(To
Prospectus dated April 14, 2006)
Filed
Pursuant to Rule 424(b)(3)
File
No.
333-129680
ZIOPHARM
Oncology, Inc.
7,462,095
Shares
Common
Stock
The
information contained in this prospectus supplement amends and updates our
prospectus dated April 14, 2006 (the “Prospectus”), and should be read in
conjunction therewith. Please keep this prospectus supplement with your
Prospectus for future reference.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
supplement or the Prospectus is truthful or complete. Any representation to
the
contrary is a criminal offense.
The
date
of this prospectus supplement is April 26, 2006
Annual
Stockholders Meeting
Pursuant
to notice, we held our 2006 annual stockholders’ meeting (the “Annual
Meeting”)
on
April 26, 2006. All proposals brought before the stockholders at the Annual
Meeting, as discussed below, were approved by the requisite stockholder vote.
Election
of Directors. The
eight
individuals who served as our directors prior to the Annual Meeting, each of
whom is identified below, were re-elected to serve as members of the Board,
each
to hold office until the next annual stockholders’ meeting, or until his
successor is elected and shall have qualified.
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·
Jonathan Lewis, M.D., Ph.D.
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·
Senator Wyche Fowler, Jr., J.D.
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·
Richard E. Bagley
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·
Gary S. Fragin
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·
Murray Brennan, M.D.
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·
Timothy McInerney
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·
James Cannon
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·
Michael Weiser, M.D., Ph.D.
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Adoption
of Amended and Restated Certificate of Incorporation.
Our
stockholders approved the adoption of an Amended and Restated Certificate of
Incorporation. See “Description of Capital Stock.”
Adoption
of Amendment to 2003 Stock Option Plan.
Our
stockholders approved the adoption of an amendment to our 2003 Stock Option
Plan
(the “2003
Plan”)
that
increases the number of shares of common stock available for issuance under
the
2003 Plan from 1,252,436 shares to 2,002,436 shares. See “Securities Authorized
for Issuance under Equity Compensation Plans.”
Ratification
of Independent Accountants.
Our
stockholders ratified the appointment of Vitale, Caturano & Company, Ltd. as
our independent registered public accounting firm for fiscal 2006.
Description
of Capital Stock
At
the
Annual Meeting, our stockholders approved the adoption of an Amended and
Restated Certificate of Incorporation for the Company, which Amended and
Restated Certificate of Incorporation was filed with the Delaware Secretary
of
State on April 26, 2006. The following is a description of our capital stock
and
the material provisions of our Amended and Restated Certificate of
Incorporation, bylaws and other agreements to which we and our stockholders
are
parties, in each case upon the date of this prospectus supplement. The following
is only a summary and is qualified by applicable law and by the provisions
of
our Amended and Restated Certificate of Incorporation, bylaws and other
agreements.
Common
Stock
The
Company’s authorized capital stock currently consists of 280,000,000 shares,
comprised of 250,000,000 shares of common stock, par value $.001 per share,
and 30,000,000 shares of preferred stock, par value $.001 per share.
We have an aggregate of 7,272,992 shares of common stock issued and
outstanding and no shares of preferred stock issued and outstanding. Each such
outstanding share of our common stock is validly issued, fully paid and
non-assessable.
Voting.
The
holders of our common stock are entitled to one vote for each outstanding share
of common stock owned by that stockholder on every matter properly submitted
to
the stockholders for their vote. Stockholders are not entitled to vote
cumulatively for the election of directors.
Dividend
Rights.
Holders
of the Company’s common stock are entitled to receive ratably dividends and
other distributions of cash or any other right or property as may be declared
by
the Board of Directors out of our assets or funds legally available for such
dividends or distributions. The dividend rights of holders of common stock
are
subject to the dividend rights of the holders of any series of preferred stock
that may be issued and outstanding from time to time.
1
Liquidation
Rights.
In the
event of any voluntary or involuntary liquidation, dissolution or winding up
of
our affairs, holders of our common stock would be entitled to share ratably
in
our assets that are legally available for distribution to stockholders after
payment of liabilities. If we have any preferred stock outstanding at such
time,
the holders of such preferred stock may be entitled to distribution and/or
liquidation preferences that require us to pay the applicable distribution
to
the holders of our preferred stock before paying distributions to the holders
of
common stock.
Conversion,
Redemption and Preemptive Rights.
Holders
of our common stock have no conversion, redemption, preemptive, subscription
or
similar rights.
Preferred
Stock
Under
our
Amended and Restated Certificate of Incorporation, our Board of Directors is
authorized, subject to limitations prescribed by law, to issue up to 30,000,000
shares of preferred stock in one or more series without further stockholder
approval. The Board of Directors has discretion to determine the rights,
preferences, privileges and restrictions of, including, without limitation,
voting rights, dividend rights, conversion rights, redemption privileges and
liquidation preferences of, and to fix the number of shares of, each series
of
our preferred stock. Upon the date of this prospectus supplement, there are
no
shares of preferred stock outstanding.
Limitations
on Directors’ Liability
Our
Amended and Restated Certificate of Incorporation and bylaws contain provisions
indemnifying our directors and officers to the fullest extent permitted by
law.
In addition, as permitted by Delaware law, our Amended and Restated Certificate
of Incorporation provides that no director will be liable to us or our
stockholders for monetary damages for breach of certain fiduciary duties as
a
director. The effect of this provision is to restrict our rights and the rights
of our stockholders in derivative suits to recover monetary damages against
a
director for breach of certain fiduciary duties as a director, except that
a
director will be personally liable for:
| • | any breach of his or her duty of loyalty to us or our stockholders; |
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•
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acts
or omissions not in good faith which involve intentional misconduct
or a
knowing violation of law;
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•
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the
payment of dividends or the redemption or purchase of stock in violation
of Delaware law; or
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•
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any
transaction from which the director derived an improper personal
benefit.
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This
provision does not affect a director’s liability under the federal securities
laws.
To
the
extent that our directors, officers and controlling persons are indemnified
under the provisions contained in our Amended and Restated Certificate of
Incorporation, Delaware law or contractual arrangements against liabilities
arising under the Securities Act, we have been advised that in the opinion
of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.
2
Provisions
that May Have an Anti-Takeover Effect
Certain
provisions set forth in our Amended and Restated Certificate of Incorporation,
bylaws and in Delaware law, which are summarized below, are intended to enhance
the likelihood of continuity and stability in the composition of our Board
of
Directors and in the policies formulated by our Board of Directors and to
discourage certain types of transactions that may involve an actual or
threatened change of control. In that regard, these provisions are designed
to
reduce our vulnerability to an unsolicited acquisition proposal. The provisions
also are intended to discourage certain tactics that may be used in proxy
fights. However, such provisions could have the effect of discouraging others
from making tender offers for our shares and, as a consequence, they also may
inhibit fluctuations in the market price of our common stock that could result
from actual or rumored takeover attempts. Such provisions also may have the
effect of preventing changes in our management.
Blank
Check Preferred Stock.
Our
Amended and Restated Certificate of Incorporation contains provisions that
permit our Board of Directors to issue, without any further vote or action
by
the stockholders, up to 30,000,000 shares of preferred stock in one or more
series and, with respect to each such series, to fix the number of shares
constituting the series and the designation of the series, the voting powers
(if
any) of the shares of the series, and the preferences and relative,
participating, optional and other special rights, if any, and any
qualifications, limitations or restrictions, of the shares of such series.
As a
result, our Board of Directors could authorize the issuance of shares of
preferred stock with terms and conditions that could have the effect of
delaying, deferring or preventing a transaction or a change in control that
might involve a premium price for holders of our common stock or otherwise
be in
their best interest.
Special
Meetings of Stockholders.
Our
bylaws provide that special meetings of stockholders may be called only by
the
Board of Directors. Stockholders are not permitted to call a special meeting
of
stockholders or to require that the Board of Directors call such a special
meeting.
Delaware
Takeover Statute
In
general, Section 203 of the Delaware General Corporation Law prohibits a
Delaware corporation that is a public company from engaging in any “business
combination” (as defined below) with any “interested stockholder” (defined
generally as an entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person affiliated
with such entity or person) for a period of three years following the date
that
such stockholder became an interested stockholder, unless: (1) prior to such
date, the board of directors of the corporation approved either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder; (2) on consummation of the transaction that resulted
in
the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the number
of shares outstanding those shares owned (x) by persons who are directors and
also officers and (y) by employee stock plans in which employee participants
do
not have the right to determine confidentially whether shares held subject
to
the plan will be tendered in a tender or exchange offer; or (3) on or subsequent
to such date, the business combination is approved by the board of directors
and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 662/3%
of the
outstanding voting stock that is not owned by the interested stockholder.
3
Section
203 of the Delaware General Corporation Law defines “business combination” to
include: (1) any merger or consolidation involving the corporation and the
interested stockholder; (2) any sale, transfer, pledge or other disposition
of
10% or more of the assets of the corporation involving the interested
stockholder; (3) subject to certain exceptions, any transaction that results
in
the issuance or transfer by the corporation of any stock of the corporation
to
the interested stockholder; (4) any transaction involving the corporation that
has the effect of increasing the proportionate share of the stock of any class
or series of the corporation beneficially owned by the interested stockholder;
or (5) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or through
the corporation.
Stock
Option Grants
On
the
date of the Annual Meeting, the Company made stock option grants of 15,000
shares to each of its non-employee directors. Each such stock option was granted
under the 2003 Plan, was vested with respect to all shares on the date of grant
and has an exercise price per share equal to $5.01 (which represents the closing
price of the Company’s common stock on the trading day immediately prior to the
date of grant). In addition, on the date of the Annual Meeting, the Company
granted (i) 214,315 stock options to Jonathan Lewis, Chief Executive Officer,
which vest with respect to all shares upon the date of grant; (ii) 94,873 stock
options to Richard E. Bagley, President, Chief Operating Officer and Treasurer
of the Company, which vest on the date of grant with respect to 74,873 shares
and vest on December 14, 2006 with respect to the remaining 20,000 shares;
and
(iii) 25,000 stock options to Robert Peter Gale, Senior Vice President Research,
which vest on the date of grant with respect to 12,500 shares and vest on
December 14, 2006 with respect to the remaining 12,500 shares. As with the
director grants, each stock option granted to such officers has an exercise
price per share equal to $5.01 (which represents the closing price of the
Company’s common stock on the trading day immediately prior to the date of
grant).
Securities
Authorized for Issuance under Equity Compensation Plans
The
2003
Plan, which is currently the Company’s only equity compensation plan, was
initially approved by the ZIOPHARM, Inc. stockholders. On April 26, 2006, the
Company’s stockholders approved the adoption of an amendment to the 2003 Plan
that increased the number of shares of common stock available for issuance
thereunder from 1,252,436 shares to 2,002,436 shares. The following table sets
forth certain information with respect to the 2003 Plan as of April 26, 2006
(following the Annual Meeting and the increase in shares of common stock
available for issuance thereunder approve thereat):
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Plan
category
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Number
of Securities to be Issued Upon Exercise of Outstanding
Options
(A)
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Weighted-Average
Exercise Price of Outstanding Options
(B)
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Number
of Securities Remaining Available for Future Issuance Under Equity
Compensation Plans (Excluding Securities Reflected in Column
(A)
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Equity
compensation plans approved by security holders:
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2003
Stock Option Plan
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1,440,827
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$
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3.35
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561,609
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Total:
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1,440,827
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$
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3.35
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561,609
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Equity
compensation plans not approved by stockholders:
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None.
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—
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—
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—
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Total
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—
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—
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—
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4