Esperion Therapeutics, Inc.
Extract: Charter Amendment (Plain English Desc) from a DEF 14A on 08/18/2022   Download
SEC Document
SEC Filing
PROPOSAL ONE:
RATIFICATION
Our Board has determined that it is in the best interests of the Company and our stockholders to ratify, pursuant to Section 204 of the Delaware General Corporation Law (the “DGCL”), the approval, filing and effectiveness of the certificate of amendment to our Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on May 26, 2022 (the “Share Increase Amendment”) and the increase in the number of shares of our authorized Common Stock effected thereby from 120,000,000 to 240,000,000 shares (the “Ratification”). This Ratification shall be retroactive to the effectiveness of the filing of the Share Increase Amendment with the Secretary of State of the State of Delaware on May 26, 2022.
Background on the Ratification
As described in the definitive proxy statement relating to our 2022 Annual Meeting, which was filed with the SEC on April 14, 2022 (the “2022 Annual Meeting Proxy Statement”), the Share Increase Amendment was proposed to increase the authorized number of shares of Common Stock in order to, among other things, provide the Company with the ability to raise the capital necessary to continue and grow its operations. The Board believes that the ability to issue equity is fundamental to our growth strategy. In order to implement our growth strategy, we may need to raise additional financing through the issuance of equity securities. The availability of equity incentive compensation is necessary for the Company to attract, retain and motivate the most high-performing executives and key employees who ultimately drive Company performance. We currently do not have an adequate number of shares available for reservation or issuance for equity compensation grants. The additional authorized shares enable us to issue shares in the future in a timely manner and under circumstances we consider favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance.
At the 2022 Annual Meeting, the Company’s stockholders voted on the Share Increase Amendment. Consistent with the applicable rules concerning the manner in which brokerage firms, banks, broker-dealers, or other similar organizations (“brokers and/or other nominees”) may exercise discretionary authority to vote on “routine” matters, certain shares of Common Stock held by brokers and/or other nominees and with respect to which the beneficial owner had not provided their broker and/or other nominee with voting instructions were voted by the brokers and/or other nominees in favor of the approval of the Share Increase Amendment. Such votes, and others cast by our stockholders, were tabulated by our inspector of elections in accordance with the applicable NYSE rules, and our inspector of elections determined that the proposal to approve the Share Increase Amendment was adopted by the requisite vote of stockholders and certified that the proposal had passed. Following this approval, we filed the Share Increase Amendment with the Secretary of State of the State of Delaware on May 26, 2022 and it became effective on the same date.
On June 13, June 16 and June 27, 2022, the Company received letters on behalf of three separate purported stockholders of the Company alleging that disclosures in the 2022 Annual Meeting Proxy Statement regarding the authority of brokers/nominees to vote on the Share Increase Amendment without instructions were inconsistent with how votes were tabulated and counted. In particular, the stockholders observed that the 2022 Annual Meeting Proxy Statement identified the Share Increase Amendment proposal as “non-routine” and stated that brokers and/or other nominees could not vote on this matter unless beneficial owners provided voting instructions. Although these stockholders did not claim to have been confused by the language in the 2022 Annual Meeting Proxy Statement and no other stockholders reported any confusion or made any inquiry with the Company on this matter, the stockholders stated that an unidentified and unspecified number of other stockholders might have been opposed to the Share Increase Amendment but, because they believed that providing no instruction would prevent their brokers and/or other nominees from casting an affirmative vote in favor of the proposal, declined to instruct their brokers and/or other nominees on the Share Increase Amendment rather than voting against the proposal. For this reason, the stockholders suggested that the votes of brokers and/or other nominees should not have been counted with respect to the Share Increase Amendment, and that the Board deem the Share Increase Amendment ineffective and make appropriate disclosure of such determination, or seek a valid stockholder approval of the Share Increase Amendment.
 
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Our Board believes it was and is appropriate to include the affirmative votes cast by brokers and/or other nominees pursuant to their discretionary authority in the tabulation of votes in favor of the Share Increase Amendment and, thus, that the Share Increase Amendment was properly approved and is effective. However, to avoid potential future litigation risk, and to eliminate any uncertainty as to the Share Increase Amendment and the validity of shares of Common Stock that in the future may be issued by virtue of the Share Increase Amendment, our Board has determined that it is in the best interests of the Company and our stockholders to ratify the approval, filing and effectiveness of the Share Increase Amendment pursuant to Section 204 of the DGCL to eliminate any uncertainty related to the effectiveness of this corporate act. In furtherance of this Ratification, our Board adopted the resolutions attached hereto as Appendix A on August 2, 2022 resolving, among other things, to approve the ratification of the Share Increase Amendment, subject to stockholder ratification, and recommend that stockholders approve the prior ratification of the Share Increase Amendment.
If the Ratification is approved by our stockholders and becomes effective, the ratification of the Share Increase Amendment will be retroactive to May 26, 2022, which was the date of the filing and effectiveness of the Share Increase Amendment with the Secretary of State of the State of Delaware.
The Ratification will provide the Company with certainty regarding the ability to raise the capital necessary to continue and grow its operations by providing sufficient reserves of authorized but unissued shares to generally support growth and to provide flexibility for future corporate needs, including but not limited to grants under equity compensation plans, stock splits, financings, potential strategic transactions, as well as other general corporate transactions. No specific transaction was contemplated in connection with the Share Increase Amendment, and as of this date, none of the shares authorized by the Share Increase Amendment have been issued. Once the Ratification is approved, the additional authorized shares pursuant to the Share Increase Amendment will enable us to issue shares in the future in a timely manner and under circumstances we consider favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. Our Board recommends that you vote “FOR” the Ratification.