the requirements for independence for Compensation, Nominating & Governance Committee members under the rules and regulations of the SEC and the listing standards of the NYSE. Each member of the Compensation, Nominating & Governance Committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Our Compensation, Nominating & Governance Committee is responsible for, among other things:
•evaluating the performance of our executive officers;
•evaluating, recommending, approving, and reviewing executive officer compensation arrangements, plans, policies, and programs maintained by us;
•administering our cash-based and equity-based compensation plans;
•considering and making recommendations regarding non-employee director compensation;
•considering and making recommendations to our Board of Directors regarding its remaining responsibilities relating to executive compensation;
•reviewing with management our major compensation-related risk exposures and the steps management has taken or should consider to monitor or mitigate such exposures;
•reviewing and developing policies regarding the desired knowledge, experience, skills, diversity, and other characteristics of members of our Board of Directors and its committees, as well as our director nomination and committee appointment processes;
•identifying, evaluating, and recommending potential candidates for nomination to and membership on our Board of Directors and certain of its committees;
•monitoring succession planning for certain of our key executives;
•developing and recommending corporate governance guidelines and policies;
•reviewing, assessing, and considering our major corporate governance-related risk exposures, monitoring compliance with our corporate governance guidelines, and recommending any proposed amendments to the Board of Directors;
•overseeing the annual self-evaluation process for our Board of Directors and committees thereof;
•reviewing, adopting, amending, terminating, and administering our clawback policies, if and as our Compensation, Nominating & Governance Committee determines to be necessary or appropriate, or as required by applicable law;
•reviewing and assessing compliance with the code of conduct, and reviewing and granting proposed waivers of the code of conduct for executive officers; and
•advising our Board of Directors on corporate governance matters and Board of Directors performance matters, including recommendations regarding the size, structure, and composition of our Board of Directors and committees thereof.
Our Compensation, Nominating & Governance Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our Compensation, Nominating & Governance Committee is available on our website at https://investors.palantir.com/governance/governance-documents. During 2022, our Compensation, Nominating & Governance Committee held five meetings.
Attendance at Board and Stockholder Meetings
During our fiscal year ended December 31, 2022, our Board of Directors held five meetings, and each incumbent director attended at least 75% of the aggregate of (1) the total number of meetings of our Board of Directors held during the period for which he or she has been a director and (2) the total number of meetings held by all committees on which he or she served during the periods that he or she served.
Although we do not have a formal policy regarding attendance by members of our Board of Directors at the annual meetings of stockholders, we strongly encourage, but do not require, directors to attend. Five of our directors who then served on the Board of Directors virtually attended the 2022 annual meeting of our stockholders.
Executive Sessions of Non-Employee Directors
To encourage and enhance communication among non-employee directors, and as required under applicable NYSE rules, our corporate governance guidelines provide that the non-employee directors will meet in executive sessions without management directors or management present on a periodic basis but no less than twice a year. Such executive sessions will be led by independent directors, as determined by the independent directors during the session. In addition, if any of our non-employee directors are not independent directors, then our independent directors will also meet in executive session on a periodic basis but not less than twice a year.
Compensation, Nominating & Governance Committee Interlocks and Insider Participation
During 2022, the members of our Compensation, Nominating & Governance Committee were Mr. Moore and Ms. Schiff. None of the members of our Compensation, Nominating & Governance Committee currently serves, or in the past year has
served, as an officer or employee of Palantir. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity (other than our subsidiaries) that has one or more of its executive officers serving on our Board of Directors.
Considerations in Evaluating Director Nominees
The Compensation, Nominating & Governance Committee uses a variety of methods for identifying and evaluating potential director nominees. The Compensation, Nominating & Governance Committee requires certain minimum qualifications to be satisfied by any nominee for a position on our Board of Directors, including but not limited to the highest personal and professional ethics and integrity and proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment. In its evaluation of director candidates, including the current directors eligible for re-election, our Compensation, Nominating & Governance Committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors and other director qualifications. In addition, the Compensation, Nominating & Governance Committee considers the following qualifications in assessing director nominees including, without limitation, issues of character, integrity, judgment, corporate experience, diversity of experience, background, independence, area of expertise, length of service, potential conflicts of interest, other commitments and the like, including as required by applicable laws, rules, and regulations. Our Board of Directors believes that our Board of Directors should be a diverse body, and the Compensation, Nominating & Governance Committee considers a broad range of perspectives, backgrounds, and experiences.
If our Compensation, Nominating & Governance Committee determines that an additional or replacement director is required, then the committee may take such measures as it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the Compensation, Nominating & Governance Committee, Board of Directors, or management.
After completing its review and evaluation of director candidates, our Compensation, Nominating & Governance Committee recommends to our full Board of Directors the director nominees for selection. Our Compensation, Nominating & Governance Committee has discretion to decide which individuals to recommend for nomination as directors and our Board of Directors has the final authority in determining the selection of director candidates for nomination to our Board of Directors.
Stockholder Recommendations and Nominations to our Board of Directors
Our Compensation, Nominating & Governance Committee will consider recommendations and nominations for candidates to our Board of Directors from stockholders holding at least one percent of our fully diluted capitalization continuously for at least twelve months prior to the date of the submission of the recommendation in the same manner as candidates recommended to the committee from other sources, so long as such recommendations and nominations comply with our amended and restated certificate of incorporation, amended and restated bylaws, all applicable company policies, and all applicable laws, rules, and regulations, including those promulgated by the SEC. Our Compensation, Nominating & Governance Committee will evaluate such recommendations in accordance with its charter, our bylaws and corporate governance guidelines, and the director nominee criteria described above.
A stockholder that wants to recommend a candidate for election to our Board of Directors should direct the recommendation in writing by letter to Palantir Technologies Inc., attention of the Chief Revenue Officer and Chief Legal Officer, at 1200 17th Street, Floor 15, Denver, Colorado 80202. The recommendation must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve, information regarding any relationships between the candidate and us, and evidence of the recommending stockholder’s ownership of our capital stock. Such recommendation must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for Board of Directors membership.
Under our amended and restated bylaws, stockholders may also directly nominate persons for our Board of Directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and the rules and regulations of the SEC and should be sent in writing to our corporate secretary at the address above. To be timely for our 2024 annual meeting of stockholders, nominations must be received by our corporate secretary observing the deadlines discussed below under “Other Matters—Stockholder Proposals or Director Nominations for 2024 Annual Meeting.”
Communications with our Board of Directors
Stockholders and other interested parties wishing to communicate directly with our directors may do so by writing and sending the correspondence to our CRO and CLO or Legal Department by mail to our corporate headquarters at Palantir Technologies Inc., 1200 17th Street, Floor 15, Denver, Colorado 80202.
Each communication should set forth (i) the name and address of the stockholder, as it appears on our books, and if our common stock is held by a nominee, the name and address of the beneficial owner of our common stock, or, if such party is not a stockholder, the name and address and other relevant contact information of such party, and (ii) if applicable, the number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.
Our CRO and CLO or Legal Department, in consultation with appropriate directors as necessary, shall review all incoming communications submitted in accordance with this policy (except for mass mailings, product complaints or inquiries, job inquiries, business solicitations, and patently offensive or otherwise inappropriate material), and, if appropriate, will route such communications to the appropriate director(s) or, if none is specified, to the Chairman of the Board of Directors or the Lead Independent Director if there is not an independent Chairman of the Board of Directors and our Board of Directors has appointed a Lead Independent Director.
Our CRO and CLO or Legal Department may decide in the exercise of his, her, or its judgment whether a response to any communication is necessary and shall provide a report to the Compensation, Nominating & Governance Committee on a quarterly basis of any stockholder communications received to which the CRO and CLO or Legal Department has responded.
These policies and procedures do not apply to communications to non-management directors from our officers or directors who are stockholders or stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act.
Corporate Governance Guidelines and Code of Conduct
Our Board of Directors has adopted corporate governance guidelines. These guidelines address, among other items, the qualifications and responsibilities of our directors and director candidates, the structure and composition of our Board of Directors, and corporate governance policies and standards applicable to us in general. In addition, our Board of Directors has adopted a code of conduct that applies to all of our officers, directors, employees, contractors, and consultants, including our CEO, CFO, and other executive and senior financial officers. The full text of our corporate governance guidelines and our code of conduct is posted on the investor relations page on our website at https://investors.palantir.com/governance/governance-documents. We intend to disclose any amendments to our code of conduct, or waivers of its requirements, on our website or in filings under the Exchange Act.
Director Compensation
Pursuant to our Outside Director Compensation Policy, in effect during fiscal year 2022, each non-employee director (or “outside director”) other than Mr. Thiel (each, a “Non-Founder Outside Director”) receives compensation for his or her service consisting of cash retainers and equity awards. Mr. Thiel does not receive compensation or benefits under the Outside Director Compensation Policy, other than potential reimbursement of expenses as described below. Our Board of Directors may amend, alter, suspend, or terminate the Outside Director Compensation Policy at any time and for any reason, provided that no such amendment, alteration, suspension, or termination will materially impair the rights of an outside director with respect to compensation that already has been paid or awarded, unless otherwise mutually agreed in writing between the outside director and us. The Outside Director Compensation Policy will be administered by our Board of Directors or a designated committee of our Board of Directors.
Cash Compensation
Pursuant to our Outside Director Compensation Policy, all Non-Founder Outside Directors serving as directors during our fiscal year ended December 31, 2022 (Messrs. Moore and Woersching, and Mses. Schiff and Stat, as well as Spencer Rascoff, who was a member of our Board of Directors until June 7, 2022) were paid cash compensation as set forth below.
| | | | | |
| 2022 Annual Retainer ($) |
| Board of Directors: | |
| All non-employee members | 40,000 | |
| Audit Committee: | |
| Additional retainer for Chairperson | 25,000 | |
| Additional retainer for Non-Chairperson members | 12,500 | |
| Compensation, Nominating & Governance Committee: | |
| Additional retainer for Committee members | 12,500 | |
For clarity, each Non-Founder Outside Director who serves as the chairperson of a committee receives only the additional annual fee for services as the chair of the committee and not the additional annual fee for services as a member of the committee while serving as such chair.
Each annual cash retainer and additional annual fee will be paid quarterly in arrears on a prorated basis to each outside director who has served in the relevant capacity at any point during the immediately preceding fiscal quarter. Mr. Thiel does not receive any cash compensation under the Outside Director Compensation Policy.
Equity Compensation
Non-Founder Outside Directors are eligible to receive all types of awards other than incentive stock options under our 2020 Equity Incentive Plan (“2020 Plan”). Mr. Thiel does not receive any equity compensation under the Outside Director Compensation Policy and has not otherwise received any awards under the 2020 Plan to date. Pursuant to our Outside Director Compensation Policy, nondiscretionary, automatic grants of equity awards are made to our Non-Founder Outside Directors as follows:
•Initial Award. Each person who first becomes a Non-Founder Outside Director (either by election or appointment) will be granted an equity award on the first trading day on or after such individual first becomes a Non-Founder Outside Director consisting of restricted stock units (“RSUs”) with a value of $400,000, with any resulting fractional shares rounded down to the nearest whole share. If an individual was a member of our Board of Directors and also an employee, becoming a Non-Founder Outside Director due to termination of employment will not entitle the Non-Founder Outside Director to an initial award. Each such initial award will be scheduled to vest as follows: one-third of the shares subject to the initial award will be scheduled to vest on each of the one, two, and three year anniversaries of the date the individual first became a Non-Founder Outside Director, in each case subject to the Non-Founder Outside Director continuing to be a service provider through the applicable vesting date.
•Annual Award. Each Non-Founder Outside Director will be granted an award of RSUs on the first trading day immediately following each annual meeting of our stockholders with a value of $300,000, with any resulting fractional shares rounded down to the nearest whole share; provided that, if the date on which an individual first became a Non-Founder Outside Director occurred after the preceding annual meeting, this value of such Non-Founder Outside Director’s annual award will be prorated. Each annual award will be scheduled to vest on the earlier of (i) the one-year anniversary of the annual award’s grant date, or (ii) the day immediately before the date of the next annual meeting following the annual award’s grant date, in each case, subject to the Non-Founder Outside Director continuing to be a service provider through the applicable vesting date.
The “value” for the awards of RSUs described above means the grant date fair value determined in accordance with U.S. generally accepted accounting principles, or such other methodology as our Board of Directors or a designated committee of our Board of Directors may determine prior to the grant of the applicable award.
Pursuant to our Outside Director Compensation Policy, each Non-Founder Outside Director award is treated in accordance with our 2020 Plan, which provides that in the event of a change in control, all restrictions on any outside director’s
outstanding awards will lapse, and all performance goals or other vesting requirements for his or her performance awards will be deemed achieved at 100% of target levels, and all other terms and conditions met.
Non-Founder Outside Directors also may be eligible to receive other compensation and benefits, as may be determined by our Board of Directors or a designated committee of our Board of Directors from time to time. In addition, each outside director, including Mr. Thiel, is entitled to be reimbursed for their reasonable, customary, and properly documented, out-of-pocket expenses in connection with service on our Board of Directors or any committee of our Board of Directors.
Pursuant to our Outside Director Compensation Policy, no Non-Founder Outside Director may be granted awards with values, and be provided any other compensation (including without limitation any cash retainers or fees) with amounts that, in any fiscal year, in the aggregate, exceed $750,000, provided that such amount is increased to $1,500,000 in the fiscal year in which the individual first becomes a Non-Founder Outside Director. Any awards or other compensation provided to an individual (a) for his or her services as an employee, or for his or her services as a consultant other than as a Non-Founder Outside Director, or (b) prior to the effective date of the Outside Director Compensation Policy, will be excluded for purposes of the foregoing limits.
On June 6, 2022, in anticipation of Mr. Rascoff’s transitioning from service as a member of our Board of Directors to service as a consultant, which occurred on June 7, 2022 (the date of our 2022 annual meeting of stockholders), our Board of Directors approved entry into a consulting agreement with Mr. Rascoff, which agreement also became effective on June 7, 2022, the date Mr. Rascoff’s successor on our Board of Directors, Mr. Woersching, was elected and qualified. For more information regarding the terms of the consulting agreement, please see the section titled “Certain Relationships and Related Party Transactions—Consulting Arrangement.”
The following table sets forth information regarding compensation earned by or paid to our outside directors during our fiscal year ended December 31, 2022:
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned
or Paid in
Cash ($) | | RSU Awards ($)(1) | | Total ($) |
Peter Thiel(2) | | — | | | — | | | — | |
Alexander Moore(3) | | 65,000 | | | 299,993 | | | 364,993 | |
Spencer Rascoff(4) | | 28,393 | | | — | | | 28,393(5) |
Alexandra Schiff(3) | | 52,500 | | | 299,993 | | | 352,493 | |
Lauren Friedman Stat(6) | | 52,500 | | | 299,993 | | | 352,493 | |
Eric Woersching(7) | | 36,786 | | | 399,994 | | | 436,780 | |
_______________
(1)Amounts represent the grant date fair value of such awards, calculated in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 718. The assumptions that we used to calculate these amounts are discussed in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023. As described in the notes to the Form 10-K referenced above, we determine the grant-date fair value of the RSUs as the fair market value of the common stock underlying the RSUs at the grant date. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the directors.
(2)As of December 31, 2022, Mr. Thiel held no outstanding awards.
(3)As of December 31, 2022, each of the indicated directors held 106,832 outstanding RSUs. Each of their 2022 RSU awards consisted of the grant of their annual award in accordance with the Outside Director Compensation Policy.
(4)As of December 31, 2022, Mr. Rascoff held 74,153 outstanding RSUs. Mr. Rascoff’s term on the Board of Directors expired on June 7, 2022 upon the election and qualification of his successor.
(5)An RSU award originally granted to Mr. Rascoff in 2020 was amended to provide for continued vesting in connection with his service as a non-director consultant to the Company. In accordance with ASC Topic 718, the value of such award did not change as a result of such amendment from the amount previously reported. No amount is reported in this table with respect to such RSU award and consulting arrangement as a result. For more information, please see the section titled “Certain Relationships and Related Party Transactions—Consulting Arrangement.”
(6)As of December 31, 2022, Ms. Stat held 42,697 outstanding RSUs. Ms. Stat’s 2022 RSU awards consisted of the grant of her annual award in accordance with the Outside Director Compensation Policy.
(7)As of December 31, 2022, Mr. Woersching held 43,811 outstanding RSUs. Mr. Woersching’s 2022 RSU awards consisted of the grant of his initial award in accordance with the Outside Director Compensation Policy.
Voting Structure and Arrangements
We have three series of common stock, Class A common stock, Class B common stock, and Class F common stock, which have different voting rights. Shares of Class A common stock have one vote per share. Shares of Class B common stock have ten votes per share. Subject to the Ownership Threshold (as defined below), shares of Class F common stock will generally have a number of votes per share that would cause the total votes of all shares of Class F common stock, together with other shares of Class A common stock and Class B common stock held by our Founders and their affiliates that are subject to the Founder Voting Agreement or are Designated Founders’ Excluded Shares, to equal 49.999999% of the voting power with respect to a matter. If the Ownership Threshold is not met, the shares of Class F common stock will have ten votes per share. In certain cases, however, even if the Ownership Threshold is met, if the voting power of shares of Class A common stock and Class B common stock held by the Founders or their affiliates that are subject to the Founder Voting Agreement or are Designated Founders’ Excluded Shares collectively equals greater than 49.999999% of the voting power with respect to a matter, then the Class F common stock will have zero votes with respect to such matter.
All shares of our Class F common stock are held in the Founder Voting Trust. So long as our Founders who are then party to the Founder Voting Agreement and certain of their affiliates collectively meet the Ownership Threshold on the applicable record date, then the Class F common stock, when taken together with all other shares subject to the Founder Voting Agreement and any Designated Founders’ Excluded Shares
(as defined in our amended and restated certificate of incorporation and as described further below), will give our Founders the ability to control up to 49.999999% of the total voting power of our capital stock. The ownership threshold (defined in our amended and restated certificate of incorporation as the “Ownership Threshold”) is 100 million “Corporation Equity Securities,” as defined in our amended and restated certificate of incorporation, and is subject to reduction if a Founder withdraws from the Founder Voting Agreement. As of the record date for the
specialannual meeting, the Ownership Threshold was satisfied.
Our amended and restated certificate of incorporation requires that, with respect to each matter that is submitted to a vote of our stockholders at the specialannual meeting, each of our Founders who is then party to the Founder Voting Agreement will, no later than three business days prior to the date of the specialannual meeting (the “Instruction Date”), deliver to our Secretary, the Trustee and each other Founder who is then party to the Founder Voting Agreement an instruction identifying how such Founder desires votes corresponding to the Class F common stock to be cast (which can include a vote of “withhold” or “abstain” that may not constitute a “vote” under the applicable voting standard required to approve the matter)matter or elect the director nominee). All three Founders are currently party to the Founder Voting Agreement. Accordingly, to the extent that at least two Founder instructions contain the same instruction as to how the Class F common stock should be cast in respect of a matter, the shares of Class F common stock held in the Founder Voting Trust will be voted, as a whole, by the Trustee in the manner contained in such matching instructions with respect to such matter. Conversely, if no two voting instructions are the same with respect to a matter, the shares of Class F common stock held in the Founder Voting Trust will be voted, as a whole, in the following manner by the Trustee with respect to such matter: (i) in the case of a vote on a director nominee, as “withhold,” and (ii) in the case of (a) the ratification of the appointment of our independent registered public accounting firm, and (b) the approval, on an advisory basis, of the named executive officer compensation as “abstain.” The Trustee will not exercise any voting discretion over the shares of Class F common stock held in the Founder Voting Trust.
Our Founders are currently party to the Founder Voting Agreement. Under the terms of the Founder Voting Agreement, the shares subject to the Founder Voting Agreement will be voted with respect to a matter in the same manner in which the Trustee votes the shares of Class F common stock with respect to such matter. Pursuant to the terms of the Founder Voting Agreement, each Founder granted, and Mr. Thiel caused certain of his affiliates to grant, a proxy and power of attorney to the Grantee to vote, or to deliver or not deliver consents, as applicable, with respect to:
(1)any Corporation Equity Securities entitled to vote on a matter submitted to a vote of our stockholders (other than shares of Class F common stock) that are held or owned, directly or indirectly, by such Founder or such affiliate, if applicable, and for which such Founder or such affiliate either has (a) sole voting power or (b) shared voting power and the power and authority to grant, or to cause to be granted, a proxy and power of attorney with respect to such Corporation Equity Securities; and
(2)any other shares of our capital stock entitled to vote on a matter submitted to a vote of our stockholders (other than shares of Class F common stock) as volunteered by such Founder or such affiliate. For
each matter subject to a vote at the
specialannual meeting, the Founder Voting Trust Agreement provides that the Trustee will notify the Grantee of how the Trustee will vote the shares of Class F common stock held in the Founder Voting Trust. Pursuant to the Founder Voting Agreement, the Grantee will vote all shares of our capital stock entitled to vote on such matter for which the Grantee has been granted a proxy and power of attorney in accordance with the Founder Voting Agreement and will take all necessary and appropriate action in order to ensure that all such shares are voted, as a whole, in the same manner as the shares of Class F common stock will be voted by the Trustee, as notified to the Grantee by the Trustee. If the Grantee has not received a vote notification from the Trustee, the Grantee will not vote any shares of our capital stock over which it has been granted a proxy and power of attorney under the Founder Voting Agreement.
Under our amended and restated certificate of incorporation, a Founder may designate as Designated Founders’ Excluded Shares a number of shares that would otherwise be required to be subject to the Founder Voting Agreement. A Founder’s Designated Founders’ Excluded Shares may be voted (or not voted) by the Founder or certain applicable affiliates of such Founder in his or their discretion, which may include a manner different than the voting power exercised in accordance with the decision of a majority of our Founders who are then party to the Founder Voting Agreement. Such Designated Founders’ Excluded Shares also reduce the total voting power of the Class F common stock. Mr. Thiel has designated a portion of the shares of Class A common stock and Class B common stock beneficially owned by him and his affiliates as Designated Founders’ Excluded Shares. Accordingly, Mr. Thiel or his affiliates may vote or not vote such Designated Founders’ Excluded Shares in their discretion.
Information About Our Capital Stock
The following chart provides information regarding shares of our Class A common stock, Class B common stock, and Class F common stock outstanding as of the close of business on the record date and related information about the number of votes with respect to
the proposal.Proposals 1, 2 and 3. | | | | | |
| Number of Shares of Class A Common Stock and Class B Common Stock | | 1,979,328,442
2,013,288,274 shares of Class A common stock 99,861,503
103,680,894 shares of Class B common stock |
| |
Number of Votes Per Share of Class A Common Stock and Class B Common Stock | | One vote per share of Class A common stock Ten votes per share of Class B common stock |
| |
| Number of Aggregate Votes of Class A Common Stock and Class B Common Stock | | 2,977,943,4723,050,097,214 votes
|
| |
| Number of Shares Subject to the Founder Voting Agreement | | 27,166,475 shares of Class A common stock 83,738,231
87,178,912 shares of Class B common stock |
| | |
| |
| Number of Aggregate Votes of Class A Common Stock and Class B Common Stock Subject to the Founder Voting Agreement | | 864,548,785898,955,595 votes
|
| |
| Number of DFES | | 109,937,306 shares of Class A common stock 6,293,765 shares of Class B common stock |
| |
| Number of Aggregate Votes of the DFES | | 172,874,956 votes |
| |
| Number of Shares Subject to the Founder Voting Agreement plus DFES (collectively, “Founder Shares”) | | 137,103,781 shares of Class A common stock 90,031,996
93,472,677 shares of Class B common stock |
| |
| Number of Aggregate Votes of the Founder Shares | | 1,037,423,7411,071,830,551 votes
|
| |
| Number of Shares Other than Founder Shares and Class F Shares (“Other Stockholder Shares”) | | 1,842,224,661
1,876,184,493 shares of Class A common stock 9,829,507
10,208,217 shares of Class B common stock |
| |
| Number of Aggregate Votes of the Other Stockholder Shares | | 1,940,519,7311,978,266,663 votes
|
| |
| Number of Aggregate Votes of the Class F Shares | | With respect to the proposal: 903,095,912Proposal 1: 906,436,032 votes |
| With respect to Proposals 2 and 3: Between 0 and 906,436,032 votes |
| Number of Shares of Class F Common Stock | | 1,005,000 shares |
| |
| Number of Votes Per Share of the Class F Common Stock | | With respect to the proposal:Proposal 1: Approximately 898.603901.926 votes per share With respect to Proposals 2 and 3: Between 0 and approximately 901.926 votes per share |
PROPOSAL NO. 1
ELECTION OF
THE PROPOSALAdoption of DIRECTORS
Our
Governance StructurePrior to 2020, we had preferred stock and two classes of common stock, Class A common stock and Class B common stock, which cast one vote and ten votes per share, respectively. In 2020, we pursued a direct public listing (the “Direct Listing”) of the Class A common stock. Prior to the Direct Listing, our stock was governed by contracts that restricted many holders’ ability to transfer or vote their shares, and which effectively prescribed the composition of our Board of Directors. On July 22, 2020,Directors currently consists of seven directors. At the annual meeting, seven directors will be elected for a one-year term and until their respective successors are duly elected and qualified or until their earlier death, resignation, or removal.
Nominees
Our Compensation, Nominating & Governance Committee has recommended, and our Board of Directors formedhas approved, Messrs. Karp, Woersching, Moore, Thiel, and Cohen and Mses. Schiff and Stat as nominees for election as directors at the annual meeting. If elected, each of Messrs. Karp, Woersching, Moore, Thiel, and Cohen and Mses. Schiff and Stat will serve as a special committee composed of four independent directors (the “Special Governance Committee”) to reviewdirector until the next annual meeting and evaluate our governance structure in connection withhis or her respective successor is elected and qualified or until his or her earlier death, resignation, or removal. For more information concerning the potential Direct Listing. The Special Governance Committee was delegated all of the power and authority of our Board of Directors for these matters, to the extent permitted by applicable law.The Special Governance Committee and our Founders agreed on the governance structure that was eventually adopted (the “Governance Structure”), which entitles our Founders, in most situations, to exercise exactly 49.999999% of our total voting power. This was accomplished by our Founders exchanging a portion of their high-vote, Class B common stock for shares of Class F common stock, whose voting power is generally determined based on the number of other shares (i) held or owned, directly or indirectly, by our Founders, and (ii) that are outstanding and entitled to vote on a given matter or are present in person or represented by proxy and entitled to vote on a given matter. The Governance Structure is described in further detail innominees, please see the section titled “Voting Structure and Arrangements.”
The Special Governance Committee unanimously approved, and recommended that our Board of Directors approve, the Governance Structure on August 19, 2020. Adopting the Governance Structure prior to the Direct Listing required amendments to our then-effective Amended and Restated Certificate of Incorporation. We solicited stockholders’ written consent by way of an Information Statement, dated August 20, 2020. The requisite written consents and other necessary approvals for the amendments for the Governance Structure were obtained, including from a majority of voting power held by non-Founder (or Founder-affiliate) stockholders in the aggregate and a majority of the non-Founder (or Founder-affiliate) voting power of each of the Class A common stock, the Class B common stock and our preferred stock outstanding at the time. These amendments were linked to the process for publicly listing our Class A common stock.
On August 25, 2020, we filed a registration statement on Form S-1 with the Securities and Exchange Commission (as amended, the “Registration Statement”). The final version of the Registration Statement, dated September 21, 2020, described in detail the Class F common stock and the Governance Structure. The Registration Statement explained that, “for the foreseeable future, the control of our company will be concentrated with our Founders through our Class F common stock.” On September 22, 2020, the Registration Statement became effective, and, on September 30, 2020, the Class A common stock began trading on the New York Stock Exchange. Disclosures identical to those contained in the Registration Statement were subsequently made in the final prospectus filed with the Securities and Exchange Commission on September 30, 2020, which discussed at length the Direct Listing and, among other things, our capital structure.
The Governance Structure replaced the three major stockholder agreements related to our pre-Direct Listing governance structure—including a voting agreement, investors’ rights agreement and first refusal and co-sale agreement—with three interrelated agreements: our current certificate of incorporation (which sets forth the terms of the Class F common stock), the Founder Voting Trust Agreement and the Founder Voting Agreement.
Litigation Regarding Our Governance Structure
On March 31, 2021, plaintiff Jason Hirsch filed a putative class action complaint in the Court of Chancery of the State of Delaware (the “Court”) asserting that our certificate of incorporation and the Class F common stock are
invalid under Delaware law generally, including because they allegedly ran afoul of Sections 151, 212, and 231 of the Delaware General Corporation Law (the “DGCL”), and that the putative class had been harmed by the issuance of the Class F common stock, and seeking to have the Court “strike” the Class F common stock from our certificate of incorporation (such putative class action, the “Class Action Litigation”). The Class Action Litigation named us, as well as our Founders, as defendants.
On May 18, 2021, Mr. Hirsch filed a motion for leave to file an amended complaint to substitute himself with Eric R. Gilbert, on the ground that Mr. Hirsch no longer desired to be the plaintiff. On May 27, 2021, Mr. Gilbert filed an amended complaint that asserted identical claims to the original complaint. On October 19, 2021, the Court held a hearing on the parties’ cross-motions for summary judgment. Subsequently, the parties to the Class Action Litigation engaged in arms-length settlement discussions before reaching an agreement in principle to settle the Class Action Litigation that was memorialized in a term sheet executed on January 13, 2022. On May 13, 2022, the parties entered into a Stipulation of Compromise and Settlement with respect to the Class Action Litigation (the “Settlement”). On September 13, 2022, the Court approved the Settlement and entered judgment dismissing the Class Action Litigation with prejudice, and, on October 13, 2022, the judgment became final and non-appealable.
Terms of the Settlement
Pursuant to the Settlement, we agreed to take the necessary corporate actions to cause the amended and restated certificate of incorporation, as set forth in Appendix A-1 hereto (the “New Certificate”), to be approved by our Board of Directors and to call a special meeting of stockholders proposing such amendments. For convenience of reference, a copy of the New Certificate showing the changes from our currently effective certificate of incorporation (the “Current Certificate”), with deleted text shown in strikethroughCorporate Governance—Nominees for Director.”
Messrs. Karp, Woersching, Moore, Thiel, and
added text shown as double-underlined, is attached as Appendix A-2. WeCohen and
our FoundersMses. Schiff and Stat have agreed to
use our individualserve as directors if elected, and
collective reasonable best effortsmanagement has no reason to
effect, take,believe that they will be unavailable to serve. In the event a nominee is unable or
causedeclines to
be taken all actions, and to do, or cause to be done, all things reasonably necessary, proper, or advisable under applicable laws, regulations, and agreements to consummate and make effective,serve as
promptly as practicable,a director at the
Settlement, including supporting the special meeting. However, the Settlement does not require any Founder or such Founder’s affiliates to vote any DFES in connection with the special meeting and the Settlement does not require us or our Founders to adjourn the special meeting until a quorum is present or represented.Pursuant to the Settlement, we also agreed to take the necessary corporate actions to cause the amended and restated bylaws, as set forth in Appendix B-1 hereto (the “New Bylaws”), to be approved by our Board and made effective following the special meeting. For convenience of reference, a copytime of the New Bylaws showing the changes from our currently effective bylaws (the “Current Bylaws”), with deleted text shown in strikethrough and added text shown as double-underlined, is attached as Appendix B-2. Pursuant to the Settlement, we have also agreed not to materially modify (a) those changes to the Current Bylaws that are marked as deleted or added text in Sections 2.14, 2.15, and 4.5 of Appendix B-2 hereto and (b) those changes to the Current Certificate (if the New Certificate is adoptedannual meeting, proxies will be voted for any nominee designated by the required votepresent Board of our stockholders) that are marked as deleted or added text in Articles IV.D.1 and 2, and V of Appendix A-2 hereto, in each case, ifDirectors to fill the modification to the deleted or added textvacancy.
Vote Required
Each director is
materially adverse to the benefits for the class as set forth in the Settlement, until the earlier of (x) the fifth anniversary of the entry of the judgment dismissing the Class Action Litigation or (y) the Final Class F Conversion Date (as defined in the New Certificate). Such changes are respectively generally described in (a) the sections titled “Summary of New Bylaws—Independent Certifier,” “ —Inspector of Elections,” “ —Independent Committee Approval of Certain Transactions” or “—Equal Treatment of Common Stock in Certain Transactions” below; and (b) the sections titled “Summary of New Certificate—Determination of Voting Power of Class F Common Stock,” “ —Documentation of Founder Shares” or “ —Approval of Certain Change of Control Transactions.”Summary of New Certificate
The following iselected by a summary of the principal amendments reflected in the New Certificate. This discussion of the New Certificate is a summary only and is qualified in its entirety by reference to the New Certificate, a copy of
which is attached as Appendix A-1. For convenience of reference, a copy of the New Certificate showing the changes from our Current Certificate, with deleted text shown in strikethrough and added text shown as double-underlined, is attached as Appendix A-2. The following discussion of changes that would be effected by the New Certificate refers to the amendments that will become effective if the New Certificate is adopted by the required vote of our stockholders and filed by us with the Secretary of State of Delaware.
Determination of Voting Power of Class F Common Stock
Article IV, Section D.1(b)(iii) of the Current Certificate provides, among other things, that, in determining the voting power of shares of our Class F common stock, whether in respect of a matter that is submitted to a vote at a stockholder meeting or with respect to an action by written consent, we shall use reasonable best efforts to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (excluding our Class F common stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (including our Class F common stock). The New Certificate would remove the “reasonable best efforts” qualification and specify that these procedures shall be performed.
Documentation of Founder Shares
Article IV, Section D.1(c)(iii) of the Current Certificate provides, among other things, that information regarding the Founder Shares (as defined in the Current Certificate) furnished by the Grantee (or all our Founders who are then party to the Founder Voting Agreement) to our secretary pursuant to Article IV, Section D.1(c)(ii)(x) of the Current Certificate shall be presumptive evidence of such information. The New Certificate would amend Article IV, Section D.1(c)(iii) to remove this presumption.
Article IV, Section D.1(c)(iii) of the Current Certificate also provides, among other things, that we are not required to furnish any evidence relating to our calculationplurality of the voting power of the Class F common stock to any person except as required by law and except to our Founders who are then party to the Founder Voting Agreement as provided in the Current Certificate. The New Certificate would amend Article IV, Section D.1(c)(iii) to provide that we are not required to furnish any evidence relating to the calculation of the voting power of the Class F common stock to any person except as required by law or as specified in our bylaws and except to our Founders who are then party to the Founder Voting Agreement as provided in the New Certificate. As discussed below, Section 2.14 of the New Bylaws would specify that certain materials related to the calculation of the voting power of the Class F common stock shall be incorporated into our “books and records,” and expressly subject to demands to us made in compliance with Section 220 of the DGCL, subject to the requirements and limitations of such section.
Approval of Certain Change of Control Transactions
The New Certificate would insert a new Article IV, Section D.2(e) providing that, if we enter into any transaction, other than a restructuring transaction or a transaction that otherwise does not involve a Change of Control (as described below), which transaction requires, pursuant to Section 251(c) or Section 271(a) of the DGCL, the approval of holders of a majority of the voting power of all of the outstanding shares of our capital stock entitled to vote thereon, such transaction shall be subject to approval by the holders of at least fifty-five percent (55.0%) of the voting power of all of the outstanding shares of our capital stock entitled to vote thereon if the record date for determining the stockholders entitled to vote to approve such transaction occurs prior to the Final Class F Conversion Date (as defined in the New Certificate). In addition, the New Certificate would add the new defined term “Change of Control” to Article V. Such term would be defined to mean any transaction the result of which is that any person (other than one or more of our Founders or their respective controlled affiliates) becomes the beneficial owner, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of our capital stock. For purposes of this definition, (i) the term “person” would have the meaning used in Section 13(d)(3) of the Exchange Act; (ii) the term “beneficial owner” would have the meaning
used in Rules 13d-3 and 13d-5 under the Exchange Act; and (iii) any direct or indirect parent company of us would not itself be considered a “person” for purposes of this definition, so long as holders of our capital stock are the beneficial owners, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of capital stock of such company.
Summary of New Bylaws
At the special meeting, stockholders will not be asked to vote on the adoption of the New Bylaws. The New Bylaws are expected to be approved by our Board of Directors in accordance with the Current Bylaws without submission to our stockholders for approval, and are expected to become effective after the date scheduled for the special meeting (regardless of the outcome or results of the special meeting). We have included a summary of the principal amendments to be reflected in the New Bylaws in order to provide additional background to stockholders on the terms of the Settlement. This discussion of the New Bylaws is a summary only and is qualified in its entirety by reference to the New Bylaws, a copy of which is attached as Appendix B-1. For convenience of reference, a copy of the New Bylaws showing the changes from our Current Bylaws, with deleted text shown in strikethrough and added text shown as double-underlined, is attached as Appendix B-2.
Determination of Quorum
Section 2.6 of the Current Bylaws provides, among other things, that in determining the voting power of the shares of our capital stock (including our Class F common stock) that are issued and outstanding and entitled to vote for purposes of assessing the presence or absence of a quorum at a stockholder meeting, we shall use reasonable best efforts to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (excluding our Class F common stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (including our Class F common stock). The New Bylaws would require us to engage an inspector or inspectors of election with respect to a stockholder meeting to perform such procedures, as applicable.
Determination of Voting Power
Section 2.9 of the Current Bylaws provides, among other things, that, for purposes of determining the voting power of shares of our capital stock present in person (including virtually) or represented by proxy at the meeting and entitled to vote on the election of directors. Because the outcome of this proposal will be determined by a matter, we shall use reasonable best effortsplurality vote, any shares not voted FOR a particular nominee, whether as a result of choosing to first, performWITHHOLD authority to vote or a broker non-vote, will have no effect on the procedures set forth in Section 231(b)(1)-(2)outcome of the DGCL with respect to all of the outstanding shares of our capital stock (excluding our Class F common stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (including our Class F common stock). The New Bylaws would remove the “reasonable best efforts” qualification and require us to engage an inspector or inspectors of election to perform such procedures in determining the voting power of such shares at a stockholder meeting.
Section 2.10 of the Current Bylaws provides that, for purposes of determining the voting power of shares of our outstanding stock with respect to a stockholder action by written consent or consents without a meeting, we shall use reasonable best efforts to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (excluding our Class F common stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of our capital stock (including our Class F common stock). The New Bylaws would remove the “reasonable best efforts” qualification and specify that we shall perform such procedures to determine the voting power of such shares with respect to a stockholder action by written consent or consents without a meeting.
Independent Certifier
The New Bylaws would insert a new Section 2.14 to our bylaws entitled “Founder Shares,” which would require that, in connection with any meeting of stockholders requiring a stockholder vote where the applicable record
election.date is prior to the Final Class F Conversion Date, we retain a third-party professional or firm independent of our Founders (the “Independent Certifier”), which Independent Certifier shall review and certify, as of the record date for determination of stockholders entitled to vote on each matter subject to a vote of stockholders at such stockholder meeting, the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each such matter. We would be obliged to publicly disclose prior to each applicable stockholder meeting, via proxy statement or Current Report on Form 8-K, the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such stockholder meeting, as certified by the Independent Certifier. The retention of the Independent Certifier would be subject to approval by either a committee composed exclusively of directors other than our Founders (a “Non-Founder Committee”) or a majority of the members of our Board of Directors (excluding our Founders). The formation of a Non-Founder Committee would be subject to approval by resolution adopted by a majority of the total number of authorized directorships (whether or not there exist any vacancies or other unfilled seats) (the “Whole Board”). With respect to any stockholder meeting, the New Bylaws would also deem the following materials to be incorporated into our “books and records” (and expressly subject to demands to us made in compliance with Section 220 of the DGCL, subject to the requirements and limitations of such section): (i) all documentation regarding the Founder Shares furnished to the secretary of the Company or his or her delegate pursuant to Article IV, Section D.1(c)(ii)(x) of our certificate of incorporation, (ii) all portions of our stock ledger used by the Independent Certifier in certifying the aggregate number and class or series of Founder Shares outstanding and entitled to vote (as described above), and (iii) the certification delivered to us by the Independent Certifier in connection with its review and certification of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such stockholder meeting.
Inspector of Elections
The New Bylaws would amend Section 2.15 of the Current Bylaws to provide that the inspector or inspectors of election appointed to act at a stockholder meeting shall be entitled to rely on the Independent Certifier’s certification of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such stockholder meeting.
Independent Committee Approval of Certain Transactions
The New Bylaws would insert a new Section 4.5 to our bylaws entitled “Independent Committee; Approvals,” which would require that certain transactions related to our Founders be approved by a committee of our Board of Directors that is composed exclusively of directors who are determined by our Board of Directors, in their reasonable judgment, to qualify as independent directors in accordance with the rules of the New York Stock Exchange or another stock exchange, if applicable (each, an “Independent Committee”). The formation of an Independent Committee would be subject to approval by resolution adopted by a majority of the Whole Board. In all cases, however, each of the Audit Committee and Compensation, Nominating & Governance Committee of our Board of Directors would constitute an Independent Committee.
The New Bylaws would provide that any transaction between any of our Founders (or their controlled affiliates), on the one hand, and us, on the other, in which consideration exchanges hands between our Founders (or their controlled affiliates) and us, and such consideration has a fair market value in excess of $50,000,000, as determined by (i) a Non-Founder Committee, (ii) a majority of the members of our Board of Directors (excluding our Founders) or (iii) an Independent Committee, and that is entered into and consummated following the effective date of the New Bylaws and prior to the Final Class F Conversion Date and that would require disclosure pursuant to Item 404(a) of Regulation S-K, would require approval by either: (a) the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the outstanding shares of our capital stock, voting together as a single class, or (b) an Independent Committee. These requirements would not apply to any transaction that results from, arises out of, relates to, involves, or constitutes the performance, satisfaction, exercise, failure to exercise, waiver of any right, remedy, obligation, undertaking, condition, or term of any transaction, agreement, contract, or arrangement that existed prior to the effectiveness of Section 4.5 of the New
Bylaws, has been previously approved pursuant to the Current Bylaws or the New Bylaws, or was part of a transaction previously disclosed pursuant to Item 404(a) of Regulation S-K.
Section 4.5 of the New Bylaws would also require that prior to any of our Founders (including their controlled affiliates) attempting any transaction, at any time prior to the Final Class F Conversion Date, involving the acquisition of our equity securities in a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the Exchange Act), such Founder or Founders notify our secretary (or his or her delegate) and the chairperson of our Board of Directors of the intention of such Founder or Founders to attempt a Rule 13e-3 transaction, and that such transaction be conditioned on the approval by (a) an Independent Committee and (b) the holders of a majority of the voting power of our capital stock that is held by our stockholders other than our Founders (including their controlled affiliates) and any holder of our Class F common stock.
Equal Treatment of Common Stock in Certain Transactions
Section 4.5 of the New Bylaws would additionally require that, in the case of a sale of all of the outstanding shares of our capital stock prior to the Final Class F Conversion Date, with respect to the consideration to which the holders of such shares are entitled (including the rights to elect among different forms of consideration), shares of our Class A common stock and Class B common stock held by any of our Founders or their controlled affiliates be treated equally, identically and ratably, on a per share basis, to those shares of our Class A common stock and Class B common stock, respectively, held by any of our stockholders other than our Founders (including their controlled affiliates) and any holder of our Class F common stock, unless different treatment is approved by an Independent Committee.
PROPOSAL
AMENDMENT AND RESTATEMENT OF OUR CERTIFICATE OF INCORPORATION
Summary
Our Board of Directors has approved, and recommends that our stockholders approve, the amendment and restatement of the Current Certificate to read as set forth in the New Certificate. For a summary of the principal amendments that will be effected if the New Certificate is adopted, refer to the section entitled “Background of the Proposal—Summary of New Certificate.” This discussion of the New Certificate is a summary only and is qualified in its entirety by reference to the New Certificate, a copy of which is attached as Appendix A-1. For convenience of reference, a copy of the New Certificate showing the changes from our Current Certificate, with deleted text shown in strikethrough and added text shown as double-underlined, is attached as Appendix A-2.
If the New Certificate is adopted by the required vote of our stockholders, we intend to file the New Certificate with the Secretary of State of Delaware. The New Certificate will be effective immediately upon acceptance of filing by the Secretary of State. Our Board of Directors reserves the right to abandon or delay the filing of the New Certificate even if it is approved by our stockholders.
Vote Required
The approval of the New Certificate will require a majority of the voting power of all shares of our outstanding capital stock. Abstentions will have the same effect as votes against this proposal.
Board of Directors Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE AMENDMENT AND RESTATEMENTELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending December 31, 2023. Ernst & Young LLP served as our independent registered public accounting firm for the fiscal year ended December 31, 2022.
At the annual meeting, we are asking our stockholders to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023. Our Audit Committee is submitting the appointment of Ernst & Young LLP to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Notwithstanding the appointment of Ernst & Young LLP, and even if our stockholders ratify the appointment, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our Audit Committee believes that such a change would be in the best interests of Palantir and our stockholders. If our stockholders do not ratify the appointment of Ernst & Young LLP, then our Audit Committee may reconsider the appointment. One or more representatives of Ernst & Young LLP are expected to be present at the annual meeting, and they will have an opportunity to make a statement and are expected to be available to respond to appropriate questions from our stockholders.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to us by Ernst & Young LLP for our fiscal years ended December 31, 2022 and December 31, 2021.
| | | | | | | | | | | |
| | 2022 ($) | | 2021 ($) |
Audit Fees(1) | 5,246,061 | | | 4,447,329 | |
| Audit-Related Fees | — | | | — | |
Tax Fees(2) | 121,911 | | | 327,157 | |
All Other Fees(3) | 29,790 | | | 11,746 | |
| Total Fees | 5,397,762 | | | 4,786,232 | |
_______________
(1)“Audit Fees” consist of fees billed for professional services rendered in connection with the audit of our consolidated financial statements, reviews of our quarterly condensed consolidated financial statements, services in connection with the audit of our internal controls over financial reporting for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, and related accounting consultations and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years. For 2021, audit fees included fees in connection with the filing of an S-3 Registration Statement.
(2)“Tax Fees” consist of fees for professional services for tax compliance, tax advice, and tax planning. These services include consultation on tax matters.
(3)“All Other Fees” consist of fees billed for products and services provided by the independent registered public accountants other than those disclosed above, which relate to subscription fees paid for access to online accounting research software applications.
Auditor Independence
In 2022, there were no other professional services provided by Ernst & Young LLP, other than those listed above, that would have required our Audit Committee to consider their compatibility with maintaining the independence of Ernst & Young LLP.
Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our Audit Committee shall (i) review and approve, in advance, the scope and plans for the audit and the audit fees and (ii) generally approve in advance, in compliance with SEC rules and regulations, all non-audit and tax services to be performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair such accounting firm’s independence. Our Audit Committee has pre-approved all services performed by Ernst & Young LLP since the pre-approval policy was adopted.
Vote Required
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023 requires the affirmative vote of a majority of the voting power of the shares present in person (including virtually) or represented by proxy at the annual meeting and entitled to vote thereon. Abstentions will have the same effect as a vote AGAINST this proposal.
Board of Directors Recommendation
OUR CERTIFICATEBOARD OF INCORPORATION.DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING DECEMBER 31, 2023.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is a committee of the Board of Directors composed solely of independent directors as required by the NYSE listing rules and the rules and regulations of the SEC. The Audit Committee operates under a written charter adopted by the Board of Directors. This written charter is reviewed periodically for changes, as appropriate. With respect to Palantir’s financial reporting process, Palantir’s management is responsible for (1) establishing and maintaining internal controls and (2) preparing Palantir’s consolidated financial statements. Palantir’s independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of Palantir’s consolidated financial statements and internal control over financial reporting. It is the responsibility of the Audit Committee to oversee these activities. It is not the responsibility of the Audit Committee to prepare Palantir’s financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the Audit Committee has:
•reviewed and discussed the audited consolidated financial statements with management and Ernst & Young LLP;
•discussed with Ernst & Young LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC; and
•received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young LLP its independence.
Based on the review and discussions noted above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in Palantir’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the SEC.
Respectfully submitted by the members of the Audit Committee of the Board of Directors:
Eric Woersching (Chair)
Alexander Moore
Lauren Friedman Stat
This Audit Committee report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by Palantir under the Securities Act or the Exchange Act, except to the extent Palantir specifically requests that the information be treated as “soliciting material” or specifically incorporates it by reference.
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE
NAMED EXECUTIVE OFFICER COMPENSATION
At our 2021 annual meeting of stockholders, our Board of Directors recommended and our stockholders approved holding an advisory vote on the compensation of our named executive officers every three years. Accordingly, pursuant to Section 14A of the Exchange Act, we are asking our stockholders to approve, on an advisory or non‑binding basis, the compensation of our named executive officers as described in this Proxy Statement. This proposal, commonly referred to as the “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
The say-on-pay vote is advisory, and therefore is not binding on us, our Compensation, Nominating & Governance Committee or our Board of Directors.
You are encouraged to review the section titled “Executive Compensation” and, in particular, the section titled “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement.
We are asking our stockholders to approve the compensation of our named executive officers as described in this Proxy Statement by voting for the following non‑binding resolution:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S‑K, including the compensation discussion and analysis, the compensation tables and the related disclosures included in this proxy statement.”
Vote Required
The approval, on an advisory basis, of the named executive officer compensation as set forth in the above resolution requires the affirmative vote of a majority of the voting power of the shares present in person (including virtually) or represented by proxy at the annual meeting and entitled to vote thereon. Abstentions will have the same effect as a vote AGAINST this proposal. Broker non-votes will have no effect on the outcome of this proposal.
As an advisory vote, the result of this proposal is non-binding.
Board of Directors Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE NAMED EXECUTIVE OFFICER COMPENSATION, AS DISCLOSED IN THIS PROXY STATEMENT.
EXECUTIVE OFFICERS
The following table sets forth certain information about our executive officers as of April 12, 2023.
| | | | | | | | | | | | | | |
| Name | | Age | | Position(s) |
| | | | |
| Alexander Karp | | 55 | | Co-Founder, Chief Executive Officer, and Director |
| Stephen Cohen | | 40 | | Co-Founder, President, Secretary, and Director |
| Shyam Sankar | | 41 | | Chief Technology Officer and Executive Vice President |
| David Glazer | | 39 | | Chief Financial Officer and Treasurer |
| Ryan Taylor | | 41 | | Chief Revenue Officer and Chief Legal Officer |
For Messrs. Karp and Cohen’s biographies, please see the section titled “Board of Directors and Corporate Governance—Nominees for Director.”
Shyam Sankar. Mr. Sankar has served in various positions with us since 2006, most recently as our Chief Technology Officer (“CTO”) and Executive Vice President. Mr. Sankar holds a B.S. in Electrical and Computer Engineering from Cornell University and a M.S. in Management Science and Engineering from Stanford University.
David Glazer. Mr. Glazer has served in various positions with us since 2013, most recently as our CFO and Treasurer. Mr. Glazer holds a B.A. in History from Santa Clara University and a J.D. from Emory University School of Law.
Ryan Taylor. Mr. Taylor has served in various positions with us since 2010, most recently as our CRO and CLO. Mr. Taylor holds a B.S. in Computer Science, an M.S. in Management Science & Engineering from Stanford University, and a J.D. from Harvard Law School.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) includes a detailed discussion of compensation for the following executive officers during the fiscal year ended December 31, 2022, which we refer to as our Named Executive Officers (“NEOs”):
| | | | | |
| Alexander Karp | Co-Founder, Chief Executive Officer, and Director |
| |
| Stephen Cohen | Co-Founder, President, Secretary, and Director |
| |
Shyam Sankar(1) | Chief Technology Officer and Executive Vice President |
| |
| David Glazer | Chief Financial Officer and Treasurer |
| |
Ryan Taylor(2) | Chief Revenue Officer and Chief Legal Officer |
(1)In January 2023, our Board of Directors appointed Shyam Sankar as our CTO and Executive Vice President. During 2022 and the period of 2023 prior to that appointment, Mr. Sankar served as our Chief Operating Officer and Executive Vice President (“COO”).
(2)In January 2023, our Board of Directors appointed Ryan Taylor as our CRO and CLO. During 2022 and the period of 2023 prior to that appointment, Mr. Taylor served as our Chief Legal and Business Affairs Officer (“CLBAO”).
Executive Summary
Our fiscal year 2022 financial results showed year-over-year growth and improvement, including year-over-year revenue growth of 24% and our first GAAP net income profitable quarter in the fourth quarter of 2022. We look forward to carrying our momentum into 2023 and beyond.
We believe that our executive compensation program directly supports our business strategy and continues to help drive our success and retention of our NEOs. Our program is designed to attract and retain our leadership team in the highly competitive technology talent market while also motivating our executives and aligning their interests with those of our stockholders. In 2020, our Board of Directors or its committees designed award packages for all of our NEOs for navigating Palantir through the listing process and leading a public company, and in order to incentivize and retain them through the direct listing process, the critical early days as a public company, and into the years ahead.
We believe these outstanding awards continued to effectively serve as a primary supporter of alignment between NEO incentives, our business objectives, and the interests of our stockholders in 2022, and no additional long-term incentive awards were made to our NEOs in 2021 or 2022.
Compensation Philosophy
Our executive compensation philosophy is shaped by a strong belief that competitiveness of pay opportunities alongside a long-term, performance-based pay orientation drives our success and returns for our stockholders. The objective of our executive compensation program is to attract, retain, and incentivize the most talented personnel who embody our mission and values, increase the competitiveness of our overall compensation program relative to other companies we compete with for such personnel, and incentivize them to work diligently to further our growth and profitability. We do this by designing programs that link executive compensation to overall company performance and the interests of our stockholders.
As our business evolves, we intend to continually evaluate our compensation programs, and we intend to review executive compensation in light of Palantir’s performance, macroeconomic and sector-specific developments, technology company pay practices, and other trends that may impact executive compensation. We will undertake future evaluations with the support of and input from outside executive compensation consultants and other relevant experts.
Our compensation philosophy is centered around the following principles:
•Competitiveness: we embrace the different facets of competitiveness—our employees are competitive in that they strive for excellence and measure themselves against goals and metrics of success. In order to retain this caliber of talent, we must provide competitive pay opportunities in a highly competitive talent market in the software and data analytics space.
•Long-term alignment: our main priority is the sustainable creation of long-term value for our stockholders and the retention of our top executives. Our executive compensation program is designed to retain our executives through equity awards that vest over an extended time period.
To further these principles, we adhere to the following corporate governance and compensation principles:
•Constitute our Compensation, Nominating & Governance Committee solely with independent directors;
•Provide a significant portion of compensation opportunities for NEOs in the form of equity awards that align the rewards to our NEOs with the interests of our stockholders;
•Review the alignment between pay practices and our performance;
•Engage an independent compensation advisor, who provides no other services to Palantir; and
•Encourage executives to trade through 10b5-1 plans.
Our Compensation-Setting Process
Role of the Board of Directors and the Compensation, Nominating & Governance Committee
The Compensation, Nominating & Governance Committee oversees our executive compensation program, including the compensation of our CEO.
Role of Management
Members of management typically make recommendations to our Compensation, Nominating & Governance Committee, attend certain Compensation, Nominating & Governance Committee meetings, and are involved in the process for determining our NEOs’ compensation, provided that no member of management makes recommendations as to their own compensation or participates in Compensation, Nominating & Governance Committee deliberations about or determinations of their own compensation. Our Compensation, Nominating & Governance Committee considers management recommendations but is not required to follow any recommendations and may adjust compensation up or down as they determine in their discretion. The Compensation, Nominating & Governance Committee reviews the recommendations of management and other data in determining each NEO’s total compensation, as well as each individual pay component.
Role of the Compensation Consultant
The Compensation, Nominating & Governance Committee has the authority to engage its own advisors to assist in carrying out its responsibilities. Semler Brossy Consulting Group (“Semler Brossy”) was originally engaged by the Board of Directors and its legacy committees in the spring of 2019. Throughout 2022, Semler Brossy supported the Compensation, Nominating & Governance Committee by providing guidance regarding the amount and types of compensation and structures of compensation programs and awards that we provide to our executives, input on how our compensation practices compare to the compensation practices of other similarly situated high-growth technology companies, and advice on other compensation-related matters. Currently, Semler Brossy reports directly to the Compensation, Nominating & Governance Committee, although Semler Brossy may meet with members of management for the purposes of gathering information and providing input on proposals that management may make to the Compensation, Nominating & Governance Committee. Semler Brossy is independent under applicable guidelines and does not provide any services to us other than the services provided to the Compensation, Nominating & Governance Committee.
Use of Comparative Market Data
No long-term incentive grants were made to NEOs in 2022. Historically, our Board of Directors, Compensation, Nominating & Governance Committee, or other committees, as applicable, have assessed our NEOs’ compensation against aggregate market data.
During 2022, we did not benchmark our NEOs against any specific percentile or cohort of such aggregate market data. The Compensation, Nominating & Governance Committee did not engage in formalized benchmarking or comparisons against a peer group for any of its decisions in 2022.
As we move forward, our Compensation, Nominating & Governance Committee expects to continue and expand its use of market data as a reference point in making compensation decisions related to our NEOs. In January 2023, our Compensation, Nominating & Governance Committee approved an executive compensation peer group developed with the assistance of Semler Brossy for anticipated use in connection with the Committee’s future assessment of executive compensation.
Elements of Executive Pay and 2022 Compensation
Base Salary and Bonuses
As part of our compensation packages, we provide a base salary to our NEOs. We did not provide any bonuses to our NEOs related to their 2022 service. Cash compensation has not been, nor have we intended it to be, the most significant form of compensation for our NEOs. Descriptions of additional compensatory arrangements and values are described in further detail in the Fiscal 2022 Summary Compensation Table.
Equity Compensation
We believe the outstanding equity awards held by our NEOs continued to support the retention of our NEOs and fostered their alignment with our stockholders during 2022, and as such, no new long-term incentive grants were made to our NEOs in 2022. In order to provide context for the Compensation, Nominating & Governance Committee’s compensation decisions related to our NEOs in 2022, details on the outstanding awards are provided in summary fashion below, with additional detail on vesting provisions found in the Outstanding Equity Awards at Fiscal Year End Table and under the section of this Proxy Statement entitled “Change in Control Provisions Under 2020 Executive Equity Awards.”
Specifically, as described in the Compensation Discussion and Analysis section of our proxy statement for our 2021 annual meeting of stockholders (the “2021 CD&A”), in July 2020, our CEO, President, and our then-COO (now CTO) were granted out-of-the-money options (the “Executive Options”) and RSUs (the “Executive RSUs”) to balance the need to retain these executives over the long-term and the desire to tie their compensation to our long-term performance and success. The Executive Options and Executive RSUs contain certain provisions for partial acceleration in connection with a change in control of Palantir, which were implemented to strongly incentivize the NEOs to appropriately consider Palantir change in control scenarios that are in the best interests of our stockholders, while neither excessively encouraging nor discouraging the pursuit of these transactions.
Similarly, as described in the 2021 CD&A, in August 2020, our CFO and then-CLBAO (now CRO and CLO) were granted RSUs intended to both retain and motivate them over the next several years. The vesting of the remainder of Mr. Glazer’s 2020 RSU award is back-loaded, with a larger portion scheduled to vest in 2023 as compared to 2020, 2021, and 2022, to encourage his retention and the successful execution of our strategic growth plan. The RSUs granted to Messrs. Glazer and Taylor in 2020 did not contain special acceleration of vesting features, but are subject to the change in control acceleration provisions of our 2010 Equity Incentive Plan, which was our primary pre-listing equity incentive plan.
As determined by the Compensation, Nominating & Governance Committee in February 2022, all of Mr. Karp’s RSUs that vested in 2022 settled in December 2022, to minimize the frequency of sales of our common stock by Mr. Karp during that year, since upon settlement of RSUs we sell a portion of the RSU shares to meet our withholding obligations.
Benefits
Our NEOs have the opportunity to participate in the same benefits programs offered to all employees. In addition, our NEOs are provided additional benefits related to tax services, and are provided additional umbrella liability insurance coverage. Furthermore, certain of our executives are provided additional security-related benefits including private use of corporate aircraft, certain security services, and the provision of corporate housing in locations to which they regularly travel on business.We believe that the perquisites provided to our NEOs are appropriate given the use of similar benefits at software and data analytics companies of comparable size and with similarly high public profiles and that the perquisites serve Palantir’s interests by ensuring the safety of our key executives and our proprietary data. The security-related benefits provided to our CEO result from a bona-fide business-related security concern given the nature of our business and his leadership role at Palantir. The security-related benefits are regularly reviewed by third parties to determine if the benefits provided are consistent with those necessitated by the business-related security concern.
Due to the high profile nature of our CEO’s work for us, we will provide Mr. Karp with security continuation support (“Continuation Support”) following the termination of his employment with us, if his employment is terminated under certain conditions and he executes a separation agreement and release of claims. This Continuation Support generally will consist of the continuation of his security program as in effect immediately prior to Mr. Karp’s termination for a specified period of time (which length will depend on whether the termination is an involuntary, voluntary, or other termination), plus additional payments sufficient to make the security continuation and such additional payments tax neutral to Mr. Karp. We offered Continuation Support to Mr. Karp, in part, because the risks that he faces as a result of his high-profile work on behalf of and association with Palantir are reasonably expected to continue following any termination of his employment.
Other Compensation Information
Post-Employment Compensation
The post-employment compensation terms for key executives are designed to ensure that a change in control only occurs when there is benefit to stockholders. Other than the termination provisions described above related to the equity awards granted to our NEOs and the post-termination security continuation arrangements with Mr. Karp, we have not entered into severance or change in control arrangements with our NEOs. We may consider doing so in the future if we believe it to be important to the continued retention and focus of our NEOs.
Accounting and Tax Consideration Treatment
The Compensation, Nominating & Governance Committee generally takes into consideration the tax implications to Palantir of our NEO compensation program, including with respect to the tax deductibility of compensation paid under Section 162(m) of the IRC.
While our Compensation, Nominating & Governance Committee may consider the deductibility of equity awards and cash and other compensation as one factor in determining executive compensation, the Compensation, Nominating & Governance Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes.
In addition to considering the tax consequences, our Compensation, Nominating & Governance Committee generally considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards.
Hedging and Pledging Policies; Clawback Policy
We have implemented a policy that prohibits hedging by our NEOs. In addition, our NEOs are prohibited from pledging any of our securities as collateral for a loan and from holding any of our securities in a margin account, subject to certain limited potential exceptions with respect to members of our Board of Directors and our CEO.
Our 2020 Plan provides that awards granted under it will be subject to recoupment under any clawback policy that Palantir is required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, and under the 2020 Plan we may also impose such other clawback provisions to an equity award as we deem appropriate. We intend to implement a clawback policy in accordance with SEC and NYSE requirements prior to the date required by such rules.
Compensation, Nominating & Governance Committee Report
The Compensation, Nominating & Governance Committee has reviewed and discussed with management the Compensation Discussion and Analysis provided above. Based on its review and discussions, the Compensation, Nominating & Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Palantir’s Annual Report on Form 10-K for the year ended December 31, 2022.
| | | | | |
| Compensation, Nominating & Governance Committee |
| |
| Alexander Moore |
| |
| Alexandra Schiff |
Compensation and Risk
Our Compensation, Nominating & Governance Committee reviews and discusses with management the risks arising from our compensation philosophy and practices generally applicable to our employees to determine whether they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate such risks.
In addition, our Compensation, Nominating & Governance Committee engaged Semler Brossy to independently conduct a risk assessment of our general compensation policies and practices and related mitigation controls. After consideration of the findings of this assessment and its discussions with management, our Compensation, Nominating & Governance Committee concluded that our compensation policies and practices are designed and administered with the appropriate balance of risk and reward in relation to our overall business strategy and do not encourage employees to take unnecessary or excessive risks, and that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
Fiscal 2022 Summary Compensation Table
The following table presents information regarding the compensation awarded to, earned by and paid to each individual who served as one of our named executive officers during the fiscal years ended December 31, 2020, 2021 and 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal
Position | | Year | | Salary ($) | | Bonus ($) | | Stock
Awards
($)(1) | | Option
Awards
($)(2) | | All Other
Compensation
($) | | Total
($) |
Alexander Karp Chief Executive Officer | | 2022 | | 1,101,637 | (3) | — | | — | | | — | | 4,390,966 | (4) | 5,492,603 | |
| 2021 | | 1,101,637 | | — | | — | | | — | | 3,381,977 | | 4,483,614 | |
| 2020 | | 1,101,637 | | 28,081 | (5) | 296,400,000 | | | 797,851,743 | | 3,131,836 | | 1,098,513,297 | |
Stephen Cohen President & Secretary | | 2022 | | 273,636 | (6) | — | | — | | | — | | 310,269 | (7) | 583,905 | |
| 2021 | | 1,229,461 | (8) | — | | — | | | — | | 699,406 | | 1,928,867 | |
| 2020 | | 2,175,610 | (8) | 28,081 | (5) | 102,600,000 | | | 80,704,876 | (9) | 6,495,102 | | 192,003,669 | |
Shyam Sankar Chief Technology Officer & Executive Vice President | | 2022 | | 509,419 | (10) | — | | — | | | — | | 137,453 | (11) | 646,872 | |
| 2021 | | 509,419 | | — | | — | | | — | | 189,268 | | 698,687 | |
| 2020 | | 509,819 | | 44,672 | (5) | 57,000,000 | | | 45,010,811 | (9) | 83,488 | | 102,648,790 | |
David Glazer Chief Financial Officer & Treasurer | | 2022 | | 450,200 | (12) | — | | — | | | — | | 23,640 | (13) | 473,840 | |
| 2021 | | 450,200 | | — | | — | | | — | | 25,522 | | 475,722 | |
| 2020 | | 451,050 | | 32,347 | (5) | 37,438,700 | | | 856,536 | (9) | 9,430 | | 38,788,063 | |
Ryan Taylor Chief Revenue Officer and Chief Legal Officer | | 2022 | | 437,925 | (14) | — | | — | | | — | | 25,440 | (15) | 463,365 | |
| 2021 | | 437,925 | | — | | — | | | — | | 24,890 | | 462,815 | |
| 2020 | | 646,718 | | 39,428 | (5) | 12,749,224 | | | 878,099 | (9) | — | | | 14,313,469 | |
_______________(1)This column reflects the aggregate grant date fair value computed in accordance with ASC Topic 718 of the RSUs granted to our NEOs. The assumptions used in the valuation of these awards are described in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023, as supplemented by the below information in this footnote. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by our NEOs.
Determination of RSU fair value
As described in the notes to the Form 10-K referenced above, we determine the grant-date fair value of the RSUs granted since our direct listing on the NYSE as the fair market value of the common stock underlying the RSUs at the grant date. For RSUs granted prior to our direct listing,
given the absence of a public trading market for our common stock, we determined the fair market value of our common stock in reliance on valuation reports provided by a third party independent valuation firm, and after review and consideration of such valuation reports. For RSUs granted after our direct listing, we generally estimate the grant date fair value of time-based RSU awards based on the closing market price of our Class A common stock on the date of grant.
(2)This column reflects the aggregate grant date fair value computed in accordance with ASC Topic 718 of the options to purchase shares of our common stock granted to our NEOs. The assumptions used in the valuation of these awards are described in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023, our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022, and/or our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by our NEOs.
(3)Salary includes $177,273 salary paid in bi-monthly installments, $124,364 paid in quarterly installments as an additional stipend, and $800,000 paid in quarterly installments as a travel stipend.
(4)The amount reported includes (i) costs related to the provision of personal tax services in the amount of $363,000, (ii) payment of legal fees and expenses in the amount of $205,238 related to litigation in which Palantir and our Founders, including Mr. Karp, were named as parties, as required to be paid by Palantir pursuant to our obligations under our amended and restated bylaws and under an indemnification agreement between Mr. Karp and Palantir, (iii) costs related to the provision of additional umbrella liability insurance coverage in the amount of $100,000, (iv) approximately $1,769,874 in costs related to personal security services provided pursuant to an overall security program based on an independent security study, with such costs being calculated based on an allocation of total costs incurred by Palantir attributable to personal use of the security services and (v) approximately $1,952,854 in costs related to the use of chartered aircraft pursuant to the security program noted above incurred in connection with personal travel, with such costs representing actual costs incurred by Palantir. No tax-gross-ups were paid to Mr. Karp with respect to any of his 2022 compensation.
(5)The amounts reflect RSUs received as part of Palantir’s broad-based company distribution program. As part of the distributions, Mr. Karp received 1,213 RSUs with a grant date fair value of $23.15 per share, Mr. Cohen received 1,213 RSUs with a grant date fair value of $23.15 per share, Mr. Sankar received 3,515 RSUs with a grant date fair value of $4.72 per share and 1,213 RSUs with a grant date fair value of $23.15 per share, Mr. Glazer received 1,973 RSUs with a grant date fair value of $4.72 per share and 995 RSUs with a grant date fair value of $23.15 per share, and Mr. Taylor received 2,404 RSUs with a grant date fair value of $4.72 per share and 1,213 RSUs with a grant date fair value of $23.15 per share.
(6)Salary includes $230,000 salary paid in bi-monthly installments and $43,636 paid in bi-monthly installments as an additional stipend.
(7)The amount reported includes (i) costs related to the provision of personal tax services in the amount of $97,491, (ii) payment of legal fees and expenses in the amount of $205,238 related to litigation in which Palantir and our Founders, including Mr. Cohen, were named as parties, as required to be paid by Palantir pursuant to our obligations under our amended and restated bylaws and under an indemnification agreement between Mr. Cohen and Palantir and (iii) costs related to the provision of additional umbrella liability insurance coverage in the amount of $7,540. No tax-gross-ups were paid to Mr. Cohen with respect to any of his 2022 compensation.
(8)A portion of the disclosed amount relates to a compensation adjustment, as described in our proxy statements for our annual meetings of stockholders in 2022 and 2021.
(9)A portion of the disclosed amount relates to a stock option exchange, as described in our proxy statements for our annual meetings of stockholders in 2022 and 2021.
(10)Salary includes $415,200 salary paid in bi-monthly installments and $94,219 paid in bi-monthly installments as an additional stipend.
(11)The amount reported includes (i) costs related to the provision of personal tax services in the amount of $129,913, and (ii) costs related to the provision of additional umbrella liability insurance coverage in the amount of $7,540. No tax-gross-ups were paid to Mr. Sankar with respect to any of his 2022 compensation.
(12)Salary includes $285,200 salary paid in bi-monthly installment and $165,000 paid in bi-monthly installments as an additional stipend.
(13)The amount reported includes (i) a stipend related to personal tax services in the amount of $16,100 and (ii) costs related to the provision of additional umbrella liability insurance coverage in the amount of $7,540. No tax-gross-ups were paid to Mr. Glazer with respect to any of his 2022 compensation.
(14)Salary includes $407,925 salary paid in bi-monthly installments and $30,000 paid in bi-monthly installments as an additional stipend.
(15)The amount reported includes (i) a stipend related to personal tax services in the amount of $17,900 and (ii) costs related to the provision of additional umbrella liability insurance coverage in the amount of $7,540. No tax-gross-ups were paid to Mr. Taylor with respect to any of his 2022 compensation.
Outstanding Equity Awards at Fiscal Year End
The following table provides information regarding equity awards held by our named executive officers as of December 31, 2022. See “ —Potential Payments upon Termination or Change of Control” below for information regarding the impact of certain employment termination scenarios on outstanding equity awards.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Option Awards | | Stock Awards |
| Name | | Grant Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Option
Exercise
Price ($) | | Option
Expiration
Date | | Number of Shares of Stock That Have Not Vested (#) | | Market Value of Shares of Stock That Have Not Vested ($)(1) |
| Alexander Karp | | 08/06/2020 | | 21,150,000 | (2) | | 119,850,000 | | 11.38 | | | 08/20/2032 | | — | | | — |
| 08/06/2020 | | — | | | — | | — | | | — | | | 29,835,000 | (3) | | 191,540,700 |
| 08/06/2020 | | — | | | — | | — | | | — | | | 3,315,000 | (4) | | 21,282,300 |
| Stephen Cohen | | 06/09/2020 | | 12,401,568 | (5) | | — | | 4.72 | | | 06/08/2030 | | — | | | — |
| 08/06/2020 | | 4,050,000 | (6) | | 9,450,000 | | 11.38 | | | 08/20/2032 | | — | | | — |
| 08/06/2020 | | — | | | — | | — | | | — | | | 9,450,000 | (7) | | 60,669,000 |
| Shyam Sankar | | 06/04/2020 | | 3,935,000 | (5) | | — | | 4.72 | | | 06/03/2030 | | — | | | — |
| 08/06/2020 | | 2,250,000 | (6) | | 5,250,000 | | 11.38 | | | 08/20/2032 | | — | | | — |
| 11/04/2019 | | — | | | — | | — | | | — | | | 841,320 | (8) | | 5,401,274 |
| 08/06/2020 | | — | | | — | | — | | | — | | | 5,250,000 | (7) | | 33,705,000 |
| David Glazer | | 06/04/2020 | | 1,329,169 | (9) | | 150,000 | | 4.72 | | | 06/03/2030 | | — | | | — |
| 11/04/2019 | | — | | | — | | — | | | — | | | 304,760 | (10) | | 1,956,559 |
| 08/28/2020 | | — | | | — | | — | | | — | | | 1,200,000 | (11) | | 7,704,000 |
| Ryan Taylor | | 06/04/2020 | | 1,395,503 | (12) | | 140,001 | | 4.72 | | | 06/03/2030 | | — | | | — |
| 11/04/2019 | | — | | | — | | — | | | — | | | 247,380 | (13) | | 1,588,180 |
| 08/28/2020 | | — | | | — | | — | | | — | | | 33,553 | (14) | | 215,410 |
_______________
(1)The market value is based on the closing price of our Class A common stock on December 31, 2022 of $6.42 per share.
(2)Amount reflects shares of our Class B common stock subject to a stock option granted pursuant to the terms and conditions of our Executive Equity Plan and a stock option agreement thereunder. The stock option vests in 40 equal quarterly installments beginning on August 20, 2021.
(3)Amount reflects shares of our Class B common stock subject to an award of RSUs pursuant to the terms and conditions of our 2010 Plan and an RSU agreement thereunder. The RSUs vest in 40 equal quarterly installments beginning on August 20, 2021.
(4)Amount reflects shares of our Class B common stock subject to an award of RSUs pursuant to the terms and conditions of our Executive Equity Plan and an RSU agreement thereunder. The RSUs vest in 40 equal quarterly installments beginning on August 20, 2021.
(5)Amount reflects shares of our Class B common stock subject to a stock option granted pursuant to the terms and conditions of our 2010 Plan and a stock option agreement thereunder. The shares subject to the stock option are fully vested and exercisable.
(6)Amount reflects shares of our Class B common stock subject to a stock option granted pursuant to the terms and conditions of our Executive Equity Plan and a stock option agreement thereunder. Each stock option vests in 20 equal quarterly installments beginning on August 20, 2021.
(7)Amount reflects shares of our Class B common stock subject to an award of RSUs pursuant to the terms and conditions of our 2010 Plan and an RSU agreement thereunder. The RSUs vest in 20 equal quarterly installments beginning on August 20, 2021.
(8)Amount reflects shares of our Class A common stock subject to awards of RSUs pursuant to the terms and conditions of our 2010 Plan and RSU agreements thereunder. The remaining unvested RSUs vest as to 210,330 shares each quarter through November 20, 2023.
(9)Amount reflects shares of our Class A common stock subject to stock options granted pursuant to the terms and conditions of our 2010 Plan and stock option agreements thereunder. 1,329,169 of the stock options are fully vested and exercisable. The remaining unvested stock options vest in monthly installments through September 1, 2023.
(10)Amount reflects shares of our Class A common stock subject to awards of RSUs pursuant to the terms and conditions of our 2010 Plan and RSU agreements thereunder. The remaining unvested RSUs vest as to 76,190 shares each quarter through November 20, 2023.
(11)Amount reflects shares of our Class A common stock subject to an award of RSUs pursuant to the terms and conditions of our 2010 Plan and an RSU agreement thereunder. The remaining unvested RSUs vest as to 300,000 shares each quarter through November 20, 2023.
(12)Amount reflects shares of our Class A common stock subject to stock options granted pursuant to the terms and conditions of our 2010 Plan and stock option agreements thereunder. 1,395,503 of the stock options are fully vested and exercisable. The remaining unvested stock options vest as to 46,667 shares each month through March 1, 2023.
(13)Amount reflects shares of our Class A common stock subject to awards of RSUs pursuant to the terms and conditions of our 2010 Plan and RSU agreements thereunder. The remaining unvested RSUs vest as to 61,845 shares each quarter through November 20, 2023.
(14)Amount reflects shares of our Class A common stock subject to awards of RSUs pursuant to the terms and conditions of our 2010 Plan and RSU agreements thereunder. The remaining unvested RSUs vest on February 20, 2023.
Option Exercises and Stock Vested
The following table shows certain information concerning option exercises and value realized upon the exercise of stock options and the vesting of RSU grants by our named executive officers during the fiscal year ended December 31, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
| Name | | Number of shares
acquired on
exercise (#) | | Value realized on exercise ($)(1) | | Number of shares acquired on vesting (#)(2) | | Value realized on vesting ($)(3) |
| Alexander Karp | | — | | | — | | | 3,900,000 | | 28,041,000 | |
| Stephen Cohen | | — | | | — | | | 2,700,000 | | 23,780,250 | |
Shyam Sankar(4) | | 100,000 | | 262,000 | | | 2,341,320 | | 20,621,176 | |
| David Glazer | | — | | | — | | | 804,760 | | 7,087,924 | |
| Ryan Taylor | | — | | | — | | | 650,000 | | 5,724,875 | |
_______________
(1)Reflects the product of the number of shares of stock subject to the exercised option multiplied by the difference between the market price of our Class A common stock at the time of exercise and the exercise price of the option.
(2)Reflects the gross number of shares acquired in connection with RSU vesting. A portion of RSU shares were automatically sold to cover tax withholding obligations incurred in connection with each vesting date, reducing the number of shares ultimately acquired by the individual.
(3)Reflects the product of the number of shares of stock vested multiplied by the closing price of our Class A common stock on the vesting date or, if the vesting date was not a trading day, by the closing price on the last trading day immediately preceding such vesting date.
(4)None of the shares received upon exercise have been sold, and therefore the amount listed has not been received by Mr. Sankar with respect to the shares acquired on exercise.
Executive Compensation and Related Arrangements
Alexander Karp
Mr. Karp’s annual salary for the fiscal year ended December 31, 2022 was $1,101,637, which included $177,273 paid in bi-monthly installments, $124,364 paid in quarterly installments as an additional stipend, and $800,000 paid in quarterly installments as a travel stipend.
Stephen Cohen
Mr. Cohen’s annual salary for the fiscal year ended December 31, 2022 was $273,636, which included $230,000 paid in bi-monthly installments and $43,636 paid in bi-monthly installments as an additional stipend.
Shyam Sankar
Mr. Sankar’s annual salary for the fiscal year ended December 31, 2022 was $509,419, which included $415,200 paid in bi-monthly installments and $94,219 paid in bi-monthly installments as an additional stipend.
David Glazer
Mr. Glazer’s annual salary for the fiscal year ended December 31, 2022 was $450,200, which included $285,200 paid in bi-monthly installments and $165,000 paid in bi-monthly installments as an additional stipend.
Ryan Taylor
Mr. Taylor’s annual salary for the fiscal year ended December 31, 2022 was $437,925, which included $407,925 paid in bi-monthly installments and $30,000 paid in bi-monthly installments as an additional stipend.
Potential Payments upon Termination or Change in Control
Post-Termination Arrangements
Mr. Karp entered into a Security Program Continuation Agreement with us dated June 5, 2019 (the “Security Continuation Agreement”), pursuant to which, if Mr. Karp’s employment is terminated under certain conditions and he executes a separation agreement and release of claims in a form reasonably satisfactory to Palantir, we will generally provide Mr. Karp with continuation support, consisting of continuation of his security program as in effect immediately prior to Mr. Karp’s termination, for a specified period of time, plus additional payments sufficient to make the continuation support and such additional payments tax neutral to Mr. Karp (collectively, “Continuation Support”).
The maximum specified period of time the Continuation Support will be provided, and the estimated value of such Continuation Support is as follows, provided that Mr. Karp may elect to continue the Continuation Support at his own expense under certain conditions (the value estimates set forth below are based on (a) our good faith estimates of the monthly security costs of Mr. Karp using recent utilization and expenditures as a guide and (b) the assumption that the security continuation would not constitute taxable income):
1.If Mr. Karp’s termination is an Involuntary Termination (as such term is defined in the Security Continuation Agreement), we will provide Mr. Karp with Continuation Support for up to 30 months following such termination (ending earlier upon Mr. Karp’s death or commencement or continuation of Competitor Service (as defined in the Security Continuation Agreement)). The estimated value of the security continuation for 30 months in the case of an Involuntary Termination is $16,200,000;
2.If Mr. Karp’s termination is a Voluntary Termination (as such term is defined in the Security Continuation Agreement), we will provide Mr. Karp with Continuation Support for up to 15 months following such termination (ending earlier upon Mr. Karp’s death or commencement or continuation of Competitor Service (as defined in the Security Continuation Agreement)). The estimated value of the security continuation for 15 months in the case of a Voluntary Termination is $8,100,000; and
3.If Mr. Karp’s termination is an Other Termination (as such term is defined in the Security Continuation Agreement), we will provide Mr. Karp with Continuation Support for up to one month following such termination (ending earlier upon Mr. Karp’s death or commencement or continuation of Competitor Service (as defined in the Security Continuation Agreement)). The estimated value of the security continuation for one month in the case of an Other Termination is $540,000.
Change in Control-Related Benefits
Change in Control Provisions Under 2020 Executive Equity Awards
On August 6, 2020, the awards of Executive RSUs under our 2010 Plan and Executive Equity Plan (referred to as “Executive RSU Awards”) and Executive Options covering shares of our Class B common stock were granted to Messrs. Karp, Cohen, and Sankar that contain the below-described provisions related to a change in control of Palantir. The Executive Options and Executive RSUs are as follows:
| | | | | | | | | | | | | | | | | | | | |
| Named Executive Officer | | Applicable Plan | | Number of Shares of Class B
Common Stock Covered by
Award | | Type of Award |
| Alexander Karp | | Executive Equity Plan | | 141,000,000 | | Stock Option |
| Executive Equity Plan | | 3,900,000 | | RSU Award |
| 2010 Plan | | 35,100,000 | | RSU Award |
| Stephen Cohen | | Executive Equity Plan | | 13,500,000 | | Stock Option |
| 2010 Plan | | 13,500,000 | | RSU Award |
| Shyam Sankar | | Executive Equity Plan | | 7,500,000 | | Stock Option |
| 2010 Plan | | 7,500,000 | | RSU Award |
Each Executive Option has an exercise price of $11.38 per share and a term/expiration date of August 20, 2032. These options were out of the money as of the date of grant, as the fair market value of a share of our common stock at the date of grant was $7.60. Each Executive Option vests as follows: Subject to the applicable named executive officer continuing to be a service provider through each applicable date, (i) with respect to Mr. Karp, 2.5% of the shares subject to the Executive Option vested on August 20, 2021 and 2.5% vest quarterly thereafter, and (ii) with respect to Messrs. Cohen and Sankar, 5.0% of the shares subject to the Executive Option vested on August 20, 2021 and 5.0% vest quarterly thereafter.
Each Executive RSU Award vests upon the satisfaction of both a service-based and a performance-based vesting condition. The service-based vesting condition is satisfied, subject to the applicable named executive officer continuing to be a service provider through each applicable date, (i) with respect to Mr. Karp, as to 2.5% of the RSUs subject to the applicable Executive RSU Award on August 20, 2021 and 2.5% quarterly thereafter, and (ii) with respect to Messrs. Cohen and Sankar, as to 5.0% of the RSUs subject to the applicable Executive RSU Award on August 20, 2021 and 5.0% quarterly thereafter. The performance-based vesting condition for each Executive RSU Award was satisfied upon the occurrence of our direct listing in September 2020 and the applicable named executive officer’s remaining a service provider through immediately prior to that date.
If Palantir experiences a change in control (as defined in the Executive Equity Plan with respect to Executive Options, and as defined in the applicable award agreement with respect to Executive RSU Awards), and the named executive officer remains a service provider through immediately prior to such change in control, (A) with respect to Mr. Karp, pursuant to an amendment approved by our Compensation, Nominating & Governance Committee in January 2021, a number of the shares subject to each Executive Option and each Executive RSU Award will accelerate and fully vest immediately prior to such change in control equal to the greater of (x) 20% of the shares subject to the Executive Option or Executive RSU Award, as applicable, or (y) 50% of the then-unvested shares subject to the Executive Option or Executive RSU Award, as applicable, as of immediately prior to the application of such acceleration, and (B) with respect to Messrs. Cohen and Sankar, 40% of the shares subject to the applicable Executive Option and Executive RSU Award will accelerate and fully vest immediately prior to such change in control. In all cases, no more than 100% of the shares subject to an Executive Option or Executive RSU Award, as applicable, may vest. Prior to the January 2021 amendment of Mr. Karp’s Executive Option and Executive RSU Awards, each applicable award agreement related to these awards provided that 20% of the shares subject to the applicable Executive Option and Executive RSU Award would accelerate and fully vest immediately prior to such change in control, subject to his remaining a service provider as of immediately prior to the change in control.
In the event of a merger or change in control, pursuant to the 2010 Plan or Executive Equity Plan, as applicable, each Executive Option and Executive RSU Award will generally be treated as the administrator determines, including, without limitation, (i) that each award will be assumed or a substantially equivalent award substituted by the acquiring or succeeding corporation (or an affiliate thereof), (ii) that each award will terminate prior to the consummation of such merger or change in control, (iii) that each outstanding award will vest and become exercisable, (iv) that each award will be terminated in exchange for an amount of cash and/or property, or (v) any combination of the foregoing.
Unless the administrator determines otherwise, in the event of a merger or change in control in which the successor corporation does not assume or substitute for an Executive Option or Executive RSU Award (or portion thereof), the unvested award (or portion thereof) (after the application of the above acceleration of vesting provisions in the context of a change in control) will generally terminate immediately prior to such merger or change in control, and the administrator will notify the participant in writing or electronically that the vested shares subject to any Executive Option (or portion thereof) will be exercisable for a period of time determined by the administrator in its sole discretion and the vested Executive Option (or portion thereof) will terminate upon the expiration of such period without consideration to the participants. For Executive RSU Awards granted under the 2010 Plan, this provision overrides the 2010 Plan’s typical treatment of equity awards granted thereunder, which are described below under “Change in Control Provisions under the 2020 Plan, 2010 Plan, and Executive Equity Plan.”
Change in Control Provisions under the 2020 Plan, 2010 Plan, and Executive Equity Plan
2020 Equity Incentive Plan
Our 2020 Plan provides that in the event of a merger or change in control, as defined under our 2020 Plan, each outstanding award will be treated as the administrator determines, without a requirement to obtain a participant’s consent, including, without limitation, that such award will be continued by the successor corporation or a parent or subsidiary of the successor corporation. An award generally will be considered continued if, following the transaction, (i) the award gives the right to purchase or receive the consideration received in the transaction by holders of our shares or (ii) the award
is terminated in exchange for an amount of cash and/or property, if any, equal to the amount that would have been received upon the exercise or realization of the award at the closing of the transaction, which payment may be subject to any escrow applicable to holders of our Class A common stock in connection with the transaction or subjected to the award’s original vesting schedule. The administrator will not be required to treat all awards or portions thereof, the vested and unvested portions of an award, or all participants similarly.
In the event that a successor corporation or its parent or subsidiary does not continue an outstanding award, then such award will fully vest, all restrictions on such award will lapse, all performance goals or other vesting criteria applicable to such award will be deemed achieved at 100% of target levels, and such award will become fully exercisable, if applicable, for a specified period prior to the transaction, unless specifically provided for otherwise under the applicable award agreement or other written agreement with the participant. The award will then terminate upon the expiration of the specified period of time. If an option or stock appreciation right is not continued, the administrator will notify the participant in writing or electronically that such option or stock appreciation right will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right will terminate upon the expiration of such period.
With respect to awards granted to an outside director, in the event of a change in control, all of his or her options and stock appreciation rights, if any, will vest fully and become immediately exercisable, all restrictions on his or her restricted stock and RSUs will lapse, and all performance goals or other vesting requirements for his or her performance awards will be deemed achieved at 100% of target levels, and all other terms and conditions met.
Amended 2010 Equity Incentive Plan
Our 2010 Plan provides that in the event of a merger or change in control, as defined under our 2010 Plan, each outstanding award will be treated as the administrator determines, including, without limitation, (i) that each award will be assumed or a substantially equivalent award substituted by the acquiring or succeeding corporation (or an affiliate thereof), (ii) that each award will terminate prior to the consummation of such merger or change in control, (iii) that each outstanding award will vest and become exercisable, (iv) that each award will be terminated in exchange for an amount of cash and/or property, or (v) any combination of the foregoing. The administrator is not required to treat all awards similarly in the transaction.
Unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and us (or our parent or subsidiaries, as applicable), in the event of a change in control, for each participant whose service as a service provider has not terminated as of, or immediately prior to, the effective time of the change in control, then, as of the effective time of such change in control, the vesting and exercisability of such participant’s award will be accelerated to the extent of 25% of the award. Additionally, if a successor corporation does not assume or substitute for any outstanding award, then the participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, all restrictions on restricted stock and RSUs will lapse, and for awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met, in all cases unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and us (or our parent or subsidiaries, as applicable). If an option or stock appreciation right is not assumed or substituted in the event of a change in control, unless specifically provided otherwise under the applicable award agreement or other written agreement between the participant and us (or our parent or subsidiaries, as applicable), the administrator will notify the participant in writing or electronically that such option or stock appreciation right will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right will terminate upon the expiration of such period.
The provisions of the 2010 Plan described in the prior two paragraphs do not apply to the Executive RSU Awards granted under the 2010 Plan. A brief description of the provisions that apply to the Executive RSU Awards is described under “Change in Control Provisions Under 2020 Executive Equity Awards,” above.
2020 Executive Equity Incentive Plan
See “Change in Control Provisions Under 2020 Executive Equity Awards,” above, for a description of the treatment of our Executive Options and Executive RSUs, including those granted under our Executive Equity Plan, in connection with a merger or change in control.
The following table shows the potential payments and benefits that Palantir would be obligated to make or provide upon the occurrence of a change in control. For purposes of this table, it is assumed that a change in control occurred on December 31, 2022, the last day of our 2022 fiscal year, and each named executive officer remained a service provider through immediately before such change in control.
For a description of the treatment of the Executive Options and the Executive RSU Awards upon the consummation of a change in control under the terms of such awards (including a description of treatment of such awards if the awards are not assumed or substituted pursuant to such change in control), please see the section titled “Change in Control-Related Benefits—Change in Control Provisions under 2020 Executive Equity Awards.” For a description of the treatment of awards upon the consummation of a change in control under the terms of each of the Executive Equity Plan and the 2010 Plan that are not Executive Options and the Executive RSU Awards (including a description of treatment of such awards if the awards are not assumed or substituted pursuant to such change in control), with respect to awards granted under such plans, please see the section titled “Change in Control-Related Benefits—Change in Control Provisions under the 2020 Plan, 2010 Plan, and Executive Equity Plan.” The amounts in the table below are calculated on the assumption that the named executive officer remained a service provider through immediately before such change in control and that the awards were assumed or substituted by a successor in connection with the change in control.
| | | | | | | | | | | | | | | | | |
| Name | | Executive Benefits and Payments
Upon Termination or Change in Control | | Change in Control ($)(1) | |
| Alexander Karp | | Restricted Stock Units | | 106,411,500 | (2) |
| | Executive Equity Plan Option Grant | | — | (2) |
| | TOTAL | | 106,411,500 | |
| Stephen Cohen | | Restricted Stock Units | | 34,668,000 | (3) |
| | Stock Options | | — | (3) |
| | TOTAL | | 34,668,000 | |
| Shyam Sankar | | Restricted Stock Units | | 24,661,274 | (4) |
| | Stock Options | | — | (4) |
| | TOTAL | | 24,661,274 | |
| David Glazer | | Restricted Stock Units | | 8,424,709 | (5) |
| | Stock Options | | 255,000 | (5) |
| | TOTAL | | 8,679,709 | |
| Ryan Taylor | | Restricted Stock Units | | 1,803,590 | (6) |
| | Stock Options | | 238,002 | (6) |
| | TOTAL | | 2,041,592 | |
_______________
(1)The value of the accelerated RSUs in this table are calculated by multiplying the number of shares subject to acceleration (calculated based on the descriptions in the below footnotes relating to each named executive officer in the table) by the closing price of our Class A common stock on December 31, 2022, which was $6.42. The value of the accelerated stock options is calculated by multiplying (x) the number of shares subject to acceleration for each stock option (calculated based on the descriptions in the below footnotes relating to each named executive officer in the table) by (y) the closing price per share minus the applicable exercise price per share.
(2)Mr. Karp was granted an Executive RSU Award and an Executive Option under the Executive Equity Plan and an Executive RSU Award under the 2010 Plan. The amounts with respect to Mr. Karp’s Executive Option and Executive RSU Awards were calculated assuming that the number of shares subject to the Executive Option and each Executive RSU Award accelerates and fully vests immediately prior to such change in control equal to the greater of (x) 20% of the shares subject to the Executive Option or Executive RSU Award, as applicable, or (y) 50% of the then-unvested shares subject to the Executive Option or Executive RSU Award, as applicable, as of immediately prior to the application of such acceleration. A total of 59,925,000 unvested shares of our Class A common stock subject to Mr. Karp’s Executive Option would have accelerated and fully vested immediately prior to a change in control had one occurred on December 31, 2022; however, because the Executive Option has an exercise price per share that was higher than the closing price of our Class A common stock on December 31, 2022, no amount is reportable with respect to Mr. Karp’s Executive Option for purposes of this table.
(3)Mr. Cohen was granted an Executive Option under the Executive Equity Plan and an Executive RSU Award under the 2010 Plan. The amounts with respect to Mr. Cohen’s Executive Option and Executive RSU Award were calculated assuming an acceleration of 40% of each such award immediately prior to a change in control, in accordance with the terms of such awards. A total of 5,400,000 unvested shares of our Class A common stock subject to Mr. Cohen’s Executive Option would have accelerated and fully vested immediately prior to a change in control had one occurred on December 31, 2022; however, because the Executive
Option has an exercise price per share that was higher than the closing price of our Class A common stock on December 31, 2022, no amount is reportable with respect to Mr. Cohen’s Executive Option for purposes of this table.
(4)Mr. Sankar was granted an Executive Option under the Executive Equity Plan and an Executive RSU Award under the 2010 Plan. The amounts with respect to Mr. Sankar’s Executive Option and Executive RSU Award were calculated assuming an acceleration of 40% of each such award immediately prior to a change in control, in accordance with the terms of such awards. The amounts with respect to Mr. Sankar’s other RSU awards were calculated assuming an acceleration of 25% of each such award (or if less, the remaining unvested shares subject to the applicable award) upon a change in control in accordance with the terms of the 2010 Plan. A total of 3,000,000 unvested shares of our Class A common stock subject to Mr. Sankar’s Executive Option would have accelerated and fully vested immediately prior to a change in control had one occurred on December 31, 2022; however, because the Executive Option has an exercise price per share that was higher than the closing price of our Class A common stock on December 31, 2022, no amount is reportable with respect to Mr. Sankar’s Executive Option for purposes of this table.
(5)Mr. Glazer’s RSUs and stock options are all granted pursuant to the 2010 Plan. The amounts with respect to such awards were calculated assuming an acceleration of 25% of each such award (or if less, the remaining unvested shares subject to each such award) upon a change in control, in accordance with the terms of the 2010 Plan.
(6)Mr. Taylor’s RSUs and stock options are all granted pursuant to the 2010 Plan. The amounts with respect to such awards were calculated assuming an acceleration of 25% of each such award (or if less, the remaining unvested shares subject to each such award) upon a change in control, in accordance with the terms of the 2010 Plan.
Equity Compensation Plan Information
The following table provides information as of December 31, 2022 with respect to shares of our common stock that may be issued under our existing equity compensation plans.
| | | | | | | | | | | | | | | | | | | | |
| Plan Category | | Number of
Securities
Underlying
Outstanding
Options,
Restricted
Stock Units
Warrants
and Other
Rights
(#) | | Weighted Average Exercise Price of Outstanding Options and Rights ($)(1) | | Number of
Securities
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(Excluding
Securities
Reflected in
the First
Column)
(#) |
| Equity compensation plans approved by security holders | | | | | | |
Amended 2010 Equity Incentive Plan(2) | | 240,270,162 | | 4.78 | | | — |
2020 Equity Incentive Plan(3) | | 47,753,185 | | — | | | 219,528,336 |
| Equity compensation plans not approved by security holders | | | | | | |
2020 Executive Equity Incentive Plan(4) | | 165,315,000 | | 11.38 | | | — |
| TOTAL | | 453,338,347 | | | | 219,528,336 |
_______________
(1)RSUs, which do not have an exercise price, are excluded from the calculation of weighted-average exercise price.
(2)Our Board of Directors adopted, and our stockholders approved, the 2010 Plan. As a result of our direct listing and the adoption of the 2020 Plan, we no longer grant awards under the 2010 Plan; however, all outstanding awards issued pursuant to the 2010 Plan continue to be governed by their existing terms. To the extent that any such awards are forfeited or lapse unexercised or are repurchased, the shares of common stock subject to such awards will become available for issuance under the 2020 Plan.
(3)Our 2020 Plan provides that the number of shares available for issuance under the 2020 Plan will be increased on the first day of each fiscal year beginning on January 1, 2022, in an amount equal to the least of (i) 250,000,000 shares, (ii) five percent of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year or (iii) a lesser amount determined by the administrator of our 2020 Plan.
(4)A committee of our Board of Directors adopted our Executive Equity Plan in August 2020, which was adopted without stockholder approval prior to our direct listing. Subject to the adjustment provisions of the Executive Equity Plan, 165,900,000 shares of our Class B common stock were reserved for issuance pursuant to equity awards granted under the Executive Equity Plan. The Executive Equity Plan terminated on September 21, 2020 but continues to govern the terms and conditions of the outstanding awards previously granted under the Executive Equity Plan. The Executive Equity Plan permitted the grant of
nonstatutory stock options and RSUs. As of December 31, 2022, options to purchase 162,000,000 shares of our Class B common stock (granted to Messrs. Karp, Cohen, and Sankar) and RSUs covering 3,315,000 shares of our Class B common stock (granted to Mr. Karp) were outstanding under the Executive Equity Plan. See “—2020 Executive Equity Awards” for a description of these awards, and “—Change in Control Provisions under the 2020 Plan, 2010 Plan, and Executive Equity Plan” for a description of the treatment of equity awards in the event of a merger or “change in control.” The Executive Equity Plan prohibits an exchange program whereby outstanding awards are surrendered or exchanged for new awards or cash, participants have the opportunity to transfer outstanding awards to a financial institution or other entity, or the exercise price of an outstanding award is reduced.
CEO Pay Ratio
Under SEC rules, we are required to provide information regarding the relationship between the total annual compensation of our CEO and the total annual compensation of our median employee (other than our CEO). For our last completed fiscal year, which ended December 31, 2022.
•The CEO’s total annual compensation in 2022 was $5,492,603.
•The median employee’s total annual compensation in 2022 (as determined using the methodology described below) was $203,693.
•Based on the above, for fiscal 2022, the ratio of our CEO’s total annual compensation to the median employee total annual compensation was approximately 27.0 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Act, and is based upon our reasonable judgment and assumptions. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratios. Accordingly, the pay ratios disclosed by other companies may not be comparable to our pay ratio as disclosed above.
We identified the median employee from among all of Palantir’s employees, excluding our CEO and including employees of Palantir’s consolidated subsidiaries. To identify our median employee, we used (i) total annual base pay, (ii) bonuses and cash incentives paid in fiscal year 2022, and (iii) the grant date fair value of equity awards made in fiscal year 2022 as our consistently applied compensation measure. We applied this measure to our eligible population as of December 31, 2022 (the “Determination Date”), and annualized base pay for employees that were not employed for the full year. Payments not made in U.S. dollars were converted to U.S. dollars using the exchange rate as of the Determination Date.
After identifying the median employee using this approach, we calculated annual total compensation for the median employee according to the methodology used to report the annual compensation of our named executive officers in the Fiscal 2022 Summary Compensation Table above. For our CEO, we used the amount reported in the “Total” column of the Fiscal 2022 Summary Compensation Table above.
PAY VERSUS PERFORMANCE
The following table sets forth information concerning the relationship between executive compensation actually paid and certain measures of our financial performance for the years ended December 31, 2022, 2021 and 2020 as determined in accordance with the requirements published by the SEC. For further information concerning our compensation philosophy, please see the section titled “Executive Compensation.”
Pay vs. Performance Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Summary Compensation Table Total for CEO(1) | | Compensation Actually Paid to CEO(2) | | Average Summary Compensation Table Total for Non-CEO NEOs(3) | | Average Compensation Actually Paid to Non-CEO NEOs(4) | | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss)
(in thousands)(7) |
| | | | | Total Shareholder Return(5) | | Peer Group Total Shareholder Return(6) | |
| 2022 | | $ | 5,492,603 | | | $ | (1,709,637,930) | | | $ | 541,996 | | | $ | (112,628,126) | | | $ | 67.58 | | | $ | 108.01 | | | $ | (373,705) | |
| 2021 | | $ | 4,483,614 | | | $ | (894,125,580) | | | $ | 891,523 | | | $ | (56,560,525) | | | $ | 191.68 | | | $ | 150.42 | | | $ | (520,379) | |
| 2020 | | $ | 1,098,513,297 | | | $ | 3,868,940,075 | | | $ | 86,938,498 | | | $ | 316,157,985 | | | $ | 247.89 | | | $ | 111.81 | | | $ | (1,166,391) | |
_______________
(1)The dollar amounts in this column are the amounts of total compensation reported for Mr. Karp (our Principal Executive Officer, who we refer to in this disclosure as our “CEO”) for each corresponding year in the “Total” column of the Summary Compensation Table.
(2)The dollar amounts in this column represent the amount of “compensation actually paid” to Mr. Karp. The term “compensation actually paid” (“CAP”) does not reflect the amount of compensation actually paid, earned or received by him during the applicable year. Per relevant rules, Mr. Karp’s CAP was calculated by adjusting the Summary Compensation Table Total values for CEO for the applicable year in accordance with the adjustment table below:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Reported Summary Compensation Table Total for CEO | | Less: Reported Value of Equity Awards to CEO(a) | | Add: Equity Award Adjustments to CEO(b) | | Compensation Actually Paid to CEO |
| 2022 | | $ | 5,492,603 | | $ | 0 | | $ | (1,715,130,533) | | $ | (1,709,637,930) |
| 2021 | | $ | 4,483,614 | | $ | 0 | | $ | (898,609,194) | | $ | (894,125,580) |
| 2020 | | $ | 1,098,513,297 | | $ | 1,094,251,743 | | $ | 3,864,678,521 | | $ | 3,868,940,075 |
_______________
(a)The amounts in this column reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year for Mr. Karp.
(b)The amounts deducted or added in calculating the total equity award adjustments in the above table are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Year End Fair Value of Equity Awards Granted in the Year* | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | Total Equity Award Adjustments |
| 2022 | | $ | 0 | | $ | (1,558,644,915) | | $ | 0 | | $ | (156,485,618) | | $ | 0 | | $ | 0 | | $ | (1,715,130,533) |
| 2021 | | $ | 0 | | $ | (892,150,035) | | $ | 22,283 | | $ | (6,481,442) | | $ | 0 | | $ | 0 | | $ | (898,609,194) |
| 2020 | | $ | 3,763,533,900 | | $ | 86,971,813 | | $ | 0 | | $ | 14,172,808 | | $ | 0 | | $ | 0 | | $ | 3,864,678,521 |
_______________
* In accordance with the relevant rules, the fair values of unvested and outstanding equity awards to our NEOs (including Mr. Karp) were remeasured as of each vesting date and as of the end of each fiscal year during the years displayed in the table above. For options, the fair values as of each measurement date were determined using the Black-Scholes model, with assumptions and methodologies regarding volatility, dividend yield, and risk-free rates that are generally consistent with those used to estimate fair value at grant under US GAAP. The expected life of options as of each measurement date is estimated based on consideration of consistency with the original valuation assumptions for the grant, the circumstances of the grant at the measurement date, and other relevant factors under US GAAP. The resulting
expected term assumptions ranged between 0.9 - 11.6 years for 2020, 0.5 years – 11 years for 2021, and 3.0 – 10.5 years for 2022. The range of estimates used in the fair value calculations are as follows: (i) for 2022, volatility between 71% - 71.39%, and risk-free rate between 1.12% - 4.36%; (ii) for 2021, volatility at 71%, and risk-free rate between 0.04% - 1.58%; (iii) for 2020, volatility at 71%, and risk-free rate between 0.1% - 1.68%. Since Palantir did not pay any dividends during the period from our direct listing through the end of fiscal year 2022, the dividend yield was set to 0% for all measurement dates. The vesting of the Growth Units granted on May 30, 2019 was based on a service requirement of 180 days post-our direct listing. As such, to account for the value of the growth units, the stock price of each measurement date post-our direct listing was used. For the RSUs, the value is based on Palantir’s stock price as of the measurement date.
(3)The dollar amounts in this column represent the average of the amounts reported for our NEOs as a group (excluding Mr. Karp) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Karp) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Stephen Cohen, Shyam Sankar, David Glazer, Ryan Taylor, (ii) for 2021, Stephen Cohen, Shyam Sankar, David Glazer, Ryan Taylor; and (iii) for 2020, Stephen Cohen, Shyam Sankar, David Glazer, Ryan Taylor.
(4)The dollar amounts in this column represent the average CAP amount to the NEOs as a group (excluding Mr. Karp) determined under the same methodology described in (2) above. Per relevant rules, Average CAPs to Non-CEO NEOs were calculated by adjusting the Summary Compensation Table Total values for the applicable year in accordance with the adjustment table below:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Average Reported Summary Compensation Table Total for Non-CEO NEOs | | Less: Average Reported Value of Equity Awards for Non-CEO NEOs(a) | | Add: Average Equity Award Adjustments for Non-CEO NEOs(b) | | Average Compensation Actually Paid to Non-CEO NEOs |
| 2022 | | $ | 541,996 | | $ | 0 | | $ | (113,170,122) | | $ | (112,628,126) |
| 2021 | | $ | 891,523 | | $ | 0 | | $ | (57,452,048) | | $ | (56,560,525) |
| 2020 | | $ | 86,938,498 | | $ | 84,309,562 | | $ | 313,529,049 | | $ | 316,157,985 |
_______________
(a)The amounts in this column reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year for our NEOs as a group (excluding Mr. Karp).
(b)The amounts deducted or added in calculating the total equity award adjustments in the above table are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Average Year End Fair Value of Equity Awards Granted in the Year | | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year* | | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | Total Average Equity Award Adjustments |
| 2022 | | $ | 0 | | $ | (87,619,807) | | $ | 0 | | $ | (25,550,314) | | $ | 0 | | $ | 0 | | $ | (113,170,122) |
| 2021 | | $ | 0 | | $ | (57,633,177) | | $ | 21,282 | | $ | 159,848 | | $ | 0 | | $ | 0 | | $ | (57,452,048) |
| 2020 | | $ | 281,243,796 | | $ | 17,362,574 | | $ | 6,028,288 | | $ | 8,894,391 | | $ | 0 | | $ | 0 | | $ | 313,529,049 |
_______________
* In June 2020, in connection with a broad-based repricing, certain underwater stock options of our Non-CEO NEOs were exchanged for new stock options with an exercise price equal to $4.72 per share and a new maximum term (“Option Exchange”), with all other terms remaining the same. For purposes of calculating the equity award adjustments shown in the table above, the incremental change in fair value recognized related to the Option Exchange is reflected in this column.
(5)The amounts in this column show changes over our past three fiscal years in the value of a hypothetical $100 (assuming reinvestment of dividends, but noting that for the period in question no dividends were paid) invested in Palantir’s common shares traded on the NYSE. For 2020, this reflects a change starting with the closing price on the day that Palantir’s common stock was first traded on the NYSE, which was September 30, 2020.
(6)The amounts in this column show changes over our past three fiscal years in the value of $100 (assuming reinvestment of dividends), invested in the S&P 500 Information Technology Index. For 2020, this reflects a change starting with the closing price on the day that Palantir’s common stock was first traded on the NYSE, which was September 30, 2020.
(7)The dollar amounts reported in this column represent the amount of net income (loss) reflected in Palantir’s audited financial statements for the applicable year.
Tabular List of Financial Performance Measures
The financial performance measure used in 2022 to link CAP to performance is our stock price, based on its impact on the value of equity-based awards granted prior to 2022, including awards granted as out-of-the-money options in 2020, which remained outstanding during part or all of 2022. Guidance issued under the relevant rules states that we cannot use stock price as our company selected measure; therefore, we have not listed a company selected measure in the pay versus performance table above.
Description of Relationship Between the Information Presented in the Pay versus Performance Table
In accordance with the relevant rules, we are providing the following description of the relationships between the information presented in the Pay versus Performance table on CAP and each of cumulative total shareholder return (“TSR”) and net income (loss).
CAP and Cumulative TSR
CAP and Net Income (Loss)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our capital stock as of
November 2, 2022,April 12, 2023, for:
•each of our named executive officers;
•all of our directors and executive officers as a group; and
•each person known by us to be the beneficial owner of more than five percent of any class of our voting securities.
The amounts and percentages of Class A common stock, Class B common stock and Class F common stock beneficially owned are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is considered to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security and under these rules, more than one person may be considered to be a beneficial owner of the same securities. We have deemed shares of our Class A common stock and Class B common stock subject to stock options that are currently exercisable or exercisable within 60 days of November 2, 2022April 12, 2023 assuming continued service through that period or issuable pursuant to RSUs which are subject to vesting and settlement conditions expected to occur within 60 days of November 2, 2022April 12, 2023 assuming continued service through that period to be outstanding and to be beneficially owned by the person holding the stock option or RSU for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person, and we did not deem these shares to be outstanding or beneficially owned for the purpose of the calculation of percentage of votes (record date outstanding shares) in the table below. Unless otherwise indicated, the address of each beneficial owner is c/o Palantir Technologies Inc., 1200 17th Street, Floor 15, Denver, Colorado 80202.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Shares Beneficially Owned | |
| | | Class A | | | Class B | | | Class F | | | Percentage
of Votes
(Record
Date
Outstanding
Shares) %† | |
| | | Shares | | | % | | | Shares | | | % | | | Shares | | | % | | | | |
Named Executive Officers and Directors: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alexander Karp(1) | | | 6,432,258 | | | | * | | | | 71,022,785 | | | | 56.9 | | | | 335,000 | | | | 33.3 | | | | 12.0†† | |
Stephen Cohen(2) | | | 592 | | | | * | | | | 28,726,531 | | | | 24.6 | | | | 335,000 | | | | 33.3 | | | | 3.0†† | |
Shyam Sankar(3) | | | 1,914,013 | | | | * | | | | 7,252,868 | | | | 6.8 | | | | — | | | | — | | | | * | |
David Glazer(4) | | | 1,656,883 | | | | * | | | | — | | | | — | | | | — | | | | — | | | | * | |
Ryan Taylor(5) | | | 1,682,227 | | | | * | | | | 130,484 | | | | * | | | | — | | | | — | | | | * | |
Alexander Moore(6) | | | 1,817,020 | | | | * | | | | — | | | | — | | | | — | | | | — | | | | * | |
Alexandra Schiff(7) | | | 85,529 | | | | * | | | | 10,000 | | | | * | | | | — | | | | — | | | | * | |
Lauren Friedman Stat(8) | | | 229,975 | | | | * | | | | — | | | | — | | | | — | | | | — | | | | * | |
Peter Thiel(9) | | | 130,670,931 | | | | 6.6 | | | | 32,459,248 | | | | 32.5 | | | | 335,000 | | | | 33.3 | | | | 11.7†† | |
Eric Woersching | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
All executive officers and directors as a group (10 persons)(10) | | | 144,489,428 | | | | 7.3 | | | | 139,601,916 | | | | 93.9 | | | | 1,005,000 | | | | 100.0 | | | | 50.3†† | |
Greater than 5% Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Canada Pension Plan Investment Board(11) | | | 7,218,435 | | | | * | | | | 5,624,297 | | | | 5.6 | | | | — | | | | — | | | | 1.6 | |
The Vanguard Group(12) | | | 127,439,994 | | | | 6.4 | | | | — | | | | — | | | | — | | | | — | | | | 3.3 | |
Founder Voting Control: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares subject to the Founder Voting Agreement(13) | | | 27,166,475 | | | | 1.4 | | | | 125,914,799 | | | | 88.6 | | | | — | | | | — | | | | 22.3 | |
Founder Voting Trust(14) | | | — | | | | — | | | | — | | | | — | | | | 1,005,000 | | | | 100.0 | | | | 23.3 | |
Designated Founders’ Excluded Shares(15) | | | 109,937,306 | | | | 5.6 | | | | 6,293,765 | | | | 6.3 | | | | — | | | | — | | | | 4.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Founder Total | | | 137,103,781 | | | | 6.9 | | | | 132,208,564 | | | | 93.1 | | | | 1,005,000 | | | | 100.0 | | | | 49.999999 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Represents less than one percent (1%)
|
† | Percentage of votes (record date outstanding shares) represents the percentage of the total votes attributable to all shares of our Class A common stock, Class B common stock and Class F common stock outstanding as of the record date, as though all such shares were voted with respect to a matter submitted to our stockholders. With respect to Messrs. Cohen, Karp, and Thiel, the stated percentage is based on the votes attributable to all outstanding shares of Class A common stock and Class B common stock owned by them or their specified affiliates as of the close of business on the record date and does not include the votes attributable to the Class F common stock, except as shown in the row entitled “Founder Total” and as noted in footnotes 10 and 14 below. Each holder of our Class A common stock is entitled to one vote per share, each holder of our Class B common stock is entitled to 10 votes per share and each holder of our Class F common stock is entitled to a number of votes per share as described in the sections titled “Questions and Answers about the Proxy Materials and our Special Meeting—How many votes is each share entitled to for the proposal at the special meeting?” and “Voting Structure and Arrangements.” Holders of our Class A common stock, Class B common stock and Class F common stock will vote together as one class on any matters submitted to a vote of our stockholders, except as otherwise expressly provided in our amended and restated certificate of incorporation or required by applicable law.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares Beneficially Owned | | | |
| Class A | | Class B | | Class F | | Percentage
of Votes
(Record
Date
Outstanding
Shares) %† | |
| Shares | | % | | Shares | | % | | Shares | | % | | | |
| Named Executive Officers and Directors: | | | | | | | | | | | | | | |
Alexander Karp(1) | 6,432,258 | | * | | 77,969,295 | | 58.7 | | | 335,000 | | 33.3 | | | 12.5 | | †† |
Stephen Cohen(2) | 592 | | * | | 30,695,702 | | 25.1 | | | 335,000 | | 33.3 | | | 3.1 | | †† |
Shyam Sankar(3) | 2,030,463 | | * | | 8,391,578 | | 7.6 | | | — | | * | | * | |
David Glazer(4) | 1,999,856 | | * | | — | | * | | — | | * | | * | |
Ryan Taylor(5) | 1,640,774 | | * | | 130,484 | | * | | — | | * | | * | |
Alexander Moore(6) | 1,805,899 | | * | | — | | * | | — | | * | | * | |
Alexandra Schiff(7) | 118,208 | | * | | 10,000 | | * | | — | | * | | * | |
Lauren Friedman Stat(8) | 253,663 | | * | | — | | * | | — | | * | | * | |
Peter Thiel(9) | 130,670,931 | | 6.5 | | | 32,459,248 | | 31.3 | | | 335,000 | | 33.3 | | | 11.5 | | †† |
Eric Woersching(10) | 14,603 | | * | | — | | * | | — | | * | | * | |
All executive officers and directors (10 persons)(11) | 144,967,247 | | 7.2 | | | 149,656,307 | | 94.3 | | | 1,005,000 | | 100.0 | | | 50.4 | | †† |
| Greater than 5% Stockholders: | | | | | | | | | | | | | | |
Canada Pension Plan Investment Board(12) | 455,600 | | * | | 5,624,297 | | 5.4 | | | — | | * | | 1.4 | | |
The Vanguard Group(13) | 161,635,065 | | 8.0 | | | — | | * | | — | | * | | 4.1 | | |
| Founder Voting Control: | | | | | | | | | | | | | | |
Shares subject to the Founder Voting Agreement(14) | 27,166,475 | | 1.3 | | | 134,830,480 | | 89.1 | | | — | | * | | 22.7 | | |
Founder Voting Trust(15) | — | | * | | — | | * | | 1,005,000 | | 100.0 | | | 22.9 | | |
Designated Founders’ Excluded Shares(16) | 109,937,306 | | 5.5 | | | 6,293,765 | | 6.1 | | | — | | * | | 4.4 | | |
| Founder Total | 137,103,781 | | 6.8 | | | 141,124,245 | | 93.3 | | | 1,005,000 | | 100.0 | | | 49.999999 | | |
†† | Our Founders are party to the Founder Voting Agreement. The Founder Voting Agreement provides that all shares in respect of which our Founders or certain of their affiliates have granted a proxy and power of attorney in connection with such agreement will be voted, consented or not consented, as a whole, in the same manner as the shares of Class F common stock held in the Founder Voting Trust. Pursuant to the Founder Voting Agreement, voting power will be exercised pursuant to the instructions of our Founders who are then party to the Founder Voting Agreement pursuant to the terms of the Founder Voting Trust Agreement, so long as such Founders and certain of their affiliates meet the Ownership Threshold as of the applicable record date. For more information, please see the sections titled “Questions and Answers about the Proxy Materials and our Special Meeting—How many votes is each share entitled to for the proposal at the special meeting?” and “Voting Structure and Arrangements.”
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(1) | Shares beneficially owned includes (i) 6,432,258 shares of Class A common stock and 45,972,785 shares of Class B common stock held of record by Mr. Karp; (ii) 21,150,000 shares of Class B common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; (iii) 2,925,000 shares of Class B common stock subject to RSUs which are vested and will settle within 60 days of November 2, 2022; (iv) 975,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022; and (v) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust.
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(2) | Shares beneficially owned includes (i) 592 shares of Class A common stock and 11,599,963 shares of Class B common stock held of record by Mr. Cohen; (ii) 16,451,568 shares of Class B common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; (iii) 675,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022; and (iv) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust.
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(3) | Shares beneficially owned includes (i) 953,784 shares of Class A common stock and 692,868 shares of Class B common stock held of record by Mr. Sankar; (ii) 749,899 shares of Class A common stock held of record by the Sankar Irrevocable Remainder Trust; (iii) 6,185,000 shares of Class B common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; (iv) 210,330 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022; and (v) 375,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022.
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(4) | Shares beneficially owned includes (i) 109,858 shares of Class A common stock held of record by Mr. Glazer; (ii) 1,345,835 shares of Class A common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; and (iii) 201,190 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022.
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(5) | Shares beneficially owned includes (i) 77,557 shares of Class A common stock and 130,484 shares of Class B common stock held of record by Mr. Taylor; (ii) 1,442,170 shares of Class A common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; and (iii) 162,500 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022.
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(6) | Of the shares of Class A common stock held of record by Mr. Moore, 1,000,000 shares are pledged as security for a line of credit.
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(7) | Shares beneficially owned includes 85,529 shares of Class A common stock and 10,000 shares of Class B common stock held of record by Ms. Schiff.
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(8) | Shares beneficially owned includes (i) 9,145 shares of Class A common stock held of record Ms. Stat and (ii) 220,830 shares of Class A common stock held of record by Ms. Stat’s spouse.
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(9) | Shares beneficially owned includes (i) 17,502,211 shares of Class A common stock held of record by PLTR Holdings LLC (“PH”); (ii) 20,733,625 shares of Class A common stock and 26,165,483 shares of Class B
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_______________ | common stock held of record by STS Holdings II LLC (“STS-II”); (iii) 77,851,188 shares of Class A common stock held of record by Rivendell 7 LLC (“RV-7”); (iv) 53,487 shares of Class A common stock and 2,962,961 shares of Class B common stock held of record by Rivendell 25 LLC (“RV-25”); (v) 14,530,420 shares of Class A common stock and 3,330,804 shares of Class B common stock held of record by Mithril PAL-SPV 1, LLC (“Mithril”); and (vi) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust. Mr. Thiel is the sole beneficial owner of each of STS-II, RV-7, RV-25, and PH and may be deemed to have sole voting and investment power over the shares held by such limited liability companies. Mr. Thiel is the Chairman of the Investment Committee of Mithril GP LP, the General Partner of Mithril LP, which, in turn, owns Mithril, and accordingly Mr. Thiel may be deemed to share voting and investment power over the securities held by Mithril. Shares of common stock held by certain entities affiliated with Mr. Thiel are subject to the Founder Voting Agreement, and as such will be included in the voting power shared by our Founders. Shares of our capital stock held by certain entities affiliated with Mr. Thiel, as controlled affiliates of Mr. Thiel, may also become subject to the Founder Voting Agreement, subject to exclusion pursuant to the terms of our amended and restated certificate of incorporation and the Founder Voting Agreement. |
(10) | Shares beneficially owned includes (i) 141,127,403 shares of Class A common stock; (ii) 90,865,348 shares of Class B common stock; (iii) 1,005,000 shares of Class F common stock; (iv) 2,788,005 shares of Class A common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; (v) 43,786,568 shares of Class B common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022; (vi) 574,020 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022; (vii) 2,925,000 shares of Class B common stock subject to RSUs which are vested and will settle within 60 days of November 2, 2022; and (viii) 2,025,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022. Percentage of votes (record date outstanding shares) for all directors and executive officers as a group is based on the votes attributable to all outstanding shares of Class A common stock and Class B common stock owned by them or their specified affiliates as of the close of business on the record date and also includes the votes attributable to the Class F common stock.
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(11) | Based on information obtained from our transfer agent and provided to us by the Canada Pension Plan Investment Board (“CPPIB”), shares beneficially owned includes 7,218,435 shares of Class A common stock and 5,624,297 shares of Class B common stock held of record by CPPIB. The address for CPPIB is One Queen Street East Suite 2500, Toronto ON M5C 2W8, Canada.
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(12) | Based on information reported by The Vanguard Group - 23-1945930 (“Vanguard”) on Schedule 13G filed with the SEC on February 10, 2022. Of the shares of Class A common stock beneficially owned, Vanguard reported that it had shared voting power with respect to 1,489,363 shares, sole voting power with respect to zero shares, shared dispositive power with respect to 3,356,623 shares, and sole dispositive power with respect to 124,083,371 shares. Vanguard listed its address as 100 Vanguard Blvd. Malvern, PA 19355.
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(13) | Shares of Class A common stock and Class B common stock subject to the Founder Voting Agreement include (i) 27,166,475 shares of Class A common stock and (ii) 83,738,231 shares of Class B common stock. In addition, pursuant to proxies and powers of attorney granted by our Founders or their affiliates in connection with the Founder Voting Agreement, the following shares will be subject to the Founder Voting Agreement upon vesting and settlement or exercise, as applicable: (a) 37,601,568 shares of Class B common stock subject to options exercisable within 60 days of November 2, 2022, all of which will be fully vested within 60 days of November 2, 2022, (b) 2,925,000 shares of Class B common stock subject to RSUs which are vested and will settle within 60 days of November 2, 2022 and (c) 1,650,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of November 2, 2022.
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(14) | Shares held in the Founder Voting Trust include 1,005,000 shares of Class F common stock held in the Founder Voting Trust, with respect to which the Founder Voting Trust has sole voting power. Shares of our capital stock held in the Founder Voting Trust will be voted by the Trustee based on the instructions of our
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*Represents less than one percent (1%) | Founders who are then party to the Founder Voting Agreement pursuant to the terms of the Founder Voting Trust Agreement. For more information, please see the section titled “Voting Structure and Arrangements.” |
(15) | As of November 2, 2022, Mr. Thiel had identified a portion of the shares of Class A common stock and Class B common stock beneficially owned by him and his affiliates as Designated Founders’ Excluded Shares, which will not be subject to the Founder Voting Agreement. Such Designated Founders’ Excluded Shares will reduce the total voting power of the Class F common stock. For more information regarding the voting power of these Designated Founders’ Excluded Shares with respect to the matter to be voted on at the special meeting, please refer to the section titled “Voting Structure and Arrangements.”
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†Percentage of votes (record date outstanding shares) represents the percentage of the total votes attributable to all shares of our Class A common stock, Class B common stock and Class F common stock outstanding as of the record date, as though all such shares were voted with respect to a matter submitted to our stockholders. With respect to Messrs. Cohen, Karp, and Thiel, the stated percentage is based on the votes attributable to all outstanding shares of Class A common stock and Class B common stock owned by them or their specified affiliates as of the close of business on the record date and does not include the votes attributable to the Class F common stock, except as shown in the row entitled “Founder Total” and as noted in footnotes 11 and 15 below. Each holder of our Class A common stock is entitled to one vote per share, each holder of our Class B common stock is entitled to 10 votes per share and each holder of our Class F common stock is entitled to a number of votes per share as described in the sections titled “Questions and Answers about the Proxy Materials and our Annual Meeting—How many votes is each share entitled to for each proposal at the annual meeting?” and “Board of Directors and Corporate Governance—Voting Structure and Arrangements.” Holders of our Class A common stock, Class B common stock and Class F common stock will vote together as one class on any matters submitted to a vote of our stockholders, except as otherwise expressly provided in our amended and restated certificate of incorporation or required by applicable law.
††Our Founders are party to the Founder Voting Agreement. The Founder Voting Agreement provides that all shares in respect of which our Founders or certain of their affiliates have granted a proxy and power of attorney in connection with such agreement will be voted, consented or not consented, as a whole, in the same manner as the shares of Class F common stock held in the Founder Voting Trust. Pursuant to the Founder Voting Agreement, voting power will be exercised pursuant to the instructions of our Founders who are then party to the Founder Voting Agreement pursuant to the terms of the Founder Voting Trust Agreement, so long as such Founders and certain of their affiliates meet the Ownership Threshold as of the applicable record date. For more information, please see the sections titled “Questions and Answers about the Proxy Materials and our Annual Meeting—How many votes is each share entitled to for each proposal at the annual meeting?” and “Board of Directors and Corporate Governance—Voting Structure and Arrangements.”
(1)Shares beneficially owned includes (i) 6,432,258 shares of Class A common stock and 48,794,295 shares of Class B common stock held of record by Mr. Karp; (ii) 28,200,000 shares of Class B common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; (iii) 975,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023; and (iv) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust.
(2)Shares beneficially owned includes (i) 592 shares of Class A common stock and 12,219,134 shares of Class B common stock held of record by Mr. Cohen; (ii) 17,801,568 shares of Class B common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; (iii) 675,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023; and (iv) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust.
(3)Shares beneficially owned includes (i) 1,070,234 shares of Class A common stock and 1,081,578 shares of Class B common stock held of record by Mr. Sankar; (ii) 749,899 shares of Class A common stock held of record by the Sankar Irrevocable Remainder Trust; (iii) 6,935,000 shares of Class B common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; (iv) 210,330 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023; and (v) 375,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(4)Shares beneficially owned includes (i) 194,497 shares of Class A common stock held of record by Mr. Glazer; (ii) 1,429,169 shares of Class A common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; and (iii) 376,190 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(5)Shares beneficially owned includes (i) 43,425 shares of Class A common stock and 130,484 shares of Class B common stock held of record by Mr. Taylor; (ii) 1,535,504 shares of Class A common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; and (iii) 61,845 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(6)Shares beneficially owned includes 1,773,220 shares of Class A common stock held of record by Mr. Moore and (ii) 32,679 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023. Of the shares of Class A common stock held of record by Mr. Moore, 1,000,000 shares are pledged as security for a line of credit.
(7)Shares beneficially owned includes (i) 85,529 shares of Class A common stock and 10,000 shares of Class B common stock held of record by Ms. Schiff; and (ii) 32,679 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(8)Shares beneficially owned includes (i) 14,154 shares of Class A common stock held of record by Ms. Stat; (ii) 206,830 shares of Class A common stock held of record by Ms. Stat’s spouse; and (iii) 32,679 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(9)Shares beneficially owned includes (i) 17,502,211 shares of Class A common stock held of record by PLTR Holdings LLC (“PH”); (ii) 20,733,625 shares of Class A common stock and 26,165,483 shares of Class B common stock held of record by STS Holdings II LLC (“STS-II”); (iii) 77,851,188 shares of Class A common stock held of record by Rivendell 7 LLC (“RV-7”); (iv) 53,487 shares of Class A common stock and 2,962,961 shares of Class B common stock held of record by Rivendell 25 LLC (“RV-25”); (v) 14,530,420 shares of Class A common stock and 3,330,804 shares of Class B common stock held of record by Mithril PAL-SPV 1, LLC (“Mithril”); and (vi) 335,000 shares of Class F common stock held in the Founder Voting Trust. Each of our Founders has sole investment power with respect to 335,000 shares of Class F common stock held in the Founder Voting Trust. Mr. Thiel is the sole beneficial owner of each of STS-II, RV-7, RV-25, and PH and may be deemed to have sole voting and investment power over the shares held by such limited liability companies. Mr. Thiel is the Chairman of the Investment Committee of Mithril GP LP, the General Partner of Mithril LP, which, in turn, owns Mithril, and accordingly Mr. Thiel may be deemed to share voting and investment power over the securities held by Mithril. Shares of common stock held by certain entities affiliated with Mr. Thiel are subject to the Founder Voting Agreement, and as such will be included in the voting power shared by our Founders. Shares of our capital stock held by certain entities affiliated with Mr. Thiel, as controlled affiliates of Mr. Thiel, may also become subject to the Founder Voting Agreement, subject to exclusion pursuant to the terms of our amended and restated certificate of incorporation and the Founder Voting Agreement.
(10)Shares beneficially owned includes 14,603 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(11)Shares beneficially owned includes (i) 141,241,569 shares of Class A common stock; (ii) 94,694,739 shares of Class B common stock; (iii) 1,005,000 shares of Class F common stock; (iv) 2,964,673 shares of Class A common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; (v) 52,936,568 shares of Class B common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023; (vi) 761,005 shares of Class A common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023; and (vii) 2,025,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023. Percentage of votes (record date outstanding shares) for all directors and executive officers as a group is based on the votes attributable to all outstanding shares of Class A common stock and Class B common stock owned by them or their specified affiliates as of the close of business on the record date and also includes the votes attributable to the Class F common stock.
(12)Based on information obtained from our transfer agent and provided to us by the Canada Pension Plan Investment Board (“CPPIB”), shares beneficially owned includes 455,600 shares of Class A common stock and 5,624,297 shares of Class B common stock held of record by CPPIB. The address for CPPIB is One Queen Street East Suite 2500, Toronto ON M5C 2W8, Canada.
(13)Based on information reported by The Vanguard Group - 23-1945930 (“Vanguard”) on Schedule 13G/A filed with the SEC on February 9, 2023. Of the shares of Class A common stock beneficially owned, Vanguard reported that it had shared voting power with respect to 1,411,998 shares, sole voting power with respect to zero shares, shared dispositive power with respect to 3,916,841 shares, and sole dispositive power with respect to 157,718,224 shares. Vanguard listed its address as 100 Vanguard Blvd. Malvern, PA 19355.
(14)Shares of Class A common stock and Class B common stock subject to the Founder Voting Agreement include (i) 27,166,475 shares of Class A common stock and (ii) 87,178,912 shares of Class B common stock. In addition, pursuant to proxies and powers of attorney granted by our Founders or their affiliates in connection with the Founder Voting Agreement, the following shares will be subject to the Founder Voting Agreement upon vesting and settlement or exercise, as applicable: (a) 46,001,568 shares of Class B common stock subject to options exercisable within 60 days of April 12, 2023, all of which will be fully vested within 60 days of April 12, 2023, and (b) 1,650,000 shares of Class B common stock subject to RSUs for which the applicable vesting and settlement conditions will be satisfied within 60 days of April 12, 2023.
(15)Shares held in the Founder Voting Trust include 1,005,000 shares of Class F common stock held in the Founder Voting Trust, with respect to which the Founder Voting Trust has sole voting power. Shares of our capital stock held in the Founder Voting Trust will be voted by the Trustee based on the instructions of our Founders who are then party to the Founder Voting Agreement pursuant to the terms of the Founder Voting Trust Agreement. For more information, please see the section titled “Board of Directors and Corporate Governance—Voting Structure and Arrangements.”
(16)As of April 12, 2023, Mr. Thiel had identified a portion of the shares of Class A common stock and Class B common stock beneficially owned by him and his affiliates as Designated Founders’ Excluded Shares, which will not be subject to the Founder Voting Agreement. Such Designated Founders’ Excluded Shares will reduce the total voting power of the Class F common stock. For more information regarding the voting power of these Designated Founders’ Excluded Shares with respect to the matters to be voted on at the annual meeting, please refer to the section titled “Board of Directors and Corporate Governance—Voting Structure and Arrangements.”
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The following is a description of each transaction since the beginning of our last fiscal year, and each currently proposed transaction, in which:
•we have been or are to be a participant;
•the amount involved exceeded or exceeds $120,000; and
•any of our directors (including director nominees), executive officers, or beneficial holders of more than 5% of any class of our voting securities, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.
Investors’ Rights Agreement
We are party to an amended and restated investors’ rights agreement, as amended, dated as of August 24, 2020 (“IRA”), which provides, among other things, that certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing. While the registration rights of our non-affiliates pursuant to our IRA have expired under the terms of that agreement, our affiliates who are party to the IRA, including our Founders and certain of the entities affiliated with Peter Thiel, will retain the right to cause us to register shares held by them for resale until such rights terminate in accordance with our IRA.
Commercial Arrangements
During the year ended December 31, 2022, we received payments of $1.53 million for our products and services from BlackSky Holdings, Inc. (including its affiliated entities,“BlackSky”). Mr. Thiel, a member of our Board of Directors, is the Chairman of the Investment Committee of Mithril GP LP, the general partner of Mithril LP, as well as a member of the Investment Committee established by Mithril II GP LP, the general partner of Mithril II LP. Mithril LP and Mithril II LP collectively own more than 10% of BlackSky. Mr. Thiel may be deemed to have shared voting, investment and dispositive power with respect to the BlackSky securities held by the Mithril venture capital funds.
In the first quarter of 2022, we invested $10.0 million in connection with Rigetti & Co., Inc.’s (including its affiliated entities and successors, “Rigetti”) business combination with Supernova Partners Acquisition Company II, Ltd. (“Supernova”). Mr. Rascoff, a member of our Board of Directors until June 7, 2022, was the Co-Chairman of Supernova prior to the closing of the business combination. We also have a commercial relationship with Rigetti. During the year ended December 31, 2022, we received payments of $4.18 million for our products and services from Rigetti.
We have a commercial relationship with Anduril Industries, Inc. (“Anduril”). Mr. Thiel, a member of our Board of Directors, owns more than 10% of Anduril through Mr. Thiel’s related entities. During the year ended December 31, 2022, Anduril provided $4.15 million of subcontracting services related to our work with a U.S. government customer.
Consulting Arrangement
In June 2022, we entered into a consulting agreement with Mr. Rascoff, a former member of our Board of Directors. Under the consulting agreement, Mr. Rascoff will advise the Company’s Chief Financial Officer, audit committee and finance teams regarding finance and accounting matters. The consulting agreement is expected to be in effect until July 1, 2023 unless earlier terminated by the parties. At the same time that it approved the entry into the consulting agreement, and as consideration for his continued services under that agreement, our Board of Directors approved an amendment to an award of RSUs that had been granted to Mr. Rascoff in July 2020 in connection with his service on our Board of Directors. This amendment did not change the size or vesting schedule of the award but provided that the award would continue to vest subject to Mr. Rascoff continuing to be a non-director service provider to us.In accordance with ASC Topic 718, the value of such RSU award did not change as a result of such amendment from the amount previously reported. As such, the value of such consulting agreement as of June 7, 2022, the effective date, was $632,892, which represents the grant date fair value of the then-unvested portion of such RSU award through its final vesting date in July 2024, in accordance with ASC Topic 718.
Limitation of Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by the Delaware General Corporation Law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for the following:
•any breach of their duty of loyalty to Palantir or our stockholders;
•any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or
•any transaction from which they derived an improper personal benefit.
Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission, or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the Delaware General Corporation Law.
In addition, our amended and restated bylaws provide that we will indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit, or proceeding by reason of the fact that they are or were one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise. Our amended and restated bylaws provide that we may indemnify to the fullest extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit, or proceeding by reason of the fact that they are or were one of our employees or agents or is or was serving at our request as an employee or agent of another corporation, partnership, joint venture, trust, or other enterprise. Our amended and restated bylaws also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to limited exceptions.
Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.
The limitation of liability and indemnification provisions that are included in our amended and restated certificate of incorporation, amended and restated bylaws, and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions.
We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.
Certain of our non-employee directors may, through their relationships with their employers, be insured or indemnified against certain liabilities incurred in their capacity as members of our Board of Directors.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling Palantir pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Policies and Procedures for Related Person Transactions
We have adopted a formal, written policy regarding related person transactions. This written policy regarding related person transactions provides that a related person transaction is a transaction, arrangement, or relationship or any series of similar transactions, arrangements, or relationships, in which we are a participant and in which a related person has, had, or will have a direct or indirect material interest and in which the aggregate amount involved exceeds $120,000. For purposes of this policy, a related person means any of our executive officers and directors (including director nominees), in each case at any time since the beginning of our last fiscal year, or holders of more than 5% of any class of our voting securities, and any member of the immediate family of, or person sharing the household with, any of the foregoing persons.
Our Audit Committee has the primary responsibility for reviewing and approving, ratifying or disapproving related person transactions. In determining whether to approve, ratify, or disapprove any such transaction, our Audit Committee will consider, among other factors, whether the related person transaction would affect the independence of any director and is on terms that reflect an arms-length transaction – in other words, terms that are no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, as well as the extent of the related person’s interest in the transaction.
The policy deems certain transactions to not be related party transactions including (1) certain compensation arrangements for our directors or executive officers; (2) transactions with another company at which a related person’s only relationship is as a non-executive employee, director, or beneficial owner of less than 10% of that company’s shares; (3) transactions where a related person’s interest arises solely from the ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis; (4) charitable contributions by us to a charitable organization, foundation, or university at which a related person’s only relationship is as a non-executive employee or director, provided that the aggregate amount involved in the advancement of expenses made pursuant to our organizational documents or any agreement does not exceed the greater of $1,000,000 or 2% of such organization’s total annual receipts; (5) any transaction available to U.S. employees generally; and (6) any other transaction where disclosure of such transaction would not be required pursuant to Item 404 of Regulation S-K. In addition to our policy, our Audit Committee charter provides that our Audit Committee shall review and oversee any related person transactions.
Stockholder Proposals or Director Nominations for
20232024 Annual Meeting
If a stockholder would like us to consider including a proposal in our
proxy statementProxy Statement for our
20232024 annual meeting pursuant to Rule
14a-8 of the Exchange Act, then the proposal must be received by our corporate secretary at our corporate headquarters on or before December
29, 2022.28, 2023. In addition, stockholder proposals must comply with the requirements of Rule
14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:
Palantir Technologies Inc.
Attention: Corporate Secretary
1200 17th Street, Floor 15
Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal or nominate a director at an annual meeting, but do not seek to include the proposal or director nominee in our
proxy statement.Proxy Statement. In order to be properly brought before our
20232024 annual meeting, the stockholder must provide timely written notice to our corporate secretary at our corporate headquarters, and any such proposal or nomination must constitute a proper matter for stockholder action. The written notice must contain the information specified in our amended and restated bylaws. To be timely, a stockholder’s written notice must be received by our corporate secretary at our corporate headquarters:
•no earlier than 8:00 a.m., Mountain time, on February 7, 2023;2024; and
•no later than 5:00 p.m., Mountain time, on March 9, 2023.
In addition, to comply with newly-enacted Rule 14a-19 of the Exchange Act, stockholders must provide notice of the intent to solicit proxies in support of director nominees (other than our nominees) for the 2023 annual meeting by notifying our corporate secretary no later than April 8, 2023. Please note that the notice requirement under Rule 14a-19 is in addition to the applicable notice requirements under the advance notice provisions of our amended and restated bylaws as described above.
2024.
In the event that we hold our
20232024 annual meeting more or less than 25 days from the
one-year anniversary of this year’s annual meeting, then such written notice must be received by our corporate secretary at our corporate headquarters:
•no earlier than 8:00 a.m., Mountain time, on the 120th day prior to the day of our 20232024 annual meeting, and
•no later than 5:00 p.m., Mountain time, on the 10th day following the day on which public announcement of the date of our 2023the annual meeting is first made by us.
If a stockholder who has notified us of his, her, or its intention to present a proposal at an annual meeting of stockholders does not appear
in person to present his, her, or its proposal at such annual meeting, then we are not required to present the proposal for a vote at such annual meeting.
In addition, to comply with Rule 14a-19 of the Exchange Act, stockholders must provide notice of the intent to solicit proxies in support of director nominees (other than our nominees) for the 2024 annual meeting by notifying our corporate secretary no later than April 7, 2024. Please note that the notice requirement under Rule 14a-19 is in addition to the applicable notice requirements under the advance notice provisions of our amended and restated bylaws as described above.
A copy of our amended and restated bylaws may be obtained by accessing our filings on the SEC’s website at www.sec.gov. You may also contact our corporate secretary at our corporate headquarters for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. 2022 Annual Report
Our financial statements for our fiscal year ended December 31, 2022 are included in our annual report, which we will make available to stockholders at the same time as this Proxy Statement. Our proxy materials and our annual report are posted on our website at https://investors.palantir.com and are available from the SEC at its website at www.sec.gov. You may also obtain a copy of our annual report, free of charge, by sending a written request to Palantir Technologies Inc., 1200 17th Street, Floor 15, Denver, Colorado 80202, Attention: Investor Relations.
Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement, and references to our website address in this Proxy Statement are inactive textual references only.
* * *
Our Board of Directors does not know of any other matters to be presented at the specialannual meeting. If any additional matters are properly presented at the specialannual meeting, the persons named in the proxy will have discretion to vote the shares of our common stock they represent in accordance with their own judgment on such matters.
It is important that your shares be represented at the
specialannual meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote as promptly as possible to ensure your vote is recorded.
Denver, Colorado
November 10, 2022
APPENDIX A-1PALANTIR TECHNOLOGIES INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Palantir Technologies Inc. (the “Corporation”), a corporation organized and existing under the lawsTable of the StateContents
Table of Delaware, hereby certifies as follows:A. The Corporation was originally incorporated under the name of Palantir Technologies Inc., and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on May 6, 2003.
B. This Amended and Restated Certificate of Incorporation (this “Restated Certificate of Incorporation”) was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”).
C. The Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
The name of the Corporation is Palantir Technologies Inc.
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange St., Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
ARTICLE IV
A. Classes of Stock. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 24,701,005,000 shares, of which 22,701,005,000 shares shall be Common Stock (the “Common Stock”), par value $0.001 per share, and 2,000,000,000 shares shall be Preferred Stock (the “Preferred Stock”), par value $0.001 per share. 20,000,000,000 shares of the authorized shares of Common Stock are hereby designated Class A Common Stock (the “Class A Common Stock”), 2,700,000,000 shares of the authorized Common Stock are hereby designated Class B Common Stock (the “Class B Common Stock”), and 1,005,000 shares of the authorized Common Stock are hereby designated Class F Common Stock (the “Class F Common Stock”).
B. Rights of Preferred Stock. The Board of Directors of the Corporation (the “Board of Directors”) is authorized, subject to any limitations prescribed by law or set forth herein, to provide by resolution for the designation and issuance of 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 (which may include, without limitation, full, limited or no voting powers), preferences, and relative, participating, optional or other special rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and to file a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter
referred to as a “Preferred Stock Designation”), setting forth such resolution or resolutions; provided that, prior to the Final Class F Conversion Date, the Board of Directors shall not designate or issue any series of Preferred Stock without the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a separate class.
C. Vote to Increase or Decrease Authorized Shares of Common Stock and Preferred Stock. The number of authorized shares of Common Stock (or any class thereof) and Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, without a separate vote of the holders of any class of Common Stock or Preferred Stock, or any separate series votes of any series thereof, irrespective of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
D. Rights of Class A Common Stock, Class B Common Stock and Class F Common Stock. The relative powers, rights, qualifications, limitations and restrictions granted to or imposed on the shares of Class A Common Stock, Class B Common Stock and Class F Common Stock are as follows:
1. Voting Rights.
(a) General Right to Vote Together; Exception. Except as otherwise expressly provided herein or required by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class F Common Stock shall vote together as one class on all matters submitted to a vote of the stockholders of the Corporation. Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Class A Common Stock, Class B Common Stock and Class F Common Stock, as such, shall not be entitled to vote on any amendment to this Restated Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the terms of this Restated Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to applicable law; provided that, prior to the Final Class F Conversion Date, any such amendment that affects the number of shares of Preferred Stock, or the designation, powers, preferences, and relative, participating, optional or other special rights of the shares of each such series and any qualifications, limitations or restrictions thereof, shall also require the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a separate class.
(b) Votes Per Share. Except as otherwise expressly provided herein or required by applicable law, on any matter that is submitted to a vote of stockholders of the Corporation:
| i. | Each holder of Class A Common Stock shall be entitled to one (1) vote for each share of Class A Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation.
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| ii. | Each holder of Class B Common Stock shall be entitled to ten (10) votes for each share of Class B Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation.
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| iii. | Each holder of Class F Common Stock shall be entitled to a number of votes for each share of Class F Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation equal to (x) ten (10) votes (I) if the Founder Block, calculated as of the applicable record date, is less than the Ownership Threshold or (II) if the applicable vote is being sought from the holders of the Class F Common Stock separately as a class, solely for such separate class vote, and (y) in all other instances, (1) the Applicable Vote for All Shares of Class F Common Stock divided by (2) the number of outstanding shares of Class F Common Stock. Shares of Class F Common Stock shall be voted only in accordance with the corresponding True Founder Instruction. In determining the “Applicable Vote for All Shares of Class F Common Stock” (as defined below), whether in respect of a matter that is submitted to a vote at a meeting of the
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| stockholders of the Corporation or with respect to an action by written consent, first, the procedures set forth in Section 231(b)(1)–(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Corporation (excluding the Class F Common Stock) shall be performed and, second, the procedures set forth in Section 231(b)(1)–(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Corporation (including the Class F Common Stock) shall be performed. |
(c) Class F Common Stock Matters.
| i. | Each Founder (or, in the event of his death, such Founder’s estate) shall promptly deliver written notice to the Corporation when any Founder ceases to be a Continuing Founder.
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| ii. | With respect to each matter that is submitted to a vote of the stockholders of the Corporation, (x) the Grantee (or all the Continuing Founders, in a single writing) shall, on or promptly after the applicable record date, submit to the Secretary the number, by class or series, of Founder Shares as of the applicable record date and (y) each Continuing Founder shall, no later than the applicable Instruction Date, deliver to the Secretary, the Trustee and each other Continuing Founder a Continuing Founder Instruction.
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| iii. | The voting power corresponding to the Class F Common Stock shall be calculated on the basis of such information furnished by the Grantee (or all of the Continuing Founders), unless a court of competent jurisdiction determines in a final, nonappealable order that such information is materially incorrect. Upon the request of a Continuing Founder, before the results of any vote or action of the stockholders of the Corporation are certified or otherwise become effective, the Corporation shall furnish to each Continuing Founder sufficient evidence for each such person to determine whether the Corporation’s calculation of voting power corresponding to the Class F Common Stock was correct and provide any such persons a reasonable opportunity to object to such calculation. Upon the resolution of any such objections, the results of such vote shall be certified or action shall become effective, and thereafter the calculation by the Corporation of the voting power corresponding to the Class F Common Stock in accordance with Article IV, Section D.1(b) and this Article IV, Section D.1(c) shall be conclusive and binding. The Corporation shall not be required to furnish any evidence relating to the calculation of the voting power corresponding to the Class F Common Stock to any Person except as required by law or as specified in the Bylaws of the Corporation and except to the Continuing Founders as provided above.
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| iv. | If the Corporation cannot determine with information available to the Corporation whether the Founder Block is at least equal to the Ownership Threshold, the Corporation may, upon reasonable notice to each of the Trustee and the Continuing Founders, request in writing that evidence be furnished to the Corporation that the Founder Block is at least equal to the Ownership Threshold. Each Continuing Founder shall promptly provide such information to the Secretary, the Trustee and each other Continuing Founder.
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2. Identical Rights. Except as otherwise expressly provided herein or required by applicable law, shares of Class A Common Stock, Class B Common Stock and Class F Common Stock shall have the same rights and privileges and rank equally, share ratably and be identical in all respects as to all matters, including, without limitation:
(a) Dividends and Distributions. Subject to the rights of any Preferred Stock that may then be outstanding, the holders of Class A Common Stock, Class B Common Stock and Class F Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available for distribution to stockholders of the Corporation, such dividends or other distributions as may be declared from time to time by the Board of Directors. Any dividends or other distributions paid to the holders of shares of Common Stock shall be paid on an equal priority and ratably on a per share basis to the holders of Common Stock, unless different treatment of the shares of any such class is approved by an affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock, Class B Common Stock and
Class F Common Stock entitled to vote thereon, each voting separately as a class. Further, the Corporation shall not declare or pay any dividend or make any other distribution to the holders of Common Stock payable in securities of the Corporation unless the same dividend or distribution with the same record date and payment date shall be declared and paid on all shares of Common Stock; provided, however, that (i) dividends or other distributions payable in shares of Class A Common Stock or rights to acquire shares of Class A Common Stock may be declared and paid to the holders of Class A Common Stock without the same dividend or distribution being declared and paid to the holders of the Class B Common Stock or Class F Common Stock if, and only if, a dividend payable in shares of Class B Common Stock or rights to acquire shares of Class B Common Stock is declared and paid to the holders of Class B Common Stock and Class F Common Stock at the same rate and with the same record date and payment date and (ii) dividends or other distributions payable in shares of Class B Common Stock or rights to acquire shares of Class B Common Stock may be declared and paid to the holders of Class B Common Stock and Class F Common Stock without the same dividend or distribution being declared and paid to the holders of the Class A Common Stock if, and only if, a dividend payable in shares of Class A Common Stock, or rights to acquire shares of Class A Common Stock, is declared and paid to the holders of Class A Common Stock at the same rate and with the same record date and payment date; and provided, further, that nothing in the foregoing shall prevent the Corporation from declaring and paying dividends or other distributions payable in shares of one class of Common Stock (other than Class F Common Stock) or rights to acquire one class of Common Stock (other than Class F Common Stock) to holders of all classes of Common Stock.
(b) Subdivision or Combination. If the Corporation in any manner subdivides or combines the outstanding shares of Class A Common Stock, Class B Common Stock or Class F Common Stock, the outstanding shares of the other such classes will be subdivided or combined in the same proportion and manner, unless different treatment of the shares of each such class is approved (i) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon and (ii) if the voting rights or economic rights of one class of Common Stock would be adversely affected by such subdivision or combination relative to the voting rights or economic rights of any other class of Common Stock, by the affirmative vote of the holders of a majority of the outstanding shares of such class, voting separately.
(c) Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, in connection with which assets are to be distributed to stockholders of the Corporation, subject to the rights of any Preferred Stock that may then be outstanding, the assets of the Corporation legally available for distribution to stockholders of the Corporation shall be distributed on an equal priority and ratably on a per share basis to the holders of Common Stock, unless different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock, Class B Common Stock and Class F Common Stock entitled to vote thereon, each voting separately as a class.
(d) Merger or Consolidation. In the case of any consolidation or merger of the Corporation with or into any other entity, or in the case of any other transaction having an effect on stockholders of the Corporation substantially similar to that resulting from a consolidation or merger, each share of Common Stock must be converted into the same securities, cash or other property (including the same rights to elect among different forms of consideration); provided, however, that (1) the foregoing shall not apply to any such combination, merger or other transaction in which each share of Common Stock remains outstanding as a share of the same class of Common Stock and is not converted into other securities, cash or other property, and (2) shares of any class of Common Stock may be converted into, or the holders thereof may have the right to elect to receive, different securities in connection with such consolidation, merger or other transaction if the only difference in the securities being issued to the holders of the Class A Common Stock, Class B Common Stock and Class F Common Stock is that the voting power of such securities is proportionate to the voting power of the shares of such class in the Corporation.
(e) Certain Transactions. If the Corporation enters into any transaction, other than a restructuring transaction or a transaction that otherwise does not involve a Change of Control, which transaction requires,
pursuant to Section 251(c) or Section 271(a) of the DGCL, the approval of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, such transaction shall be subject to approval by the holders of at least fifty-five percent (55.0%) of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon if the record date for determining the stockholders entitled to vote to approve such transaction occurs prior to the Final Class F Conversion Date.
3. Conversion of Class B Common Stock.
(a) Voluntary Conversion. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
(b) Automatic Conversion. Each share of Class B Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the earlier of:
| i. | a Transfer of such share other than a Permitted Transfer; and
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| ii. | the date or the happening of a future event specified by a written notice and certification request of the Corporation to the holder of such share of Class B Common Stock requesting a certification, in a form satisfactory to the Corporation, verifying such holder’s ownership of Class B Common Stock and confirming that a conversion to Class A Common Stock has not occurred, which date shall not be less than sixty (60) calendar days after the date such notice and certification request is sent; provided that no such automatic conversion pursuant to this subsection ii shall occur in the case of a Qualified Stockholder or its Permitted Transferees that furnishes a certification satisfactory to the Corporation prior to the specified date.
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(c) Procedures. The Corporation shall not be obligated to issue certificates evidencing the shares of Class A Common Stock issuable on such conversion unless the certificates evidencing such shares of Class B Common Stock, if any such certificates have been issued, are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation may, from time to time, establish such other policies and procedures relating to the conversion of Class B Common Stock to Class A Common Stock and the general administration of this multi-class stock structure, including the issuance of stock certificates (or the establishment of book-entry positions) with respect thereto, as it may deem reasonably necessary or advisable, and may from time to time request that holders of shares of Class B Common Stock furnish certifications, affidavits or other proof to the Corporation as it deems necessary to verify the ownership of Class B Common Stock and to confirm that a conversion to Class A Common Stock has not occurred. The Secretary shall determine whether a Transfer or other event giving rise to a conversion has occurred that results in a conversion to Class A Common Stock, and such determination shall be conclusive and binding.
(d) Immediate Effect. In the event of a conversion of shares of Class B Common Stock to shares of Class A Common Stock pursuant to this Article IV, Section D.3, such conversion(s) shall be deemed to have been made at the time of the applicable Transfer or event; provided that,in the case of a share issuable or deliverable by the Corporation, upon any of the conversion of another security, the exercise of an option or warrant or similar arrangement, the occurrence or non-occurrence of a contingency, or upon vesting, the conversion of such shares of Class B Common Stock to shares of Class A Common Stock pursuant to Article IV, Section D.3(b)i shall occur immediately following issuance or delivery. For the avoidance of doubt, if the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act, the conversion may, at the option of any holder tendering Class B Common Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the persons entitled to receive the Class A Common Stock upon conversion of the Class B Common Stock shall not be deemed to have converted such Class B Common Stock until immediately prior to the closing of such sale of
securities. Upon any conversion of Class B Common Stock to Class A Common Stock, all rights of the holder of shares of Class B Common Stock shall cease and the person or persons in whose name or names the certificate or certificates (or book-entry position(s)) 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. Following any such conversion, the reissuance of such shares of Class B Common Stock shall be prohibited, and such shares shall be retired in accordance with Section 243 of the DGCL and the filing by the Secretary of State of the State of Delaware required thereby.
(e) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock or out of shares of Class A Common Stock held in its treasury, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
4. Conversion of Class F Common Stock.
(a) Voluntary Conversion. Each share of Class F Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class B Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
(b) Automatic Conversion of all Outstanding Class F Common Stock. Each share of Class F Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class B Common Stock upon the Final Class F Conversion Date.
(c) Procedures. The Corporation shall not be obligated to issue certificates evidencing the shares of Class B Common Stock issuable on such conversion unless the certificates evidencing such shares of Class F Common Stock, if any such certificates have been issued, are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation may, from time to time, establish such other policies and procedures relating to the conversion of Class F Common Stock to Class B Common Stock and the general administration of this multi-class stock structure, including the issuance of stock certificates (or the establishment of book-entry positions) with respect thereto, as it may deem reasonably necessary or advisable. The Secretary shall determine whether an event has occurred that results in a conversion to Class B Common Stock, and such determination shall be conclusive and binding.
(d) Immediate Effect. Upon any conversion of Class F Common Stock to Class B Common Stock, all rights of the holder of shares of Class F Common Stock shall cease and the person or persons in whose name or names the certificate or certificates (or book-entry position(s)) representing the shares of Class B 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 B Common Stock. Following any such conversion, the reissuance of such shares of Class F Common Stock shall be prohibited, and such shares shall be retired in accordance with Section 243 of the DGCL and the filing by the Secretary of State of the State of Delaware required thereby.
(e) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares or out of shares held in its treasury of (i) Class B Common Stock, solely for the purpose of effecting the conversion of the shares of Class F Common Stock, such number of its shares of Class B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class F Common Stock into shares of Class B Common Stock and (ii) Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock issuable upon conversion of Class F Common Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all shares of Class B Common Stock issuable upon conversion of outstanding Class F Common Stock into shares of Class A Common Stock.
5. Transfer Restrictions on Class F Common Stock. (a) Any transfer or purported transfer of shares of Class F Common Stock or any legal or beneficial interest in such shares shall be null and void. Any transaction or series of transactions undertaken to effect a Reorganization shall not be considered a transfer or purported transfer of shares of Class F Common Stock. A holder of Class F Common Stock may surrender shares of Class F Common Stock to the Corporation for cancellation at any time. If a Person shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported transferee or owner (the “Purported Owner”) of shares of Class F Common Stock by a purported transfer, then the Purported Owner shall not obtain any rights in, to or with respect to such shares of Class F Common Stock, and the purported transfer of such shares to the Purported Owner shall not be recognized by the Corporation. For the avoidance of doubt, actions described in clauses (a) and (d) of the definition of Transfer in Article V below are not prohibited.
(b) Certificates. All certificates or book entries representing shares of Class F Common Stock shall bear a legend substantially in the following form (or in such other form as the Board of Directors may determine):
THE SECURITIES REPRESENTED BY THIS [CERTIFICATE][BOOK ENTRY] ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION AS IT MAY BE AMENDED AND/OR RESTATED (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR).
E. No Further Issuances. Except for (1) a dividend payable or subdivision in accordance with Article IV, Section D.2 and (2) the exchange of shares of Class B Common Stock held in the Founder Voting Trust for shares of Class F Common Stock immediately after the effectiveness of the Corporation’s previous Amended and Restated Certificate of Incorporation on September 22, 2020 (the “Effective Time”), the Corporation shall not at any time after the Effective Time issue any additional shares of Class F Common Stock, unless such issuance is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a single class. After the Final Class F Conversion Date, the Corporation shall not issue any additional shares of Class F Common Stock.
ARTICLE V
The following terms, where capitalized in this Restated Certificate of Incorporation, shall have the meanings ascribed to them in this Article V:
“Applicable Vote for All Shares of Class F Common Stock” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (1) the number of votes (which shall not be less than zero and which shall be rounded down to the nearest whole number) that equal 49.999999% of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote on such matter (including in the case of the election of directors), reduced to the number of votes (which shall not be less than zero and which shall be rounded down to the nearest whole number) that equal 49.999999% of the voting power of the shares present in person or represented by proxy and entitled to vote on such matter only if a majority of the shares present in person or represented by proxy and entitled to vote on such matter is the applicable voting standard, in each case minus (2) the number of votes corresponding to the Founder Shares entitled to vote on such matter.
“Approved Affiliate” means, with respect to a Continuing Founder, any affiliate thereof that has been approved by the Secretary or the Treasurer of the Corporation.
“Change of Control” means, any transaction the result of which is that any person (other than one or more of the Founders or their respective controlled affiliates) becomes the beneficial owner, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of capital stock of the Corporation. For
purposes of this definition, (i) the term “person” shall be defined as that term is used in Section 13(d)(3) of the Exchange Act; (ii) the term “beneficial owner” shall be defined as that term is used in Rules 13d-3 and 13d-5 under the Exchange Act; and (iii) any direct or indirect parent company of the Corporation shall not itself be considered a “person” for purposes of this definition, so long as holders of capital stock of the Corporation are the beneficial owners, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of capital stock of such company.
“Continuing Founder” means, on any date of determination, each Founder that is then a party to the Voting Agreement.
“Continuing Founder Instruction” means, with respect to any matter subject to a vote of the stockholders of the Corporation, a written instruction delivered by a Continuing Founder to the Secretary, the Trustee and each other Continuing Founder identifying how such Continuing Founder desires (a) votes corresponding to the Class F Common Stock to be cast (including a vote of “withhold” or “abstain” that may not constitute a “vote” under the applicable voting standard required to approve the matter or elect the director nominee), or (b) consents corresponding to the Class F Common Stock be delivered or not delivered, as applicable, in each case with respect to such matter.
“Corporation Equity Securities” means (a) any securities having voting rights in the election of the Board of Directors, (b) any equity securities evidencing an ownership interest in the Corporation, (c) any equity securities, whether vested or unvested, convertible into or exchangeable or exercisable for any shares of the foregoing, (d) any warrants, calls, options or other rights, whether vested or unvested, to acquire from the Corporation any shares of the foregoing, (e) any other obligation of the Corporation, whether vested or unvested, to issue or deliver any of the foregoing, (f) any rights granted by the Corporation to receive any value based on or linked to the value of any of the foregoing, and (g) any securities of the Corporation as would be identified on a Schedule 13D or Schedule 13G pursuant to Rule 13d-101 or Rule 13d-102, respectively, under the Exchange Act (or any successor form), including any footnotes therein and after giving effect to any disclaimers of beneficial ownership, in the case of each of clauses (a)–(g), without duplication and except for any securities specifically designated in writing from time to time by a Continuing Founder, accompanied by signed acknowledgments from each other Continuing Founder, to the Secretary (securities so designated, “Designated Founders’ Excluded Shares”).
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
“Final Class F Conversion Date” means the earliest of:
(a) the effective date of the termination of the Founder Voting Trust, other than any termination that occurs in connection with a Reorganization; and
(b) the effective date of the termination of the Voting Agreement.
“Founders”means Alexander Karp, Stephen Cohen and Peter Thiel, and each, a “Founder”.
“Founder Block” means the aggregate number of Corporation Equity Securities held or owned, directly or indirectly, by any of (a) a Continuing Founder or (b) an Approved Affiliate of a Continuing Founder, in the case of each of clauses (a) and (b), calculated on a fully diluted and as converted basis.
“Founder Shares” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (a) all Corporation Equity Securities entitled to vote on such matter held or owned, directly or indirectly, by the Continuing Founders to which the Grantee has a proxy and power of attorney granted pursuant to the Voting Agreement to vote such shares in the same manner as the shares of Class F Common Stock will be voted by the Trustee plus (b) any other Corporation Equity Securities entitled to vote on such matter to which the Grantee has a proxy and power of attorney granted pursuant to the Voting Agreement to vote such shares in the same manner as the shares of Class F Common Stock will be voted by the Trustee plus (c) any Designated Founders’ Excluded Shares.
“Founder Voting Trust” means the voting trust established pursuant to the Voting Trust Agreement (and any successor thereto following a Reorganization).
“Grantee” means the grantee of the proxies and powers of attorney to vote shares of one or more classes of capital stock of the Corporation in the same manner as the shares of Class F Common Stock will be voted by the Trustee, in accordance with the Voting Agreement.
“Independent Directors” means the members of the Board of Directors designated as independent directors in accordance with the requirements of the Securities Exchange that are generally applicable to companies with common equity securities listed thereon (or if the Corporation’s equity securities are not listed for trading on a Securities Exchange, the requirements of the New York Stock Exchange generally applicable to companies with common equity securities listed thereon).
“Instruction Date” means:
| (a) | for any annual or special meeting of the stockholders of the Corporation, the date that is three business days prior to the date of such meeting; and
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| (b) | for any stockholder action by written consent, (i) if the Corporation has established a date by which such consents must be received, the date that is two business days prior to such date, and (ii) in all other instances, the date that is five business days after written notice of such proposed action has been delivered to the Continuing Founders and the Trustee.
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“No Majority Founder Instruction” means (a) in the case of director elections, the votes corresponding to the Class F Common Stock shall be cast to “withhold” or, if unavailable based on the applicable voting standard required to elect a director nominee, such votes shall be cast to “abstain”, (b) in the case of a vote on the frequency of the “say-on-pay” vote, the votes corresponding the Class F Common Stock shall be cast to “abstain”, (c) in the case of all other matters subject to a vote of the stockholders of the Corporation at a meeting, the votes corresponding to the Class F Common Stock shall be cast to “abstain” or “withhold”, so long as the effect thereof would be a vote against such matter, otherwise, such votes shall be cast “against”, and (d) in the case of a proposed stockholder action by written consent, no consent shall be delivered in respect of the Class F Common Stock.
“Ownership Threshold” means100,000,000 Corporation Equity Securities (as equitably adjusted for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event), provided, however,that the Ownership Threshold shall be automatically reduced by the Pro Rata Share of each Founder who is not a Continuing Founder, such reduction to take effect on the date such Founder ceases to be a Continuing Founder.
“Parent” of an entity means any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity.
“Permitted Entity” means, with respect to a Qualified Stockholder, (a) a Permitted Trust solely for the benefit of (i) such Qualified Stockholder and/or (ii) any other Permitted Entity of such Qualified Stockholder, or (b) any general partnership, limited partnership, limited liability company, corporation or other entity exclusively owned by (i) such Qualified Stockholder and/or (ii) any other Permitted Entity of such Qualified Stockholder.
“Permitted Transfer” means any Transfer of a share of Class B Common Stock that satisfies the following requirements:
(a) by a Qualified Stockholder to (i) any Permitted Entity of such Qualified Stockholder or (ii) to another Qualified Stockholder; or
(b) by a Permitted Entity of a Qualified Stockholder to (i) such Qualified Stockholder or (ii) any other Permitted Entity of such Qualified Stockholder;
provided that in the case of any Transfers described in clause (a) and (b) above: (x) all such Transfers by any holder of Class B Common Stock (whether then held or acquired in the future) taken together do not result in shares of Class B Common Stock being “held of record” (as such term is defined in Rule 12g5-1 promulgated under the Exchange Act) by a larger number of stockholders of the Corporation following any such Transfer and (y) any such transfer (1) must result in the Transfer of all of such holder’s shares of Class B Common Stock then held by such holder to such transferee, and (2) such holder or such holder’s legal representative (including a guardian or conservator) must agree that any shares of Class B Common Stock acquired by such holder or such holder’s estate or beneficiary after the date of such Transfer will be automatically Transferred, without further action by such holder or such legal representative, to the same transferee such that neither the Transfer nor any subsequent acquisition of Class B Common Stock results in any shares of Class B Common Stock being “held of record” (as such term is defined in Rule 12g5-1 promulgated under the Exchange Act) by a larger number of stockholders of the Corporation following such Transfer or subsequent acquisition.
“Permitted Transferee” means a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer or a transferee of shares of Class B Common Stock involving consent or approval of the Board of Directors or an officer of the Corporation as described in the definition of “Transfer”.
“Permitted Trust” means a bona fide trust where each trustee is (a) a Qualified Stockholder or (b) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments.
“Person” means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership or other entity.
“Pro Rata Share” means, with respect to a Founder, (1) 100,000,000 Corporation Equity Securities (as equitably adjusted for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event) multiplied by (2) a fraction, the numerator of which shall be the number of Corporation Equity Securities held or owned, directly or indirectly, at the Submission Date by such Founder and such Founder’s Approved Affiliates, on a fully diluted and as converted basis, and the denominator of which shall be the total number of Corporation Equity Securities held or owned, directly or indirectly, at the Submission Date by all Founders and their Approved Affiliates, on a fully diluted and as converted basis.
“Qualified Stockholder” means (a) the registered holder of a share of Class B Common Stock immediately following the Effective Time; (b) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Corporation after the Effective Time pursuant to the exercise or conversion of options or warrants or settlement of convertible securities; (c) each natural person who Transferred shares of or equity awards for Class B Common Stock (including any option or warrant exercisable or convertible into or any convertible securities that can be settled in shares of Class B Common Stock) to a Permitted Entity that is or becomes a Qualified Stockholder pursuant to subclauses (a) or (b) of this definition; (d) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Corporation after the Effective Time (including upon conversion of shares of Class F Common Stock) and (e) a Permitted Transferee.
“Reorganization” means a reorganization or redomiciliation of the Founder Voting Trust undertaken with the written consent of each beneficiary thereof and, if applicable, the Trustee, prior to such reorganization or redomiciliation, which reorganization or redomiciliation does not result in a change in the beneficiaries.
“Secretary” means the Secretary of the Corporation or his or her delegate.
“Securities Act” means the United States Securities Act of 1933, as amended.
“Securities Exchange” means, at any time, the registered national securities exchange on which the Corporation’s Class A Common Stock is then principally listed or traded (or, if the Class A Common Stock is not then listed, the registered national securities exchange on which any other class of the Corporation’s equity securities is then listed).
“Submission Date” means August 10, 2020, which is the date of the Corporation’s submission to the Securities and Exchange Commission of Amendment No. 2 to its confidential registration statement on Form S-1 relating to the shares of Class A Common Stock.
“Transfer” of a share means (x) any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, the dispositive power or Voting Control over such share by proxy or otherwise; (y) any agreement or arrangement (including any warrants, calls, options or other rights or derivative transactions) to take any such actions or cause the occurrence of any such events (whether or not contingent) identified in clause (x); or (z) any act that results in changes to the beneficial ownership of such share, unless, in the case of each of clauses (x), (y) and (z), consent or approval has been previously obtained or is concurrently or subsequently obtained from the Board of Directors or from an officer of the Corporation with delegated authority pursuant to the Bylaws of the Corporation; provided, however, that the following shall not be considered a “Transfer”:
| (a) | the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders of the Corporation;
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| (b) | entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock and/or Class F Common Stock that (i) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary, (ii) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (iii) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner;
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| (c) | the pledge of such shares by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer” or unless consent or approval has been previously obtained or is concurrently or subsequently obtained from the Board of Directors or from an officer of the Corporation with delegated authority pursuant to the Bylaws of the Corporation; or
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| (d) | entering into, amending, extending, renewing, restating, supplementing or otherwise modifying the Voting Agreement, the Voting Trust Agreement or any agreement, arrangement or understanding contemplated by the terms of the Voting Agreement or Voting Trust Agreement, or taking any actions contemplated thereby, including (i) the granting of a proxy, whether or not irrevocable, to any Person and the exercise of such proxy by such Person and (ii) the transfer of shares of Class B Common Stock to the Founder Voting Trust or to one or more beneficiaries of the Founder Voting Trust;
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provided, however, that a “Transfer” shall be deemed to have occurred with respect to such shares beneficially held by (I) an entity that is a Permitted Entity, if there occurs any act or circumstance that causes such entity to no longer be a Permitted Entity or (II) an entity that is a Qualified Stockholder, if there occurs a Transfer on a cumulative basis, from and after the Effective Time, of a majority of the voting power of the voting securities of such entity or any direct or indirect Parent of such entity, other than a Transfer to parties that are, as of the Effective Time, holders of voting securities of any such entity or Parent of such entity.
“True Founder Instruction” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (a) if there are two or three Continuing Founders as of the Instruction Date, (i) if at least two Continuing Founder Instructions contain the same instruction as to how the votes corresponding to the Class F
Common Stock shall be cast in respect of such matter (including a vote of “withhold” or “abstain” that may not constitute a “vote” under the applicable voting standard required to approve the matter or elect the director nominee), or consents corresponding to the Class F Common Stock shall be delivered or not delivered, as applicable, with respect to such matter, such instruction and (ii) otherwise, the No Majority Founder Instruction, and (b) if there is one Continuing Founder as of the Instruction Date with respect to such vote, the instruction contained in such Continuing Founder’s Continuing Founder Instruction; provided that, in the case of this clause (b), if such Continuing Founder has not delivered a Continuing Founder Instruction to the Secretary and the Trustee by the Instruction Date, such Continuing Founder shall be deemed to have delivered as of the Instruction Date a Continuing Founder Instruction corresponding to the No Majority Founder Instruction with respect to such matter.
“Trustee” means the trustee then in office under the Voting Trust Agreement.
“Voting Agreement” means the Voting Agreement, dated on or about the date of the Effective Time, among each of the Founders and Wilmington Trust, National Association, as the grantee of the proxies and powers of attorney set forth therein and not in its capacity as the trustee under the Founder Voting Trust (as amended, supplemented, restated or otherwise modified from time to time).
“Voting Control” means, with respect to a share of capital stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
“Voting Trust Agreement” means the Voting Trust Agreement, dated on or about the date of the Effective Time, among each of the Founders and Wilmington Trust, National Association, as initial trustee (as amended, supplemented, restated or otherwise modified from time to time).
ARTICLE VI
A. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
B. Number of Directors; Election. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, the number of directors that constitutes the entire Board of Directors shall be fixed solely by resolution of the Board of Directors. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, each director of the Corporation, whether before or after the Classified Board Effective Date, shall hold office until the expiration of the term for which he or she is elected and until his or her successor has been duly elected and qualified or until his or her earlier resignation, death or removal. No decrease in the number of directors constituting the Board of Directors, whether before or after the Classified Board Effective Date, shall shorten the term of any incumbent director.
C. Classified Board Structure. From and after the Final Class F Conversion Date, the directors, other than any who may be elected by the holders of any series of Preferred Stock under specified circumstances, shall be divided into three (3) classes as nearly equal in size as is practicable, hereby designated Class I, Class II and Class III. The Board of Directors shall assign members of the Board of Directors already in office to such classes at the time such classification becomes effective (the “Classified Board Effective Date”). The term of office of the initial Class I directors shall expire at the first regularly-scheduled annual meeting of the stockholders of the Corporation following the Classified Board Effective Date, the term of office of the initial Class II directors shall expire at the second annual meeting of the stockholders of the Corporation following the Classified Board Effective Date, and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders of the Corporation following the Classified Board Effective Date. At each annual meeting of stockholders of the Corporation, commencing with the first regularly-scheduled annual meeting of stockholders
of the Corporation following the Classified Board Effective Date, each of the successors elected to replace the directors of a Class whose term shall have expired at such annual meeting shall be elected to hold office for a three year term and until the third annual meeting next succeeding his or her election and until his or her respective successor shall have been duly elected and qualified. Prior to the Classified Board Effective Date, all directors shall be elected at each annual meeting of stockholders of the Corporation to serve until the next annual meeting of stockholders of the Corporation (except, for the avoidance of doubt, as provided in this Article VI, Section C in the event a Classified Board Effective Date occurs) and until his or her successor shall have been duly elected and qualified. From and after the Classified Board Effective Date, if the number of directors is thereafter changed, any newly created directorships or decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as is practicable.
D. Removal; Vacancies. Any director may be removed from office by the stockholders of the Corporation as provided in Section 141(k) of the DGCL. Vacancies occurring on the Board of Directors for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining director, at any meeting of the Board of Directors, and not by stockholders of the Corporation. A person elected to fill a vacancy or newly created directorship shall hold office until, prior to the Classified Board Effective Date, the next annual meeting of the stockholders of the Corporation or, from and after the Classified Board Effective Date, the next election of the class for which such director shall have been chosen and in each case until his or her successor shall be duly elected and qualified.
ARTICLE VII
A. Written Ballot. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.
B. Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.
C. Special Meetings. Special meetings of the stockholders of the Corporation may be called only by (1) the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board; (2) the chairman of the Board of Directors; (3) the chief executive officer of the Corporation; or (4) the president of the Corporation. For the purposes hereof, “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships.
D. Availability of Stockholder Action by Written Consent. Subject to the rights of the holders of any series of Preferred Stock, (1) prior to the Final Class F Conversion Date, any action required or permitted to be taken by the stockholders of the Corporation may be effected by the written consent of the stockholders of the Corporation in lieu of a duly called annual or special meeting of the stockholders of the Corporation; provided that, in addition to any other consent required before such action may be effected, any such action shall require the affirmative consent of the holders of a majority of the outstanding shares of Class F Common Stock, acting as a separate class, and (2) from and after the Final Class F Conversion Date, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by the written consent of the stockholders of the Corporation in lieu of a duly called annual or special meeting of the stockholders of the Corporation.
E. No Cumulative Voting. No stockholder will be permitted to cumulate votes at any election of directors.
F. Section 203 of the DGCL. The Corporation shall not be governed by Section 203 of the DGCL.
ARTICLE VIII
To the fullest extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, 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 DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Neither any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Restated 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 any cause of action, suit 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
The Corporation shall indemnify, to the fullest extent permitted by applicable law, any present or former director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
The Corporation shall have the power to indemnify, to the fullest extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, any employee or agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person only if the Proceeding (or part thereof) was authorized by the Board of Directors.
A right to indemnification or to advancement of expenses arising under a provision of this Restated Certificate of Incorporation or the Bylaws of the Corporation shall not be eliminated or impaired by an amendment to this Restated Certificate of Incorporation or the Bylaws of the Corporation after the occurrence of the act or omission that is the subject of the Proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
A right to indemnification or to advancement of expenses arising under a provision of this Restated Certificate of Incorporation or the Bylaws of the Corporation shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled hereunder or thereunder or under any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in any other capacity while holding such office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
ARTICLE X
If any provision of this Restated Certificate of Incorporation becomes or is declared on any ground by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Restated Certificate of Incorporation, and the court will replace such illegal, void or unenforceable provision of this Restated Certificate of Incorporation with a valid and enforceable provision that most accurately reflects the Corporation’s intent, in order to achieve, to the maximum extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Restated Certificate of Incorporation shall be enforceable in accordance with its terms.
Except as provided in Article VIII and Article IX above, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders of the Corporation herein are granted subject to this reservation.
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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been signed on behalf of the Corporation by its duly authorized officer effective this .
Contents
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PALANTIR TECHNOLOGIES INC. |
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Title:
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APPENDIX A-2
MARKED COPY OF
PALANTIR TECHNOLOGIES INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Palantir Technologies Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
A. The Corporation was originally incorporated under the name of Palantir Technologies Inc., and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on May 6, 2003.
B. This Amended and Restated Certificate of Incorporation (this “Restated Certificate of Incorporation”) was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”), and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the DGCL.
C. The Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
The name of the Corporation is Palantir Technologies Inc.
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange St., Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
ARTICLE IV
A. Classes of Stock. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 24,701,005,000 shares, of which 22,701,005,000 shares shall be Common Stock (the “Common Stock”), par value $0.001 per share, and 2,000,000,000 shares shall be Preferred Stock (the “Preferred Stock”), par value $0.001 per share. 20,000,000,000 shares of the authorized shares of Common Stock are hereby designated Class A Common Stock (the “Class A Common Stock”), 2,700,000,000 shares of the authorized Common Stock are hereby designated Class B Common Stock (the “Class B Common Stock”), and 1,005,000 shares of the authorized Common Stock are hereby designated Class F Common Stock (the “Class F Common Stock”).
Immediately upon the effectiveness of thisAmended and Restated Certificate of Incorporation(the“Effective Time”), and without any further action on the part of the Corporation or any stockholder, each one (1) share of Class A Common Stock of the Company, par value $0.001 per share, that is issued and outstanding or held in treasury immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be re-designated as one (1) share Class A Common Stock, and each one (1) share of Class B Common Stock of the Company, par value $0.001 per share, that is issued and outstanding or held in treasury immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be re-designated as one (1) share of Class B Common Stock.
B. Rights of Preferred Stock. The Board of Directors of the Corporation (the “Board of Directors”) is authorized, subject to any limitations prescribed by law or set forth herein, to provide by resolution for the designation and issuance of 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 (which may include, without limitation, full, limited or no voting powers), preferences, and relative, participating, optional or other special rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and to file a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a “Preferred Stock Designation”), setting forth such resolution or resolutions; provided that, prior to the Final Class F Conversion Date, the Board of Directors shall not designate or issue any series of Preferred Stock without the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a separate class.
C. Vote to Increase or Decrease Authorized Shares of Common Stock and Preferred Stock. The number of authorized shares of Common Stock (or any class thereof) and Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, without a separate vote of the holders of any class of Common Stock or Preferred Stock, or any separate series votes of any series thereof, irrespective of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
D. Rights of Class A Common Stock, Class B Common Stock and Class F Common Stock. The relative powers, rights, qualifications, limitations and restrictions granted to or imposed on the shares of Class A Common Stock, Class B Common Stock and Class F Common Stock are as follows:
1. Voting Rights.
(a) General Right to Vote Together; Exception. Except as otherwise expressly provided herein or required by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class F Common Stock shall vote together as one class on all matters submitted to a vote of the stockholders of the Corporation. Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Class A Common Stock, Class B Common Stock and Class F Common Stock, as such, shall not be entitled to vote on any amendment to this Restated Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the terms of this Restated Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to applicable law; provided that, prior to the Final Class F Conversion Date, any such amendment that affects the number of shares of Preferred Stock, or the designation, powers, preferences, and relative, participating, optional or other special rights of the shares of each such series and any qualifications, limitations or restrictions thereof, shall also require the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a separate class.
(b) Votes Per Share. Except as otherwise expressly provided herein or required by applicable law, on any matter that is submitted to a vote of stockholders of the Corporation:
| i. | Each holder of Class A Common Stock shall be entitled to one (1) vote for each share of Class A Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation.
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| ii. | Each holder of Class B Common Stock shall be entitled to ten (10) votes for each share of Class B Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation.
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| iii. | Each holder of Class F Common Stock shall be entitled to a number of votes for each share of Class F Common Stock held as of the applicable record date on any matter that is submitted to a vote of such stockholders of the Corporation equal to (x) ten (10) votes (I) if the Founder Block, calculated as of the applicable record date, is less than the Ownership
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| Threshold or (II) if the applicable vote is being sought from the holders of the Class F Common Stock separately as a class, solely for such separate class vote, and (y) in all other instances, (1) the Applicable Vote for All Shares of Class F Common Stock divided by (2) the number of outstanding shares of Class F Common Stock. Shares of Class F Common Stock shall be voted only in accordance with the corresponding True Founder Instruction. In determining the “Applicable Vote for All Shares of Class F Common Stock” (as defined below), whether in respect of a matter that is submitted to a vote at a meeting of the stockholders of the Corporation or with respect to an action by written consent,the Corporation shall use reasonable best efforts to,first,performthe procedures set forth in Section 231(b)(1)–(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Corporation (excluding the Class F Common Stock) shall be performed and, second,performthe procedures set forth in Section 231(b)(1)–(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Corporation (including the Class F Common Stock) shall be performed. |
(c) Class F Common Stock Matters.
| i. | Each Founder (or, in the event of his death, such Founder’s estate) shall promptly deliver written notice to the Corporation when any Founder ceases to be a Continuing Founder.
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| ii. | With respect to each matter that is submitted to a vote of the stockholders of the Corporation, (x) the Grantee (or all the Continuing Founders, in a single writing) shall, on or promptly after the applicable record date, submit to the Secretary the number, by class or series, of Founder Shares as of the applicable record date and (y) each Continuing Founder shall, no later than the applicable Instruction Date, deliver to the Secretary, the Trustee and each other Continuing Founder a Continuing Founder Instruction.
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| iii. | Theinformation regarding the Founder Shares furnished by the Grantee (or all the Continuing Founders) to the Secretary pursuant toArticle IV, SectionD.1(c)(ii)(x) shall be presumptive evidence thereof. The Corporation shall calculate thevoting power corresponding to the Class F Common Stock shall be calculated on the basis of such information furnished by the Grantee (or all of the Continuing Founders), unless a court of competent jurisdiction determines in a final, nonappealable order that such information is materially incorrect. Upon the request of a Continuing Founder, before the results of any vote or action of the stockholders of the Corporation are certified or otherwise become effective, the Corporation shall furnish to each Continuing Founder sufficient evidence for each such person to determine whether the Corporation’s calculation of voting power corresponding to the Class F Common Stock was correct and provide any such persons a reasonable opportunity to object to such calculation. Upon the resolution of any such objections, the results of such vote shall be certified or action shall become effective, and thereafter the calculation by the Corporation of the voting power corresponding to the Class F Common Stock in accordance with Article IV, Section D.1(b) and this Article IV, Section D.1(c) shall be conclusive and binding. The Corporation shall not be required to furnish any evidence relating toitsthe calculation of the voting power corresponding to the Class F Common Stock to any Person except as required by law or as specified in the Bylaws of the Corporation and except to the Continuing Founders as provided above.
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| iv. | If the Corporation cannot determine with information available to the Corporation whether the Founder Block is at least equal to the Ownership Threshold, the Corporation may, upon reasonable notice to each of the Trustee and the Continuing Founders, request in writing that evidence be furnished to the Corporation that the Founder Block is at least equal to the Ownership Threshold. Each Continuing Founder shall promptly provide such information to the Secretary, the Trustee and each other Continuing Founder.
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2. Identical Rights. Except as otherwise expressly provided herein or required by applicable law, shares of Class A Common Stock, Class B Common Stock and Class F Common Stock shall have the same rights and
privileges and rank equally, share ratably and be identical in all respects as to all matters, including, without limitation:
(a) Dividends and Distributions. Subject to the rights of any Preferred Stock that may then be outstanding, the holders of Class A Common Stock, Class B Common Stock and Class F Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available for distribution to stockholders of the Corporation, such dividends or other distributions as may be declared from time to time by the Board of Directors. Any dividends or other distributions paid to the holders of shares of Common Stock shall be paid on an equal priority and ratably on a per share basis to the holders of Common Stock, unless different treatment of the shares of any such class is approved by an affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock, Class B Common Stock and Class F Common Stock entitled to vote thereon, each voting separately as a class. Further, the Corporation shall not declare or pay any dividend or make any other distribution to the holders of Common Stock payable in securities of the Corporation unless the same dividend or distribution with the same record date and payment date shall be declared and paid on all shares of Common Stock; provided, however, that (i) dividends or other distributions payable in shares of Class A Common Stock or rights to acquire shares of Class A Common Stock may be declared and paid to the holders of Class A Common Stock without the same dividend or distribution being declared and paid to the holders of the Class B Common Stock or Class F Common Stock if, and only if, a dividend payable in shares of Class B Common Stock or rights to acquire shares of Class B Common Stock is declared and paid to the holders of Class B Common Stock and Class F Common Stock at the same rate and with the same record date and payment date and (ii) dividends or other distributions payable in shares of Class B Common Stock or rights to acquire shares of Class B Common Stock may be declared and paid to the holders of Class B Common Stock and Class F Common Stock without the same dividend or distribution being declared and paid to the holders of the Class A Common Stock if, and only if, a dividend payable in shares of Class A Common Stock, or rights to acquire shares of Class A Common Stock, is declared and paid to the holders of Class A Common Stock at the same rate and with the same record date and payment date; and provided, further, that nothing in the foregoing shall prevent the Corporation from declaring and paying dividends or other distributions payable in shares of one class of Common Stock (other than Class F Common Stock) or rights to acquire one class of Common Stock (other than Class F Common Stock) to holders of all classes of Common Stock.
(b) Subdivision or Combination. If the Corporation in any manner subdivides or combines the outstanding shares of Class A Common Stock, Class B Common Stock or Class F Common Stock, the outstanding shares of the other such classes will be subdivided or combined in the same proportion and manner, unless different treatment of the shares of each such class is approved (i) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon and (ii) if the voting rights or economic rights of one class of Common Stock would be adversely affected by such subdivision or combination relative to the voting rights or economic rights of any other class of Common Stock, by the affirmative vote of the holders of a majority of the outstanding shares of such class, voting separately.
(c) Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, in connection with which assets are to be distributed to stockholders of the Corporation, subject to the rights of any Preferred Stock that may then be outstanding, the assets of the Corporation legally available for distribution to stockholders of the Corporation shall be distributed on an equal priority and ratably on a per share basis to the holders of Common Stock, unless different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock, Class B Common Stock and Class F Common Stock entitled to vote thereon, each voting separately as a class.
(d) Merger or Consolidation. In the case of any consolidation or merger of the Corporation with or into any other entity, or in the case of any other transaction having an effect on stockholders of the Corporation substantially similar to that resulting from a consolidation or merger, each share of Common Stock must be converted into the same securities, cash or other property (including the same rights to elect among different
forms of consideration); provided, however, that (1) the foregoing shall not apply to any such combination, merger or other transaction in which each share of Common Stock remains outstanding as a share of the same class of Common Stock and is not converted into other securities, cash or other property, and (2) shares of any class of Common Stock may be converted into, or the holders thereof may have the right to elect to receive, different securities in connection with such consolidation, merger or other transaction if the only difference in the securities being issued to the holders of the Class A Common Stock, Class B Common Stock and Class F Common Stock is that the voting power of such securities is proportionate to the voting power of the shares of such class in the Corporation.
(e) Certain Transactions. If the Corporation enters into any transaction, other than a restructuring transaction or a transaction that otherwise does not involve a Change of Control, which transaction requires, pursuant to Section 251(c) or Section 271(a) of the DGCL, the approval of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, such transaction shall be subject to approval by the holders of at least fifty-five percent (55.0%) of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon if the record date for determining the stockholders entitled to vote to approve such transaction occurs prior to the Final Class F Conversion Date.
3. Conversion of Class B Common Stock.
(a) Voluntary Conversion. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
(b) Automatic Conversion. Each share of Class B Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the earlier of:
| i. | a Transfer of such share other than a Permitted Transfer; and
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| ii. | the date or the happening of a future event specified by a written notice and certification request of the Corporation to the holder of such share of Class B Common Stock requesting a certification, in a form satisfactory to the Corporation, verifying such holder’s ownership of Class B Common Stock and confirming that a conversion to Class A Common Stock has not occurred, which date shall not be less than sixty (60) calendar days after the date such notice and certification request is sent; provided that no such automatic conversion pursuant to this subsection ii shall occur in the case of a Qualified Stockholder or its Permitted Transferees that furnishes a certification satisfactory to the Corporation prior to the specified date.
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(c) Procedures. The Corporation shall not be obligated to issue certificates evidencing the shares of Class A Common Stock issuable on such conversion unless the certificates evidencing such shares of Class B Common Stock, if any such certificates have been issued, are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation may, from time to time, establish such other policies and procedures relating to the conversion of Class B Common Stock to Class A Common Stock and the general administration of this multi-class stock structure, including the issuance of stock certificates (or the establishment of book-entry positions) with respect thereto, as it may deem reasonably necessary or advisable, and may from time to time request that holders of shares of Class B Common Stock furnish certifications, affidavits or other proof to the Corporation as it deems necessary to verify the ownership of Class B Common Stock and to confirm that a conversion to Class A Common Stock has not occurred. The Secretary shall determine whether a Transfer or other event giving rise to a conversion has occurred that results in a conversion to Class A Common Stock, and such determination shall be conclusive and binding.
(d) Immediate Effect. In the event of a conversion of shares of Class B Common Stock to shares of Class A Common Stock pursuant to this Article IV, Section D.3, such conversion(s) shall be deemed to have
been made at the time of the applicable Transfer or event; provided that,in the case of a share issuable or deliverable by the Corporation, upon any of the conversion of another security, the exercise of an option or warrant or similar arrangement, the occurrence or non-occurrence of a contingency, or upon vesting, the conversion of such shares of Class B Common Stock to shares of Class A Common Stock pursuant to Article IV, Section D.3(b)i shall occur immediately following issuance or delivery. For the avoidance of doubt, if the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act, the conversion may, at the option of any holder tendering Class B Common Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the persons entitled to receive the Class A Common Stock upon conversion of the Class B Common Stock shall not be deemed to have converted such Class B Common Stock until immediately prior to the closing of such sale of securities. Upon any conversion of Class B Common Stock to Class A Common Stock, all rights of the holder of shares of Class B Common Stock shall cease and the person or persons in whose name or names the certificate or certificates (or book-entry position(s)) 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. Following any such conversion, the reissuance of such shares of Class B Common Stock shall be prohibited, and such shares shall be retired in accordance with Section 243 of the DGCL and the filing by the Secretary of State of the State of Delaware required thereby.
(e) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock or out of shares of Class A Common Stock held in its treasury, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
4. Conversion of Class F Common Stock.
(a) Voluntary Conversion. Each share of Class F Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class B Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
(b) Automatic Conversion of all Outstanding Class F Common Stock. Each share of Class F Common Stock shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of Class B Common Stock upon the Final Class F Conversion Date.
(c) Procedures. The Corporation shall not be obligated to issue certificates evidencing the shares of Class B Common Stock issuable on such conversion unless the certificates evidencing such shares of Class F Common Stock, if any such certificates have been issued, are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation may, from time to time, establish such other policies and procedures relating to the conversion of Class F Common Stock to Class B Common Stock and the general administration of this multi-class stock structure, including the issuance of stock certificates (or the establishment of book-entry positions) with respect thereto, as it may deem reasonably necessary or advisable. The Secretary shall determine whether an event has occurred that results in a conversion to Class B Common Stock, and such determination shall be conclusive and binding.
(d) Immediate Effect. Upon any conversion of Class F Common Stock to Class B Common Stock, all rights of the holder of shares of Class F Common Stock shall cease and the person or persons in whose name or names the certificate or certificates (or book-entry position(s)) representing the shares of Class B 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 B Common Stock. Following any such conversion, the reissuance of such shares of Class F Common Stock shall be prohibited, and such shares shall be retired in accordance with Section 243 of the DGCL and the filing by the Secretary of State of the State of Delaware required thereby.
(e) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares or out of shares held in its treasury of (i) Class B Common Stock, solely for the
purpose of effecting the conversion of the shares of Class F Common Stock, such number of its shares of Class B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class F Common Stock into shares of Class B Common Stock and (ii) Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock issuable upon conversion of Class F Common Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all shares of Class B Common Stock issuable upon conversion of outstanding Class F Common Stock into shares of Class A Common Stock.
5. Transfer Restrictions on Class F Common Stock. (a) Any transfer or purported transfer of shares of Class F Common Stock or any legal or beneficial interest in such shares shall be null and void. Any transaction or series of transactions undertaken to effect a Reorganization shall not be considered a transfer or purported transfer of shares of Class F Common Stock. A holder of Class F Common Stock may surrender shares of Class F Common Stock to the Corporation for cancellation at any time. If a Person shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported transferee or owner (the “Purported Owner”) of shares of Class F Common Stock by a purported transfer, then the Purported Owner shall not obtain any rights in, to or with respect to such shares of Class F Common Stock, and the purported transfer of such shares to the Purported Owner shall not be recognized by the Corporation. For the avoidance of doubt, actions described in clauses (a) and (d) of the definition of Transfer in Article V below are not prohibited.
(b) Certificates. All certificates or book entries representing shares of Class F Common Stock shall bear a legend substantially in the following form (or in such other form as the Board of Directors may determine):
THE SECURITIES REPRESENTED BY THIS [CERTIFICATE][BOOK ENTRY] ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION AS IT MAY BE AMENDED AND/OR RESTATED (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR).
E. No Further Issuances. Except for (1) a dividend payable or subdivision in accordance with Article IV, Section D.2 and (2) the exchange of shares of Class B Common Stock held in the Founder Voting Trust for shares of Class F Common Stock immediately after theeffectiveness of the Corporation’s previous Amended and Restated Certificate of Incorporation on September 22, 2020 (the “Effective Time”), the Corporation shall not at any time after the Effective Time issue any additional shares of Class F Common Stock, unless such issuance is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class F Common Stock, voting as a single class. After the Final Class F Conversion Date, the Corporation shall not issue any additional shares of Class F Common Stock.
ARTICLE V
The following terms, where capitalized in this Restated Certificate of Incorporation, shall have the meanings ascribed to them in this Article V:
“Applicable Vote for All Shares of Class F Common Stock” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (1) the number of votes (which shall not be less than zero and which shall be rounded down to the nearest whole number) that equal 49.999999% of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote on such matter (including in the case of the election of directors), reduced to the number of votes (which shall not be less than zero and which shall be rounded down to the nearest whole number) that equal 49.999999% of the voting power of the shares present in person or represented by proxy and entitled to vote on such matter only if a majority of the shares present in person or represented by proxy and entitled to vote on such matter is the applicable voting standard, in each case minus (2) the number of votes corresponding to the Founder Shares entitled to vote on such matter.
“Approved Affiliate” means, with respect to a Continuing Founder, any affiliate thereof that has been approved by the Secretary or the Treasurer of the Corporation.
“Change of Control” means, any transaction the result of which is that any person (other than one or more of the Founders or their respective controlled affiliates) becomes the beneficial owner, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of capital stock of the Corporation. For purposes of this definition, (i) the term “person” shall be defined as that term is used in Section 13(d)(3) of the Exchange Act; (ii) the term “beneficial owner” shall be defined as that term is used in Rules 13d-3 and 13d-5 under the Exchange Act; and (iii) any direct or indirect parent company of the Corporation shall not itself be considered a “person” for purposes of this definition, so long as holders of capital stock of the Corporation are the beneficial owners, directly or indirectly, of more than 50% of the voting power of all of the outstanding shares of capital stock of such company.
“Continuing Founder” means, on any date of determination, each Founder that is then a party to the Voting Agreement.
“Continuing Founder Instruction” means, with respect to any matter subject to a vote of the stockholders of the Corporation, a written instruction delivered by a Continuing Founder to the Secretary, the Trustee and each other Continuing Founder identifying how such Continuing Founder desires (a) votes corresponding to the Class F Common Stock to be cast (including a vote of “withhold” or “abstain” that may not constitute a “vote” under the applicable voting standard required to approve the matter or elect the director nominee), or (b) consents corresponding to the Class F Common Stock be delivered or not delivered, as applicable, in each case with respect to such matter.
“Corporation Equity Securities” means (a) any securities having voting rights in the election of the Board of Directors, (b) any equity securities evidencing an ownership interest in the Corporation, (c) any equity securities, whether vested or unvested, convertible into or exchangeable or exercisable for any shares of the foregoing, (d) any warrants, calls, options or other rights, whether vested or unvested, to acquire from the Corporation any shares of the foregoing, (e) any other obligation of the Corporation, whether vested or unvested, to issue or deliver any of the foregoing, (f) any rights granted by the Corporation to receive any value based on or linked to the value of any of the foregoing, and (g) any securities of the Corporation as would be identified on a Schedule 13D or Schedule 13G pursuant to Rule 13d-101 or Rule 13d-102, respectively, under the Exchange Act (or any successor form), including any footnotes therein and after giving effect to any disclaimers of beneficial ownership, in the case of each of clauses (a)–(g), without duplication and except for any securities specifically designated in writing from time to time by a Continuing Founder, accompanied by signed acknowledgments from each other Continuing Founder, to the Secretary (securities so designated, “Designated Founders’ Excluded Shares”).
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
“Final Class F Conversion Date” means the earliest of:
(a) the effective date of the termination of the Founder Voting Trust, other than any termination that occurs in connection with a Reorganization; and
(b) the effective date of the termination of the Voting Agreement.
“Founders”means Alexander Karp, Stephen Cohen and Peter Thiel, and each, a “Founder”.
“Founder Block” means the aggregate number of Corporation Equity Securities held or owned, directly or indirectly, by any of (a) a Continuing Founder or (b) an Approved Affiliate of a Continuing Founder, in the case of each of clauses (a) and (b), calculated on a fully diluted and as converted basis.
“Founder Shares” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (a) all Corporation Equity Securities entitled to vote on such matter held or owned, directly or
indirectly, by the Continuing Founders to which the Grantee has a proxy and power of attorney granted pursuant to the Voting Agreement to vote such shares in the same manner as the shares of Class F Common Stock will be voted by the Trustee plus (b) any other Corporation Equity Securities entitled to vote on such matter to which the Grantee has a proxy and power of attorney granted pursuant to the Voting Agreement to vote such shares in the same manner as the shares of Class F Common Stock will be voted by the Trustee plus (c) any Designated Founders’ Excluded Shares.
“Founder Voting Trust” means the voting trust established pursuant to the Voting Trust Agreement (and any successor thereto following a Reorganization).
“Grantee” means the grantee of the proxies and powers of attorney to vote shares of one or more classes of capital stock of the Corporation in the same manner as the shares of Class F Common Stock will be voted by the Trustee, in accordance with the Voting Agreement.
“Independent Directors” means the members of the Board of Directors designated as independent directors in accordance with the requirements of the Securities Exchange that are generally applicable to companies with common equity securities listed thereon (or if the Corporation’s equity securities are not listed for trading on a Securities Exchange, the requirements of the New York Stock Exchange generally applicable to companies with common equity securities listed thereon).
“Instruction Date” means:
| (a) | for any annual or special meeting of the stockholders of the Corporation, the date that is three business days prior to the date of such meeting; and
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| (b) | for any stockholder action by written consent, (i) if the Corporation has established a date by which such consents must be received, the date that is two business days prior to such date, and (ii) in all other instances, the date that is five business days after written notice of such proposed action has been delivered to the Continuing Founders and the Trustee.
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“No Majority Founder Instruction” means (a) in the case of director elections, the votes corresponding to the Class F Common Stock shall be cast to “withhold” or, if unavailable based on the applicable voting standard required to elect a director nominee, such votes shall be cast to “abstain”, (b) in the case of a vote on the frequency of the “say-on-pay” vote, the votes corresponding the Class F Common Stock shall be cast to “abstain”, (c) in the case of all other matters subject to a vote of the stockholders of the Corporation at a meeting, the votes corresponding to the Class F Common Stock shall be cast to “abstain” or “withhold”, so long as the effect thereof would be a vote against such matter, otherwise, such votes shall be cast “against”, and (d) in the case of a proposed stockholder action by written consent, no consent shall be delivered in respect of the Class F Common Stock.
“Ownership Threshold” means100,000,000 Corporation Equity Securities (as equitably adjusted for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event), provided, however,that the Ownership Threshold shall be automatically reduced by the Pro Rata Share of each Founder who is not a Continuing Founder, such reduction to take effect on the date such Founder ceases to be a Continuing Founder.
“Parent” of an entity means any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity.
“Permitted Entity” means, with respect to a Qualified Stockholder, (a) a Permitted Trust solely for the benefit of (i) such Qualified Stockholder and/or (ii) any other Permitted Entity of such Qualified Stockholder, or (b) any general partnership, limited partnership, limited liability company, corporation or other entity exclusively owned by (i) such Qualified Stockholder and/or (ii) any other Permitted Entity of such Qualified Stockholder.
“Permitted Transfer” means any Transfer of a share of Class B Common Stock that satisfies the following requirements:
(a) by a Qualified Stockholder to (i) any Permitted Entity of such Qualified Stockholder or (ii) to another Qualified Stockholder; or
(b) by a Permitted Entity of a Qualified Stockholder to (i) such Qualified Stockholder or (ii) any other Permitted Entity of such Qualified Stockholder;
provided that in the case of any Transfers described in clause (a) and (b) above: (x) all such Transfers by any holder of Class B Common Stock (whether then held or acquired in the future) taken together do not result in shares of Class B Common Stock being “held of record” (as such term is defined in Rule 12g5-1 promulgated under the Exchange Act) by a larger number of stockholders of the Corporation following any such Transfer and (y) any such transfer (1) must result in the Transfer of all of such holder’s shares of Class B Common Stock then held by such holder to such transferee, and (2) such holder or such holder’s legal representative (including a guardian or conservator) must agree that any shares of Class B Common Stock acquired by such holder or such holder’s estate or beneficiary after the date of such Transfer will be automatically Transferred, without further action by such holder or such legal representative, to the same transferee such that neither the Transfer nor any subsequent acquisition of Class B Common Stock results in any shares of Class B Common Stock being “held of record” (as such term is defined in Rule 12g5-1 promulgated under the Exchange Act) by a larger number of stockholders of the Corporation following such Transfer or subsequent acquisition.
“Permitted Transferee” means a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer or a transferee of shares of Class B Common Stock involving consent or approval of the Board of Directors or an officer of the Corporation as described in the definition of “Transfer”.
“Permitted Trust” means a bona fide trust where each trustee is (a) a Qualified Stockholder or (b) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments.
“Person” means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership or other entity.
“Pro Rata Share” means, with respect to a Founder, (1) 100,000,000 Corporation Equity Securities (as equitably adjusted for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event) multiplied by (2) a fraction, the numerator of which shall be the number of Corporation Equity Securities held or owned, directly or indirectly, at the Submission Date by such Founder and such Founder’s Approved Affiliates, on a fully diluted and as converted basis, and the denominator of which shall be the total number of Corporation Equity Securities held or owned, directly or indirectly, at the Submission Date by all Founders and their Approved Affiliates, on a fully diluted and as converted basis.
“Qualified Stockholder” means (a) the registered holder of a share of Class B Common Stock immediately following the Effective Time; (b) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Corporation after the Effective Time pursuant to the exercise or conversion of options or warrants or settlement of convertible securities; (c) each natural person who Transferred shares of or equity awards for Class B Common Stock (including any option or warrant exercisable or convertible into or any convertible securities that can be settled in shares of Class B Common Stock) to a Permitted Entity that is or becomes a Qualified Stockholder pursuant to subclauses (a) or (b) of this definition; (d) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Corporation after the Effective Time (including upon conversion of shares of Class F Common Stock) and (e) a Permitted Transferee.
“Reorganization” means a reorganization or redomiciliation of the Founder Voting Trust undertaken with the written consent of each beneficiary thereof and, if applicable, the Trustee, prior to such reorganization or redomiciliation, which reorganization or redomiciliation does not result in a change in the beneficiaries.
“Secretary” means the Secretary of the Corporation or his or her delegate.
“Securities Act” means the United States Securities Act of 1933, as amended.
“Securities Exchange” means, at any time, the registered national securities exchange on which the Corporation’s Class A Common Stock is then principally listed or traded (or, if the Class A Common Stock is not then listed, the registered national securities exchange on which any other class of the Corporation’s equity securities is then listed).
“Submission Date” means August 10, 2020, which is the date of the Corporation’s submission to the Securities and Exchange Commission of Amendment No. 2 to its confidential registration statement on Form S-1 relating to the shares of Class A Common Stock.
“Transfer” of a share means (x) any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, the dispositive power or Voting Control over such share by proxy or otherwise; (y) any agreement or arrangement (including any warrants, calls, options or other rights or derivative transactions) to take any such actions or cause the occurrence of any such events (whether or not contingent) identified in clause (x); or (z) any act that results in changes to the beneficial ownership of such share, unless, in the case of each of clauses (x), (y) and (z), consent or approval has been previously obtained or is concurrently or subsequently obtained from the Board of Directors or from an officer of the Corporation with delegated authority pursuant to the Bylaws of the Corporation; provided, however, that the following shall not be considered a “Transfer”:
| (a) | the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders of the Corporation;
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| (b) | entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock and/or Class F Common Stock that (i) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary, (ii) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (iii) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner;
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| (c) | the pledge of such shares by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer” or unless consent or approval has been previously obtained or is concurrently or subsequently obtained from the Board of Directors or from an officer of the Corporation with delegated authority pursuant to the Bylaws of the Corporation; or
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| (d) | entering into, amending, extending, renewing, restating, supplementing or otherwise modifying the Voting Agreement, the Voting Trust Agreement or any agreement, arrangement or understanding contemplated by the terms of the Voting Agreement or Voting Trust Agreement, or taking any actions contemplated thereby, including (i) the granting of a proxy, whether or not irrevocable, to any Person and the exercise of such proxy by such Person and (ii) the transfer of shares of Class B Common Stock to the Founder Voting Trust or to one or more beneficiaries of the Founder Voting Trust;
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provided, however, that a “Transfer” shall be deemed to have occurred with respect to such shares beneficially held by (I) an entity that is a Permitted Entity, if there occurs any act or circumstance that causes such entity to no longer be a Permitted Entity or (II) an entity that is a Qualified Stockholder, if there occurs a Transfer on a
cumulative basis, from and after the Effective Time, of a majority of the voting power of the voting securities of such entity or any direct or indirect Parent of such entity, other than a Transfer to parties that are, as of the Effective Time, holders of voting securities of any such entity or Parent of such entity.
“True Founder Instruction” means, with respect to any matter subject to a vote of the stockholders of the Corporation, (a) if there are two or three Continuing Founders as of the Instruction Date, (i) if at least two Continuing Founder Instructions contain the same instruction as to how the votes corresponding to the Class F Common Stock shall be cast in respect of such matter (including a vote of “withhold” or “abstain” that may not constitute a “vote” under the applicable voting standard required to approve the matter or elect the director nominee), or consents corresponding to the Class F Common Stock shall be delivered or not delivered, as applicable, with respect to such matter, such instruction and (ii) otherwise, the No Majority Founder Instruction, and (b) if there is one Continuing Founder as of the Instruction Date with respect to such vote, the instruction contained in such Continuing Founder’s Continuing Founder Instruction; provided that, in the case of this clause (b), if such Continuing Founder has not delivered a Continuing Founder Instruction to the Secretary and the Trustee by the Instruction Date, such Continuing Founder shall be deemed to have delivered as of the Instruction Date a Continuing Founder Instruction corresponding to the No Majority Founder Instruction with respect to such matter.
“Trustee” means the trustee then in office under the Voting Trust Agreement.
“Voting Agreement” means the Voting Agreement, dated on or about the date of the Effective Time, among each of the Founders and Wilmington Trust, National Association, as the grantee of the proxies and powers of attorney set forth therein and not in its capacity as the trustee under the Founder Voting Trust (as amended, supplemented, restated or otherwise modified from time to time).
“Voting Control” means, with respect to a share of capital stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
“Voting Trust Agreement” means the Voting Trust Agreement, dated on or about the date of the Effective Time, among each of the Founders and Wilmington Trust, National Association, as initial trustee (as amended, supplemented, restated or otherwise modified from time to time).
ARTICLE VI
A. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
B. Number of Directors; Election. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, the number of directors that constitutes the entire Board of Directors shall be fixed solely by resolution of the Board of Directors. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, each director of the Corporation, whether before or after the Classified Board Effective Date, shall hold office until the expiration of the term for which he or she is elected and until his or her successor has been duly elected and qualified or until his or her earlier resignation, death or removal. No decrease in the number of directors constituting the Board of Directors, whether before or after the Classified Board Effective Date, shall shorten the term of any incumbent director.
C. Classified Board Structure. From and after the Final Class F Conversion Date, the directors, other than any who may be elected by the holders of any series of Preferred Stock under specified circumstances, shall be divided into three (3) classes as nearly equal in size as is practicable, hereby designated Class I, Class II and Class III. The Board of Directors shall assign members of the Board of Directors already in office to such
classes at the time such classification becomes effective (the “Classified Board Effective Date”). The term of office of the initial Class I directors shall expire at the first regularly-scheduled annual meeting of the stockholders of the Corporation following the Classified Board Effective Date, the term of office of the initial Class II directors shall expire at the second annual meeting of the stockholders of the Corporation following the Classified Board Effective Date, and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders of the Corporation following the Classified Board Effective Date. At each annual meeting of stockholders of the Corporation, commencing with the first regularly-scheduled annual meeting of stockholders of the Corporation following the Classified Board Effective Date, each of the successors elected to replace the directors of a Class whose term shall have expired at such annual meeting shall be elected to hold office for a three year term and until the third annual meeting next succeeding his or her election and until his or her respective successor shall have been duly elected and qualified. Prior to the Classified Board Effective Date, all directors shall be elected at each annual meeting of stockholders of the Corporation to serve until the next annual meeting of stockholders of the Corporation (except, for the avoidance of doubt, as provided in this Article VI, Section C in the event a Classified Board Effective Date occurs) and until his or her successor shall have been duly elected and qualified. From and after the Classified Board Effective Date, if the number of directors is thereafter changed, any newly created directorships or decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as is practicable.
D. Removal; Vacancies. Any director may be removed from office by the stockholders of the Corporation as provided in Section 141(k) of the DGCL. Vacancies occurring on the Board of Directors for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining director, at any meeting of the Board of Directors, and not by stockholders of the Corporation. A person elected to fill a vacancy or newly created directorship shall hold office until, prior to the Classified Board Effective Date, the next annual meeting of the stockholders of the Corporation or, from and after the Classified Board Effective Date, the next election of the class for which such director shall have been chosen and in each case until his or her successor shall be duly elected and qualified.
ARTICLE VII
A. Written Ballot. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.
B. Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.
C. Special Meetings. Special meetings of the stockholders of the Corporation may be called only by (1) the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board; (2) the chairman of the Board of Directors; (3) the chief executive officer of the Corporation; or (4) the president of the Corporation. For the purposes hereof, “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships.
D. Availability of Stockholder Action by Written Consent. Subject to the rights of the holders of any series of Preferred Stock, (1) prior to the Final Class F Conversion Date, any action required or permitted to be taken by the stockholders of the Corporation may be effected by the written consent of the stockholders of the Corporation in lieu of a duly called annual or special meeting of the stockholders of the Corporation; provided that, in addition to any other consent required before such action may be effected, any such action shall require the affirmative consent of the holders of a majority of the outstanding shares of Class F Common Stock, acting as a separate class, and (2) from and after the Final Class F Conversion Date, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by the written consent of the stockholders of the Corporation in lieu of a duly called annual or special meeting of the stockholders of the Corporation.
E. No Cumulative Voting. No stockholder will be permitted to cumulate votes at any election of directors.
F. Section 203 of the DGCL. The Corporation shall not be governed by Section 203 of the DGCL.
ARTICLE VIII
To the fullest extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, 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 DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Neither any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Restated 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 any cause of action, suit 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
The Corporation shall indemnify, to the fullest extent permitted by applicable law, any present or former director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
The Corporation shall have the power to indemnify, to the fullest extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, any employee or agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person only if the Proceeding (or part thereof) was authorized by the Board of Directors.
A right to indemnification or to advancement of expenses arising under a provision of this Restated Certificate of Incorporation or the Bylaws of the Corporation shall not be eliminated or impaired by an amendment to this Restated Certificate of Incorporation or the Bylaws of the Corporation after the occurrence of the act or omission that is the subject of the Proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
A right to indemnification or to advancement of expenses arising under a provision of this Restated Certificate of Incorporation or the Bylaws of the Corporation shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled hereunder or thereunder or under any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action
in such person’s official capacity and as to action in any other capacity while holding such office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
ARTICLE X
If any provision of this Restated Certificate of Incorporation becomes or is declared on any ground by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Restated Certificate of Incorporation, and the court will replace such illegal, void or unenforceable provision of this Restated Certificate of Incorporation with a valid and enforceable provision that most accurately reflects the Corporation’s intent, in order to achieve, to the maximum extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Restated Certificate of Incorporation shall be enforceable in accordance with its terms.
Except as provided in Article VIII and Article IX above, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders of the Corporation herein are granted subject to this reservation.
* * *
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been signed on behalf of the Corporation by its duly authorized officer effective this22nd day of September, 2020.
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PALANTIR TECHNOLOGIES INC. |
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By: | | /s/ Alexander Karp
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AlexanderKarpName:
Chief ExecutiveOfficerTitle:
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APPENDIX B-1
AMENDED AND RESTATED BYLAWS OF
PALANTIR TECHNOLOGIES INC.
(effective as of )
TABLE OF CONTENTS
(continued)
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BYLAWS OF PALANTIR TECHNOLOGIES INC.
ARTICLE I - CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of Palantir Technologies Inc. (the “Company”) shall be fixed in the Company’s certificate of incorporation, as the same may be amended from time to time.
1.2 OTHER OFFICES
The Company may at any time establish other offices.
ARTICLE II - MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at a place, if any, within or outside the State of Delaware, determined by the board of directors of the Company (the “Board of Directors”). The Board of Directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the Company’s principal executive office.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year. The Board of Directors shall designate the date and time of the annual meeting. At the annual meeting, directors shall be elected and any other proper business, brought in accordance with Section 2.4 of these bylaws, may be transacted. The Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, or the chairperson of the meeting, may cancel, postpone or reschedule any previously scheduled annual meeting at any time, before or after the notice for such meeting has been sent to the stockholders. For the purposes of these bylaws, the term “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships.
2.3 SPECIAL MEETING
(a) A special meeting of the stockholders, other than as required by statute, may be called at any time by (i) the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, (ii) the chairperson of the Board of Directors, (iii) the chief executive officer or (iv) the president, but a special meeting may not be called by any other person or persons, and any power of stockholders to call a special meeting of stockholders is specifically denied. The Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, or the chairperson of the meeting, may cancel, postpone or reschedule any previously scheduled special meeting at any time, before or after the notice for such meeting has been sent to the stockholders.
(b) The notice of a special meeting shall include the purpose for which the meeting is called. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the
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meeting by or at the direction of a majority of the Whole Board, the chairperson of the Board of Directors, the chief executive officer or the president. Nothing contained in this Section 2.3(b) shall be construed as limiting, fixing or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
2.4 ADVANCE NOTICE PROCEDURES
(a) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (1) pursuant to the Company’s notice of meeting (or any supplement thereto); (2) by or at the direction of the Board of Directors; (3) as may be provided in the certificate of designations for any class or series of preferred stock; or (4) by any stockholder of the Company who (A) is a stockholder of record at the time of giving of the notice contemplated by Section 2.4(a)(ii); (B) is a stockholder of record on the record date for the determination of stockholders entitled to notice of the annual meeting; (C) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the annual meeting; (D) is a stockholder of record at the time of the annual meeting; and (E) complies with the procedures set forth in this Section 2.4(a).
(ii) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (4) of Section 2.4(a)(i), the stockholder must have given timely notice in writing to the secretary and any such nomination or proposed business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day and no later than 5:00 p.m., local time, on the 90th day prior to the day of the first anniversary of the preceding year’s annual meeting of stockholders. However, if no annual meeting of stockholders was held in the preceding year, or if the date of the applicable annual meeting has been changed by more than 25 days from the first anniversary of the preceding year’s annual meeting, then to be timely such notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the annual meeting and no later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Company. In no event will the adjournment, rescheduling or postponement of any annual meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. If the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors at least 10 days before the last day that a stockholder may deliver a notice of nomination pursuant to the foregoing provisions, then a stockholder’s notice required by this Section 2.4(a)(ii) will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the secretary at the principal executive offices of the Company no later than 5:00 p.m., local time, on the 10th day following the day on which such public announcement is first made. “Public announcement” means disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (as amended and inclusive of rules and regulations thereunder, the “1934 Act”).
(iii) A stockholder’s notice to the secretary must set forth:
(1) as to each person whom the stockholder proposes to nominate for election as a director:
(A) such person’s name, age, business address, residence address and principal occupation or employment; the class and number of shares of the Company that are held of record or are beneficially owned by such person and a description of any Derivative Instruments (defined below) held or beneficially owned thereby or of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage
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the risk or benefit of share price changes for, or to increase or decrease the voting power of such person; and all information relating to such person that is required to be disclosed in solicitations of proxies for the contested election of directors, or is otherwise required, in each case pursuant to the Section 14 of the 1934 Act;
(B) such person’s written consent to being named in such stockholder’s proxy statement as a nominee of such stockholder and to serving as a director of the Company if elected;
(C) a reasonably detailed description of any direct or indirect compensatory, payment, indemnification or other financial agreement, arrangement or understanding that such person has, or has had within the past three years, with any person or entity other than the Company (including the amount of any payment or payments received or receivable thereunder), in each case in connection with candidacy or service as a director of the Company (a “Third-Party Compensation Arrangement”); and
(D) a description of any other material relationships between such person and such person’s respective affiliates and associates, or others acting in concert with them, on the one hand, and such stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their respective affiliates and associates, or others acting in concert with them, on the other hand;
(2) as to any other business that the stockholder proposes to bring before the annual meeting:
(A) a brief description of the business desired to be brought before the annual meeting;
(B) the text of the proposal or business (including the text of any resolutions proposed for consideration and, if applicable, the text of any proposed amendment to these bylaws or the Company’s certificate of incorporation);
(C) the reasons for conducting such business at the annual meeting;
(D) any material interest in such business of such stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates and associates, or others acting in concert with them; and
(E) a description of all agreements, arrangements and understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates or associates or others acting in concert with them, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder; and
(3) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:
(A) the name and address of such stockholder (as they appear on the Company’s books), of such beneficial owner and of their respective affiliates or associates or others acting in concert with them;
(B) for each class or series, the number of shares of stock of the Company that are, directly or indirectly, held of record or are beneficially owned by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(C) a description of any agreement, arrangement or understanding between such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with
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them, and any other person or persons (including, in each case, their names) in connection with the proposal of such nomination or other business;
(D) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities (any of the foregoing, a “Derivative Instrument”), or any other agreement, arrangement or understanding that has been made the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for or increase or decrease the voting power of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities;
(E) any rights to dividends on the Company’s securities owned beneficially by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, that are separated or separable from the underlying security;
(F) any proportionate interest in the Company’s securities or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;
(G) any performance-related fees (other than an asset-based fee) that such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with, them is entitled to based on any increase or decrease in the value of the Company’s securities or Derivative Instruments, including, without limitation, any such interests held by members of the immediate family of such persons sharing the same household;
(H) any significant equity interests or any Derivative Instruments in any principal competitor of the Company that are held by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(I) any direct or indirect interest of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (in each case, including any employment agreement, collective bargaining agreement or consulting agreement);
(J) a representation and undertaking that the stockholder is a holder of record of stock of the Company as of the date of submission of the stockholder’s notice and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;
(K) a representation and undertaking that such stockholder or any such beneficial owner intends, or is part of a group that intends, to (x) deliver a proxy statement or form of proxy to holders of at least the percentage of the voting power of the Company’s then-outstanding stock required to approve or adopt the proposal or to elect each such nominee; or (y) otherwise solicit proxies from stockholders in support of such proposal or nomination;
(L) any other information relating to such stockholder, such beneficial owner, or their respective affiliates or associates or others acting in concert with them, or director nominee or proposed business that, in each case, would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee (in a contested election of directors) or proposal pursuant to Section 14 of the 1934 Act; and
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(M) such other information relating to any proposed item of business as the Company may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
(iv) In addition to the requirements of this Section 2.4, to be timely, a stockholder’s notice (and any additional information submitted to the Company in connection therewith) must further be updated and supplemented (1) if necessary, so that the information provided or required to be provided in such notice is true and correct as of the record date(s) for determining the stockholders entitled to notice of, and to vote at, the meeting and as of the date that is 10 days prior to the meeting or any adjournment, rescheduling or postponement thereof and (2) to provide any additional information that the Company may reasonably request. Such update and supplement or additional information, if applicable, must be received by the secretary at the principal executive offices of the Company, in the case of a request for additional information, promptly following a request therefor, which response must be delivered not later than such reasonable time as is specified in any such request from the Company or, in the case of any other update or supplement of any information, not later than five business days after the record date(s) for the meeting (in the case of any update and supplement required to be made as of the record date(s)), and not later than eight business days prior to the date for the meeting or any adjournment, rescheduling or postponement thereof (in the case of the update and supplement required to be made as of 10 days prior to the meeting or any adjournment, rescheduling or postponement thereof). The failure to timely provide such update, supplement or additional information shall result in the nomination or proposal no longer being eligible for consideration at the meeting.
(b) Special Meetings of Stockholders. Except to the extent required by the DGCL, and subject to Section 2.3(a), special meetings of stockholders may be called only in accordance with the Company’s certificate of incorporation and these bylaws. Only such business will be conducted at a special meeting of stockholders as has been brought before the special meeting pursuant to the Company’s notice of meeting. If the election of directors is included as business to be brought before a special meeting in the Company’s notice of meeting, then nominations of persons for election to the Board of Directors at such special meeting may be made by any stockholder who (i) is a stockholder of record at the time of giving of the notice contemplated by this Section 2.4(b); (ii) is a stockholder of record on the record date for the determination of stockholders entitled to notice of the special meeting; (iii) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the special meeting; (iv) is a stockholder of record at the time of the special meeting; and (v) complies with the procedures set forth in this Section 2.4(b). For nominations to be properly brought by a stockholder before a special meeting pursuant to this Section 2.4(b), the stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the special meeting and no later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the special meeting was first made. In no event will any adjournment, rescheduling or postponement of a special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice. A stockholder’s notice to the Secretary must comply with the applicable notice requirements of Section 2.4(a)(iii).
(c) Other Requirements.
(i) To be eligible to be a nominee by any stockholder for election as a director of the Company, the proposed nominee must provide to the secretary, in accordance with the applicable time periods prescribed for delivery of notice under Section 2.4(a)(ii) or Section 2.4(b):
(1) a signed and completed written questionnaire (in the form provided by the secretary at the written request of the nominating stockholder, which form will be provided by the secretary within 10 days of receiving such request) containing information regarding such nominee’s background and qualifications and such other information as may reasonably be required by the Company to determine the
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eligibility of such nominee to serve as a director of the Company or to serve as an independent director of the Company;
(2) a written representation and undertaking that, unless previously disclosed to the Company, such nominee is not, and will not become, a party to any voting agreement, arrangement, commitment, assurance or understanding with any person or entity as to how such nominee, if elected as a director, will vote on any issue;
(3) a written representation and undertaking that, unless previously disclosed to the Company, such nominee is not, and will not become, a party to any Third-Party Compensation Arrangement;
(4) a written representation and undertaking that, if elected as a director, such nominee would be in compliance, and will continue to comply, with the Company’s corporate governance guidelines as disclosed on the Company’s website, as amended from time to time; and
(5) a written representation and undertaking that such nominee, if elected, intends to serve a full term on the Board of Directors.
(ii) At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director must furnish to the secretary the information that is required to be set forth in a stockholder’s notice of nomination that pertains to such nominee.
(iii) No person will be eligible to be nominated by a stockholder for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 2.4. No business proposed by a stockholder will be conducted at a stockholder meeting except in accordance with this Section 2.4.
(iv) The chairperson of the applicable meeting of stockholders will, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws or that business was not properly brought before the meeting. If the chairperson of the meeting should so determine, then the chairperson of the meeting will so declare to the meeting and the defective nomination will be disregarded or such business will not be transacted, as the case may be.
(v) Notwithstanding anything to the contrary in this Section 2.4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear in person at the meeting to present a nomination or other proposed business, such nomination will be disregarded or such proposed business will not be transacted, as the case may be, notwithstanding that proxies in respect of such nomination or business may have been received by the Company and counted for purposes of determining a quorum. For purposes of this Section 2.4, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting.
(vi) Without limiting this Section 2.4, a stockholder must also comply with all applicable requirements of the 1934 Act with respect to the matters set forth in this Section 2.4, it being understood that (1) any references in these bylaws to the 1934 Act are not intended to, and will not, limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.4; and (2) compliance with clause (4) of Section 2.4(a)(i) and with Section 2.4(b) are the exclusive means for a stockholder to make nominations or submit other business (other than as provided in Section 2.4(c)(vii)).
(vii) Nothing in this Section 2.4 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 of Regulation 14A
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under the 1934 Act (or any successor provision thereto). Subject to Rule 14a-8 and other applicable rules and regulations under the 1934 Act, nothing in these bylaws will be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination of a director or any other business proposal.
2.5 NOTICE OF STOCKHOLDERS’ MEETINGS
Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.
2.6 QUORUM
The holders of a majority of the voting power of the shares of the capital stock of the Company issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. In determining the voting power of such shares, the Company shall engage the Inspector(s) (as defined below) to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL, as applicable, with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock (as defined in the certificate of incorporation)) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL, as applicable, with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock). Where a separate vote by a class or series or classes or series is required, a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.
If, however, such quorum is not present or represented at any meeting of the stockholders, then either (a) the chairperson of the meeting, or (b) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the DGCL and Section 2.11 of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
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2.8 CONDUCT OF BUSINESS
The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business and discussion as seem to the chairperson in order. The chairperson of any meeting of stockholders shall be designated by the Board of Directors; in the absence of such designation, the chairperson of the Board of Directors, if any, or the chief executive officer (in the absence of the chairperson of the Board of Directors) or the president (in the absence of the chairperson of the Board of Directors), or in their absence any other executive officer of the Company, shall serve as chairperson of the stockholder meeting. The chairperson of any meeting of stockholders shall have the power to adjourn the meeting to another place, if any, date or time, whether or not a quorum is present.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as otherwise provided by law, the certificate of incorporation, these bylaws or the rules of the stock exchange on which the Company’s securities are listed, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of the voting power of the shares of such class or series or classes or series present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of such class or series or classes or series, except as otherwise provided by law, the certificate of incorporation, these bylaws or the rules of the stock exchange on which the securities of the Company are listed. In determining the voting power of such shares at a meeting, the Company shall engage the Inspector(s) to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock).
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or in an electronic transmission, 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 Company by delivery to its registered office in the state of Delaware, its principal place of business, or an officer or agent of the Company having custody of the book in which minutes of proceedings of stockholders are recorded (or, in the case of a consent or consents in an electronic transmission, written and signed and delivered to the Company in compliance with and to the extent permitted by Section 228 of the DGCL). Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written
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consents signed by a sufficient number of holders to take the action were delivered to the Company as provided in Section 228 of the DGCL. No written consent shall be effective to take the corporate action referred to therein unless a valid written consent or valid written consents signed by a sufficient number of stockholders to take such action are delivered to the Company in the manner prescribed in this Section 2.10 and applicable law within sixty (60) days of the first date on which a written consent is so delivered to the Company. In determining the voting power of such shares, the Company shall, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock).
2.11 RECORD DATES
In order that the Company may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.
If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the provisions of Section 213 of the DGCL and this Section 2.11 at the adjourned meeting.
In order that the Company may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company by delivery to its registered office in Delaware, its principal place of business or an officer or agent of the Company having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting if prior action by the Board of Directors is required by applicable law shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
In order that the Company may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is
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fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
2.12 PROXIES
Each stockholder entitled to vote at a meeting of stockholders, or such stockholder’s authorized officer, director, employee or agent, may authorize another person or persons to act for such stockholder by proxy authorized by a document or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The Company shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the Company’s principal place of business. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
2.14 FOUNDER SHARES
Without limiting the power of the Board of Directors to take the actions set forth in Section 4.1, Section 4.5 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolution adopted by a majority of the Whole Board, establish one or more committees composed exclusively of directors who are not Founders (as defined in the certificate of incorporation) (a “Non-Founder Committee”). For purposes of these bylaws, a “Non-Founder Approval” shall mean any approval by a Non-Founder Committee or any approval by a majority of the members of the Board of Directors then serving in office (excluding any Founders who are then members of the Board of Directors).
In connection with any meeting of stockholders requiring a stockholder vote where the applicable record date is prior to the Final Class F Conversion Date (as defined in the certificate of incorporation) (any such meeting, a “Shareholder Meeting”), the Company shall retain a third-party professional or firm, the retention of which professional or firm shall be subject to a Non-Founder Approval and which professional or firm shall be independent of the Founders as determined in good faith pursuant to such Non-Founder Approval (such professional or firm, the “Independent Certifier”). The Independent Certifier shall review and certify, as of the record date for the determination of stockholders entitled to vote on each matter subject to a vote of stockholders at such meeting, the aggregate number and class or series of Founder Shares (as defined in the certificate of incorporation) outstanding and entitled to vote on each such matter.
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Prior to any Shareholder Meeting, the Company shall publicly disclose (either in the Company’s proxy statement for such Shareholder Meeting or in a Current Report on Form 8-K) the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting, as certified by the Independent Certifier.
With respect to any Shareholder Meeting, the following materials shall be incorporated into the Company’s books and records: (i) all documentation regarding the Founder Shares furnished to the secretary of the Company or his or her delegate pursuant to Article IV, Section D.1(c)(ii)(x) of the certificate of incorporation, (ii) all portions of the Company’s stock ledger used by the Independent Certifier in certifying the aggregate number and class or series of Founder Shares outstanding and entitled to vote (as described above), and (iii) the certification delivered to the Company by the Independent Certifier in connection with its review and certification of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting. The materials listed in clauses (i) – (iii) of the preceding sentence shall be made expressly subject to demands to the Company made in compliance with Section 220 of the DGCL, subject to the requirements and limitations of such section.
For the avoidance of doubt, the Company shall not be required to perform the procedures specified in this Section 2.14, including the retention of an Independent Certifier, in connection with (i) any meeting of stockholders requiring a stockholder vote where the applicable record date is on or after the Final Class F Conversion Date or (ii) any action taken by written consent of stockholders.
2.15 INSPECTORS OF ELECTION
Before any meeting of stockholders, the Company shall appoint an inspector or inspectors of election (the “Inspector(s)”) to act at the meeting or its adjournment. The Company may designate one or more persons as alternate Inspector(s) to replace any Inspector(s) who fails to act. Such Inspector(s) shall take all actions as required under Section 231 of the DGCL or any successor provision thereto.
The Inspector(s) shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are multiple Inspectors, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. The Inspector(s) appointed to act at any Shareholder Meeting, or its adjournment, shall be entitled to rely upon the certification by the Independent Certifier of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting. Any report or certificate made by the Inspector(s) is prima facie evidence of the facts stated therein.
ARTICLE III - DIRECTORS
3.1 POWERS
The business and affairs of the Company shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided in the DGCL or the certificate of incorporation.
3.2 NUMBER OF DIRECTORS
The Board of Directors shall consist of one or more members, each of whom shall be a natural person. Unless the certificate of incorporation fixes the number of directors, the number of directors shall be determined from time to time by resolution of a majority of the Board of Directors. No reduction of the authorized number of directors shall shorten the term of any incumbent director.
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3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which he or she is elected and until his or her successor has been duly elected and qualified or until his or her earlier resignation, death or removal. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors.
If so provided in the certificate of incorporation, the directors of the Company shall be divided into three classes. Until such time, the directors of the Company shall be elected at each annual meeting of stockholders to hold office until the next annual meeting.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon notice given in writing or by electronic transmission to the Company. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation which is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.
Unless otherwise provided in the certificate of incorporation or these bylaws or permitted in the specific case by resolution of the Board of Directors, and subject to the rights of holders of Preferred Stock (as defined in the certificate of incorporation), vacancies and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining director, at any meeting of the Board of Directors, and not by stockholders. A person so chosen to fill a vacancy or newly created directorship shall hold office until, if the directors are not divided into classes, the next annual meeting of the stockholders or, if the directors are divided into classes, the next election of the class for which such director shall have been chosen and in each case until his or her successor shall have been duly elected and qualified.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The Board of Directors may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the chairperson of the Board of Directors, the chief executive officer, the president, the secretary or a majority of the Whole Board.
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Notice of the time and place of special meetings shall be:
(a) delivered personally by hand, by courier or by telephone;
(b) sent by United States first-class mail, postage prepaid;
(c) sent by facsimile;
(d) sent by electronic mail; or
(e) otherwise given by electronic transmission (as defined in Section 232 of the DGCL),
directed to each director at that director’s address, telephone number, facsimile number, electronic mail address or other contact for notice by electronic transmission, as the case may be, as shown on the Company’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile, (iii) sent by electronic mail or (iv) otherwise given by electronic transmission, it shall be delivered, sent or otherwise directed to each director, as applicable, at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Company’s principal executive office) nor the purpose of the meeting, unless required by statute.
3.8 QUORUM; VOTING
At all meetings of the Board of Directors, a majority of the Whole Board shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
The affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.
If the certificate of incorporation provides that one or more directors shall have more or less than one vote per director on any matter, except as may otherwise be expressly provided herein or therein and denoted with the phrase “notwithstanding the final paragraph of Section 3.8 of the bylaws” or language to similar effect, every reference in these bylaws to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.
3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given for purposes of this Section 3.9 at such effective time so long as such person is then a director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to its becoming effective. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board of Directors or committee thereof.
3.10 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board of Directors shall have the authority to fix the compensation of directors.
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3.11 REMOVAL OF DIRECTORS
Any director or the entire Board of Directors may be removed from office by stockholders of the Company as provided in Section 141(k) of the DGCL. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.
3.12 STOCK TRANSFERS
The Board of Directors (1) may, from time to time, authorize automatic consents and approvals for any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of a share (in the case of a share issuable or deliverable upon any of the conversion of another security, exercise of an option or warrant, or similar arrangement, the occurrence or non-occurrence of a contingency, or upon vesting, whether or not such share has then been issued or delivered) or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, or any agreement to take any such actions or cause the occurrence of any such events, or any act that results in changes to the beneficial ownership of such share, in each case, which consent or approval may be prior to, concurrent with or subsequent to such action and (2) shall designate the president, the treasurer and the chief executive officer, if any, and may, by resolution passed by a majority of the Whole Board, designate one or more other officers of the Company to provide such consents or approvals, in each case, as provided in the certificate of incorporation.
ARTICLE IV - COMMITTEES
4.1 COMMITTEES OF DIRECTORS
Without limiting the power of the Board of Directors to take the actions set forth in Section 2.14, Section 4.5 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolution adopted by a majority of the Whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Company. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors or in these bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers that may require it; but no such committee shall have the power or authority to (a) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (b) adopt, amend or repeal any bylaw of the Company.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(a) Section 3.5 (place of meetings and meetings by telephone);
(b) Section 3.6 (regular meetings);
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(c) Section 3.7 (special meetings and notice);
(d) Section 3.8 (quorum; voting);
(e) Section 3.9 (action without a meeting); and
(f) Section 7.4 (waiver of notice)
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members. However, (i) the time and place of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the Board of Directors or the committee; and (iii) notice of special meetings of committees shall also be given to all alternate members who shall have the right to attend all meetings of the committee. The Board of Directors or in the absence of any such action by the Board of Directors, the applicable committee, may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
Any provision in the certificate of incorporation providing that one or more directors shall have more or less than one vote per director on any matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.
4.4 SUBCOMMITTEES
Unless otherwise provided in the certificate of incorporation, these bylaws or the resolutions of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
4.5 INDEPENDENT COMMITTEE; APPROVALS
Without limiting the power of the Board of Directors to take the actions set forth in Section 2.14, Section 4.1 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolution adopted by a majority of the Whole Board, establish one or more committees composed exclusively of directors who are determined by the Board of Directors, in their reasonable judgment, to qualify as Independent Directors (as defined in the certificate of incorporation) (an “Independent Committee”). For the avoidance of doubt, each of the Audit Committee and Compensation, Nominating & Governance Committee of the Board of Directors shall constitute an Independent Committee.
Any transaction between a Founder (or controlled affiliate), on the one hand, and the Company, on the other, in which consideration exchanges hands between them, and such consideration has a fair market value in excess of $50,000,000, as determined by a Non-Founder Approval or an Independent Committee, and that is entered into and consummated following the date of the effectiveness of these bylaws and prior to the Final Class F Conversion Date and that requires disclosure pursuant to 17 CFR § 229.404(a), must be approved by either: (a) the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the outstanding shares of the capital stock of the Company, voting together as a single class, or (b) an Independent Committee, unless such transaction results from, arises out of, relates to, involves, or constitutes the performance, satisfaction, exercise, failure to exercise, waiver of any right, remedy, obligation, undertaking, condition, or term of any transaction, agreement, contract, or arrangement that existed prior to the effectiveness of these bylaws, was previously approved pursuant to these bylaws, or was part of a transaction previously disclosed pursuant to 17 CFR § 229.404(a).
Prior to any of the Founders (including their controlled affiliates) attempting any transaction, at any time prior to the Final Class F Conversion Date, which transaction involves the acquisition of the Company’s equity
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securities and is a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the 1934 Act), such Founder or Founders shall notify the Company’s secretary (or his or her delegate) and chairperson of the Board of Directors of the intention of such Founder or Founders to attempt such transaction, and such transaction must be conditioned on the approval by (a) an Independent Committee and (b) the holders of a majority of the voting power of capital stock of the Company that is held by Non-Founder Stockholders (as defined below). “Non-Founder Stockholders” shall mean all stockholders of the Company other than the Founders (including their controlled affiliates) and any holder of the Class F Common Stock.
In the case of a sale of all of the outstanding shares of the capital stock of the Company prior to the Final Class F Conversion Date, with respect to the consideration to which the holders of such shares are entitled (including the rights to elect among different forms of consideration), unless different treatment is approved by an Independent Committee, (x) each share of Class A Common Stock (as defined in the certificate of incorporation) held by any of the Founders or their controlled affiliates must be treated equally, identically and ratably, on a per share basis, with each share of Class A Common Stock held by Non-Founder Stockholders, and (y) each share of Class B Common Stock (as defined in the certificate of incorporation) held by any of the Founders or their controlled affiliates must be treated equally, identically and ratably, on a per share basis, with each share of Class B Common Stock held by any Non-Founder Stockholders.
ARTICLE V - OFFICERS
5.1 OFFICERS
The officers of the Company shall be a president and a secretary. The Company may also have, at the discretion of the Board of Directors, a chairperson of the Board of Directors, a vice chairperson of the Board of Directors, a chief executive officer, a chief financial officer or treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The Board of Directors shall appoint the officers of the Company, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or empower the chief executive officer or the president to appoint, such other officers as the business of the Company may require. Each of such officers shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors or, for the avoidance of doubt, any duly authorized committee or subcommittee thereof or by any officer who has been conferred such power of removal.
Any officer may resign at any time by giving notice, in writing or by electronic transmission, to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.
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5.5 VACANCIES IN OFFICES
Any vacancy occurring in any office of the Company shall be filled by the Board of Directors or as provided in Section 5.3.
5.6 REPRESENTATION OF SECURITIES OF OTHER ENTITIES
The chairperson of the Board of Directors, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of the Company or any other person authorized by the Board of Directors or the chief executive officer, the president or a vice president, is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares or other securities of any other entity or entities, and all rights incident to any management authority conferred on the Company in accordance with the governing documents of any entity or entities, standing in the name of the Company, including the right to act by written consent. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
5.7 AUTHORITY AND DUTIES OF OFFICERS
All officers of the Company shall respectively have such authority and perform such duties in the management of the business of the Company as may be designated from time to time by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors.
ARTICLE VI - STOCK
6.1 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of the Company shall be represented by certificates; provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Unless otherwise provided by resolution of the Board of Directors, every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the Company by any two authorized officers of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Company shall not have power to issue a certificate in bearer form.
The Company may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly-paid shares, or upon the books and records of the Company in the case of uncertificated partly-paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully-paid shares, the Company shall declare a dividend upon partly-paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
6.2 SPECIAL DESIGNATION ON CERTIFICATES
If the Company is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of
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each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Company shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Company shall issue to represent such class or series of stock, a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the registered owner thereof shall be given a notice, in writing or by electronic transmission, containing the information required to be set forth or stated on certificates pursuant to this Section 6.2 or Sections 151, 156, 202(a), 218(a) or 364 of the DGCL or with respect to this Section 6.2 a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
6.3 LOST CERTIFICATES
Except as provided in this Section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 DIVIDENDS
The Board of Directors, subject to any restrictions contained in the certificate of incorporation or applicable law, may declare and pay dividends upon the shares of the Company’s capital stock. Dividends may be paid in cash, in property, or in shares of the Company’s capital stock, subject to the provisions of the certificate of incorporation. The Board of Directors may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
6.5 TRANSFER OF STOCK
Transfers of record of shares of stock of the Company shall be made only upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer.
6.6 STOCK TRANSFER AGREEMENTS
The Company shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Company to restrict the transfer of shares of stock of the Company of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
6.7 REGISTERED STOCKHOLDERS
The Company:
(a) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and notices and to vote as such owner; and
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(b) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
7.1 NOTICE OF STOCKHOLDERS’ MEETINGS
Notice of any meeting of stockholders shall be given in the manner set forth in Section 2.5 and Section 2.7.
7.2 NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
Except as otherwise prohibited under the DGCL, without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Company under the provisions of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any stockholder who fails to object in writing to the Company, within 60 days of having been given written notice by the Company of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice. This Section 7.2 shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
7.3 NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
Whenever notice is required to be given, under the DGCL, the certificate of incorporation or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Company is such as to require the filing of a certificate under the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
7.4 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
ARTICLE VIII - INDEMNIFICATION
8.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS
Subject to the other provisions of this Article VIII, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be
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made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) (other than an action by or in the right of the Company) by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
8.2 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE COMPANY
Subject to the other provisions of this Article VIII, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.
8.3 SUCCESSFUL DEFENSE
To the extent that a present or former director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 8.1 or Section 8.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
8.4 INDEMNIFICATION OF OTHERS
Subject to the other provisions of this Article VIII, the Company shall have power to indemnify its employees and agents and provide advancement of expenses to the extent not prohibited by the DGCL or other applicable law. The Board of Directors shall have the power to delegate to any person or persons identified in subsections (1) through (4) of Section 145(d) of the DGCL the determination of whether employees or agents shall be indemnified.
8.5 ADVANCED PAYMENT OF EXPENSES
To the fullest extent not prohibited by the DGCL or by any other applicable law, expenses (including attorneys’ fees) incurred by a current or former officer or director of the Company in defending any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a written
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request therefor (together with documentation reasonably evidencing such expenses) and an undertaking, if required by the DGCL, by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under this Article VIII or the DGCL. Such expenses (including attorneys’ fees) incurred by other employees and agents of the Company or by persons serving at the request of the Company as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply to any Proceeding (or any part of any Proceeding) for which indemnity is excluded pursuant to these bylaws, but shall apply to any Proceeding (or any part of any Proceeding) referenced in Section 8.6(b) or 8.6(c) prior to a determination that the person is not entitled to be indemnified by the Company.
Notwithstanding the foregoing, unless otherwise determined pursuant to Section 8.8, no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company, in which event this paragraph shall not apply) in any Proceeding if a determination is reasonably and promptly made (a) by a vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (b) by a committee of such directors designated by the vote of the majority of such directors, even though less than a quorum, or (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
8.6 LIMITATION ON INDEMNIFICATION
Subject to the requirements in Section 8.3 and the DGCL, the Company shall not be obligated to indemnify any person pursuant to this Article VIII in connection with any Proceeding (or any part of any Proceeding) if prohibited by the DGCL or other applicable law.
8.7 DETERMINATION; CLAIM
If a claim for indemnification or advancement of expenses under this Article VIII is not paid in full within 90 days after receipt by the Company of the written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. The Company shall indemnify such person against any and all expenses that are actually and reasonably incurred by such person in connection with any action for indemnification or advancement of expenses from the Company under this Article VIII, to the extent such person is successful in such action, and to the extent not prohibited by law. In any such suit, the Company shall, to the fullest extent not prohibited by law, have the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.
8.8 NON-EXCLUSIVITY OF RIGHTS
The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
8.9 INSURANCE
The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director,
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officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of the DGCL.
8.10 SURVIVAL
The rights to indemnification and advancement of expenses conferred by this Article VIII shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
8.11 EFFECT OF REPEAL OR MODIFICATION
A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or these bylaws after the occurrence of the act or omission that is the subject of the Proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
8.12 SEVERABILITY
If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII (including, without limitation, all portions of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, all portions of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or enforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
8.13 CERTAIN DEFINITIONS
For purposes of this Article VIII, references to the “Company” shall include, in addition to the resulting company, any constituent company (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving company as such person would have with respect to such constituent company if its separate existence had continued. For purposes of this Article VIII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article VIII.
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ARTICLE IX - GENERAL MATTERS
9.1 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
Except as otherwise provided by law, the certificate of incorporation or these bylaws, the Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute any document or instrument in the name of and on behalf of the Company; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Company by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
9.2 FISCAL YEAR
The fiscal year of the Company shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.
9.3 SEAL
The Company may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors. The Company may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
9.4 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes a company (including, but not limited to, a limited liability company), corporation, partnership, joint venture, trust or other enterprise, and a natural person. Any reference in these bylaws to a section of the DGCL shall be deemed to refer to such section as amended from time to time and any successor provisions thereto.
9.5 FORUM SELECTION
Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have jurisdiction, another State court in Delaware or, if and only if all such State courts do not have jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, stockholder, officer or other employee of the Company to the Company or the Company’s stockholders, (c) any action or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the DGCL or the certificate of incorporation or these bylaws (as each may be amended from time to time), (d) any action or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action or proceeding asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (e) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. For the avoidance of doubt, this first paragraph of Section 9.5 shall not apply to any action brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”) or the 1934 Act.
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Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any security of the Company shall be deemed to have notice of and have consented to the provisions of this Section 9.5.
ARTICLE X - AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. The Board of Directors shall also have the power to adopt, amend or repeal bylaws; provided, however, that a bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed by the Board of Directors.
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APPENDIX B-2
MARKED COPY OF
AMENDED AND RESTATED BYLAWS OF
PALANTIR TECHNOLOGIES INC.
(effective as ofSeptember 22, 2020)
TABLE OF CONTENTS
(Continued)
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BYLAWS OF PALANTIR TECHNOLOGIES INC.
ARTICLE I - CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of Palantir Technologies Inc. (the “Company”) shall be fixed in the Company’s certificate of incorporation, as the same may be amended from time to time.
1.2 OTHER OFFICES
The Company may at any time establish other offices.
ARTICLE II - MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at a place, if any, within or outside the State of Delaware, determined by the board of directors of the Company (the “Board of Directors”). The Board of Directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the Company’s principal executive office.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year. The Board of Directors shall designate the date and time of the annual meeting. At the annual meeting, directors shall be elected and any other proper business, brought in accordance with Section 2.4 of these bylaws, may be transacted. The Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, or the chairperson of the meeting, may cancel, postpone or reschedule any previously scheduled annual meeting at any time, before or after the notice for such meeting has been sent to the stockholders. For the purposes of these bylaws, the term “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships.
2.3 SPECIAL MEETING
(a) A special meeting of the stockholders, other than as required by statute, may be called at any time by (i) the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, (ii) the chairperson of the Board of Directors, (iii) the chief executive officer or (iv) the president, but a special meeting may not be called by any other person or persons, and any power of stockholders to call a special meeting of stockholders is specifically denied. The Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, or the chairperson of the meeting, may cancel, postpone or reschedule any previously scheduled special meeting at any time, before or after the notice for such meeting has been sent to the stockholders.
(b) The notice of a special meeting shall include the purpose for which the meeting is called. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by
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or at the direction of a majority of the Whole Board, the chairperson of the Board of Directors, the chief executive officer or the president. Nothing contained in this Section 2.3(b) shall be construed as limiting, fixing or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
2.4 ADVANCE NOTICE PROCEDURES
(a) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (1) pursuant to the Company’s notice of meeting (or any supplement thereto); (2) by or at the direction of the Board of Directors; (3) as may be provided in the certificate of designations for any class or series of preferred stock; or (4) by any stockholder of the Company who (A) is a stockholder of record at the time of giving of the notice contemplated by Section 2.4(a)(ii); (B) is a stockholder of record on the record date for the determination of stockholders entitled to notice of the annual meeting; (C) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the annual meeting; (D) is a stockholder of record at the time of the annual meeting; and (E) complies with the procedures set forth in this Section 2.4(a).
(ii) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (4) of Section 2.4(a)(i), the stockholder must have given timely notice in writing to the secretary and any such nomination or proposed business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day and no later than 5:00 p.m., local time, on the 90th day prior to the day of the first anniversary of the preceding year’s annual meeting of stockholders. However, if no annual meeting of stockholders was held in the preceding year, or if the date of the applicable annual meeting has been changed by more than 25 days from the first anniversary of the preceding year’s annual meeting, then to be timely such notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the annual meeting and no later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Company. In no event will the adjournment, rescheduling or postponement of any annual meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. If the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors at least 10 days before the last day that a stockholder may deliver a notice of nomination pursuant to the foregoing provisions, then a stockholder’s notice required by this Section 2.4(a)(ii) will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the secretary at the principal executive offices of the Company no later than 5:00 p.m., local time, on the 10th day following the day on which such public announcement is first made. “Public announcement” means disclosure in a press release reported by a national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (as amended and inclusive of rules and regulations thereunder, the “1934 Act”).
(iii) A stockholder’s notice to the secretary must set forth:
(1) as to each person whom the stockholder proposes to nominate for election as a director:
(A) such person’s name, age, business address, residence address and principal occupation or employment; the class and number of shares of the Company that are held of record or are beneficially owned by such person and a description of any Derivative Instruments (defined below) held or beneficially owned thereby or of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage
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the risk or benefit of share price changes for, or to increase or decrease the voting power of such person; and all information relating to such person that is required to be disclosed in solicitations of proxies for the contested election of directors, or is otherwise required, in each case pursuant to the Section 14 of the 1934 Act;
(B) such person’s written consent to being named in such stockholder’s proxy statement as a nominee of such stockholder and to serving as a director of the Company if elected;
(C) a reasonably detailed description of any direct or indirect compensatory, payment, indemnification or other financial agreement, arrangement or understanding that such person has, or has had within the past three years, with any person or entity other than the Company (including the amount of any payment or payments received or receivable thereunder), in each case in connection with candidacy or service as a director of the Company (a “Third-Party Compensation Arrangement”); and
(D) a description of any other material relationships between such person and such person’s respective affiliates and associates, or others acting in concert with them, on the one hand, and such stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their respective affiliates and associates, or others acting in concert with them, on the other hand;
(2) as to any other business that the stockholder proposes to bring before the annual meeting:
(A) a brief description of the business desired to be brought before the annual meeting;
(B) the text of the proposal or business (including the text of any resolutions proposed for consideration and, if applicable, the text of any proposed amendment to these bylaws or the Company’s certificate of incorporation);
(C) the reasons for conducting such business at the annual meeting;
(D) any material interest in such business of such stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates and associates, or others acting in concert with them; and
(E) a description of all agreements, arrangements and understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates or associates or others acting in concert with them, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder; and
(3) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:
(A) the name and address of such stockholder (as they appear on the Company’s books), of such beneficial owner and of their respective affiliates or associates or others acting in concert with them;
(B) for each class or series, the number of shares of stock of the Company that are, directly or indirectly, held of record or are beneficially owned by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(C) a description of any agreement, arrangement or understanding between such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, and any other person or persons (including, in each case, their names) in connection with the proposal of such nomination or other business;
(D) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps,
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options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities (any of the foregoing, a “Derivative Instrument”), or any other agreement, arrangement or understanding that has been made the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for or increase or decrease the voting power of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities;
(E) any rights to dividends on the Company’s securities owned beneficially by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, that are separated or separable from the underlying security;
(F) any proportionate interest in the Company’s securities or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;
(G) any performance-related fees (other than an asset-based fee) that such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with, them is entitled to based on any increase or decrease in the value of the Company’s securities or Derivative Instruments, including, without limitation, any such interests held by members of the immediate family of such persons sharing the same household;
(H) any significant equity interests or any Derivative Instruments in any principal competitor of the Company that are held by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(I) any direct or indirect interest of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (in each case, including any employment agreement, collective bargaining agreement or consulting agreement);
(J) a representation and undertaking that the stockholder is a holder of record of stock of the Company as of the date of submission of the stockholder’s notice and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;
(K) a representation and undertaking that such stockholder or any such beneficial owner intends, or is part of a group that intends, to (x) deliver a proxy statement or form of proxy to holders of at least the percentage of the voting power of the Company’s then-outstanding stock required to approve or adopt the proposal or to elect each such nominee; or (y) otherwise solicit proxies from stockholders in support of such proposal or nomination;
(L) any other information relating to such stockholder, such beneficial owner, or their respective affiliates or associates or others acting in concert with them, or director nominee or proposed business that, in each case, would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee (in a contested election of directors) or proposal pursuant to Section 14 of the 1934 Act; and
(M) such other information relating to any proposed item of business as the Company may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
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(iv) In addition to the requirements of this Section 2.4, to be timely, a stockholder’s notice (and any additional information submitted to the Company in connection therewith) must further be updated and supplemented (1) if necessary, so that the information provided or required to be provided in such notice is true and correct as of the record date(s) for determining the stockholders entitled to notice of, and to vote at, the meeting and as of the date that is 10 days prior to the meeting or any adjournment, rescheduling or postponement thereof and (2) to provide any additional information that the Company may reasonably request. Such update and supplement or additional information, if applicable, must be received by the secretary at the principal executive offices of the Company, in the case of a request for additional information, promptly following a request therefor, which response must be delivered not later than such reasonable time as is specified in any such request from the Company or, in the case of any other update or supplement of any information, not later than five business days after the record date(s) for the meeting (in the case of any update and supplement required to be made as of the record date(s)), and not later than eight business days prior to the date for the meeting or any adjournment, rescheduling or postponement thereof (in the case of the update and supplement required to be made as of 10 days prior to the meeting or any adjournment, rescheduling or postponement thereof). The failure to timely provide such update, supplement or additional information shall result in the nomination or proposal no longer being eligible for consideration at the meeting.
(b) Special Meetings of Stockholders. Except to the extent required by the DGCL, and subject to Section 2.3(a), special meetings of stockholders may be called only in accordance with the Company’s certificate of incorporation and these bylaws. Only such business will be conducted at a special meeting of stockholders as has been brought before the special meeting pursuant to the Company’s notice of meeting. If the election of directors is included as business to be brought before a special meeting in the Company’s notice of meeting, then nominations of persons for election to the Board of Directors at such special meeting may be made by any stockholder who (i) is a stockholder of record at the time of giving of the notice contemplated by this Section 2.4(b); (ii) is a stockholder of record on the record date for the determination of stockholders entitled to notice of the special meeting; (iii) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the special meeting; (iv) is a stockholder of record at the time of the special meeting; and (v) complies with the procedures set forth in this Section 2.4(b). For nominations to be properly brought by a stockholder before a special meeting pursuant to this Section 2.4(b), the stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the special meeting and no later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the special meeting was first made. In no event will any adjournment, rescheduling or postponement of a special meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice. A stockholder’s notice to the Secretary must comply with the applicable notice requirements of Section 2.4(a)(iii).
(c) Other Requirements.
(i) To be eligible to be a nominee by any stockholder for election as a director of the Company, the proposed nominee must provide to the secretary, in accordance with the applicable time periods prescribed for delivery of notice under Section 2.4(a)(ii) or Section 2.4(b):
(1) a signed and completed written questionnaire (in the form provided by the secretary at the written request of the nominating stockholder, which form will be provided by the secretary within 10 days of receiving such request) containing information regarding such nominee’s background and qualifications and such other information as may reasonably be required by the Company to determine the eligibility of such nominee to serve as a director of the Company or to serve as an independent director of the Company;
(2) a written representation and undertaking that, unless previously disclosed to the Company, such nominee is not, and will not become, a party to any voting agreement, arrangement, commitment, assurance or understanding with any person or entity as to how such nominee, if elected as a director, will vote on any issue;
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(3) a written representation and undertaking that, unless previously disclosed to the Company, such nominee is not, and will not become, a party to any Third-Party Compensation Arrangement;
(4) a written representation and undertaking that, if elected as a director, such nominee would be in compliance, and will continue to comply, with the Company’s corporate governance guidelines as disclosed on the Company’s website, as amended from time to time; and
(5) a written representation and undertaking that such nominee, if elected, intends to serve a full term on the Board of Directors.
(ii) At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director must furnish to the secretary the information that is required to be set forth in a stockholder’s notice of nomination that pertains to such nominee.
(iii) No person will be eligible to be nominated by a stockholder for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 2.4. No business proposed by a stockholder will be conducted at a stockholder meeting except in accordance with this Section 2.4.
(iv) The chairperson of the applicable meeting of stockholders will, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws or that business was not properly brought before the meeting. If the chairperson of the meeting should so determine, then the chairperson of the meeting will so declare to the meeting and the defective nomination will be disregarded or such business will not be transacted, as the case may be.
(v) Notwithstanding anything to the contrary in this Section 2.4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear in person at the meeting to present a nomination or other proposed business, such nomination will be disregarded or such proposed business will not be transacted, as the case may be, notwithstanding that proxies in respect of such nomination or business may have been received by the Company and counted for purposes of determining a quorum. For purposes of this Section 2.4, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting.
(vi) Without limiting this Section 2.4, a stockholder must also comply with all applicable requirements of the 1934 Act with respect to the matters set forth in this Section 2.4, it being understood that (1) any references in these bylaws to the 1934 Act are not intended to, and will not, limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.4; and (2) compliance with clause (4) of Section 2.4(a)(i) and with Section 2.4(b) are the exclusive means for a stockholder to make nominations or submit other business (other than as provided in Section 2.4(c)(vii)).
(vii) Nothing in this Section 2.4 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 of Regulation 14A under the 1934 Act (or any successor provision thereto). Subject to Rule 14a-8 and other applicable rules and regulations under the 1934 Act, nothing in these bylaws will be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination of a director or any other business proposal.
2.5 NOTICE OF STOCKHOLDERS’ MEETINGS
Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote
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communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.
2.6 QUORUM
The holders of a majority of the voting power of the shares of the capital stock of the Company issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. In determining the voting power of such shares, the Company shalluse reasonable besteffortsengage the Inspector(s) (as defined below) to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL, as applicable, with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock (as defined in the certificate of incorporation)) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL, as applicable, with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock). Where a separate vote by a class or series or classes or series is required, a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.
If, however, such quorum is not present or represented at any meeting of the stockholders, then either (a) the chairperson of the meeting, or (b) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the DGCL and Section 2.11 of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
2.8 CONDUCT OF BUSINESS
The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business and discussion as seem to the chairperson in order. The chairperson of any meeting of stockholders shall be designated by the Board of Directors; in the absence of such designation, the chairperson of the Board of Directors, if any, or the chief executive officer (in the absence of the chairperson of the Board of Directors) or the president (in the absence of the chairperson of the Board of Directors), or in their absence any other executive officer of the
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Company, shall serve as chairperson of the stockholder meeting. The chairperson of any meeting of stockholders shall have the power to adjourn the meeting to another place, if any, date or time, whether or not a quorum is present.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as otherwise provided by law, the certificate of incorporation, these bylaws or the rules of the stock exchange on which the Company’s securities are listed, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of the voting power of the shares of such class or series or classes or series present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of such class or series or classes or series, except as otherwise provided by law, the certificate of incorporation, these bylaws or the rules of the stock exchange on which the securities of the Company are listed. In determining the voting power of such shares at a meeting, the Company shalluse reasonable besteffortsengage the Inspector(s) to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock).
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or in an electronic transmission, 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 Company by delivery to its registered office in the state of Delaware, its principal place of business, or an officer or agent of the Company having custody of the book in which minutes of proceedings of stockholders are recorded (or, in the case of a consent or consents in an electronic transmission, written and signed and delivered to the Company in compliance with and to the extent permitted by Section 228 of the DGCL). Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company as provided in Section 228 of the DGCL. No written consent shall be effective to take the corporate action referred to therein unless a valid written consent or valid written consents signed by a sufficient number of stockholders to take such action are delivered to the Company in the manner prescribed in this Section 2.10 and applicable law within sixty (60) days of the first date on which a written consent is so delivered to the Company. In determining the voting power of such shares, the Company shall use reasonable best efforts to, first, perform the procedures set forth in Section 231(b)(1)-(2) of the DGCL with respect to all of the outstanding shares of capital stock of the Company (excluding the Class F Common Stock) and, second, perform the procedures set forth in Section 231(b)(1)-(2) of
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the DGCL with respect to all of the outstanding shares of capital stock of the Company (including the Class F Common Stock).
2.11 RECORD DATES
In order that the Company may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.
If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the provisions of Section 213 of the DGCL and this Section 2.11 at the adjourned meeting.
In order that the Company may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company by delivery to its registered office in Delaware, its principal place of business or an officer or agent of the Company having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting if prior action by the Board of Directors is required by applicable law shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
In order that the Company may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
2.12 PROXIES
Each stockholder entitled to vote at a meeting of stockholders, or such stockholder’s authorized officer, director, employee or agent, may authorize another person or persons to act for such stockholder by proxy
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authorized by a document or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The Company shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the Company’s principal place of business. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
2.14 FOUNDER SHARES
Without limiting the power of the Board of Directors to take the actions set forth in Section 4.1, Section 4.5 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolution adopted by a majority of the Whole Board, establish one or more committees composed exclusively of directors who are not Founders (as defined in the certificate of incorporation) (a “Non-Founder Committee”). For purposes of these bylaws, a “Non-Founder Approval” shall mean any approval by a Non-Founder Committee or any approval by a majority of the members of the Board of Directors then serving in office (excluding any Founders who are then members of the Board of Directors).
In connection with any meeting of stockholders requiring a stockholder vote where the applicable record date is prior to the Final Class F Conversion Date (as defined in the certificate of incorporation) (any such meeting, a “Shareholder Meeting”), the Company shall retain a third-party professional or firm, the retention of which professional or firm shall be subject to a Non-Founder Approval and which professional or firm shall be independent of the Founders as determined in good faith pursuant to such Non-Founder Approval (such professional or firm, the “Independent Certifier”). The Independent Certifier shall review and certify, as of the record date for the determination of stockholders entitled to vote on each matter subject to a vote of stockholders at such meeting, the aggregate number and class or series of Founder Shares (as defined in the certificate of incorporation) outstanding and entitled to vote on each such matter.
Prior to any Shareholder Meeting, the Company shall publicly disclose (either in the Company’s proxy statement for such Shareholder Meeting or in a Current Report on Form 8-K) the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting, as certified by the Independent Certifier.
With respect to any Shareholder Meeting, the following materials shall be incorporated into the Company’s books and records: (i) all documentation regarding the Founder Shares furnished to the secretary of the Company
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or his or her delegate pursuant to Article IV, Section D.1(c)(ii)(x) of the certificate of incorporation, (ii) all portions of the Company’s stock ledger used by the Independent Certifier in certifying the aggregate number and class or series of Founder Shares outstanding and entitled to vote (as described above), and (iii) the certification delivered to the Company by the Independent Certifier in connection with its review and certification of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting. The materials listed in clauses (i) – (iii) of the preceding sentence shall be made expressly subject to demands to the Company made in compliance with Section 220 of the DGCL, subject to the requirements and limitations of such section.
For the avoidance of doubt, the Company shall not be required to perform the procedures specified in this Section 2.14, including the retention of an Independent Certifier, in connection with (i) any meeting of stockholders requiring a stockholder vote where the applicable record date is on or after the Final Class F Conversion Date or (ii) any action taken by written consent of stockholders.
2.152.14 INSPECTORS OF ELECTION
Before any meeting of stockholders, the Company shall appoint an inspector or inspectors of election (the “Inspector(s)”) to act at the meeting or its adjournment. The Company may designate one or more persons as alternateinspectorsInspector(s) to replace anyinspectorsInspector(s) who fails to act. SuchinspectorsInspector(s) shall take all actions ascontemplatedrequired under Section 231 of the DGCL or any successor provision thereto.
Theinspectors ofelectionInspector(s) shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are multipleinspectors of electionInspectors, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. The Inspector(s) appointed to act at any Shareholder Meeting, or its adjournment, shall be entitled to rely upon the certification by the Independent Certifier of the aggregate number and class or series of Founder Shares outstanding and entitled to vote on each matter subject to a vote of stockholders at such Shareholder Meeting. Any report or certificate made by theinspectors ofelectionInspector(s) is prima facie evidence of the facts stated therein.
ARTICLE III - DIRECTORS
3.1 POWERS
The business and affairs of the Company shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided in the DGCL or the certificate of incorporation.
3.2 NUMBER OF DIRECTORS
The Board of Directors shall consist of one or more members, each of whom shall be a natural person. Unless the certificate of incorporation fixes the number of directors, the number of directors shall be determined from time to time by resolution of a majority of the Board of Directors. No reduction of the authorized number of directors shall shorten the term of any incumbent director.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which he or she is elected and until his or her successor has been duly elected and qualified or until his or her earlier resignation, death or removal. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors.
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If so provided in the certificate of incorporation, the directors of the Company shall be divided into three classes. Until such time, the directors of the Company shall be elected at each annual meeting of stockholders to hold office until the next annual meeting.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon notice given in writing or by electronic transmission to the Company. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation which is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.
Unless otherwise provided in the certificate of incorporation or these bylaws or permitted in the specific case by resolution of the Board of Directors, and subject to the rights of holders of Preferred Stock (as defined in the certificate of incorporation), vacancies and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining director, at any meeting of the Board of Directors, and not by stockholders. A person so chosen to fill a vacancy or newly created directorship shall hold office until, if the directors are not divided into classes, the next annual meeting of the stockholders or, if the directors are divided into classes, the next election of the class for which such director shall have been chosen and in each case until his or her successor shall have been duly elected and qualified.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The Board of Directors may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the chairperson of the Board of Directors, the chief executive officer, the president, the secretary or a majority of the Whole Board.
Notice of the time and place of special meetings shall be:
(a) delivered personally by hand, by courier or by telephone;
(b) sent by United States first-class mail, postage prepaid;
(c) sent by facsimile;
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(d) sent by electronic mail; or
(e) otherwise given by electronic transmission (as defined in Section 232 of the DGCL),
directed to each director at that director’s address, telephone number, facsimile number, electronic mail address or other contact for notice by electronic transmission, as the case may be, as shown on the Company’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile, (iii) sent by electronic mail or (iv) otherwise given by electronic transmission, it shall be delivered, sent or otherwise directed to each director, as applicable, at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Company’s principal executive office) nor the purpose of the meeting, unless required by statute.
3.8 QUORUM; VOTING
At all meetings of the Board of Directors, a majority of the Whole Board shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
The affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.
If the certificate of incorporation provides that one or more directors shall have more or less than one vote per director on any matter, except as may otherwise be expressly provided herein or therein and denoted with the phrase “notwithstanding the final paragraph of Section 3.8 of the bylaws” or language to similar effect, every reference in these bylaws to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.
3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given for purposes of this Section 3.9 at such effective time so long as such person is then a director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to its becoming effective. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board of Directors or committee thereof.
3.10 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board of Directors shall have the authority to fix the compensation of directors.
3.11 REMOVAL OF DIRECTORS
Any director or the entire Board of Directors may be removed from office by stockholders of the Company as provided in Section 141(k) of the DGCL. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.
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3.12 STOCK TRANSFERS
The Board of Directors (1) may, from time to time, authorize automatic consents and approvals for any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of a share (in the case of a share issuable or deliverable upon any of the conversion of another security, exercise of an option or warrant, or similar arrangement, the occurrence or non-occurrence of a contingency, or upon vesting, whether or not such share has then been issued or delivered) or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, or any agreement to take any such actions or cause the occurrence of any such events, or any act that results in changes to the beneficial ownership of such share, in each case, which consent or approval may be prior to, concurrent with or subsequent to such action and (2) shall designate the president, the treasurer and the chief executive officer, if any, and may, by resolution passed by a majority of the Whole Board, designate one or more other officers of the Company to provide such consents or approvals, in each case, as provided in the certificate of incorporation.
ARTICLE IV - COMMITTEES
4.1 COMMITTEES OF DIRECTORS
TheWithout limiting the power of the Board of Directors to take the actions set forth in Section 2.14, Section 4.5 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolutionpassedadopted by a majority of the Whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Company. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors or in these bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers that may require it; but no such committee shall have the power or authority to (a) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (b) adopt, amend or repeal any bylaw of the Company.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(a) Section 3.5 (place of meetings and meetings by telephone);
(b) Section 3.6 (regular meetings);
(c) Section 3.7 (special meetings and notice);
(d) Section 3.8 (quorum; voting);
(e) Section 3.9 (action without a meeting); and
(f) Section 7.4 (waiver of notice)
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with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members. However, (i) the time and place of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the Board of Directors or the committee; and (iii) notice of special meetings of committees shall also be given to all alternate members who shall have the right to attend all meetings of the committee. The Board of Directors or in the absence of any such action by the Board of Directors, the applicable committee, may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
Any provision in the certificate of incorporation providing that one or more directors shall have more or less than one vote per director on any matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.
4.4 SUBCOMMITTEES
Unless otherwise provided in the certificate of incorporation, these bylaws or the resolutions of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
4.5 INDEPENDENT COMMITTEE; APPROVALS
Without limiting the power of the Board of Directors to take the actions set forth in Section 2.14, Section 4.1 or otherwise in these bylaws, the Board of Directors may, from time to time, by resolution adopted by a majority of the Whole Board, establish one or more committees composed exclusively of directors who are determined by the Board of Directors, in their reasonable judgment, to qualify as Independent Directors (as defined in the certificate of incorporation) (an “Independent Committee”). For the avoidance of doubt, each of the Audit Committee and Compensation, Nominating & Governance Committee of the Board of Directors shall constitute an Independent Committee.
Any transaction between a Founder (or controlled affiliate), on the one hand, and the Company, on the other, in which consideration exchanges hands between them, and such consideration has a fair market value in excess of $50,000,000, as determined by a Non-Founder Approval or an Independent Committee, and that is entered into and consummated following the date of the effectiveness of these bylaws and prior to the Final Class F Conversion Date and that requires disclosure pursuant to 17 CFR § 229.404(a), must be approved by either: (a) the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the outstanding shares of the capital stock of the Company, voting together as a single class, or (b) an Independent Committee, unless such transaction results from, arises out of, relates to, involves, or constitutes the performance, satisfaction, exercise, failure to exercise, waiver of any right, remedy, obligation, undertaking, condition, or term of any transaction, agreement, contract, or arrangement that existed prior to the effectiveness of these bylaws, was previously approved pursuant to these bylaws, or was part of a transaction previously disclosed pursuant to 17 CFR § 229.404(a).
Prior to any of the Founders (including their controlled affiliates) attempting any transaction, at any time prior to the Final Class F Conversion Date, which transaction involves the acquisition of the Company’s equity securities and is a “Rule 13e-3 transaction” (as defined in Rule 13e-3 under the 1934 Act), such Founder or Founders shall notify the Company’s secretary (or his or her delegate) and chairperson of the Board of Directors of the intention of such Founder or Founders to attempt such transaction, and such transaction must be conditioned on the approval by (a) an Independent Committee and (b) the holders of a majority of the voting power of capital stock of the Company that is held by Non-Founder Stockholders (as defined below). “Non-Founder Stockholders” shall mean all stockholders of the Company other than the Founders (including their controlled affiliates) and any holder of the Class F Common Stock.
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In the case of a sale of all of the outstanding shares of the capital stock of the Company prior to the Final Class F Conversion Date, with respect to the consideration to which the holders of such shares are entitled (including the rights to elect among different forms of consideration), unless different treatment is approved by an Independent Committee, (x) each share of Class A Common Stock (as defined in the certificate of incorporation) held by any of the Founders or their controlled affiliates must be treated equally, identically and ratably, on a per share basis, with each share of Class A Common Stock held by Non-Founder Stockholders, and (y) each share of Class B Common Stock (as defined in the certificate of incorporation) held by any of the Founders or their controlled affiliates must be treated equally, identically and ratably, on a per share basis, with each share of Class B Common Stock held by any Non-Founder Stockholders.
ARTICLE V - OFFICERS
5.1 OFFICERS
The officers of the Company shall be a president and a secretary. The Company may also have, at the discretion of the Board of Directors, a chairperson of the Board of Directors, a vice chairperson of the Board of Directors, a chief executive officer, a chief financial officer or treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The Board of Directors shall appoint the officers of the Company, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or empower the chief executive officer or the president to appoint, such other officers as the business of the Company may require. Each of such officers shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors or, for the avoidance of doubt, any duly authorized committee or subcommittee thereof or by any officer who has been conferred such power of removal.
Any officer may resign at any time by giving notice, in writing or by electronic transmission, to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.
5.5 VACANCIES IN OFFICES
Any vacancy occurring in any office of the Company shall be filled by the Board of Directors or as provided in Section 5.3.
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5.6 REPRESENTATION OF SECURITIES OF OTHER ENTITIES
The chairperson of the Board of Directors, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of the Company or any other person authorized by the Board of Directors or the chief executive officer, the president or a vice president, is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares or other securities of any other entity or entities, and all rights incident to any management authority conferred on the Company in accordance with the governing documents of any entity or entities, standing in the name of the Company, including the right to act by written consent. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
5.7 AUTHORITY AND DUTIES OF OFFICERS
All officers of the Company shall respectively have such authority and perform such duties in the management of the business of the Company as may be designated from time to time by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors.
ARTICLE VI - STOCK
6.1 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of the Company shall be represented by certificates; provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Unless otherwise provided by resolution of the Board of Directors, every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the Company by any two authorized officers of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Company shall not have power to issue a certificate in bearer form.
The Company may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly-paid shares, or upon the books and records of the Company in the case of uncertificated partly-paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully-paid shares, the Company shall declare a dividend upon partly-paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
6.2 SPECIAL DESIGNATION ON CERTIFICATES
If the Company is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Company shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Company shall issue to represent such class or series of stock, a statement that the Company will furnish
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without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the registered owner thereof shall be given a notice, in writing or by electronic transmission, containing the information required to be set forth or stated on certificates pursuant to this Section 6.2 or Sections 151, 156, 202(a), 218(a) or 364 of the DGCL or with respect to this Section 6.2 a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
6.3 LOST CERTIFICATES
Except as provided in this Section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 DIVIDENDS
The Board of Directors, subject to any restrictions contained in the certificate of incorporation or applicable law, may declare and pay dividends upon the shares of the Company’s capital stock. Dividends may be paid in cash, in property, or in shares of the Company’s capital stock, subject to the provisions of the certificate of incorporation. The Board of Directors may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
6.5 TRANSFER OF STOCK
Transfers of record of shares of stock of the Company shall be made only upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer.
6.6 STOCK TRANSFER AGREEMENTS
The Company shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Company to restrict the transfer of shares of stock of the Company of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
6.7 REGISTERED STOCKHOLDERS
The Company:
(a) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and notices and to vote as such owner; and
(b) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
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ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
7.1 NOTICE OF STOCKHOLDERS’ MEETINGS
Notice of any meeting of stockholders shall be given in the manner set forth in Section 2.5 and Section 2.7.
7.2 NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
Except as otherwise prohibited under the DGCL, without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Company under the provisions of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any stockholder who fails to object in writing to the Company, within 60 days of having been given written notice by the Company of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice. This Section 7.2 shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
7.3 NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
Whenever notice is required to be given, under the DGCL, the certificate of incorporation or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Company is such as to require the filing of a certificate under the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
7.4 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
ARTICLE VIII - INDEMNIFICATION
8.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS
Subject to the other provisions of this Article VIII, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) (other than an action by or in the right of the Company) by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees),
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judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
8.2 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE COMPANY
Subject to the other provisions of this Article VIII, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.
8.3 SUCCESSFUL DEFENSE
To the extent that a present or former director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 8.1 or Section 8.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
8.4 INDEMNIFICATION OF OTHERS
Subject to the other provisions of this Article VIII, the Company shall have power to indemnify its employees and agents and provide advancement of expenses to the extent not prohibited by the DGCL or other applicable law. The Board of Directors shall have the power to delegate to any person or persons identified in subsections (1) through (4) of Section 145(d) of the DGCL the determination of whether employees or agents shall be indemnified.
8.5 ADVANCED PAYMENT OF EXPENSES
To the fullest extent not prohibited by the DGCL or by any other applicable law, expenses (including attorneys’ fees) incurred by a current or former officer or director of the Company in defending any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a written request therefor (together with documentation reasonably evidencing such expenses) and an undertaking, if required by the DGCL, by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under this Article VIII or the DGCL. Such expenses (including attorneys’ fees) incurred by other employees and agents of the Company or by persons serving at the request of the Company as directors, officers, employees or agents of another corporation, partnership, joint venture, trust
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or other enterprise may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply to any Proceeding (or any part of any Proceeding) for which indemnity is excluded pursuant to these bylaws, but shall apply to any Proceeding (or any part of any Proceeding) referenced in Section 8.6(b) or 8.6(c) prior to a determination that the person is not entitled to be indemnified by the Company.
Notwithstanding the foregoing, unless otherwise determined pursuant to Section 8.8, no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company, in which event this paragraph shall not apply) in any Proceeding if a determination is reasonably and promptly made (a) by a vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (b) by a committee of such directors designated by the vote of the majority of such directors, even though less than a quorum, or (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
8.6 LIMITATION ON INDEMNIFICATION
Subject to the requirements in Section 8.3 and the DGCL, the Company shall not be obligated to indemnify any person pursuant to this Article VIII in connection with any Proceeding (or any part of any Proceeding) if prohibited by the DGCL or other applicable law.
8.7 DETERMINATION; CLAIM
If a claim for indemnification or advancement of expenses under this Article VIII is not paid in full within 90 days after receipt by the Company of the written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. The Company shall indemnify such person against any and all expenses that are actually and reasonably incurred by such person in connection with any action for indemnification or advancement of expenses from the Company under this Article VIII, to the extent such person is successful in such action, and to the extent not prohibited by law. In any such suit, the Company shall, to the fullest extent not prohibited by law, have the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.
8.8 NON-EXCLUSIVITY OF RIGHTS
The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
8.9 INSURANCE
The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of the DGCL.
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8.10 SURVIVAL
The rights to indemnification and advancement of expenses conferred by this Article VIII shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
8.11 EFFECT OF REPEAL OR MODIFICATION
A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or these bylaws after the occurrence of the act or omission that is the subject of the Proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
8.12 SEVERABILITY
If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII (including, without limitation, all portions of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, all portions of any paragraph of this Article VIII containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or enforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
8.13 CERTAIN DEFINITIONS
For purposes of this Article VIII, references to the “Company” shall include, in addition to the resulting company, any constituent company (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving company as such person would have with respect to such constituent company if its separate existence had continued. For purposes of this Article VIII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article VIII.
ARTICLE IX - GENERAL MATTERS
9.1 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
Except as otherwise provided by law, the certificate of incorporation or these bylaws, the Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute any document or instrument in the name of and on behalf of the Company; such authority may be general or confined to specific
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instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Company by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
9.2 FISCAL YEAR
The fiscal year of the Company shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.
9.3 SEAL
The Company may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors. The Company may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
9.4 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes a company (including, but not limited to, a limited liability company), corporation, partnership, joint venture, trust or other enterprise, and a natural person. Any reference in these bylaws to a section of the DGCL shall be deemed to refer to such section as amended from time to time and any successor provisions thereto.
9.5 FORUM SELECTION
Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have jurisdiction, another State court in Delaware or, if and only if all such State courts do not have jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, stockholder, officer or other employee of the Company to the Company or the Company’s stockholders, (c) any action or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the DGCL or the certificate of incorporation or these bylaws (as each may be amended from time to time), (d) any action or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action or proceeding asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (e) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. For the avoidance of doubt, this first paragraph of Section 9.5 shall not apply to any action brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”) or the 1934 Act.
Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any security of the Company shall be deemed to have notice of and have consented to the provisions of this Section 9.5.
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ARTICLE X - AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. The Board of Directors shall also have the power to adopt, amend or repeal bylaws; provided, however, that a bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed by the Board of Directors.
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PALANTIR
PALANTIR TECHNOLOGIES INC. 1200 17th STREET, FLOOR 15 DENVER, CO 80202
SCAN TO VIEW MATERIALS & VOTE
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on December 21, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/PLTR2022SM
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on December 21, 2022. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D92455-S53713
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PALANTIR TECHNOLOGIES INC.
The Board of Directors recommends you vote FOR the following proposal: For Against Abstain
1. Amendment and restatement of Palantir's certificate of incorporation.
NOTE: Such other business as may properly come before the meeting or any adjournment thereof.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX] Date
Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:
The Notice and Proxy Statement is available at www.proxyvote.com.
D92456-S53713
PALANTIR TECHNOLOGIES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS December 22, 2022
The shareholder(s) hereby appoint(s) David Glazer and Ryan Taylor, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Palantir Technologies Inc. that the shareholder(s) is/are entitled to vote at the Special Meeting of Shareholders to be held at 8:00 a.m., Mountain Time on Thursday, December 22, 2022, at the meeting held via the Internet at www.virtualshareholdermeeting.com/PLTR2022SM, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE SIGNED ON REVERSE SIDE
