Final CNS AR 2020 - Flipbook - Page 29
The failure of a key vendor to fulfill its obligations to the Company could have a material adverse effect on the
Company and its products.
We depend on a number of key vendors for various fund administration, fund and corporate accounting, custody and
transfer agent services, information technology services, market data, and other operational needs. The failure or inability of
the Company to establish backup for key services or the failure of any key vendor to fulfill its obligations for any reason,
including those that may be beyond our or such vendor’s control, could lead to operational issues for the Company and
certain of its products, which could result in financial losses for the Company and its clients.
Risks Related to our Common Stock
A significant portion of our common stock is owned or controlled by our Chief Executive Officer and our
Chairman and their respective family members, which may limit the ability of other stockholders to influence the
affairs of the Company.
Our Chief Executive Officer and a member of his family beneficially owned or controlled approximately 24.6% of our
common stock as of December 31, 2020. In addition, our Chairman and a member of his family beneficially owned or
controlled approximately 20.4% of our common stock as of December 31, 2020. Such levels of ownership or control create
the ability to meaningfully influence, among other things:
• the election of members of our board of directors, thereby indirectly influencing the management and affairs of the
• the outcome of matters submitted to a vote of our stockholders; and
• any unsolicited acquisition of us and, consequently, potentially adversely affect the market price of our common
stock or prevent our stockholders from realizing a premium on their shares.
The interests of one or more of such persons may differ from those of other stockholders in instances where, for
example, management compensation is being determined or where an unsolicited acquisition of us could result in a change in
our management. The concentration of beneficial ownership in such persons may limit the ability of our other stockholders to
influence the affairs of the Company.
We may change our dividend policy at any time and there is no guarantee that we will pay dividends in the
Although we have a long history of paying regular and special cash dividends, there is no guarantee or requirement that
we pay cash dividends in the future. Our dividend policy may change at any time without notice to our stockholders. The
declaration and amount of any future dividends will be at the discretion of our board of directors and in accordance with
applicable law and only after taking into account various factors that our board of directors deems relevant, including our
financial condition, results of operations, cash flows and liquidity, current and anticipated cash needs and capital
requirements, and potential alternative uses of cash. As a result, we cannot assure you that we will pay dividends at any rate
or at all.
A sale of a substantial number of shares of our common stock may adversely affect the market price of our
common stock, and the issuance of additional shares will dilute your percentage ownership in the Company.
A sale of a substantial number of shares of our common stock in the public market, or the perception that such sale may
occur, could adversely affect the market price of our common stock. Our Chief Executive Officer and our Chairman, together
with certain of their respective family members, beneficially owned or controlled 11,746,364 shares and 9,728,847 shares,
respectively, of our common stock as of December 31, 2020. Any of such persons may sell shares of our common stock in
the open market, subject to any restrictions imposed by U.S. federal securities laws on sales by affiliates.
In connection with our initial public offering in 2004, we entered into a Registration Rights Agreement with our Chief
Executive Officer and our Chairman and certain trust entities controlled by certain of their respective family members that
requires us to register under the Securities Act of 1933, as amended, shares of our common stock (and other securities
convertible into or exchangeable or exercisable for shares of common stock) held by them under certain circumstances. In
May 2018, we filed a Registration Statement on Form S-3 covering (i) the resale of up to an aggregate of 22,911,757 shares
owned or controlled by our Chief Executive Officer and our Chairman and certain other persons and (ii) the offer and sale of
an indeterminate number of shares by us to the public. The sale of a substantial number of shares of our common stock may
adversely affect the market price of our common stock, and any additional shares that we issue will dilute your percentage
ownership in the Company.