To approve an amendment to the Amended and Restated Certificate of Incorporation, as amended, to effect an increase in the number of authorized shares of the Company’s common stock to a total of 5 billion shares
The Board of Directors has adopted, subject to stockholder approval, the Certificate of Amendment, attached as Appendix A to this proxy statement, to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Restated Certificate”), which increases the number of authorized shares of common stock, $0.01 par value per share, from 3 billion shares to 5 billion shares (as so amended, the “Amended Certificate”). Proposal 3 approves the Certificate of Amendment, which increases the number of authorized shares of common stock to a total of 5 billion shares. If the stockholders approve this Proposal 3, the Board of Directors intends to file the Certificate of Amendment with the Secretary of State of the State of Delaware. The increase in the number of authorized shares would become effective upon such filing.
As of September 17, 2013, approximately 2,391,239,613 shares of common stock were issued and outstanding, 50,399,503 shares of common stock were reserved for issuance upon exercise of outstanding options, 22,074,710 shares of common stock were reserved for future option grants under our 2004 Equity Incentive Plan, 7,974,030 shares of common stock were reserved for issuance upon exercise of outstanding warrants, 27,806,452 shares of common stock were reserved for issuance upon the conversions of the Company’s outstanding preferred stock, and 3,448 shares of the company preferred stock were issued and outstanding.
The additional shares of common stock to be authorized by the Amended Certificate would have rights identical to the currently outstanding common stock of the Company. Future issuances of common stock may, depending on the circumstances, have a dilutive effect on the earnings per share, voting power and other interests of existing stockholders. The Board of Directors does not presently intend to seek further stockholder approval of any particular issuance of shares unless such approval is required by applicable law.
The Board of Directors believes that an increase in authorized shares is desirable for a number of reasons. The Board of Directors believes that it is in the best interest of stockholders to raise additional equity capital and an increase in authorized shares is therefore necessary in order to have a sufficient number of authorized shares to satisfy the Company’s commitments and to allow the Company to conduct its business. Further, the Company currently has a limited number of shares of common stock which it can sell to raise capital, and the Board of Directors believes that an increase in authorized shares could improve the Company’s ability to raise new capital. Finally, the Company’s stated objective of acquiring additional intellectual property through license agreements, the hiring of key scientists or acquisition, is currently limited in light of the number shares of common stock currently authorized for issues.