Extract: Charter Amended/Restated (Plain English Desc) from a DEF 14A on 04/03/2024
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SEC Filing
DownloadPROPOSAL NO. 2:
AMEND OUR ARTICLES OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Summary of Proposed Amendments
Our board of directors has adopted a resolution recommending that the shareholders approve the amendment to our Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock (the “Amendment”).
Our Articles of Incorporation currently provide that the board of directors are authorized to issue up to 10,000,000 shares of common stock. If Proposal No. 2 is passed, the number of authorized shares would increase by 10,000,000 shares for a new total of 20,000,000 authorized shares of common stock.
Rationale and Recommendation
Our board of directors believes that it is advisable to have a greater number of authorized shares of common stock available for issuance. We may issue additional common shares to grant common shares under current or future equity compensation plans for our directors, officers, and employees, and in connection with various general corporate programs and purposes. We may also in the future, from time to time, consider acquisitions and mergers as opportunities arise, stock splits, and other public or private financings to
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provide us with capital, any or all of which any or all of which may involve the issuance of additional shares of common stock or securities convertible into shares of common stock. The additional common shares will
| · | give us the flexibility to meet our future needs for unreserved common shares without the expense and delay associated with obtaining shareholder approval to affect an increase in authorized common shares when needed, and |
| · | enhance our ability to respond promptly to opportunities for increasing our capital levels through public or private offerings of our common stock, acquisitions and mergers, and stock splits. |
Principal Effects on Outstanding Common Stock
If the Amendment is approved, the additional authorized shares of common stock may be issued for such consideration, cash or otherwise, at such times and in such amounts as the board of directors may determine without further shareholder approval—except to the extent that shareholder approval is required by applicable laws, rules or regulations. The authorization of additional shares of common stock will not, by itself, have any effect on the rights of present shareholders. The additional 10,000,000 shares to be authorized will be a part of the existing class of common stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently issued and outstanding.
The following table illustrates the effect the Amendment would have on the number of shares of common stock available for issuance.
|
As of |
If the | |||
| Shares of common stock authorized | 10,000,000 | 20,000,000 | ||
| Shares of common stock issued and outstanding | 8,088,186 | 8,088,186 | ||
| Shares of common stock reserved for issuance1 | 331,349 | 331,349 | ||
| Shares of common stock available for future issuance | 1,580,465 | 11,580,465 |
1 Pursuant to outstanding stock options.
Vote Required; Authority of the Board of Directors to Issue Common Stock
If the Amendment is approved by the affirmative vote of two-thirds of the shares of our common stock outstanding on the record date (the only class of our capital stock outstanding and entitled to vote), the Amendment will become effective if, and when, Articles of Amendment effecting such Amendment are filed by the Company with the Secretary of State of South Carolina. Approval of the Amendment by the shareholders will not require that the Articles of Amendment be filed, and our board of directors may decide to delay the filing of the Amendment or abandon and not file this amendment after shareholder approval.
The board of directors has expressly conditioned its submission of the Amendment to a vote by the Company’s shareholders on the board’s right to delay the filing of the Amendment or to abandon and not file the Amendment after shareholder approval. The board would make any such decision to delay or abandon the filing of the Amendment in the exercise of its fiduciary duties and based on the facts and circumstances known to the board of directors at the time of its decision(s).
The full text of the proposed Amendment to our Amended and Restated Articles of Incorporation is attached to this proxy statement as Appendix A.
The board of directors unanimously recommends that you vote “FOR” the Amendment to our Articles of Incorporation to increase the number of authorized shares of common stock.