DEF: Tempus AI Seeks Stockholder Approval for Director Elections, Auditor Ratification, and Reincorporation to Nevada

Tempus AI is holding its annual meeting on May 20, 2025, to elect directors, ratify its auditor, and approve a reincorporation from Delaware to Nevada.

Summary

• Tempus AI is holding its Annual Meeting of Stockholders on May 20, 2025, virtually.
• Stockholders will vote on three proposals: electing nine directors, ratifying the appointment of PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending December 31, 2025, and approving the reincorporation of the company from Delaware to Nevada.
• The Board of Directors recommends voting in favor of all proposals.
• The record date for determining stockholders eligible to vote is March 25, 2025.
• The meeting will be a virtual meeting conducted via live audio webcast.
• Stockholders can attend, submit questions, and vote online during the meeting.
• The company intends to first mail the Notice and make this proxy statement and the form of proxy available to stockholders on or about April 7, 2025.
• The company may send a proxy card, along with a second Notice, on or after April 17, 2025.

Sentiment

Score: 7

Explanation: The document is largely procedural, outlining the proposals for the annual meeting. The Board's recommendation to vote FOR all proposals suggests a positive outlook from management's perspective. The discussion of benefits from reincorporation also contributes to a moderately positive sentiment.

Positives

• The reincorporation to Nevada is expected to provide a more predictable, statute-focused legal environment.
• The reincorporation will eliminate the obligation to pay Delaware franchise tax, resulting in substantial savings.
• The company is providing a virtual meeting format to allow for greater stockholder participation.
• The Board believes that the rights of stockholders under the DGCL and the NRS are substantially the same.

Negatives

• There can be no assurance that the Reincorporation will result in all or any of the benefits described in this Proxy Statement, including the benefits of or resulting from incorporation in Nevada or the application of Nevada law to the internal affairs of the Company.
• The NRS requires the vote of the holders of at least two-thirds of the voting power of the shares to remove a director, while the DGCL requires a majority.
• The NRS grants inspection rights only to stockholders holding at least 5% of the outstanding shares or having been a holder for at least six months, which is more restrictive than the DGCL.
• The Reincorporation may result in litigation, with additional expense and distraction for the Company.

Risks

• The Board retains the discretion to abandon the reincorporation at any time.
• There is a risk of litigation associated with the reincorporation, regardless of merit.
• The company may incur unanticipated costs in connection with the reincorporation.
• There may be further changes to the DGCL and/or the NRS that are not currently contemplated and we cannot predict the nature or extent of any such future changes to the DGCL and/or the NRS.

Future Outlook

The Board retains the discretion to abandon the Reincorporation at any time and will evaluate the then-current laws of Delaware and Nevada prior to determining whether to effectuate the Reincorporation. We anticipate that the Board will effectuate or otherwise abandon the Reincorporation prior to the Companys 2027 annual meeting of stockholders.

Management Comments

• Our Board believes that there are several reasons the Reincorporation is in the best interests of the Company and its stockholders.
• The Board believes that Nevada can offer more predictability and certainty in decision-making because of its statute-focused legal environment.

Industry Context

The document does not provide specific details on how this announcement relates to broader industry trends or competitors beyond the general discussion of corporate governance and legal environments.

Comparison to Industry Standards

• Both Delaware and Nevada permit a range of antitakeover defenses, including poison pills.
• Both states have prohibitions (unless statutorily mandated conditions are met) on business combinations with interested stockholders owning certain proportions of the outstanding shares, though they apply at different ownership thresholds and have differing moratorium periods: 15% of the voting power of the outstanding voting stock for three years in Delaware and 10% of the voting or investment power of the outstanding voting stock for up to four years in Nevada.
• Both allow for classified boards of directors, though there are different default standards for director removal: in Delaware, unless the certificate of incorporation provides otherwise, directors on a classified board may only be removed for cause and by the holders of at least a majority of the voting power of the outstanding shares entitled to vote at an election of directors, and in Nevada, there is no distinction between removals for cause and removals without cause, and a two-thirds stockholder vote is generally required to remove any director.

Related Party Transactions

• The company subleases office space to Lightbank LLC, Lefkofsky Family Foundation and 346 Investment Partners, each an entity affiliated with and controlled by Mr. Lefkofsky, on a month-to-month basis.
• The company charters for business use an aircraft owned by 346 Investment Partners LLC, an entity affiliated with and controlled by Mr. Lefkofsky, through a third-party aircraft management company, which in turn reimburses 346 Investment Partners LLC at market rates.
• The company has a master agreement with Pathos AI, Inc. (Pathos), a healthcare company co-founded by Mr. Lefkofsky, our Chief Executive Officer, Founder and Chairman, and Mr. Fukushima, our Chief Operating Officer.

Stakeholder Impact

• Approval of the reincorporation could impact stockholders through changes in corporate governance and legal protections.
• The election of directors will determine the leadership and oversight of the company.
• The ratification of the auditor ensures the integrity of the company's financial reporting.

Next Steps

• Stockholders to vote on the proposals at the Annual Meeting on May 20, 2025.
• Board to determine whether to proceed with the reincorporation to Nevada based on legal and business considerations.

Key Dates

Keywords

reincorporation, Nevada, Delaware, proxy statement, annual meeting, directors, auditor, PricewaterhouseCoopers, stockholders, corporate governance