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in the market, resulting in reduced liquidity. In addition, a decision by one or more large shareholder to liquidate its holdings
could adversely affect the trading price of our stock. On August 11, 2010, the SEC declared effective the S-3 Registration
Statement we had filed at the request of NTR to register the resale of 11,227,653 shares of our common stock representing all
of NTR’s shares held at that date, as permitted under the Shareholders’ Agreement. The registration statement permits NTR
to sell some or all of its shares without restriction. On September 9, 2011, we repurchased 3.5 million shares of common
stock from NTR plc reducing their ownership to 7,727,653 shares. The registration of the remaining shares of common stock
does not necessarily mean that NTR will offer or sell any more of these shares.
Anti-takeover provisions could make it difficult for a third party to acquire us.
Our second amended and restated articles of incorporation, our amended and restated bylaws and Iowa law contain anti-
takeover provisions that could have the effect of delaying or preventing changes in control of us or our management. These
provisions could also discourage proxy contests and make it more difficult for our shareholders to elect directors and take
other corporate actions without the concurrence of our Board of Directors. The provisions in our charter documents include
the following:
a classified Board of Directors pursuant to which our directors are divided into three classes, with three-year
staggered terms;
members of our Board of Directors can only be removed for cause by shareholders with the affirmative vote of not
less than two-thirds of the outstanding shares of capital stock;
shareholder action may be taken only at a special or annual meeting, and not by any written consent, except where
required by Iowa law;
our bylaws restrict our shareholders’ ability to make proposals at shareholder meetings; and
our Board of Directors has the ability to cause us to issue authorized and unissued shares of stock from time to time.
We are subject to the provisions of the Iowa Business Corporations Act, or IBCA, under which, certain business
combinations between an Iowa corporation whose stock is publicly traded or held by more than 2,000 shareholders and an
interested shareholder are prohibited for a three-year period following the date that such a shareholder became an interested
shareholder unless certain exemption requirements are met. In addition, certain other provisions of the IBCA may have anti-
takeover effects in certain situations.
Certain provisions in the convertible notes and the related indenture could make it more difficult or more expensive for a
third party to acquire us. For example, if a takeover would constitute a fundamental change, holders of the notes will have the
right to require us to repurchase their notes in cash. In addition, if a takeover constitutes a make-whole fundamental change,
we may be required to increase the conversion rate for holders who convert their notes in connection with such takeover. In
either case, and in other cases, our obligations under the notes and the related indenture could increase the cost of acquiring
us or otherwise discourage a third party from acquiring us or removing incumbent management.
The foregoing items may discourage transactions that otherwise could provide for the payment of a premium over
prevailing market prices of our common stock and also could limit the price that investors are willing to pay in the future for
shares of our common stock.
Non-U.S. holders may be subject to U.S. income tax with respect to gain on disposition of their common stock.
If we are or have been a U.S. real property holding corporation at any time within the shorter of the five-year period
preceding a disposition of common stock by a non-U.S. holder or such holder’s holding period of the stock disposed of, such
non-U.S. holder may be subject to United States federal income tax with respect to gain on such disposition. Because the
determination of whether we are a USRPHC depends on the fair market value of our United States real property interests
relative to the fair market value of our other trade or business assets and our non-U.S. real property interests, there can be no
assurance that we are not a USRPHC or will not become one in the future.
Item 1B. Unresolved Staff Comments.