Aura Biosciences Inc

This management proposal asks stockholders to approve a Certificate of Amendment to increase the Company’s authorized common shares from 150 million to 500 million. Management and the Board argue the increase is intended to give Aura greater flexibility to issue shares for capital raising (including at-the-market offerings), strategic transactions (mergers, acquisitions or other business combinations), future equity compensation grants, stock splits or dividends, and general corporate working capital needs. The Board states that, as of the record date, existing share usage consumed about 90% of authorized shares and remaining availability was inadequate to support likely future equity needs. No specific issuance program is proposed at the time of the vote other than routine issuances under existing equity plans and potential ATM sales under the Jefferies sales agreement; however, the additional authorization would permit the Board to act without seeking further shareholder approval except where law or Nasdaq rules require it. The company discloses potential adverse effects, including dilution to earnings per share, book value, and voting power, and notes the additional shares could be used defensively in takeover contexts though management does not present the amendment as an anti-takeover device. The Board recommends FOR the proposal, citing administrative and financial flexibility and the need to preserve the ability to grant equity incentives to attract and retain talent. From a governance perspective, shareholders should weigh the tradeoff between managerial flexibility and dilution risk; management’s intent and past disclosure indicate no immediate large issuance plan but the authority would permit prompt future issuances. Approving the amendment is a straightforward mechanism to ensure the company can pursue financing and compensation objectives quickly if attractive opportunities arise, while rejecting it could constrain the company’s capital strategy.

This management proposal requests shareholder approval to amend the 2021 Stock Option and Incentive Plan to alter its evergreen formula so that outstanding pre-funded warrants are counted as part of the company’s outstanding shares when calculating the annual automatic share increase. Management’s rationale is that in May 2025 and May 2026 the company issued pre-funded warrants in connection with public offerings, which increased cash available to the company without increasing outstanding shares; as a result, the plan’s automatic annual increase (based on outstanding shares) did not rise proportionally, reducing the pool of shares available for equity awards relative to the company’s economic capitalization. Including pre-funded warrants in the definition of “Outstanding Shares” would modestly increase the annual evergreen share additions (illustrated by management as an additional ~368,572 shares under a given scenario, roughly 0.3% of capitalization), preserving the company’s ability to grant competitive equity awards for hiring and retention. The amendment applies prospectively beginning with the increase on January 1, 2027 through the plan’s expiration in October 2031 and does not change other substantive plan terms. The Board and Compensation Committee recommend FOR the amendment as reasonable, asserting it aligns the plan’s reserve with similarly situated peers and will facilitate recruitment and retention of talent. From a shareholder perspective the change is dilutive but incremental and directly tied to a non-cash instrument (pre-funded warrants) that represents potential common shares; management presents the amendment as a proportionate correction rather than an expansionary action. The approval would maintain the plan’s intended economics after financing choices that used pre-funded warrants to preserve current outstanding share counts.