PROPOSAL 3
APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECREASE, CONCURRENT WITH AND CONDITIONED UPON THE
IMPLEMENTATION OF THE REVERSE STOCK SPLIT, THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK FROM 200,000,000 TO 57,142,000
General
Our board of directors has approved and declared advisable an amendment to our Amended and Restated Certificate of Incorporation,
as currently in effect to decrease, concurrent with and conditioned upon the effectiveness of the Reverse Stock Split, the number of authorized shares of common stock from 200,000,000 to 57,142,000 shares substantially in the form attached hereto as
Appendix B. 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 11, 2022, we had 143,879,140 shares of common stock outstanding. 12,608,752 shares are reserved for issuance upon exercise of
stock options and other equity awards that were outstanding on April 11, 2022, 4,652,993 shares are reserved for future issuances and grants made under our equity incentive and employee stock purchase plans, and 30,368,647 shares are reserved
for the conversion of our convertible senior notes. In addition, pursuant to Proposal 4, we are seeking stockholder approval of an amendment and restatement of the Clovis Oncology, Inc. Amended and Restated 2020 Stock Incentive Plan that will
increase the number shares of common stock issuable under the plan by 4,000,000 shares (prior to giving effect to the Reverse Stock Split).
Reason for
the Proposal
As a matter of Delaware law, implementation of the Reverse Stock Split does not require a change in the total number of
shares of common stock authorized under our Amended and Restated Certificate of Incorporation. If the number of outstanding shares of common stock resulting from the Reverse Stock Split in Proposal 2 is approved by the stockholders and implemented
by our board of directors, the company may no longer have a need for 200,000,000 authorized shares of common stock.
The proposed
authorization to reduce the number of authorized shares of common stock is also intended to conform to the requirements of certain entities that make recommendations to stockholders regarding proposals submitted by the company and to ensure that the
company does not have what some stockholders might view as an unreasonably high number of authorized but unissued shares of common stock. In the event that we need to increase our authorized shares of common stock in the future, we may, subject to
stockholder approval, seek to amend the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock. In addition, our board of directors believes that the reduction in the number of authorized shares
of common stock may also reduce certain of our costs, such as annual franchise taxes paid to the State of Delaware.
If our stockholders
approve the Reverse Stock Split and our board of directors chooses to implement it, the board of directors would decrease the number of authorized shares by filing the amendment to our Amended and Restated Certificate of Incorporation, which is set
forth in Appendix B to this proxy statement.
Description of the Amendment
Subject to stockholder approval of Proposal 2 and this Proposal 3, and concurrent with and conditioned upon the implementation of the Reverse
Stock Split, 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 67,142,000 shares, consisting
of 57,142,000 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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