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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
SCHEDULE 14C
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
____________________________________________
Check the appropriate box:
ý Preliminary Information Statement
¨ Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
¨ Definitive Information Statement
Meta Platforms, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check all boxes that apply):
ý No fee required.
¨ Fee paid previously with preliminary materials.
¨ Fee computed on table in exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a-101) per Item 1 of this Schedule and Exchange Act Rules
14c-5(g) and 0-11
1 Meta Way
Menlo Park, California 94025
NOTICE OF ACTION TAKEN BY WRITTEN CONSENT BY HOLDERS OF
A MAJORITY OF THE AGGREGATE VOTING POWER
OF ALL OUTSTANDING SHARES OF CAPITAL STOCK OF META PLATFORMS, INC.
To Our Shareholders:
This notice and accompanying information statement (the "Information Statement") is being distributed to the holders of record, as of the close of business
on October 20, 2026 (the "Record Date"), of the Class A common stock and the Class B common stock of Meta Platforms, Inc. (the "Company," "Meta," "we,"
"us," or "our").
The purpose of the Information Statement is to inform you of action taken by holders of a majority of the voting power of the outstanding shares of capital
stock of the Company to (i) amend and restate the Company's Amended and Restated Certificate of Incorporation (the "Charter"), to be effective as of January
19, 2027 (the "Charter Effective Date"), to, among other things, establish a new class of capital stock, which will be known as Class C common stock (as so
amended and restated, the "Restated Charter"), and (ii) amend and restate the Meta Platforms, Inc. 2025 Equity Incentive Plan (the "2025 Plan") to, among
other things, provide that shares available for issuance thereunder can consist of either shares of our Class A common stock or shares of our new Class C
common stock, as further described in this Information Statement (the "Equity Plan Amendment"). On the Record Date, the Consenting Shareholders (as defined
below) delivered to the Company a written consent (the "Written Consent") approving the Restated Charter and the Equity Plan Amendment.
The "Consenting Shareholders" are, collectively, CZI Holdings, LLC, Chan Zuckerberg Holdings, LLC, Chan Zuckerberg Holdings II, LLC, Chan
Zuckerberg Holdings III, LLC, Chan Zuckerberg Holdings IV, LLC, Chan Zuckerberg Holdings V, LLC, and Chan Zuckerberg Holdings VI, LLC. As of the close of
business on the Record Date, the Consenting Shareholders together owned 315,826,951 shares of the Company's Class B common stock, representing
approximately 56.1% of the voting power of the outstanding shares of capital stock of the Company, on a combined basis.
Our board of directors (the "Board") has (i) adopted and declared advisable, based on the unanimous recommendation of a special committee consisting
of disinterested and independent directors established to review such transaction (the "Special Committee"), the Restated Charter, which adjusts our capital
structure by establishing a new class of capital stock, which will be known as Class C common stock (the "Recapitalization"), and (ii) declared a dividend of one
share of Class C common stock for each outstanding share of Class A common stock and Class B common stock (the "Dividend"), contingent upon the filing and
effectiveness of the Restated Charter. Based on the recommendation of the Special Committee and as further described below, our Board believes that the
Recapitalization and Dividend are in the best interests of the Company and our shareholders in order to, among other things, (i) create a publicly traded, non-
voting equity security that the Company may use for capital raising, employee compensation, potential acquisitions, and other general corporate purposes, in
each case, without diluting the voting power of the existing Class A and Class B common stock; (ii) establish a deep and liquid trading market for Class C
common stock designed to minimize any trading-value discount relative to the Class A common stock; (iii) in addition to the initial number of shares of Class C
common stock that are freely transferable immediately following the Dividend, ensure that Mr. Zuckerberg's ability to freely transfer his economic interest in his
remaining shares of Class C common stock from the Dividend is permitted only in compliance with the Founder Alignment Agreement (as defined below); (iv)
ensure that future dividends of Class C common stock pursuant to the Founder Alignment Agreement are subject to the Company's achievement of extraordinary
stock price targets and certain other conditions in the Founder Alignment Agreement; and (v) continue to align with the determinations historically made by the
Board, acting through its Compensation, Nominating & Governance Committee, as disclosed in the Company's annual proxy statements, that Mr. Zuckerberg's
equity ownership sufficiently aligns his interests with those of the Company's shareholders such that no cash compensation or equity or equity-based awards to
him are warranted (and, by not having to establish any such cash compensation or grant any such equity or equity-based awards, accrue significant benefit to
the Company's shareholders by avoiding the compensation expense and impact on the Company's stock price that any such cash compensation program or
equity or equity-based grants to Mr. Zuckerberg would have imposed on the Company's shareholders). The Company also expects to conduct offerings of Class
C common stock from time to time in the future.
In order to establish the Class C common stock, it is necessary to amend and restate the Charter. The Board has also adopted and declared advisable
the Equity Plan Amendment to, among other things, include shares of Class C common stock for issuance thereunder. The Equity Plan Amendment will be
effective as of, and is conditioned upon, the filing and
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effectiveness of the Restated Charter. The Restated Charter and the Equity Plan Amendment were approved by the Consenting Shareholders on October 20,
2026.
Following the unanimous recommendation of the Special Committee, the Board approved, declared advisable, and recommended the Restated Charter
and the Equity Plan Amendment for approval by the Company's shareholders, and the Consenting Shareholders approved the Restated Charter and the Equity
Plan Amendment, in each case, pursuant to the General Corporation Law of the State of Delaware (the "DGCL"), the Charter, and the Company's Amended and
Restated Bylaws (the "Bylaws"). A copy of the Restated Charter showing the changes from the Charter, with deleted text shown in strikethrough and added or
moved text shown as underlined, is attached as Annex A to the Information Statement. A copy of the Equity Plan Amendment showing the changes from the
2025 Plan, with deleted text shown in strikethrough and added or moved text shown as underlined, is attached as Annex B to the Information Statement.
In connection with the Recapitalization, Mr. Zuckerberg entered into the Founder Alignment Agreement with the Company. The Founder Alignment
Agreement governs dispositions of shares of Class C common stock by Mr. Zuckerberg and the other members of the Holder Group (as defined below) following
the Dividend, as well as certain other conditions. The Founder Alignment Agreement also governs the timing of future dividends of shares of Class C common
stock, subject to legally available funds. Mr. Zuckerberg's ability to sell his shares of Class C common stock received in the Dividend is subject to the terms of
the Founder Alignment Agreement. A copy of the Founder Alignment Agreement is attached as Annex C to the Information Statement.
The Written Consent constitutes the only shareholder approval required to approve the Restated Charter and the Equity Plan Amendment under the
DGCL, the Charter, and the Bylaws. The Board is not soliciting your proxy or consent in connection with the Restated Charter and the Equity Plan
Amendment and no proxies or consents are being requested from shareholders.
The Information Statement is being furnished only to (1) inform the Company's shareholders of the actions described above before they take effect in
accordance with Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended, and (2) provide the notice required under Section 228(e) of
the DGCL. The Company intends to file the Restated Charter with the Secretary of State of the State of Delaware on or about October 21, 2026, but the
Restated Charter will not be effective until the Charter Effective Date. The Equity Plan Amendment also will be effective upon the Charter Effective Date. This
Notice of Internet Availability of Information Statement is being distributed and made available on or about [●], 2026 to shareholders of record as of the Record
Date.
This Information Statement does not constitute an offer to sell, or an invitation on our behalf, or a solicitation of an offer to buy, any of the equity securities
described herein, including the Class C common stock, and may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in
which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.
THE INFORMATION STATEMENT IS FOR YOUR INFORMATION ONLY. YOU DO NOT NEED TO DO ANYTHING IN RESPONSE TO THE
INFORMATION STATEMENT. THIS IS NOT A NOTICE OF A MEETING OF SHAREHOLDERS AND NO SHAREHOLDER MEETING WILL BE HELD TO
CONSIDER ANY MATTER DESCRIBED IN THE INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY OR YOUR VOTE AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF INFORMATION STATEMENT: THE INFORMATION STATEMENT IS AVAILABLE AT
www.materialnotice.com.
Katherine R. Kelly
Vice President and Corporate Secretary
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INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
PURPOSE OF INFORMATION STATEMENT
This Information Statement (this "Information Statement") advises shareholders of Meta Platforms, Inc. (the "Company," "Meta," "we," "us," or "our") of
action taken by holders of a majority of the voting power of the outstanding shares of capital stock of the Company to (i) amend and restate the Company's
Amended and Restated Certificate of Incorporation (the "Charter"), to be effective as of January 19, 2027 (the "Charter Effective Date"), to, among other things,
establish a new class of capital stock, which will be known as Class C common stock (as so amended and restated, the "Restated Charter"), and (ii) amend and
restate the Meta Platforms, Inc. 2025 Equity Incentive Plan (the "2025 Plan") to, among other things, provide that the shares available for issuance can consist of
either shares of our Class A common stock or shares of our new Class C common stock, as further described in this Information Statement (the "Equity Plan
Amendment"). On October 19, 2026, based on the unanimous recommendation of a special committee consisting of disinterested and independent directors
established to review such transaction (the "Special Committee"), the board of directors of the Company (the "Board") approved, declared advisable, and
recommended that the Company's shareholders approve the Restated Charter and the Equity Plan Amendment. The record date for the shareholder approval
was October 20, 2026 (the "Record Date"). On the Record Date, the Consenting Shareholders (as defined below) delivered to the Company a written consent
(the "Written Consent") approving the Restated Charter and the Equity Plan Amendment. The "Consenting Shareholders" are, collectively, CZI Holdings, LLC,
Chan Zuckerberg Holdings, LLC, Chan Zuckerberg Holdings II, LLC, Chan Zuckerberg Holdings III, LLC, Chan Zuckerberg Holdings IV, LLC, Chan Zuckerberg
Holdings V, LLC, and Chan Zuckerberg Holdings VI, LLC. Attached as Annex A to this Information Statement is a copy of the Restated Charter showing the
changes from the Charter, with deleted text shown in strikethrough and added or moved text shown as underlined. Attached as Annex B to this Information
Statement is a copy of the Equity Plan Amendment showing the changes from the 2025 Plan, with deleted text shown in strikethrough and added or moved text
shown as underlined.
This Information Statement is being furnished to (1) inform the Company's shareholders of the actions described herein before they take effect in
accordance with Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (2) provide the notice required
under Section 228(e) of the General Corporation Law of the State of Delaware (the "DGCL"). The Company intends to file the Restated Charter with the
Secretary of State of the State of Delaware on or about October 21, 2026, but the Restated Charter will not be effective until the Charter Effective Date. The
Equity Plan Amendment also will be effective upon the Charter Effective Date. This Information Statement is being distributed and made available on or about
[●], 2026 to shareholders of record as of the Record Date.
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GENERAL OVERVIEW OF ACTION
After receiving the unanimous recommendation of the Special Committee, our Board has determined that it is advisable and in the best interest of the
Company and our shareholders to adjust our capital structure by establishing a new class of capital stock, which will be known as Class C common stock (the
"Recapitalization") and declare a dividend of one share of Class C common stock for each outstanding share of Class A common stock and Class B common
stock. The Class C common stock will be available for use for capital raising, employee compensation, potential acquisitions, and other general corporate
purposes.
Our Board has declared a dividend of one share of Class C common stock for each outstanding share of Class A common stock and Class B common
stock, contingent upon the filing and effectiveness of the Restated Charter (the "Dividend"). The record date and payment date of the Dividend will be
determined and approved by the Board by subsequent action, with such payment date to occur no later than the fifth business day following the effectiveness of
the Restated Charter, subject to applicable law. Further, in connection with the Recapitalization, the Company has entered into the Founder Alignment
Agreement (the "Founder Alignment Agreement") with Mark Zuckerberg, our founder, Chairman, and Chief Executive Officer ("CEO"), as summarized below.
Shareholder approval of the Dividend and the Founder Alignment Agreement is not required and was not included in the Written Consent.
As more fully explained below, the Recapitalization and the Dividend will not initially affect the relative voting power or economic interest of any
shareholder. However, following the payment date of the Dividend, we expect that the market price for the shares of our Class A common stock will reflect the
effect of a two-for-one stock split.
The shares of our Class A common stock will continue to trade on the Nasdaq Stock Market LLC ("Nasdaq"). We intend to qualify the shares of our Class
C common stock for listing on Nasdaq upon their issuance as a result of the Dividend.
The Special Committee
The Special Committee was established in February 2026 as a committee of our Board, and in March 2026, our Board delegated to the Special
Committee the full power and authority of our Board, to the fullest extent permitted under the DGCL, to (i) review, analyze, and evaluate potential modifications
to our capital structure, including the ability to trade shares of our Class B common stock and the potential creation of a new class of low- or no-vote common
stock to permit us to raise equity capital, (ii) identify and evaluate potential alternatives to any such modification, (iii) make a recommendation to our Board
regarding any such modification or any alternative thereto, and (iv) approve or reject any such modification on behalf of our Board.
Our Board appointed Ambassador Robert M. Kimmitt, Charles Songhurst, and Tony Xu as members of the Special Committee, and the members of the
Special Committee confirmed Ambassador Kimmitt as its Chair. The Special Committee retained Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel
and Moelis & Company LLC as its financial advisor.
Our Board determined that each member of the Special Committee was independent of Mr. Zuckerberg and was disinterested with respect to the
Recapitalization, and that none of them had any material interest in the Recapitalization. The Special Committee unanimously (i) determined that each of the
Restated Charter, the Dividend, and the Founder Alignment Agreement is advisable, fair to, and in the best interests of the Company and our shareholders,
including the holders of our Class A common stock, (ii) recommended that our Board approve, adopt, and declare advisable the Restated Charter and thereafter
submit it for the written consent of the shareholders entitled to vote thereon, and (iii) recommended that our Board declare and pay the Dividend, effective upon
and subject to the effectiveness of the Restated Charter.
Founder Alignment Agreement
In connection with the Recapitalization and the Dividend, the Company and Mark Zuckerberg have entered into a Founder Alignment Agreement, which
limits the ability of Mr. Zuckerberg and certain of his permitted transferees (together with Mr. Zuckerberg, the “Holder Group”) to sell shares of Class C common
stock without a corresponding reduction in Mr. Zuckerberg’s voting power, by conditioning sales of such shares on compliance with the Stapling Condition (as
described below).
Mr. Zuckerberg generally cannot obtain liquidity in a significant majority of the non-voting Class C common stock that he will receive in the Dividend
without a corresponding reduction in his voting power. Pursuant to the Founder Alignment Agreement, 20% of the shares of Class C common stock to be issued
to the Holder Group in the Dividend will be freely saleable and the other 80% of the shares of Class C common stock will be subject to sale and transfer
restrictions (any shares of Class C common stock subject to such sale and transfer restrictions, the “Stapled Class C Shares”). The Holder Group generally may
only sell Stapled Class C Shares if, for each such Stapled Class C Share sold, the Holder Group, no later than two business days after the settlement of such
sale, sells one share of Class A or Class B common stock, or converts one share of Class B common stock into a share of Class A common stock, or a
combination thereof, or applies Stapling Credits (as defined below) (the “Stapling Condition”). However, if immediately prior to such sale the number of Stapled
Class C Shares
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then held by the Holder Group exceeds the sum of the shares of Class A common stock and Class B common stock then held by the Holder Group plus its
unapplied Stapling Credits (including as a result of the payment of Additional Dividends (as defined below)) (the “Unstapling Capacity”), the number of shares of
Class A common stock or Class B common stock that the Holder Group must sell, or the number of shares of Class B common stock that the Holder Group must
convert into shares of Class A common stock, or any combination thereof, will be proportionately reduced (rounded up to the nearest whole share) by multiplying
it by a fraction equal to the Unstapling Capacity divided by the number of Stapled Class C Shares then held, which fraction shall not be greater than one (the
“Unstapling Ratio”). In addition, following the payment of the Dividend, the Holder Group accrues credit for each sale of Class A common stock or Class B
common stock, or conversion of Class B common stock into Class A common stock, that is not made in connection with a sale of Stapled Class C Shares (each
such credit, as equitably adjusted for stock splits, reverse stock splits, combinations, reclassifications or similar events, a “Stapling Credit”) that may be applied
to future sales of Stapled Class C Shares, at a rate equal to the Unstapling Ratio per Stapled Class C Share sold, such that such sales of Stapled Class C
Shares are deemed to be in compliance with the Stapling Condition. Stapling Credits do not expire and may be accrued and applied in fractional amounts. At the
time the Holder Group no longer holds any shares of Class B common stock, all Stapled Class C Shares then held by the Holder Group will be deemed released
from the Stapling Condition and no shares held or acquired thereafter will be subject to the Stapling Condition.
If a member of the Holder Group sells Stapled Class C Shares in violation of the Stapling Condition, the Holder Group will be deemed to have irrevocably
converted a number of its shares of Class B common stock into Class A common stock equal to the number of Stapled Class C Shares so sold multiplied by the
Unstapling Ratio (rounded up to the nearest whole share). The Founder Alignment Agreement provides that, in the case of an inadvertent error with respect to a
sale or transfer of Stapled Class C Shares, the Holder Group will have five trading days after the earlier of the Company notifying Mr. Zuckerberg, or Mr.
Zuckerberg notifying the Company, of such sale to cure the violation and avoid the automatic conversion of shares of Class B common stock by selling or
converting the number of shares of Class A common stock or Class B common stock that would have been required for a compliant sale, causing the sale of
Stapled Class C Shares to be rescinded or unwound, or designating an equal number of unstapled shares of Class C common stock as Stapled Class C Shares.
The Holder Group may transfer shares of Class A common stock, Class B common stock or Class C common stock among themselves as permitted by
the Restated Charter. In addition, Mr. Zuckerberg may also transfer shares of Class A common stock or Class C common stock to any other person in a
charitable or estate planning transfer provided that Mr. Zuckerberg has certified to the Company prior to such transfer its treatment as a permitted transferee and
such transferee will thereafter be subject to the terms and conditions of the Founder Alignment Agreement, including the Stapling Condition with respect to any
Stapled Class C Shares so transferred. Mr. Zuckerberg has also agreed to cause each member of the Holder Group to comply with the Company’s insider
trading policy as in effect from time to time, with respect to the Class A common stock, Class B common stock, Class C common stock and all other Company
securities.
On the last day of the first full calendar quarter following the payment of the Dividend and on the last day of each calendar quarter thereafter, a number of
Stapled Class C Shares then held by the Holder Group equal to 2.5% of the shares of Class C common stock issued to the Holder Group in the Dividend will be
released from the Stapling Condition, provided that Mr. Zuckerberg remains employed by the Company on the executive team or as the executive chair of the
Board, in either case, on a full-time basis (the “Continued Leadership Condition”) at all times during such calendar quarter. Calendar quarters in which the
Continued Leadership Condition is not satisfied at all times do not count toward the release schedule, which need not be satisfied over consecutive quarters, but
no shares are forfeited if the Continued Leadership Condition is not met. Upon the thirty-second calendar quarter in which the Continued Leadership Condition
has been satisfied at all times, all remaining Stapled Class C Shares then held by the Holder Group will be released from the Stapling Condition. Mr. Zuckerberg
has also separately committed, for eight years following the date of the Founder Alignment Agreement, and so long as the Continued Leadership Condition is
met, to remain a resident of California or any other jurisdiction in which the Company maintains its corporate headquarters, absent material unforeseen
circumstances rendering it prudent or advisable for him to reside elsewhere.
Under the Founder Alignment Agreement, our Board has agreed to declare an additional dividend of Class C common stock at a 1:1 ratio for each then
outstanding share of Class A common stock, Class B common stock and Class C common stock following the first date on which both of the following conditions
have been satisfied (such date, an "Additional Dividend Date," and each such dividend, an "Additional Dividend"): (i) the 30-day volume weighted average price
of the Class C common stock reaches a successive doubling, initially 2x, then 4x, then 8x and so on, of the corresponding price of the Class A common stock on
September 10, 2026 of $580.60 per share, as equitably adjusted for stock splits, stock dividends, recapitalizations and other equitable adjustments (including
with respect to the Dividend) (such event, a "Doubling Event"), and (ii) the compound annualized shareholder return from September 10, 2026, calculated on the
basis of the 30-day volume weighted average price and giving effect to the reinvestment of cash dividends and distributions, is no less than 10%. No more than
one Additional Dividend may be paid in respect of any single Doubling Event, and no Additional Dividend Date may occur following Mr. Zuckerberg's death. Any
shares of Class C common stock issued to Mr. Zuckerberg and the Holder Group in any Additional Dividend will not be subject to the Stapling Condition if, on the
Additional Dividend Date, the Continued Leadership Condition is satisfied. If, on the Additional Dividend Date, the Continued Leadership Condition is not
satisfied, a number of shares of Class C common stock equal to (i) the total number of shares of Class C common stock payable to the Holder Group in
connection with the Additional Dividend multiplied by (ii) a fraction equal to (x) the sum of shares of Class B common stock
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held by the Holder Group plus the number of Stapled Class C Shares held by the Holder Group divided by (y) the total number of shares of Class A, Class B and
Class C common stock held by the Holder Group, in each case of clause (x) and (y), measured as of the last date the Continued Leadership Condition was
satisfied (the “Post-Leadership Stapling Number”), shall be deemed Stapled Class C Shares and subject to the Stapling Condition and only released from the
Stapling Condition if Mr. Zuckerberg thereafter satisfies the Continued Leadership Condition for at least six consecutive months (or upon the Holder Group no
longer holding any shares of Class B common stock). If the Board fails to declare and pay an Additional Dividend within a reasonable time and at a time when
payment of such Additional Dividend is permitted by Section 173 of the DGCL, as prescribed by the Founder Alignment Agreement, a number of Stapled Class C
Shares then held by the Holder Group equal to the number of shares of Class C common stock the Holder Group would have received in such Additional
Dividend (or, if fewer, all remaining Stapled Class C shares) will be released from the Stapling Condition, and the Company shall remain obligated to declare and
pay such Additional Dividend.
In the event of (i) any merger, consolidation, conversion or other business combination requiring the approval of the holders of our capital stock, whether
or not the Company is the surviving entity, or the acquisition of all or substantially all of our assets; (ii) any tender or exchange offer by a third party to acquire a
majority of the shares of Class A common stock, Class B common stock or Class C common stock; or (iii) any tender or exchange offer by the Company to
acquire any such shares, neither Mr. Zuckerberg nor the Holder Group may sell, transfer, exchange or convert any shares in or in connection with that
transaction for (a) as to their shares of Class A common stock, an amount per share greater than, or a form of consideration different from that which, the other
holders of Class A common stock would receive or may elect to receive, (b) as to their shares of Class B common stock, an amount per share greater than, or a
form of consideration different from that which, the other holders of Class B common stock would receive or may elect to receive or (c) as to their shares of Class
C common stock, an amount per share greater than, or a form of consideration different from that which, the other holders of Class C common stock would
receive or may elect to receive.
Further, from and after the payment of the Dividend, in the event the Company, with the approval of the Board, determines to repurchase shares of Class
A common stock, the Company and the Board shall, in good faith, use their best efforts to contemporaneously repurchase at least an equal number of shares of
Class C common stock on an aggregate basis.
Mr. Zuckerberg may terminate the Founder Alignment Agreement if the Restated Charter is not filed with the Secretary of State of the State of Delaware
within two business days of the date of the Founder Alignment Agreement or is not effective by January 19, 2027 (or any agreed extension), the Dividend is not
paid by the fifth business day following the effectiveness of the Restated Charter (subject to applicable Delaware law and any agreed extension), the Company
materially breaches the Founder Alignment Agreement and fails to cure within thirty days of receiving notice of such breach, or a material Company commitment
under the Founder Alignment Agreement (or under any provision of the Restated Charter added in connection with the matters contemplated by the Founder
Alignment Agreement) ceases to be in full force and effect or is modified without Mr. Zuckerberg’s prior written consent. The Company, with the approval of a
committee of the Board consisting of at least two directors, or the audit & privacy committee, in each case with members that the Board has determined to be
disinterested with respect to the matters set forth in the Founder Alignment Agreement, may terminate the Founder Alignment Agreement if Mr. Zuckerberg
materially breaches the Founder Alignment Agreement and fails to cure within thirty days of receiving notice of such breach, or if a material commitment by Mr.
Zuckerberg under the Founder Alignment Agreement (or under any provision of the Restated Charter added in connection with the matters contemplated by the
Founder Alignment Agreement) ceases to be in full force and effect or is modified without the Company’s prior written consent.
The foregoing description of the Founder Alignment Agreement is qualified by reference to, and should be read in conjunction with, the full text of the
Founder Alignment Agreement, which is included as Annex C to this Information Statement.
The Special Committee's Reasons for the Recapitalization, the Adoption of the Restated Charter, and the Dividend
The Special Committee believes that the Recapitalization, the adoption of the Restated Charter, and the declaration and payment of the Dividend, and
entering into the Founder Alignment Agreement with Mr. Zuckerberg in accordance with the terms thereof, are advisable, fair to and in the best interests of the
Company and our shareholders in order to (i) create a publicly traded, non-voting equity security that the Company may use for capital raising, employee
compensation, potential acquisitions, and other general corporate purposes, in each case, without diluting the voting power of the existing Class A and Class B
common stock; (ii) establish a deep and liquid trading market for Class C common stock designed to minimize any trading-value discount relative to the Class A
common stock; (iii) in addition to the initial number of shares of Class C common stock that are freely transferable immediately following the Dividend, ensure
that Mr. Zuckerberg’s ability to freely transfer his economic interest in his remaining shares of Class C common stock from the Dividend is permitted only in
compliance with the Stapling Condition, with a number of shares equal to 2.5% of the shares of Class C common stock issued to Mr. Zuckerberg in the Dividend
released from such conditions for each full calendar quarter during which the Continued Leadership Condition is satisfied at all times; (iv) ensure that future
dividends of Class C common stock pursuant to the Founder Alignment Agreement are subject to the Company’s achievement of extraordinary stock price
targets, and, with respect to Mr. Zuckerberg, subject to the Stapling Condition for a number of shares of Class C common stock equal to the Post-Leadership
Stapling Number, unless the Continued Leadership Condition is satisfied as of the date of the event giving rise to such dividend; and (v) continue to align with
the determinations historically made by the Board, acting through its Compensation, Nominating & Governance
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Committee, as disclosed in the Company’s annual proxy statements, that Mr. Zuckerberg’s equity ownership sufficiently aligns his interests with those of the
Company’s shareholders such that no cash compensation or equity or equity-based awards to him are warranted (and, by not having to establish any such cash
compensation or grant any such equity or equity-based awards, accrue significant benefit to the Company’s shareholders by avoiding the compensation expense
and impact on the Company’s stock price that any such cash compensation program or equity or equity-based grants to Mr. Zuckerberg would have imposed on
the Company’s shareholders). The Special Committee and our Board (with Mr. Zuckerberg abstaining) approved the Recapitalization, the Dividend and the
adoption of the Restated Charter and the Special Committee further approved the Founder Alignment Agreement. The discussion of the information and factors
that the Special Committee considered below in making its respective determinations, recommendations, and resolutions is not intended to be exhaustive but
includes the material factors considered. In view of the wide variety of factors considered and the complexity of these matters, the Special Committee did not find
it useful to, and did not attempt to, quantify, rank, or otherwise assign relative weight to these factors. In addition, the individual members of the Special
Committee may have assigned different weights to different factors. At all times, the members of the Special Committee prioritized the best interests of the
Company’s Class A shareholders.
Provide the Company with Necessary Liquid Capital to Evolve, Grow, and Compete
The Special Committee determined that the ability to issue non-voting shares of Class C common stock via the Recapitalization and the Dividend will
provide us with the critical ability to raise equity capital to finance our evolution and growth, and help us remain a leader among fierce competition domestically
and from foreign competitors. The scale of investment required to compete, sustain our growth, expand our infrastructure, and pursue new strategic initiatives
amidst the dramatic transformation taking place in the tech industry and global economy related to artificial intelligence is unprecedented. The ability to raise
equity capital through issuances of Class C common stock will allow us access to the equity markets to meet our capital requirements without diluting the voting
power of our current shareholders or affecting Mr. Zuckerberg’s leadership or his current control of the Company (discussed more fully below), which is in the
best interests of all shareholders in light of his track record of creating exceptional value for Company shareholders. The Special Committee considered whether
the Company could issue Class A common stock in order to raise capital, but Mr. Zuckerberg made it clear during the course of the negotiations with the Special
Committee that he would not support a significant equity financing that would have the effect of reducing his voting power in the Company. The Special
Committee also considered whether debt financing could be an alternative for the financing needs of the Company but recognized that debt financing
alternatives of the magnitude that Company management was considering could have an adverse effect on the Company’s credit ratings and would be a less
attractive alternative for the Company.
The Special Committee also recognized that timing is important to secure capital before competitors saturate various funding options. Recent significant
capital raises at other notable companies, and others soon anticipated to take place, to fund the same AI growth—for example, Alphabet, SpaceX, Anthropic,
and OpenAI—have resulted in an increasingly challenging environment for raising capital. The Special Committee considered that, while the Company presently
has sufficient capital resources for its current needs, in order to finance its funding needs going forward it would be prudent for the Company to do so before
even more companies have absorbed available capital in the market. In addition, management had conveyed to the Special Committee a desire for the Class C
common stock to be available for use as early as the end of 2026. The Special Committee determined that it is preferable to implement the Recapitalization and
Dividend now, so that we are positioned to act with speed and flexibility when capital needs or strategic opportunities arise and so that, with the Dividend, there
will be a liquid market for the Class C common stock. The Company expects to use shares of Class C common stock to conduct equity offerings from time to
time in the future, subject to market conditions.
We are at a significant inflection point in our industry where there is rapid technological advance driven by the growth of AI and concomitant enormous
need for capital. The Special Committee recognized that this inflection point represents an unprecedented market opportunity for the Company to grow and
create value for all shareholders. Establishing the Class C common stock now will make the Class C common stock a viable currency for financings, potential
acquisitions and employee compensation in order to pursue that market opportunity. We operate in a highly competitive industry that is subject to rapid and often
disruptive technological change, driven by both new competitors and established companies investing in leading-edge technologies. Establishing the availability
of Class C common stock now to be used for future equity capital raises will allow us to remain at the forefront of our industry to the benefit of all shareholders of
the Company. In addition, the non-voting nature of the Class C common stock will allow the Company to pursue equity capital raises with sovereign financial
institutions in light of U.S. foreign direct investment regulatory requirements.
Further, it is critical that, along with the establishment of Class C common stock, the Company issue an initial Dividend to create a liquid market for the
Class C common stock. The Special Committee considered it important, through the Dividend, to establish a deep and liquid trading market for Class C common
stock to minimize any trading-value discount relative to the Class A common stock and maximize the price for which Class C common stock could be sold in the
market. Without creating such liquidity, it would be very difficult to utilize the Class C common stock for capital raises without the Class C common stock
potentially suffering a very significant discount relative to the trading price of Class A common stock, which could significantly
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reduce the amount of capital the Company could raise and have the effect of diluting all shareholders of the Company or could require us to issue more Class C
common stock in order to raise the same amount of capital.
Continue Mr. Zuckerberg’s Long-Term Value-Maximization for All Shareholders
Since our Company’s formation, our management team has focused on and prioritized long-term goals. Over fourteen years since our IPO, the
Company’s stock price has increased over 1,700%, from $38.23 per share to $694.25 per share as of the close of market on October 20, 2026. By contrast, over
the same period, the S&P 500 increased approximately 495%. The Special Committee recognizes that this success is in large part due to Mr. Zuckerberg’s
strong leadership, unique and creative vision, and exceptional management abilities. The Special Committee wants the Company and Mr. Zuckerberg to
continue innovating, emphasizing long-term growth and competing with other large-scale players who have already committed to unprecedented levels of capital
expenditures in connection with the development of artificial intelligence. The Special Committee recognized that the Company’s track record of huge value
creation for the Company’s shareholders is inseparable from Mr. Zuckerberg’s continued involvement in and direction of the business, and that he is the leader
best suited to shepherd the Company into its next era and beyond, and that retaining his leadership and guidance of the Company was therefore of utmost
importance. Having weighed all relevant considerations, the Special Committee concluded that Mr. Zuckerberg’s continued leadership role in our Company, and
his continuing presence at the Company’s headquarters in California, is critical at this current inflection point for the Company and the tech industry in order to
continue to provide value-maximization for all shareholders, and that those benefits substantially outweigh any countervailing considerations.
Our current corporate governance structure, which uses a dual-class stock structure, allows Mr. Zuckerberg to determine the outcome of substantially all
matters submitted to a vote of our shareholders, including the election of directors, amendments to our certificate of incorporation, and matters involving
mergers, acquisitions, and other transactions resulting in a change of control of our company. The Recapitalization will facilitate the continuation of our current
corporate governance structure, which the Special Committee believes has served us well by enabling us to continue to focus on pursuing our mission and
serving the best interests of all of our shareholders by allowing Mr. Zuckerberg to make innovative and smart investments to grow the Company over a long-term
horizon. Even though Mr. Zuckerberg has voting control of the Company, all of the directors engage meaningfully in Company matters, express their candid
views with Mr. Zuckerberg, and do not rubber stamp decisions.
As set forth in greater detail below, the Recapitalization and Dividend will allow the Company to raise critical equity capital without impacting Mr.
Zuckerberg’s voting power and the unique and creative vision and exceptional management abilities which helped to deliver the long-term value as noted above.
Further, the Dividend will allow Mr. Zuckerberg to immediately sell or transfer up to 20% of the shares of Class C common stock that he receives in the Dividend,
representing 10% of his overall economic stake in the Company, for any reason, including so that he may pay his potential tax liability under California
Proposition 40, if enacted into law, without affecting his majority voting control.
The Recapitalization will also allow us to make stock-based acquisitions and to continue to grant equity awards to our employees without affecting Mr.
Zuckerberg’s majority voting control.
Mr. Zuckerberg Is Not in Jeopardy of Losing Voting Control but for the Class C Share Issuance
As discussed herein, the Special Committee determined that it is important for Mr. Zuckerberg to retain voting control. However, the Special Committee
also noted that, unlike situations where a recapitalization may be a remedy to avoid a founder going below 50% voting power, Mr. Zuckerberg is not on the verge
of losing voting control. As of October 1, 2026, he held approximately 60.6% voting power over the Company, so the Class C common stock and Dividend do not
save Mr. Zuckerberg from losing voting control. The Special Committee considered the following factors: (i) Mr. Zuckerberg is not close to going below 50%
voting control currently; (ii) the currently foreseeable reasons why he might approach 50% in the near- to medium-term would be if he were required to pay the
California wealth tax (which has the most significant impact because it would require him to sell shares, or at least borrow against them) and the impact of equity
financings if they were done with Class A common stock (which is less impactful because it is simply dilution through primary share issuance); (iii) stock
repurchases and sales of Class B common stock by other holders of such stock in the past underscored that a dilution of voting control over time through the
natural course was not necessarily inevitable; and (iv) Mr. Zuckerberg made clear that he does not support any financing, or other actions, that would result in
his loss of voting control.
Ensure That Mr. Zuckerberg’s Economic and Voting Control Do Not Significantly Diverge
Although the Special Committee determined that it is important that Mr. Zuckerberg’s voting control is not diluted, the Special Committee also concluded
that it is beneficial for Class A shareholders that Mr. Zuckerberg’s economic interests and voting control do not significantly diverge, it being understood that the
Special Committee desired both to incentivize Mr. Zuckerberg’s continued leadership of the Company combined with extraordinary stock performance of the
Company that
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benefits all shareholders. Therefore, the Special Committee negotiated for and obtained Mr. Zuckerberg’s agreement that 80% of the shares of Class C common
stock that he receives in the Dividend be subject to the Stapling Condition. Specifically, Mr. Zuckerberg may sell the remaining 80% of his shares of Class C
common stock that he receives in the Dividend only if, no later than two business days after the settlement of such sale, he (A) also sells shares of Class A
common stock or Class B common stock, or converts shares of Class B common stock into Class A common stock, or a combination thereof, equal in the
aggregate to the product of (x) the number of Stapled Class C Shares sold and (y) the Unstapling Ratio or (B) applies a number of Stapling Credits to the sale
equal to the product of (x) the number of Stapled Class C Shares sold and (y) the Unstapling Ratio. Further, any Stapled Class C Shares that are sold not in
compliance with the foregoing agreement will, in accordance with the terms of the Founder Alignment Agreement, result in the conversion of a number of shares
of Class B common stock, equal to the product of (i) the number of Stapled Class C Shares sold in violation of the Stapling Condition and (ii) the Unstapling
Ratio, into shares of Class A common stock. This arrangement is subject to Mr. Zuckerberg’s further ability to have a small amount of the 80% be freed from the
Stapling Condition each quarter during which he continues to satisfy the Continued Leadership Condition over 32 quarters (the “Release Period”), discussed
more fully below. This is to ensure Mr. Zuckerberg’s commitment to continue to lead the Company.
The Issuance of Additional Class C Dividends Is Subject to Future Company Success Under Mr. Zuckerberg
As described above, the Dividend, with a 1:1 ratio, will allow Mr. Zuckerberg to sell, over the Release Period and subject to the Stapling Condition, up to
one-half of his economic stake in the Company through the sale of his new shares of Class C common stock without reducing his voting control. Even if Mr.
Zuckerberg were ultimately to sell all of the shares of Class C common stock he receives in the Dividend, based on a stock price of $725.93 per share of Class A
common stock as of October 1, 2026 and his stock holdings as of such date, he would still have an approximately $124 billion economic interest in the Company
at the end of the Release Period. In order for Mr. Zuckerberg to achieve additional liquidity for and transfer economic interests of the other half of his economic
interest in the Company without reducing his voting interests, the Special Committee negotiated for certain stock-performance parameters that to date have not
existed. Under the Founder Alignment Agreement, additional Class C dividends after the Dividend would be payable pro rata to all shareholders only upon the
Company’s achievement of such stock performance parameters, and Mr. Zuckerberg’s Class C shares received in any such dividend would be free of the
Stapling Condition only if he has satisfied the Continued Leadership Condition, both of which directly benefit the Class A shareholders. Specifically, following the
first date on which both (i) the 30-day volume weighted average price of the Class C common stock reaches a successive doubling, initially 2x, then 4x, then 8x
and so on, of the corresponding price of the Class A common stock on September 10, 2026 of $580.60 per share, as equitably adjusted for stock splits, stock
dividends, recapitalizations and other equitable adjustments (including with respect to the Dividend) and (ii) the compound annualized shareholder return from
September 10, 2026, calculated on the basis of the 30-day volume weighted average price and giving effect to the reinvestment of cash dividends and
distributions, is no less than 10% (whether or not both conditions are satisfied at the same time), the Board will, subject to legally available funds, declare an
Additional Dividend on all shares of Class A, Class B, and Class C common stock then-outstanding, not just Mr. Zuckerberg’s. No more than one such dividend
may be paid in respect of any single doubling event, and no Additional Dividend will be payable following Mr. Zuckerberg's death. Shares of Class C common
stock received by Mr. Zuckerberg in any such Additional Dividend will be free of the Stapling Condition only if the Continued Leadership Condition is satisfied on
the Additional Dividend Date; if it is not, a number of shares of Class C common stock received in respect of any such Additional Dividend equaling the Post-
Leadership Stapling Number will be subject to the Stapling Condition unless the Continued Leadership Condition is subsequently satisfied for a period of at least
six consecutive months. Such extraordinary stock performance is directly beneficial to all Class A shareholders.
Ensure That Mr. Zuckerberg Remains in a Leadership Role at the Company’s Headquarters
If California’s Proposition 40, a statewide ballot measure on the November 3, 2026 general election ballot and commonly referred to as the “California
wealth tax,” is enacted as law in California, it is expected that Mr. Zuckerberg could become liable for a significant, multi-billion dollar tax payment based on his
ownership of stock in the Company. In light of this potential tax exposure, Mr. Zuckerberg informed the Special Committee that he was evaluating relocating his
primary residence outside California and that steps toward any such relocation, including any listing of his residential real estate in California on the market,
would be public and inevitably noted and commented upon by Company employees and, accordingly, raise questions for management of the Company going
forward. The Special Committee understood that any such step could be the first in a process to establish residence outside California. The Special Committee
determined that Mr. Zuckerberg has been crucial to the Company’s growth since its inception (discussed more fully above) and is best-positioned, during this
pivotal time, to ensure the Company’s continued success and to take advantage of the tremendous market opportunity that the Special Committee believed is
available to the Company. The Special Committee further believed it is critically important to keep Mr. Zuckerberg in a leadership position with our Company and
that he continue to reside in and manage the Company from our headquarters in California to ensure his continued ability to effectively drive our performance
during this era of unprecedented challenge and competition in our industry. The Special Committee was mindful about the difficulties the Company faced during
the COVID-19 pandemic when Mr. Zuckerberg could not be physically present with the Company’s management team and did not want the Company to face
similar challenges going forward. The Special Committee decided
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that the Recapitalization and Dividend are appropriate to ensure that Mr. Zuckerberg remains in a leadership role, at our headquarters in California, and thus be
in the best position to influence our direction in the coming years. Further, the Special Committee determined, in consideration of the dramatic and
unprecedented transformation taking place in the tech industry and global economy related to artificial intelligence, that the Recapitalization and Dividend are
appropriate to ensure Mr. Zuckerberg remains working closely with Meta Superintelligence Labs at the Company’s headquarters. The Special Committee
believes that Mr. Zuckerberg’s talent and leadership have been crucial to our growth, strategy, and stability since our inception, and the Special Committee wants
that to continue.
Therefore, the Special Committee concluded that it is in the best interests of the Company and Class A shareholders to allow Mr. Zuckerberg to have an
additional 2.5% of the shares of Class C common stock from the Dividend be freed from the Stapling Condition every quarter during the Release Period that the
Continued Leadership Condition is satisfied. At the conclusion of the Release Period, assuming the Continued Leadership Condition has been satisfied
throughout, Mr. Zuckerberg will have the right to sell all of the shares of Class C common stock he received in the Dividend free of the restrictions imposed by
the Stapling Condition. If the Continued Leadership Condition is not satisfied at all times during a given quarter, no release will occur for that quarter and the
shares not released during such quarter will remain subject to the Stapling Condition until the thirty-second release, if there is one. At the time of the thirty-
second release, all of the shares of Class C common stock Mr. Zuckerberg received from the Dividend will be free of the Stapling Condition. Again, the goal is to
keep Mr. Zuckerberg continuing to lead the Company from California and in close proximity to Meta Superintelligence Labs. In light of that importance, the
Special Committee secured Mr. Zuckerberg’s commitment to remain a resident of California, or any other jurisdiction in which the Company maintains its
corporate headquarters, for eight years from the date of the Founder Alignment Agreement, for so long as Mr. Zuckerberg satisfies the Continued Leadership
Condition, unless there are material unforeseen circumstances that would render it prudent or advisable for Mr. Zuckerberg to reside elsewhere.
Mr. Zuckerberg Will Not Receive Additional Compensation as a Result of the Recapitalization
Since January 1, 2013, Mr. Zuckerberg has taken a salary of only $1 each year for his service as the Company’s chief executive officer and chairman of
the Board. This is extraordinarily different from what his peer (and even non-peer) CEOs are paid. If the California wealth tax is enacted and Mr. Zuckerberg
becomes liable for a tax payment, Mr. Zuckerberg would effectively be paying to serve as the Company’s chief executive officer while residing in California. The
Dividend is paid pro rata to all shareholders on identical terms. The portion of Mr. Zuckerberg’s Class C common stock that is immediately free of the Stapling
Condition provides him a source of liquidity, without reducing his voting interest, from which any such tax liability could be satisfied, mitigating the unintended
result that he would be paying to work at the Company while residing in California.
Further, at any time since 2013, Mr. Zuckerberg could have sought a compensation package akin to those of his peer CEOs, and the Special Committee
considered that any such package would carry substantial compensation expense and could impact the Company’s stock price. Mr. Zuckerberg confirmed to the
Special Committee that in light of the Recapitalization, he is not seeking, and the Founder Alignment Agreement does not provide for, any additional
compensation, and that his existing $1 annual salary will remain unchanged. Determinations regarding Mr. Zuckerberg’s compensation, if any, remain within the
authority of the Board and its Compensation, Nominating & Governance Committee, which historically has determined that Mr. Zuckerberg’s equity ownership
sufficiently aligns his interests with those of the Company’s shareholders, and this continues to be the case in light of the Class C dividends contemplated by the
Founder Alignment Agreement. In sum, the terms of the Founder Alignment Agreement, including the release of Class C common stock from the Stapling
Condition in accordance with its terms, the dividend of additional Class C common stock pursuant to the Company’s stock performance criteria described herein,
and Mr. Zuckerberg’s commitment with respect to his residency were, collectively, negotiated by the Special Committee to preserve the alignment of Mr.
Zuckerberg’s interests with those of all shareholders through his continued leadership and retained proportionate ownership, rather than through cash
compensation or equity or equity-based awards that would carry compensation expense and could have a negative impact on the Company’s stock price. In
other words, the Class C dividends impose no incremental cost on the Company, as a compensation package would have done, with the resulting benefit to
Class A shareholders.
Mitigating Future Potential Voting Dilution for All Shareholders
The Special Committee determined that the shares of Class A common stock have been an important tool for equity-based employee compensation, and
may be an important form of currency to help us further our strategic initiatives. However, any new issuances of shares of Class A common stock for either of
these key purposes will result in dilution to both the economic and voting interests of all our shareholders. The economic dilution can be mitigated by
endeavoring to receive value commensurate with the capital stock that we issue, but the voting dilution cannot be mitigated absent a significant use of cash or
the creation of a new class of non-voting shares such as the Class C common stock. Not only are the voting interests of all shareholders diluted by the issuance
of additional shares of Class A common stock, but issuances of shares of such stock have the additional effect, which the Special Committee believes is a
negative one, of making it more likely that Mr. Zuckerberg would lose majority voting control.
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We currently have several ways to mitigate voting dilution, including with respect to Mr. Zuckerberg’s majority voting control, to the extent that the Board
deems it appropriate, including using cash to finance acquisitions, repurchasing shares of Class A common stock in the market, and granting cash-settled equity
incentives. Each of these ways of managing voting dilution, however, requires us to expend cash, which in some circumstances may be better used to reinvest in
the growth of our business. Moreover, the Company expects to need to raise capital to finance its AI-related growth plan. The ability to issue non-voting shares of
Class C common stock will provide the Board with a significant new tool to mitigate voting dilution without requiring us to use cash. The ability to issue non-voting
shares of Class C common stock will also allow us to make decisions regarding appropriate capital structure and financing of the Company (including decisions
regarding use of debt versus equity) largely without regard to how those decisions may impact the voting power of all Class A shareholders and Mr. Zuckerberg’s
voting control, which we believe is a benefit for our shareholders.
Disinterested Directors Empowered to Act in the Interest of Our Shareholders
The Special Committee, consisting solely of independent and disinterested directors on the Board, negotiated the terms of the Restated Charter and the
Founder Alignment Agreement and had full authority to review, approve or reject any potential change to our capital structure. The Special Committee, with the
assistance of its independent financial and legal advisors, conducted an in-depth analytical review of the Recapitalization and Dividend and considered a wide
range of alternatives, including the possibility of rejecting any proposed change to our current certificate of incorporation. The Special Committee also met
regularly over the course of eight months in 2026 and held a total of thirty-three formal meetings with its legal and financial advisors, Skadden and Moelis,
respectively, to review and consider the Recapitalization, the Dividend, the Restated Charter, the Founder Alignment Agreement, and the related arrangements
with Mr. Zuckerberg.
The Special Committee determined that it was important that the negotiated arrangements remain under the purview of disinterested director oversight.
Accordingly, any amendments to or waivers of the Founder Alignment Agreement require approval of an authorized committee of at least two directors, or the
Audit & Privacy Committee, in each case with members that the Board has determined to be disinterested with respect to the matters set forth in the Founder
Alignment Agreement. That continued oversight over the foregoing agreements with Mr. Zuckerberg will help to ensure continued protection of the Class A
shareholders.
Other Benefits to the Class A Common Shareholders
As noted above, holders of shares of Class A common stock and Class B common stock are currently generally entitled to receive equal per share
consideration in a merger or similar business combination (unless the only difference is that the consideration to shares of Class B common stock has ten times
the voting power of consideration to shares of Class A common stock). However, shares of Class A common stock and Class B common stock may receive
differential consideration if the merger or business combination is approved by the affirmative vote of the holders of the outstanding shares of Class A common
stock and Class B common stock, each voting separately as a class.
As part of the Recapitalization, we would also amend the current certificate of incorporation to provide that, except as provided in the Restated Charter,
the holders of Class A common stock, Class B common stock, and Class C common stock shall share ratably on a per share basis in connection with any
dividends or distributions.
Moreover, in the event of any merger or similar business combination, or in the event of a tender or exchange offer by a third party pursuant to an
agreement to which we are a party or that we recommend, the holders of shares of Class A common stock, Class B common stock, and Class C common stock
will receive the same form of consideration and the same amount of consideration on a per share basis. However, shares of one or two of such classes may
receive or have the right to elect to receive different or disproportionate consideration in connection with any such merger, combination or tender or exchange
offer if the only difference in the per share consideration is that any securities distributed to the holder of a share of Class B common stock have ten times the
voting power of any securities distributed to the holder of a share of Class A common stock and that any securities distributed to the holder of a share of Class C
common stock have no voting rights or power.
In addition, upon a liquidation, dissolution, or winding up, all shares of Class A common stock, Class B common stock, and Class C common stock will be
entitled to receive ratably all of our assets available for distribution to the shareholders, unless disparate or different treatment of each such class with respect to
distributions upon any such liquidation, dissolution, or winding up is approved in advance by the affirmative vote (or written consent if action by written consent of
shareholders is permitted at such time under the Restated Charter) of the holders of a majority of the outstanding shares of Class A common stock, Class B
common stock, and Class C common stock, each voting separately as a class.
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