ITEM 5
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF VALLEY NATIONAL BANCORP TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON AND PREFERRED STOCK
We are asking our shareholders to approve an amendment to our certificate of incorporation to increase our authorized capital stock to 500,000,000 shares and thereby increase the number of authorized shares of our common and preferred stock. Our Restated Certificate of Incorporation currently authorizes the issuance of 362,023,233 shares of capital stock, consisting of 332,023,233 shares of common stock, no par value, and 30,000,000 shares of preferred stock, no par value. On January 24, 2017, our Board of Directors approved a proposal to amend our Restated Certificate of Incorporation to increase the number of shares of capital stock that we are authorized to issue from 362,023,233 shares to 500,000,000 shares, consisting of 450,000,000 shares of common stock and 50,000,000 shares of preferred stock, which is subject to shareholder approval to become effective. Shareholder approval of the proposed amendment will result in an increase of 117,976,767 shares of common stock and an increase of 20,000,000 shares of preferred stock.
Our Board believes the proposed amendment to be advisable and in the best interests of the Company and our shareholders and is accordingly submitting the proposed amendment to be voted on by the shareholders. The amendment gives the Company more flexibility in mergers and acquisitions, capital raising transactions, grants under equity compensation plans, and other general corporate transactions. If the authorization of an increase in the available capital stock is not approved, there may be delay and expense related to the need to obtain future approval of shareholders for more authorized shares and this delay could impair our ability to address our corporate needs.
We have no present plans to issue any capital stock in a mergers or acquisitions, capital raising transactions, or other corporate transactions, other than to directors, officers and employees under our equity compensation plans in the ordinary course of business.
As of January 31, 2017, of the 332,023,233 currently authorized shares of common stock, 263,642,819 are issued and outstanding and 5,669,247 are reserved for issuance under our long term equity incentive plans and outstanding warrants. Shares reserved for issuance include 715,830 shares to be issued upon the exercise of outstanding stock options, 3,280,974 shares to be issued upon the exercise of outstanding warrants, and up to 1,672,443 to be issued upon vesting of restricted stock units. Based on these issued and reserved shares of common stock, we currently have approximately 62,711,167 shares of common stock
remaining available for issuance in the future. Based on these issued and reserved shares of common stock, shareholder approval of the proposed amendment will result in 180,687,934 shares of common stock remaining available for issuance in the future.
As of January 31, 2017, of the 30,000,000 currently authorized shares of preferred stock, 4,600,000 are issued and outstanding. All of the unissued preferred stock is “blank check” preferred stock under the provisions of our Restated Certificate of Incorporation which provisions were previously approved by our shareholders. Our Board has the authority to set all of the terms and conditions of the preferred stock prior to issuance. The additional authorized preferred stock would also be “blank check” preferred stock. We currently have approximately 25,400,000 shares of preferred stock remaining available for issuance in the future. Shareholder approval of the proposed amendment would result in 45,400,000 shares of preferred stock remaining available for issuance.
Text of the Amendment
Our Board proposes to amend Article V(A) of our Restated Certificate of Amendment to that it would read in its entirety as follows (with the changes underlined):
“The total authorized capital stock of the Corporation shall be
500,000,000
shares, consisting of
450,000,000
shares of common stock and
50,000,000
shares of preferred stock which may be issued in one or more classes or series. The shares of common stock shall constitute a single class and shall be without nominal or par value. The shares of preferred stock of each class or series shall be without nominal or par value, except that the amendment authorizing the initial issuance of any class or series, adopted by the Board of Directors as provided herein, may provide that shares of any class or series shall have a specified par value per share, in which event all of the shares of such class or series shall have the par value per share so specified.”
Purpose of the Amendment
Our Board is recommending this increase in the number of authorized shares of capital stock primarily to have additional shares available for use as our Board deems appropriate or necessary. As such, the primary purpose of the proposed amendment is to provide us with greater flexibility with respect to issuing common or preferred stock in connection with such corporate purposes as may, from time to time, be considered advisable by our Board.
As stated previously, the newly authorized shares of capital stock would be issuable for any proper corporate purpose including, but not limited to, mergers and acquisitions, capital raising transactions, or grants under equity compensation plans. We have no immediate plans to issue any common or preferred stock other than issuing common stock to officers,