Devon Energy (DVN)

 

The Board of Directors has unanimously approved and is recommending that stockholders approve an amendment to the Company’s Restated Certificate of Incorporation to increase the number of authorized shares of common stock of the Company from 800,000,000 shares to 1,000,000,000 shares.

 

Article IV of the Company’s Restated Certificate of Incorporation currently provides the Company shall be authorized to issue a total of 804,500,001 shares of capital stock divided into three classes. If this proposal is approved, the Company shall be authorized to issue a total of 1,004,500,000 shares of capital stock divided into two classes as follows: 1,000,000,000 shares of common stock, par value $.10 per share and 4,500,000 shares of preferred stock, par value $1.00 per share.

 

The affirmative vote of the holders of at least a majority of the shares of the Company’s outstanding common stock will be required for approval of the proposal. As a result, an abstention or failure to vote with regard to this proposal will have the same effect as a vote against it. If approved, the amendment will become effective upon filing with the Secretary of State of the State of Delaware, which the Company intends to do promptly following the Annual Meeting.

 

The proposed amendment to the Restated Certificate of Incorporation authorizing an additional 200,000,000 shares of common stock will allow sufficient shares of common stock to provide the Company with flexibility to make such issuances as may be necessary in order for the Company to accomplish its goals and business and financial objectives in the future without the necessity of delaying such activities for further stockholder approval, except as may be required in particular cases by the Company’s charter documents, applicable laws or the rules of any stock exchange or other system on which the Company’s securities may then be listed. Future issuances of additional shares of common stock or securities convertible into common stock, other than a split of the Company’s common stock, would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per share of existing stockholders. The availability for issuance of additional shares of common stock could discourage and make more difficult efforts to obtain control of the Company. Other than in connection with its existing stock option plans, the Company has no present intention or plans to issue any shares of common stock.

 

The amendment will also eliminate from the Company’s Restated Certificate of Incorporation all references to the one share of Special Voting Stock that was created in connection with the acquisition of Northstar Energy Corporation in 1998 and that is no longer outstanding.

 

Our Board of Directors recommends a vote “FOR” the amendment to the Company’s Restated Certificate of Incorporation to increase the number of authorized shares of common stock.

 

 

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Commitment Runs Deep