PROPOSAL 2
APPROVAL OF AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Our board of directors has adopted, subject to stockholder approval, an amendment to our Amended and Restated Certificate of
Incorporation to increase the authorized number of shares of our common stock from 100,000,000 shares to 200,000,000 shares. The additional common stock that would be authorized by adoption of the amendment would have rights identical to our
currently outstanding shares of common stock. Adoption of the proposed amendment and any future issuance of the common stock would not affect the rights of the holders of our currently outstanding common stock, except for effects incidental to the
increase in the number of shares of our common stock outstanding, such as dilution of the per share operating results and the voting rights of current holders of our common stock. The proposed amendment will not affect the number of authorized
shares of preferred stock of the company, par value $0.001, which is 10,000,000 shares. Currently there are no shares of the preferred stock outstanding.
On April 2, 2019, we had 52,994,050 shares of common stock outstanding. In addition, 9,212,213 shares are reserved for issuance upon
exercise of stock options and other equity awards that were outstanding on April 2, 2019, 1,823,746 shares are reserved for future issuances and grants made under our equity incentive and employee stock purchase plans, and 11,902,553 shares are
reserved for the conversion of our convertible senior notes. In addition, our board of directors has approved an increase to the shares of common stock issuable under the Clovis Oncology, Inc. 2011 Stock Incentive Plan in the amount of 4% of the
number of shares of our common stock outstanding on the date of our Annual Meeting, which we currently estimate will be approximately 2,120,000 shares. As a result, without this proposed increase there would be only approximately 21,947,439 shares
of common stock available for issuance for other purposes following our Annual Meeting.
The board of directors believes it would be
prudent and advisable to have the additional shares available to provide additional flexibility regarding the potential use of shares of common stock for business and financial purposes in the future. Having an increased number of authorized but
unissued shares of common stock would allow us to take prompt action with respect to corporate opportunities that develop, without the delay and expense of convening a special meeting of stockholders for the purpose of approving an increase in our
capitalization. The additional shares could be used for various purposes without further stockholder approval. These purposes may include: (i) raising capital, if we have an appropriate opportunity, through offerings of common stock or
securities that are convertible into common stock; (ii) exchanges of common stock or securities that are convertible into common stock for other outstanding securities; (iii) providing equity incentives to employees, officers or directors;
(iv) establishing strategic relationships with other companies; (v) expanding our business or product lines through the acquisition of other businesses or products; and (vi) other purposes.
Our board of directors has not proposed the increase in authorized shares of common stock with the intention of discouraging tender offers or
takeover attempts of the company. However, the availability of additional authorized shares for issuance could, under certain circumstances, discourage or make more difficult efforts to obtain control of our company. This proposal is not being
presented with the intent that it be used to prevent or discourage any acquisition attempt, but nothing would prevent our board of directors from taking any appropriate actions not inconsistent with its fiduciary duties.
If this proposal is approved, we expect to file a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware to increase the number of authorized shares of our common stock as soon as practicable following stockholder approval. Upon filing of the Certificate of Amendment with the Delaware Secretary of State, the
first sentence of Article IV of the Amended and Restated Certificate of Incorporation will be amended and restated to read as follows:
The total number of shares of stock that the Corporation shall have authority to issue is 210,000,000 shares, consisting
of 200,000,000 shares of Common Stock, $0.001 par value per share (the Common Stock), and 10,000,000 shares of Preferred Stock, $0.001 par value per share (the Preferred Stock).
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