COMPARISON OF STOCKHOLDERS’ RIGHTS
Take-Two and Zynga are Delaware corporations and the rights of Take-Two stockholders and Zynga stockholders are governed by the DGCL. Zynga stockholders’ rights are also governed by the Zynga charter and bylaws. If the combination is completed, the rights of Zynga stockholders who become Take-Two stockholders will be governed by the Take-Two charter and bylaws.
As Take-Two and Zynga are both Delaware corporations, the rights of Take-Two stockholders and Zynga stockholders are not materially different. However, there are certain differences in the rights of Take-Two stockholders under the Take-Two charter and bylaws and of Zynga stockholders under the Zynga charter and bylaws, as summarized in the table below. This summary does not purport to be a complete statement of all the differences, or a complete description of the specific provisions referred to. Further, the identification of specific differences is not intended to indicate that other equally or more significant differences do not exist. Take-Two stockholders and Zynga stockholders should carefully read the relevant provisions of the Take-Two charter, the Take-Two bylaws, the Zynga charter, the Zynga bylaws and the DGCL. Copies of the documents referred to in this summary may be obtained as described in the section titled “Where You Can Find More Information.”
|
Take-Two |
Zynga | |
| Authorized and Outstanding Capital Stock | ||
| Take-Two is authorized to issue 205,000,000 shares of stock, consisting of 200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of undesignated preferred stock, par value $0.01 per share. | Zynga is authorized to issue 2,022,517,472 shares of stock, consisting of 2,020,517,472 shares of common stock, par value $0.00000625 per share, and 2,000,000 shares of preferred stock, par value $0.00000625 per share. | |
| If the Take-Two charter amendment proposal is approved at the Take-Two special meeting, Take-Two will file an amendment to Take-Two’s charter to provide that Take-Two is authorized to issue 305,000,000 shares of stock, consisting of 300,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of undesignated preferred stock, par value $0.01 per share. | At the close of business on the Zynga record date, there were 1,137,276,459 shares of Zynga common stock and no preferred stock issued and outstanding. | |
| At the close of business on the Take-Two record date, there were 115,457,164 shares of Take-Two common stock and no shares of preferred stock issued and outstanding. | ||
| Rights of Preferred Stock | ||
| Take-Two is authorized to issue preferred stock in one or more series, of which the number of authorized shares may be increased or decreased (but not below the number of shares thereof then outstanding). The Take-Two board of directors may provide, by resolution or resolutions duly adopted by it prior to issuance, for the creation of each such series and to fix the designation and the powers, preferences, rights, | Zynga is authorized to issue preferred stock in one or more series. The Zynga board of directors may provide for the issue of all or any of the shares of the preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights | |
| Take-Two |
Zynga | |
| qualifications, limitations and restrictions relating to the shares of each such series. | and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Zynga board of directors providing for the issuance of such shares and as may be permitted by the Delaware General Corporation Law. The Zynga board of directors may also increase or decrease the number of shares of any series of preferred stock subsequent to the issuance of shares of that series of preferred stock, but not below the number of shares of such series of preferred stock then outstanding. In case the number of shares of any series of preferred stock shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series of preferred stock. The number of authorized shares of 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 the stock of the corporation entitled to vote thereon, without a separate vote of the holders of the preferred stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of preferred stock. | |
| Voting Rights | ||
| Each stockholder is entitled to one vote for each share having voting power held by the stockholder.
Other than with respect to the election of directors, if a quorum is present at any meeting, any matter before any such meeting shall be decided by the vote of the holders of a majority of the stock having voting power present in person or represented by proxy, unless the matter is one upon which by express provision of applicable law, rule or regulation applicable to Take-Two or its securities, or the Take-Two charter, or the Take-Two bylaws, a different standard is required, in which case such express provision shall govern and control the decision of such question. |
Each holder of Zynga common stock is entitled to one vote for each share on each matter on which the holder of Zynga common stock is entitled to vote.
Except as otherwise provided by statute, by applicable stock exchange rules, by the Zynga charter or by the Zynga bylaws, in all matters other than the election of directors, the affirmative vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. | |
| Distributions and Dividends | ||
| The Take-Two board of directors or an authorized committee thereof may declare dividends. Dividends may be paid out of any assets of Take-Two legally available for the payment of dividends, either in cash, in property, or in shares of common stock. | The Zynga board of directors may declare dividends payable to the holders of its capital stock. Dividends may be paid out of any assets or funds of Zynga legally available for the payment of dividends. | |
| Take-Two |
Zynga | |
| Quorum | ||
| The Take-Two bylaws provide that, unless otherwise provided by law, the holders of a majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. | The Zynga bylaws provide that the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority the voting power of the stock entitled to vote will constitute a quorum. The Zynga bylaws further provide that, where a separate vote by a class or series or classes or series is required, a majority of the voting power of the shares of such class or series or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the Zynga charter or the Zynga bylaws. | |
| Record Date | ||
| The Take-Two board of directors may fix a record date for purposes of, among other things, determining the rights of stockholders to notice of or to vote at any stockholder meeting and determining the identity of stockholders entitled to receive payment of any dividend or other distribution.
The record date cannot be more than sixty nor less than ten days before the date of the meeting, nor more than sixty days prior to any other action.
If no record date is fixed, then (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders will 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, (ii) the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Take-Two board of directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to Take-Two by delivery to its registered office in Delaware, its principal place of business or an officer or agent of Take-Two having custody of the book in which proceedings of meetings of stockholders are recorded, (iii) the record date for determining stockholders entitled to consent to corporate action in writing without a meeting when prior action by the Take-Two board of directors is required, shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action, and (iv) the record |
Under the DGCL, the Zynga board of directors may fix a record date to determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof. The record date shall not precede the date upon which the resolution fixing the record date is adopted by the Zynga board of directors, shall not be more than 60 or less than ten days before the date of such meeting. If the Zynga 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 Zynga 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 Zynga 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 Zynga 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 foregoing, at the adjourned meeting. | |
| Take-Two |
Zynga | |
| date for determining stockholders for any other purpose will be at the close of business on the day on which the board of directors adopts the resolution relating thereto. |
Under the DGCL, the Zynga board of directors may fix a record date, to 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. Such 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.
Any stockholder of record (whether acting for him, her or itself, or at the direction of a beneficial owner) shall, by written notice to the Zynga secretary, demand that the Zynga board of directors fix a record date to determine the stockholders who are entitled to deliver a written request to call a special meeting (such record date, the “Ownership Record Date”). A written demand to fix an Ownership Record Date shall include all of the information that must be included in a written request to call a special meeting as of the date of the demand for the record date, as set forth in the Zynga bylaws. The Zynga board of directors may fix the Ownership Record Date within ten (10) days of the Zynga secretary’s receipt of a valid demand to fix the Ownership Record Date. The Ownership Record Date shall not precede, and shall not be more than ten (10) days after, the date upon which the resolution fixing the Ownership Record Date is adopted by the Zynga board of directors. If an Ownership Record Date is not fixed by the Zynga board of directors, then the Ownership Record Date shall be the date that the first written request to call a special meeting is received by the Zynga secretary with respect to the proposed business to be submitted for stockholder approval at a special meeting. | |
| Number of Directors | ||
| The Take-Two bylaws provide that the number of directors which shall constitute the whole board shall be not less than one nor more than ten. Within such specified limits, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting or by written consent. There are currently eight Take-Two directors. In connection with the closing of the combination, | The Zynga charter provides that, subject to the rights of the holders of any series of preferred stock to elect additional directors under specified circumstances, the total number of authorized directors constituting the Zynga board of directors (the “Whole Board”) shall be fixed from time to time exclusively by the Zynga board of directors pursuant to a resolution | |
| Take-Two |
Zynga | |
| Take-Two has agreed to expand the size of its board of directors from eight to ten directors, and to appoint two of Zynga’s current directors to the Take-Two board of directors as designated by Zynga and approved by Take-Two. | adopted by a majority of the Whole Board. There are currently nine Zynga directors. | |
| Election of Directors | ||
| Pursuant to the Take-Two bylaws, (i) in a meeting of stockholders other than a contested election meeting, a candidate for director is elected to the Take-Two board of directors by the affirmative vote of a majority of the votes cast for such candidate (meaning the number of shares voted “for” a candidate must exceed the number of shares voted “against” such candidate) and (ii) in a contested election, each director is elected by an affirmative vote of a plurality of the stock present in person or represented by proxy entitled to vote on the election of directors.
The Take-Two charter expressly provides that the election of directors need not be by written ballot unless the Take-Two bylaws so provide. |
The Zynga bylaws provide that, except as otherwise provided by statute, by the Zynga charter or Zynga bylaws, a nominee for director shall be elected to the Zynga board of directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for which (a) (i) the Secretary receives a notice that a stockholder has nominated a person for election to the Zynga board of directors in compliance with the advance notice requirements for stockholder nominees set forth in the Zynga bylaws; and (ii) such nomination has not been withdrawn by such stockholder on or before the fourteenth (14th) day prior to the date that Zynga files its definitive proxy statement (regardless of whether or not thereafter revised or supplemented) with the Securities and Exchange Commission; or (b) the number of director nominees otherwise exceeds the number of directors to be elected at such meeting. If directors are to be elected by a plurality of the votes cast, stockholders shall not be permitted to vote against a nominee. With respect to the election of directors only, “abstentions”, “withholds” and “broker non-votes,” if any, although counted for quorum purposes, shall not be included in the total number of votes cast or be counted as votes for or against any nominee’s election.
The Zynga charter expressly provides that the election of directors need not be by written ballot unless the Zynga bylaws so provide. | |
| Cumulative Voting | ||
| Take-Two stockholders do not have cumulative voting rights. | Zynga stockholders do not have cumulative voting rights. | |
| Removal of Directors | ||
| The Take-Two directors may be removed with or without cause, by the holders of a majority of shares entitled to vote at an election of directors, unless otherwise restricted by the certificate of incorporation or by law. | Subject to any requirements set forth in the Zynga charter, the Zynga board of directors or any individual director may be removed from office at any time with or without cause by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of Zynga, entitled to vote generally at an election of directors. | |
| Take-Two |
Zynga | |
| Director Nominations by Stockholders | ||
| The Take-Two bylaws provide that stockholders who comply with the notice provisions set forth in the Take-Two bylaws, are a stockholder of record at the time of giving notice, on the record date for the applicable meeting of stockholders, and on the date of the applicable meeting of stockholders, and are entitled to vote at the annual meeting of stockholders may nominate a candidate to the Take-Two board of directors for election at such meeting. The notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination containing specified information and representations to Take-Two’s corporate secretary no later than ninety days and no earlier than one hundred twenty days prior to the anniversary of the date of the immediately preceding annual meeting of stockholders. | The Zynga bylaws provide that stockholders who comply with the notice provisions as set forth in the Zynga bylaws and are a stockholder of record (i) at the time of giving the stockholder’s notice provided for in the Zynga bylaws, (ii) on the record date for the determination of stockholders entitled to notice of the annual meeting, (iii) on the record date for the determination of stockholders entitled to vote at the annual meeting and (iv) at the time of the annual meeting, may nominate a person to the Zynga board of directors. The notice requirements generally require that, among other things, the stockholder deliver a notice of such nomination containing specified information, including representations about the nominee and the stockholder, to Zynga’s corporate secretary, to be received no later than the 90th day and no earlier than the 120th day before the one-year anniversary of the preceding year’s annual meeting. | |
| Stockholder Proposals | ||
| Business may be properly brought before an annual meeting by any stockholder who complies with the notice provisions set forth in the Take-Two bylaws, is a stockholder of record at the time of giving notice, on the record date for the applicable meeting of stockholders, and on the date of the applicable meeting of stockholders, and is entitled to vote at the annual meeting.
The notice requirements generally require that, among other things, the stockholder deliver a notice of any such proposal containing specified information and representations to Take-Two’s corporate secretary. To be timely, a stockholder’s notice must generally be delivered to Take-Two’s corporate secretary no later than 90 days and no earlier than 120 days prior to the anniversary of the date of the immediately preceding annual meeting of stockholders. |
Business may be properly brought before an annual meeting by any stockholder who complies with the notice provisions as set forth in the Zynga bylaws and is a stockholder of record (i) at the time of giving the stockholder’s notice provided for in the Zynga bylaws, (ii) on the record date for the determination of stockholders entitled to notice of the annual meeting, (iii) on the record date for the determination of stockholders entitled to vote at the annual meeting and (iv) at the time of the annual meeting. The notice requirements generally require that, among other things, the stockholder deliver a notice of such proposal containing specified information, including representations about the proposal and the stockholder, to Zynga’s corporate secretary, to be received no later than the 90th day and no earlier than the 120th day before the one-year anniversary of the preceding year’s annual meeting. | |
| Stockholder Action by Written Consent | ||
| The Take-Two bylaws provide that, unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, subject to the notice provisions set forth in the Take-Two bylaws, may be taken without a meeting, without prior notice and without a vote, if a consent in | Subject to the rights of the holders of any series of preferred stock, the Zynga charter prohibits stockholder action by written consent and requires that any action taken by stockholders be taken at an annual or special meeting of stockholders. | |
| Take-Two |
Zynga | |
| writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. | ||
| Special Stockholder Meetings | ||
| Except as otherwise required by statute or the certificate of incorporation, a special meeting of stockholders may only be called by the executive chairman of the Take-Two board of directors, Take-Two’s non-executive chairman of the board of directors, or by Take-Two’s Chief Executive Officer or President at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. The only matters to be brought before a special meeting are those specified in the meeting notice. | A special meeting of stockholders may only be called by the by the Chief Executive Officer of Zynga, the Zynga board of directors pursuant to a resolution adopted by a majority of the Whole Board, or the chairperson of the Zynga board of directors or the Chief Executive Officer of Zynga at the written request of one or more stockholders of record who have (or who are acting on behalf of beneficial owners who have) an aggregate net long position (as determined below) of not less than 25% of the outstanding shares of capital stock of the corporation as of the Ownership Record Date (as defined above), it being understood that each such stockholder of record (or beneficial owner directing such stockholder of record) must have held such individual’s net long position included in such aggregate amount continuously for the one-year period ending on the Ownership Record Date and must continue to hold such net long position through the date of the conclusion of the special meeting. | |
| Notice of Stockholder Meetings | ||
| Whenever stockholders are required or permitted to take any action at a meeting, they must be given notice that states the place, 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 of the meeting. Notice of any meeting 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. | Whenever stockholders are required or permitted to take any action at a meeting, they must be given notice that states the place, 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 of the meeting. Notice must be given no less than 10 and not 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. | |
| Take-Two |
Zynga | |
| Adjournment of Stockholder Meetings | ||
| If a quorum is not present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted that might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Subject to the rules and regulations of the board of directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures, and to do all such acts as, in the judgment of such chairman, are necessary, appropriate, convenient or desirable for the proper conduct of the meeting, including, without limitation, establishing the authority to conclude or adjourn the meeting with or without stockholder approval. |
In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairperson of the meeting or by vote of the holders of a majority of the voting power of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairperson of the meeting or by the vote of holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, Zynga may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. | |
| Limitation of Personal Liability of Directors | ||
| The Take-Two charter provides that no Take-Two director will be personally liable to Take-Two or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except (i) for breach of the director’s duty of loyalty, (ii) for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. | The Zynga charter provides that, to the fullest extent permitted by law, no Zynga director of the corporation shall be personally liable for monetary damages for breach of fiduciary duty as a director of Zynga. | |
| Indemnification of Directors and Officers | ||
| The Take-Two charter provides that each person who was or is made a party (or is threatened to be made a party) to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director | The Zynga bylaws provide that Zynga shall indemnify its directors and executive officers (as executive officers is defined in Rule 3b-7 promulgated under the 1934 Act) to the extent not prohibited by the DGCL or any other applicable law; provided, however, that Zynga may modify the | |
| Take-Two |
Zynga | |
| or officer of Take-Two or is or was serving at the request of Take-Two as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by Take-Two to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits Take-Two to provide broader indemnification rights than said law permitted Take-Two to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided the Take-Two bylaws, Take-Two shall indemnify any such person seeking indemnification in connection with any such proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Take-Two board of directors. The right to indemnification conferred in Article VII shall be a contract right and shall include the right to be paid by Take-Two the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made upon delivery to Take-Two of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified. Take-Two may, by action of its board of directors, provide indemnification to Take-Two’s employees and agents with the same scope and effect as the foregoing indemnification of directors and officers. | extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that Zynga shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Zynga board of directors, (iii) such indemnification is provided by Zynga, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under subsection 39(d) of the Zynga bylaws.
Zynga also has the power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Zynga board of directors shall have the power to delegate the determination of whether indemnification shall be given to any such person except executive officers to such officers or other persons as the Zynga board of directors shall determine.
Zynga shall advance to 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, by reason of the fact that he is or was a director or executive officer of Zynga, or is or was serving at the request of Zynga as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or executive officer in his or her capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to Zynga of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses. |
| Take-Two |
Zynga | |
|
Notwithstanding the foregoing, unless otherwise determined pursuant the Zynga bylaws, no advance shall be made by Zynga to an executive officer of Zynga (except by reason of the fact that such executive officer is or was a director of Zynga in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made pursuant to the Zynga bylaws that the 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 Zynga. | ||
| Rights Upon Liquidation | ||
| In the event of any dissolution, liquidation or winding-up of the affairs of Take-Two, after payment or provision for payment of the debts or other liabilities of Take-Two, the holders of all then outstanding shares of preferred stock of each series shall be entitled to receive, out of the net assets of Take-Two, an amount in cash for each share equal to the amount fixed by the Take-Two board of directors for such series of preferred stock together with all cumulative dividends accrued thereon to the date fixed for distribution and not theretofore paid or declared and set apart for payment in full before any distribution is made to the holders of junior shares. If upon any dissolution, liquidation or winding-up of the affairs of Take-Two, the net assets available for distribution shall be insufficient to pay the holders of all outstanding shares of preferred stock in full amounts to which they respectively shall be entitled, the holders of all outstanding shares of preferred stock of all series shall share ratably in the distribution of assets in accordance with the sums which would be payable upon such distribution if all sums payable, were paid in full. Neither the merger nor the consolidation of Take-Two, nor the sale, lease or conveyance of all or a part of its assets, shall be deemed to be a liquidation or winding-up of the affairs of Take-Two within the meaning of the Take-Two charter.
In the event of any dissolution, liquidation or winding-up of the affairs of Take-Two, after payment or provision for payment of the debts and other liabilities of Take-Two, and of the amounts to which the holders |
Upon liquidation, dissolution or winding-up, the assets legally available for distribution to Zynga stockholders would be distributable ratably among the holders of Zynga common stock.
Under Zynga’s charter, Zynga’s board of directors may designate the powers, designations, preferences and relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, including without limitation dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including any sinking fund provisions), redemption price or prices and liquidation preferences. The issuance of preferred stock could have the effect the rights of Zynga common stock, including by impairing the liquidation rights of Zynga common stock. | |
| Take-Two |
Zynga | |
| of preferred stock are entitled, if any, the holders of all outstanding shares of common stock shall be entitled to share ratably in the remaining net assets of Take-Two. | ||
| Stockholder Rights Plan | ||
| The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Take-Two does not have a stockholder rights plan currently in effect. | The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Zynga does not have a stockholder rights plan currently in effect. | |
| Certain Business Combinations | ||
| Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Take-Two charter has not opted out of Section 203.
The DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above. The Take-Two charter does not require a greater vote. |
Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (i) together with its affiliates and associates, owns or (ii) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board of directors approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board of directors and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Zynga charter has not opted out of Section 203.
The DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above. The Zynga charter does not require a greater vote. | |
| Take-Two |
Zynga | |
| Exclusive Forum | ||
| The Take-Two bylaws provide that, unless Take-Two consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Take-Two; (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former Take-Two director, officer, employee or stockholder to Take-Two or its stockholders; (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the Take-Two charter or the Take-Two bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim governed by the internal affairs doctrine, is the Court of Chancery of the State of Delaware is or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior Court of the State of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the United States District Court for the District of Delaware, subject to the court’s having personal jurisdiction over the indispensable parties named therein. The Take-Two bylaws also provide that, unless Take-Two consents in writing to the selection of an alternate forum, the U.S. federal district courts are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Nothing in the Take-Two charter or the Take-Two bylaws would preclude stockholders that assert claims under the Exchange Act from bringing such claims in federal court to the extent the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law. | The Zynga charter provides that the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Zynga; (ii) any action asserting a claim of breach of a fiduciary duty owed by any Zynga director, officer or other employee of Zynga to Zynga or Zynga’s stockholders; (iii) any action asserting a claim against the Zynga arising pursuant to any provision of the DGCL, the Zynga charter or Zynga bylaws; or (iv) any action asserting a claim against Zynga governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Zynga shall be deemed to have notice of the foregoing.
The Zynga bylaws provide that, unless Zynga consents in writing to the selection of an alternative forum, the U.S. federal district courts the U.S. federal district courts are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Failure to enforce the foregoing provisions would cause Zynga irreparable harm and Zynga shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. | |
