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DESCRIPTION OF PHARMA-BIO SERV CAPITAL STOCK
Pharma-Bio
Serv, Inc. ("we," "us," "our," or the "Company") is authorized to
issue 50,000,000 shares of common stock, par value $.0001 per
share, and 10,000,000 shares of preferred stock, par value $.0001
per share.
Common Stock
Holders
of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders and are
entitled to share in such dividends as the board of directors, in
its discretion, may declare from funds legally available. In the
event of liquidation, each outstanding share entitles its holder to
participate ratably in the assets remaining after payment of
liabilities.
Our
directors are elected by a plurality vote. Because holders of
common stock do not have cumulative voting rights, holders or a
single holder of more than 50% of the outstanding shares of common
stock present and voting at an annual stockholders meeting at which
a quorum is present can elect all of our directors. Our
stockholders have no preemptive or other rights to subscribe for or
purchase additional shares of any class of stock or of any other
securities.
As
of October 31, 2019, the Company has 22,995,881 shares of common
stock outstanding.
The
transfer agent for our common stock is American Stock Transfer
& Trust Company.
Preferred Stock
The
board of directors is authorized to issue up to 10,000,000 shares
of preferred stock, which may be issued in series from time to time
with such designations, rights, preferences and limitations as the
board of directors may declare by resolution. The rights,
preferences and limitations of separate series of preferred stock
may differ with respect to such matters as may be determined by the
board of directors, including, without limitation, the rate of
dividends, method and nature of payment of dividends, terms of
redemption, amounts payable on liquidation, sinking fund provisions
(if any), conversion rights (if any) and voting rights. The
potential exists, therefore, that additional shares of preferred
stock might be issued which would grant dividend preferences and
liquidation preferences to preferred stockholders over common
stockholders. Unless the nature of a particular transaction and
applicable statute require such approval, the board of directors
has the authority to issue shares of preferred stock without
stockholder approval. The issuance of preferred stock may have the
effect of delaying or preventing a change in control without any
further action by stockholders. As of October 31, 2019, the Company
has no outstanding shares of preferred stock.
Delaware Law, Certificate of Incorporation and Bylaws.
We
are subject to the provisions of Section 203 of the Delaware
General Corporation Law statute. Section 203 prohibits a
publicly-held Delaware corporation from engaging in a
“business combination” with an “interested
stockholder” for a period of three years after the person
became an interested stockholder, unless the business combination
is approved in a prescribed manner. A “business
combination” includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an “interested
stockholder” is a person who, together with affiliates and
associates, owns, or within the prior three years did own, 15% or
more of the corporation’s voting stock.
Our
certificate of incorporation contains certain provisions permitted
under Delaware General Corporation Law relating to the liability of
directors. The provisions eliminate a director’s liability
for monetary damages for a breach of fiduciary duty, except in
certain circumstances where such liability may not be eliminated
under applicable law. Further, our certificate of incorporation
contains provisions to indemnify our directors and officers to the
fullest extent permitted by Delaware General Corporation
Law.
Provisions
of our certificate of incorporation and bylaws may delay or
discourage transactions involving an actual or potential change in
our control or change in our management, including transactions in
which stockholders might otherwise receive a premium for their
shares or transactions that our stockholders might otherwise deem
to be in their best interests. Therefore, these provisions could
adversely affect the price of our common stock. Among other things,
our certificate of incorporation and bylaws:
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permit
our board of directors to issue up to 10,000,000 shares of
preferred stock, with any rights, preferences and privileges as
they may designate;
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provide
that the authorized number of directors may be changed only by
resolution adopted by a majority of the board of
directors;
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provide
that all vacancies, including newly created directorships, may,
except as otherwise required by law or subject to the rights of
holders of preferred stock as designated from time to time, be
filled by the affirmative vote of a majority of directors then in
office, even if less than a quorum;
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divide
our board of directors into three classes; and
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do not
provide for cumulative voting rights, which means that holders of a
majority of the shares of Common Stock entitled to vote in any
election of directors can elect all of the directors standing for
election.
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