Company: PACB
Filing Date: 2025-04-23
Form Type: DEF 14A
Source: 0001299130-25-000090
Chunk: 41

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-04-23
Form: DEF 14A
Chunk 41
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 time, and the share reserve under the amended 2020 Plan could last for a shorter or longer time, as future circumstances and business needs, such as changes in headcount that are higher or lower than expected, including of officers and other key employees to support growth of our businesses, or any merger and acquisition activity could affect our share use. In addition, certain of our employee awards are based on value and any significant changes in our stock price as compared to the stock price we assumed for forecasting purposes could cause our actual Share usage to deviate significantly from our anticipated Share usage.

• Monitoring of Dilution, Burn Rate and Overhang. In determining the number of Shares to authorize for issuance under the 2020 Plan, the Compensation Committee considered the potential dilution to current stockholders, as measured by the burn rate and overhang, and projected future share usage.

| 2025 Proxy Statement |     | 31 |

TABLE OF CONTENTS

◦ Burn rate measures our usage of Shares for our equity plans as a percentage of total outstanding Shares of our common stock. For fiscal years 2022, 2023 and 2024, our burn rates were 4.7%, 3.0% and 4.8%, respectively, resulting in a three-year average burn rate of 4.2%. The rates were calculated by dividing the number of Shares subject to stock options granted, restricted stock units (“RSUs”) granted, and performance-based restricted stock units (“PSUs”) that vested (of which there were none during this time period), divided by the weighted average number of Shares outstanding during the year. These rates exclude, for purposes of the numerator, awards assumed by us in connection with an acquisition transaction during the applicable year.

◦ As of March 31, 2025, our overhang is 16.5% when excluding the new increase in the share reserve, and 24.2% when including the new requested increase in the share reserve by 23,000,000 shares (7.7% of new incremental dilution). For this purpose, we calculated overhang as (a) the sum of (i) 16,547,766 Shares subject to outstanding stock options granted under our equity plans, plus (ii) 21,406,508 Shares subject to outstanding RSUs granted under our equity plans, plus (iii) 392,429 Shares subject to outstanding PSUs granted under our equity plans, plus (iv) 11,307,144 Shares available for future issuance