| NAVISITE INC Item 1A Risk Factors We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control |
| Forward-looking statements in this report and those made from time to time by us through our senior management are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 |
| Forward-looking statements concerning the expected future revenues, earnings or financial results or concerning project plans, performance, or development of products and services, as well as other estimates related to future operations are necessarily only estimates of future results and we cannot assure you that actual results will not materially differ from expectations |
| Forward-looking statements represent management’s current expectations and are inherently uncertain |
| We do not undertake any obligation to update forward-looking 12 _________________________________________________________________ [58]Table of Contents statements |
| If any of the following risks actually occurs, our business, financial condition and operating results could be materially adversely affected |
| We have a history of losses and may never achieve or sustain profitability |
| We have never been profitable and may never become profitable |
| As of July 31, 2006, we had incurred losses since our incorporation resulting in an accumulated deficit of approximately dlra469dtta9 million |
| We anticipate that we will continue to incur net losses in the future |
| As a result, we can give no assurance that we will achieve profitability or be capable of sustaining profitable operations |
| Our financing agreement with Silver Point Finance includes various covenants and restrictions that may negatively affect our liquidity and our ability to operate and manage our business |
| As of July 31, 2006, we owed Silver Point Finance approximately dlra70dtta7 million under our financing agreement |
| The financing agreement: • restricts our ability to create or incur additional indebtedness; • restricts our ability to create, incur, assume or permit to exist any lien or security interest in any of our assets, excluding certain limited exemptions; • restricts our ability to make investments including joint ventures, with certain limited exemptions; • requires that we meet financial covenants for fixed charges, leverage, adjusted EBITDA, capital expenditures and minimum bookings; • restricts our ability to enter into any transaction of merger, consolidation or liquidation; • restricts our ability to enter into any transaction with any holder of more than 5prca of any class of capital stock except in the ordinary course of business; and • restricts our ability to amend our organizational documents |
| If we breach our senior secured term loan facility with Silver Point Finance, a default could result |
| A default, if not waived, could result in, among other things, us not being able to borrow additional amounts from Silver Point Finance |
| In addition, all or a portion of our outstanding amounts may become due and payable on an accelerated basis, which would adversely affect our liquidity and our ability to manage our business |
| The principal amounts of our senior secured term loan facility with Silver Point Finance are to be repaid in consecutive quarterly installments of increasing amounts beginning on April 30, 2007, while interest-only payments made in consecutive quarterly installments began in July 2006 |
| All remaining amounts due and outstanding under the financing agreement are due to be repaid in full by April 11, 2011 |
| In addition, our senior secured term loan facility with Silver Point Finance exposes us to interest rate fluctuations which could significantly increase the interest we pay Silver Point Finance |
| We are required, under our senior secured term loan facility with Silver Point Finance, to purchase interest rate protection which shall effectively limit the unadjusted LIBOR component of the interest costs of our loan with respect to not less than 70prca of the principal amount at a rate of not more than 6dtta5prca per annum |
| Had our senior secured term loan facility with Silver Point Finance been outstanding for the full fiscal year, a hypothetical 100 basis point increase in our LIBOR rate would have resulted in an approximate dlra0dtta7 million increase in our interest expense for the fiscal year ended July 31, 2006 |
| A significant portion of our revenue comes from one customer and, if we lost this customer, it would have a significant adverse impact on our business results and cash flows |
| The New York State Department of Labor represented approximately 9prca, 8prca and 12prca of our consolidated revenue for the fiscal years ended July 31, 2006, 2005 and 2004, respectively |
| The New York State Department of Labor has multiple contracts with us and has been a long-term customer of ours, but we cannot assure you that we will be able to retain all of the contracts with this customer |
| We also cannot assure you that we will be able to maintain the same level of service to this customer or that our revenue from this customer will not significantly decline in future periods |
| On August 16, 2005, we entered into a new agreement with the New York State Department of Labor with a two year term which is set to expire on June 14, 2007 |
| The New York State Department of Labor is not obligated under our new agreement to buy a minimum amount of services from us or designate us as its sole supplier of any particular service |
| Further, The New York State Department of Labor has the right to terminate the new agreement at any time by providing us with 60 days notice |
| We have been notified by the New York Department of Labor that funding for the America’s Job 13 _________________________________________________________________ [59]Table of Contents Bank program will cease at the expiration of our current contract |
| We have begun making preparations to continue the program and service without government funding and expect to receive revenues from advertising placement as well as other ancillary services, but we cannot assure you that revenue will remain at the same level or that cash flows will not be adversely impacted |
| Atlantic Investors, LLC may have interests that conflict with the interests of our other stockholders and, as our majority stockholder, can prevent new and existing investors from influencing significant corporate decisions |
| Atlantic Investors, LLC owns approximately 59prca of our outstanding capital stock as of September 30, 2006 |
| Following the closing of our senior secured term loan facility with Silver Point Finance on April 11, 2006, Atlantic Investors’ ownership was approximately 43prca on a fully diluted basis |
| In addition, Atlantic Investors holds a promissory note in the principal amount of dlra3dtta0 million, the maturity date of which was extended, pursuant to the amended loan agreement dated April 11, 2006, to 90 days after the maturity date of the Silver Point Finance loan facility |
| Atlantic has the right to convert any unpaid amounts into common stock at any time at a price of dlra2dtta81 per share |
| As of July 31, 2006, we had recorded accrued interest on this note in the amount of dlra0dtta8 million |
| Atlantic Investors has the power, acting alone, to elect a majority of our Board of Directors and has the ability to control our management and affairs and determine the outcome of any corporate action requiring stockholder approval |
| Regardless of how our other stockholders may vote, Atlantic Investors has the ability to determine whether to engage in a merger, consolidation or sale of our assets and any other significant corporate transaction |
| Under Delaware law, Atlantic Investors is able to exercise its voting power by written consent, without convening a meeting of the stockholders |
| Atlantic Investors’ ownership of a majority of our outstanding common stock may have the effect of delaying, deterring or preventing a change in control of us or discouraging a potential acquirer from attempting to obtain control of us, which could adversely affect the market price of our common stock |
| Members of our management group also have significant interests in Atlantic Investors, LLC, which may create conflicts of interest |
| Some of the members of our management group also serve as members of the management group of Atlantic Investors, LLC and its affiliates |
| Specifically, Andrew Ruhan, our Chairman of the Board, holds a 10prca equity interest in Unicorn Worldwide Holdings Limited, a managing member of Atlantic Investors |
| Arthur Becker, our President and Chief Executive Officer and a member of our Board of Directors, is the managing member of Madison Technology LLC, a managing member of Atlantic Investors |
| As a result, these NaviSite officers and directors may face potential conflicts of interest with each other and with our stockholders |
| They may be presented with situations in their capacity as our officers or directors that conflict with their fiduciary obligations to Atlantic Investors, which in turn may have interests that conflict with the interests of our other stockholders |
| Our common stockholders may suffer dilution in the future upon exercise of outstanding convertible securities or the issuance of additional securities in potential future acquisitions or financings |
| In connection with our financing agreement with Silver Point Finance we issued warrants to Silver Point Finance to purchase an aggregate of 3cmam514cmam933 shares of our common stock |
| If the warrants are exercised, Silver Point Finance may obtain a significant equity interest in NaviSite and other stockholders may experience significant and immediate dilution |
| Our stockholders will also experience dilution to the extent that additional shares of our common stock are issued in potential future acquisitions or financings |
| Acquisitions may result in disruptions to our business or distractions of our management due to difficulties in integrating acquired personnel and operations, and these integrations may not proceed as planned |
| Since December 2002, we have acquired CBTM (accounted for as an “as if pooling”), Avasta, Conxion, selected assets of Interliant, all of the shares of ten wholly-owned subsidiaries of CBT (accounted for as an “as if pooling”) and substantially all of the assets and liabilities of Surebridge |
| We intend to continue to expand our business through the acquisition of companies, technologies, products and services |
| Acquisitions involve a number of special problems and risks, including: • difficulty integrating acquired technologies, products, services, operations and personnel with the existing businesses; • difficulty maintaining relationships with important third parties, including those relating to marketing alliances and providing preferred partner status and favorable pricing; 14 _________________________________________________________________ [60]Table of Contents • diversion of management’s attention in connection with both negotiating the acquisitions and integrating the businesses; • strain on managerial and operational resources as management tries to oversee larger operations; • inability to retain and motivate management and other key personnel of the acquired businesses; • exposure to unforeseen liabilities of acquired companies; • potential costly and time-consuming litigation, including stockholder lawsuits; • potential issuance of securities in connection with an acquisition with rights that are superior to the rights of holders of our common stock, or which may have a dilutive effect on our common stockholders; • the need to incur additional debt or use cash; and • the requirement to record potentially significant additional future operating costs for the amortization of intangible assets |
| As a result of these problems and risks, businesses we acquire may not produce the revenues, earnings or business synergies that we anticipated, and acquired products, services or technologies might not perform as we expected |
| We may not be able to successfully address these problems and we cannot assure you that the acquisitions will be successfully identified and completed or that, if acquisitions are completed, the acquired businesses, products, services or technologies will generate sufficient revenue to offset the associated costs or other harmful effects on our business |
| In addition, our limited operating history with our current structure resulting from recent acquisitions makes it very difficult for us to evaluate or predict our ability to, among other things, retain customers, generate and sustain a revenue base sufficient to meet our operating expenses, and achieve and sustain profitability |
| A failure to meet customer specifications or expectations could result in lost revenues, increased expenses, negative publicity, claims for damages and harm to our reputation and cause demand for our services to decline |
| Our agreements with customers require us to meet specified service levels for the services we provide |
| In addition, our customers may have additional expectations about our services |
| Any failure to meet customers’ specifications or expectations could result in: • delayed or lost revenue; • requirements to provide additional services to a customer at reduced charges or no charge; • negative publicity about us, which could adversely affect our ability to attract or retain customers; and • claims by customers for substantial damages against us, regardless of our responsibility for the failure, which may not be covered by insurance policies and which may not be limited by contractual terms of our engagement |
| Our ability to successfully market our services could be substantially impaired if we are unable to deploy new infrastructure systems and applications or if new infrastructure systems and applications deployed by us prove to be unreliable, defective or incompatible |
| We may experience difficulties that could delay or prevent the successful development, introduction or marketing of hosting and application management services in the future |
| If any newly introduced infrastructure systems and applications suffer from reliability, quality or compatibility problems, market acceptance of our services could be greatly hindered and our ability to attract new customers could be significantly reduced |
| We cannot assure you that new applications deployed by us will be free from any reliability, quality or compatibility problems |
| If we incur increased costs or are unable, for technical or other reasons, to host and manage new infrastructure systems and applications or enhancements of existing applications, our ability to successfully market our services could be substantially limited |
| Any interruptions in, or degradation of, our private transit Internet connections could result in the loss of customers or hinder our ability to attract new customers |
| Our customers rely on our ability to move their digital content as efficiently as possible to the people accessing their Web sites and infrastructure systems and applications |
| We utilize our direct private transit Internet connections to major network providers, such as Level 3 and Global 15 _________________________________________________________________ [61]Table of Contents Crossing as a means of avoiding congestion and resulting performance degradation at public Internet exchange points |
| We rely on these telecommunications network suppliers to maintain the operational integrity of their networks so that our private transit Internet connections operate effectively |
| If our private transit Internet connections are interrupted or degraded, we may face claims by, or lose, customers, and our reputation in the industry may be harmed, which may cause demand for our services to decline |
| If we are unable to maintain existing and develop additional relationships with software vendors, the sales and marketing of our service offerings may be unsuccessful |
| We believe that to penetrate the market for managed IT services we must maintain existing and develop additional relationships with industry-leading software vendors |
| We license or lease select software applications from software vendors, including IBM, Microsoft and Oracle |
| Our relationships with Microsoft and Oracle are critical to the operations and success of our business |
| The loss of our ability to continue to obtain, utilize or depend on any of these applications or relationships could substantially weaken our ability to provide services to our customers |
| It may also require us to obtain substitute software applications that may be of lower quality or performance standards or at greater cost |
| In addition, because we generally license applications on a non-exclusive basis, our competitors may license and utilize the same software applications |
| In fact, many of the companies with which we have strategic relationships currently have, or could enter into, similar license agreements with our competitors or prospective competitors |
| We cannot assure you that software applications will continue to be available to us from software vendors on commercially reasonable terms |
| If we are unable to identify and license software applications that meet our targeted criteria for new application introductions, we may have to discontinue or delay introduction of services relating to these applications |
| Our network infrastructure could fail which would impair our ability to provide guaranteed levels of service and could result in significant operating losses |
| To provide our customers with guaranteed levels of service, we must operate our network infrastructure 24 hours a day, seven days a week without interruption |
| We must, therefore, protect our network infrastructure, equipment and customer files against damage from human error, natural disasters, unexpected equipment failure, power loss or telecommunications failures, terrorism, sabotage or other intentional acts of vandalism |
| Even if we take precautions, the occurrence of a natural disaster, equipment failure or other unanticipated problem at one or more of our data centers could result in interruptions in the services we provide to our customers |
| We cannot assure you that our disaster recovery plan will address all, or even most, of the problems we may encounter in the event of a disaster or other unanticipated problem |
| We have experienced service interruptions in the past, and any future service interruptions could: • require us to spend substantial amounts of money to replace equipment or facilities; • entitle customers to claim service credits or seek damages for losses under our service level guarantees; • cause customers to seek alternate providers; or • impede our ability to attract new customers, retain current customers or enter into additional strategic relationships |
| Our dependence on third parties increases the risk that we will not be able to meet our customers’ needs for software, systems and services on a timely or cost-effective basis, which could result in the loss of customers |
| Our services and infrastructure rely on products and services of third-party providers |
| We purchase key components of our infrastructure, including networking equipment, from a limited number of suppliers, such as IBM, Cisco Systems, F5 Networks, Microsoft and Oracle |
| We cannot assure you that we will not experience operational problems attributable to the installation, implementation, integration, performance, features or functionality of third-party software, systems and services |
| We cannot assure you that we will have the necessary hardware or parts on hand or that our suppliers will be able to provide them in a timely manner in the event of equipment failure |
| Our ability to timely obtain and continue to maintain the necessary hardware or parts could result in sustained equipment failure and a loss of revenue due to customer loss or claims for service credits under our service level guarantees |
| We could be subject to increased operating costs, as well as claims, litigation or other potential liability, in connection with risks associated with Internet security and the security of our systems |
| A significant barrier to the growth of e-commerce and communications over the Internet has been the need for secure transmission of confidential information |
| Several of our infrastructure systems and application services use encryption and 16 _________________________________________________________________ [62]Table of Contents authentication technology licensed from third parties to provide the protections necessary to ensure secure transmission of confidential information |
| We also rely on security systems designed by third parties and the personnel in our network operations centers to secure those data centers |
| Any unauthorized access, computer viruses, accidental or intentional actions and other disruptions could result in increased operating costs |
| For example, we may incur additional significant costs to protect against these interruptions and the threat of security breaches or to alleviate problems caused by these interruptions or breaches |
| If a third party were able to misappropriate a consumer’s personal or proprietary information, including credit card information, during the use of an application solution provided by us, we could be subject to claims, litigation or other potential liability |
| Third-party infringement claims against our technology suppliers, customers or us could result in disruptions in service, the loss of customers or costly and time-consuming litigation |
| We license or lease most technologies used in the infrastructure systems and application services that we offer |
| Our technology suppliers may become subject to third-party infringement or other claims and assertions, which could result in their inability or unwillingness to continue to license their technologies to us |
| We cannot assure you that third parties will not assert claims against us in the future or that these claims will not be successful |
| Any infringement claim as to our technologies or services, regardless of its merit, could result in delays in service, installation or upgrades, the loss of customers or costly and time-consuming litigation |
| We may be subject to legal claims in connection with the information disseminated through our network, which could divert management’s attention and require us to expend significant financial resources |
| We may face liability for claims of defamation, negligence, copyright, patent or trademark infringement and other claims based on the nature of the materials disseminated through our network |
| For example, lawsuits may be brought against us claiming that content distributed by some of our customers may be regulated or banned |
| In these and other instances, we may be required to engage in protracted and expensive litigation that could have the effect of diverting management’s attention from our business and require us to expend significant financial resources |
| Our general liability insurance may not cover any of these claims or may not be adequate to protect us against all liability that may be imposed |
| In addition, on a limited number of occasions in the past, businesses, organizations and individuals have sent unsolicited commercial e-mails from servers hosted at our facilities to a number of people, typically to advertise products or services |
| This practice, known as “spamming,” can lead to statutory liability as well as complaints against service providers that enable these activities, particularly where recipients view the materials received as offensive |
| We have in the past received, and may in the future receive, letters from recipients of information transmitted by our customers objecting to the transmission |
| Although we prohibit our customers by contract from spamming, we cannot assure you that our customers will not engage in this practice, which could subject us to claims for damages |
| If we fail to attract or retain key officers, management and technical personnel, our ability to successfully execute our business strategy or to continue to provide services and technical support to our customers could be adversely affected and we may not be successful in attracting new customers |
| We believe that attracting, training, retaining and motivating technical and managerial personnel, including individuals with significant levels of infrastructure systems and application expertise, is a critical component of the future success of our business |
| Qualified technical personnel are likely to remain a limited resource for the foreseeable future and competition for these personnel is intense |
| The departure of any of our executive officers, particularly Arthur P Becker, our Chief Executive Officer and President, or core members of our sales and marketing teams or technical service personnel, would have negative ramifications on our customer relations and operations |
| The departure of our executive officers could adversely affect the stability of our infrastructure and our ability to provide the guaranteed service levels our customers expect |
| Any officer or employee can terminate his or her relationship with us at any time |
| In addition, we do not carry life insurance on any of our personnel |
| Over the past three years, we have had reductions-in-force and departures of several members of senior management due to redundancies and restructurings resulting from the consolidation of our acquired companies |
| In the event of future reductions or departures of employees, our ability to successfully execute our business strategy, or to continue to provide services to our customers or attract new customers, could be adversely affected |
| The unpredictability of our quarterly results may cause the trading price of our common stock to fluctuate or decline |
| Our quarterly operating results may vary significantly from quarter-to-quarter and period-to-period as 17 _________________________________________________________________ [63]Table of Contents a result of a number of factors, many of which are outside of our control and any one of which may cause our stock price to fluctuate |
| The primary factors that may affect our operating results include the following: • a reduction of market demand and/or acceptance of our services; • our ability to develop, market and introduce new services on a timely basis; • the length of the sales cycle for our services; • the timing and size of sales of our services, which depends on the budgets of our customers; • downward price adjustments by our competitors; • changes in the mix of services provided by our competitors; • technical difficulties or system downtime affecting the Internet or our hosting operations; • our ability to meet any increased technological demands of our customers; and • the amount and timing of costs related to our marketing efforts and service introductions |
| Due to the above factors, we believe that quarter-to-quarter or period-to-period comparisons of our operating results may not be a good indicator of our future performance |
| Our operating results for any particular quarter may fall short of our expectations or those of stockholders or securities analysts |
| In this event, the trading price of our common stock would likely fall |
| If we are unsuccessful in pending and potential litigation matters, our financial condition may be adversely affected |
| We are currently involved in various pending and potential legal proceedings, including a class action lawsuit related to our initial public offering |
| If we are ultimately unsuccessful in any of these matters, we could be required to pay substantial amounts of cash to the other parties |
| The amount and timing of any of these payments could adversely affect our financial condition |
| If the markets for outsourced information technology infrastructure and applications, Internet commerce and communication decline, there may be insufficient demand for our services and, as a result, our business strategy and objectives may fail |
| The increased use of the Internet for retrieving, sharing and transferring information among businesses and consumers is developing, and the market for the purchase of products and services over the Internet is still relatively new and emerging |
| Our industry has experienced periods of rapid growth, followed by a sharp decline in demand for products and services, which related to the failure in the last few years of many companies focused on developing Internet-related businesses |
| If acceptance and growth of the Internet as a medium for commerce and communication declines, our business strategy and objectives may fail because there may not be sufficient market demand for our managed IT services |
| If we do not respond to rapid changes in the technology sector, we will lose customers |
| The markets for the technology-related services we offer are characterized by rapidly changing technology, evolving industry standards, frequent new service introductions, shifting distribution channels and changing customer demands |
| We may not be able to adequately adapt our services or to acquire new services that can compete successfully |
| In addition, we may not be able to establish and maintain effective distribution channels |
| We risk losing customers to our competitors if we are unable to adapt to this rapidly evolving marketplace |
| The market in which we operate is highly competitive and is likely to consolidate, and we may lack the financial and other resources, expertise or capability needed to capture increased market share or maintain market share |
| We compete in the managed IT services market |
| This market is rapidly evolving, highly competitive and likely to be characterized by over-capacity and industry consolidation |
| Our competitors may consolidate with one another or acquire software application vendors or technology providers, enabling them to more effectively compete with us |
| Many participants in this market have suffered significantly in the last several years |
| We believe that participants in this market must grow rapidly and achieve a significant presence to compete effectively |
| This consolidation could affect prices and other competitive factors in ways that would impede our ability to compete successfully in the managed IT services market |
| 18 _________________________________________________________________ [64]Table of Contents Further, our business is not as developed as that of many of our competitors |
| Many of our competitors have substantially greater financial, technical and market resources, greater name recognition and more established relationships in the industry |
| Many of our competitors may be able to: • develop and expand their network infrastructure and service offerings more rapidly; • adapt to new or emerging technologies and changes in customer requirements more quickly; • take advantage of acquisitions and other opportunities more readily; or • devote greater resources to the marketing and sale of their services and adopt more aggressive pricing policies than we can |
| We may lack the financial and other resources, expertise or capability needed to maintain or capture increased market share in this environment in the future |
| Because of these competitive factors and due to our comparatively small size and our lack of financial resources, we may be unable to successfully compete in the managed IT services market |
| Difficulties presented by international economic, political, legal, accounting and business factors could harm our business in international markets |
| We operate a data center in the United Kingdom |
| Revenue from our foreign operations accounted for approximately 4prca of our total revenue during the fiscal year ended July 31, 2006 |
| We recently expanded our operations to India, which could eventually broaden our customer service support |
| Although we expect to focus most of our growth efforts in the United States, we may enter into joint ventures or outsourcing agreements with third parties, acquire complementary businesses or operations, or establish and maintain new operations outside of the United States |
| Some risks inherent in conducting business internationally include: • unexpected changes in regulatory, tax and political environments; • longer payment cycles and problems collecting accounts receivable; • geopolitical risks such as political and economic instability and the possibility of hostilities among countries or terrorism; • reduced protection of intellectual property rights; • fluctuations in currency exchange rates or imposition of restrictive currency controls; • our ability to secure and maintain the necessary physical and telecommunications infrastructure; • challenges in staffing and managing foreign operations; • employment laws and practices in foreign countries; • laws and regulations on content distributed over the Internet that are more restrictive than those currently in place in the United States; and • significant changes in immigration policies or difficulties in obtaining required immigration approvals |
| Any one or more of these factors could adversely affect our international operations and consequently, our business |
| We may become subject to burdensome government regulation and legal uncertainties that could substantially harm our business or expose us to unanticipated liabilities |
| It is likely that laws and regulations directly applicable to the Internet or to hosting and managed application service providers may be adopted |
| These laws may cover a variety of issues, including user privacy and the pricing, characteristics and quality of products and services |
| The adoption or modification of laws or regulations relating to commerce over the Internet could substantially impair the growth of our business or expose us to unanticipated liabilities |
| Moreover, the applicability of existing laws to the Internet and hosting and managed application service providers is uncertain |
| These existing laws could expose us to substantial liability if they are found to be applicable to our business |
| For example, we provide services over the Internet in many states in the United States and elsewhere and facilitate the activities of our customers in these jurisdictions |
| As a result, we may be required to qualify to do business, be subject to taxation 19 _________________________________________________________________ [65]Table of Contents or be subject to other laws and regulations in these jurisdictions, even if we do not have a physical presence, employees or property in those states |
| The price of our common stock has been volatile, and may continue to experience wide fluctuations |
| Since January 2005, our common stock has closed as low as dlra1dtta19 per share and as high as dlra5dtta45 per share |
| The trading price of our common stock has been and may continue to be subject to wide fluctuations due to the risk factors discussed in this section and elsewhere in this report |
| Fluctuations in the market price of our common stock may cause an investor in our common stock to lose some or all of his investment |
| Anti-takeover provisions in our corporate documents may discourage or prevent a takeover |
| Provisions in our certificate of incorporation and our by-laws may have the effect of delaying or preventing an acquisition or merger in which we are acquired or a transaction that changes our Board of Directors |
| These provisions: • authorize the board to issue preferred stock without stockholder approval; • prohibit cumulative voting in the election of directors; • limit the persons who may call special meetings of stockholders; and • establish advance notice requirements for nominations for the election of directors or for proposing matters that can be acted on by stockholders at stockholder meetings |