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EXHIBIT 3.03
FIRST AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TRANSMETA CORPORATION
(ORIGINALLY INCORPORATED ON JULY 11, 2000)
Transmeta Corporation, a Delaware corporation, hereby certifies that the
First Amended and Restated Certificate of Incorporation of the corporation
attached hereto as Exhibit A, which is incorporated herein by this reference,
has been duly adopted by the corporation's Board of Directors and stockholders
in accordance with Sections 242 and 245 of the Delaware General Corporation Law,
with the approval of the corporation's stockholders having been given by written
consent without a meeting in accordance with Section 228 of the Delaware General
Corporation Law.
IN WITNESS WHEREOF, said corporation has caused this First Amended and
Restated Certificate of Incorporation to be signed by its by duly authorized
officer.
Dated: October 19, 2000
TRANSMETA CORPORATION
/s/ MARK K. ALLEN
-----------------------------------------
Mark Allen, President
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EXHIBIT A
FIRST AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TRANSMETA CORPORATION
ARTICLE I
The name of the corporation is Transmeta Corporation.
ARTICLE II
The address of the registered office of the corporation in the State of
Delaware is 15 East North Street, City of Dover, County of Kent. The name of its
registered agent at that address is Incorporating Services, Ltd.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock which the corporation
has authority to issue is 1,028,159,835 shares, consisting of two classes:
1,000,000,000 shares of Common Stock, $0.00001 par value per share, and
28,159,835 shares of Preferred Stock, $0.00001 par value per share. Of the
28,159,835 shares of Preferred Stock, par value $0.00001, authorized to be
issued by the corporation, 3,345,454 shares are hereby designated "Series B
Preferred Stock," 1,081,920 shares are hereby designated "Series C Preferred
Stock," 3,999,962 shares are hereby designated "Series D Preferred Stock,"
4,999,999 shares are hereby designated "Series E Preferred Stock," 7,692,500
shares are hereby designated "Series F Preferred Stock" and 7,040,000 shares are
hereby designated "Series G Preferred Stock."
The Board of Directors is authorized, subject to any limitations
prescribed by this Article IV or the law of the State of Delaware, to provide
for the issuance of the shares of Preferred Stock in one or more series, and, by
filing a Certificate of Designation pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares to be included
in each such series, to fix the designation, powers, preferences and rights of
the shares of each such series and any qualifications, limitations or
restrictions thereof, and to increase or decrease the number of shares of any
such series (but not below the number of shares of such series then
outstanding). The number of authorized shares of Preferred Stock may also be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the corporation entitled to vote, unless a vote of any other holders is
required pursuant to this Article IV or to a Certificate or Certificates of
Designation establishing a series of Preferred Stock.
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Except as otherwise expressly provided in this Article IV or in any
Certificate of Designation designating any series of Preferred Stock pursuant to
the foregoing provisions of this Article IV, any new series of Preferred Stock
may be designated, fixed and determined as provided herein by the Board of
Directors without approval of the holders of Common Stock or the holders of
Preferred Stock, or any series thereof, and any such new series may have powers,
preferences and rights, including, without limitation, voting rights, dividend
rights, liquidation rights, redemption rights and conversion rights, senior to,
junior to or pari passu with the rights of the Common Stock, the Preferred
Stock, or any future class or series of Preferred Stock or Common Stock.
The rights, preferences, privileges and restrictions granted to and
imposed on the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock, the Series F Preferred
Stock, the Series G Preferred Stock and the Common Stock are as follows:
1. DEFINITIONS. For purposes of this Article VI, the following
definitions shall apply:
1.1 "Board" means the Board of Directors of the Corporation.
1.2 "Corporation" means the corporation.
1.3 "Common Stock" means the Common Stock, $0.00001 par value,
of the Corporation.
1.4 "Common Stock Dividend" means a stock dividend declared and
paid on the Common Stock that is payable in shares of Common Stock.
1.5 "Dividend Rate" means 8% of the Original Issue Price
($0.1320) per share per annum for the Series B Preferred Stock, 8% of the
Original Issue Price ($0.20) per share per annum for the Series C Preferred
Stock, 8% of the Original Issue Price ($0.40) per share per annum for the Series
D Preferred Stock, 8% of the Original Issue Price ($0.48) per share per annum
for the Series E Preferred Stock, 8% of the Original Issue Price ($0.80) per
share per annum for the Series F Preferred Stock and 8% of the Original Issue
Price ($1.00) per share per annum for the Series G Preferred Stock.
1.6 "Original Issue Date" means, with respect to a series of
Preferred Stock, the date on which the first share of that series of Preferred
Stock is issued by the Corporation.
1.7 "Original Issue Price" means $1.65 per share for the Series
B Preferred Stock, $2.50 per share for the Series C Preferred Stock, $5.00 per
share for the Series D Preferred Stock, $6.00 per share for the Series E
Preferred Stock, $10.00 per share for the Series F Preferred Stock and $12.50
per share for the Series G Preferred Stock.
1.8 "Permitted Repurchases" means the repurchase by the
Corporation of shares of Common Stock held by employees, officers, directors,
consultants, independent contractors, advisors, or other persons performing
services for the Corporation or a subsidiary that are subject to restricted
stock purchase agreements or stock option exercise agreements
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under which the Corporation has the option to repurchase such shares: (a) at
cost, upon the occurrence of certain events, such as the termination of
employment or services; or (b) at any price pursuant to the Corporation's
exercise of a right of first refusal to repurchase such shares.
1.9 "Preferred Stock" means the Preferred Stock authorized
hereunder.
1.10 "Securities Act" means the Securities Act of 1933, as
amended.
1.11 "Series B Preferred Stock" means the Series B Preferred
Stock, $0.00001 par value, of the Corporation.
1.12 "Series C Preferred Stock" means the Series C Preferred
Stock, $0.00001 par value, of the Corporation.
1.13 "Series D Preferred Stock" means the Series D Preferred
Stock, $0.00001 par value, of the Corporation.
1.14 "Series E Preferred Stock" means the Series E Preferred
Stock, $0.00001 par value, of the Corporation.
1.15 "Series F Preferred Stock" means the Series F Preferred
Stock, $0.00001 par value, of the Corporation.
1.16 "Series G Preferred Stock" means the Series G Preferred
Stock, $0.00001 par value, of the Corporation.
1.17 "Subsidiary" means any corporation of which at least fifty
percent (50%) of the outstanding voting stock is at the time owned directly or
indirectly by the Corporation or by one or more of such subsidiary corporations.
2. DIVIDEND RIGHTS.
2.1 Dividend Preference of Preferred Stock. In each calendar
year, the holders of the then outstanding Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F
Preferred Stock and Series G Preferred Stock shall be entitled to receive, when,
as and if declared by the Board, out of any funds and assets of the Corporation
legally available therefor, noncumulative dividends at the applicable annual
Dividend Rate for each such series of Preferred Stock, prior and in preference
to the payment of any dividends on any Preferred Stock (other than the Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock or Series G Preferred Stock) or the
Common Stock in such calendar year (other than a Common Stock Dividend). No
dividends (other than a Common Stock Dividend) shall be paid, and no
distribution shall be made, with respect to Preferred Stock (other than the
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock, Series F Preferred Stock or Series G Preferred Stock)
or Common Stock during any calendar year unless dividends in the total amount of
the annual Dividend Rate for the then outstanding Series B Preferred Stock shall
have first been paid or declared and set apart for payment to the holders of
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the Series B Preferred Stock, dividends in the total amount of the annual
Dividend Rate for the then outstanding Series C Preferred Stock shall have first
been paid or declared and set apart for payment to the holders of the Series C
Preferred Stock, dividends in the total amount of the annual Dividend Rate for
the then outstanding Series D Preferred Stock shall have first been paid or
declared and set apart for payment to the holders of the Series D Preferred
Stock, dividends in the total amount of the annual Dividend Rate for the then
outstanding Series E Preferred Stock shall have first been paid or declared and
set apart for payment to the holders of the Series E Preferred Stock, dividends
in the total amount of the annual Dividend Rate for the then outstanding Series
F Preferred Stock shall have first been paid or declared and set apart for
payment to the holders of the Series F Preferred Stock and dividends in the
total amount of the annual Dividend Rate for the then outstanding Series G
Preferred Stock shall have first been paid or declared and set apart for payment
to the holders of the Series G Preferred Stock, respectively, during that
calendar year; provided, however, that this restriction shall not apply to
Permitted Repurchases. Payments of any dividends to the holders of then
outstanding Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and Series G
Preferred Stock shall be paid pro rata, on an equal priority, pari passu basis,
in the ratio of 1.65 : 2.50 : 5.00 : 6.00 : 10.00 : 12.50 for the Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock,
respectively. Dividends on the Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred
Stock and Series G Preferred Stock shall not be mandatory or cumulative, and no
rights or interest shall accrue to the holders of the Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock,
Series F Preferred Stock or Series G Preferred Stock by reason of the fact that
the Corporation shall fail to declare or pay dividends on the Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock, Series F Preferred Stock or Series G Preferred Stock in the amount of the
respective annual Dividend Rate for the Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F
Preferred Stock or Series G Preferred Stock or in any other amount in any
calendar year or any fiscal year of the Corporation, whether or not the earnings
of the Corporation in any calendar year or fiscal year were sufficient to pay
such dividends in whole or in part.
2.2 Non-Cash Dividends. Whenever a dividend or distribution
provided for in this Section 2 shall be payable in property other than cash, the
value of such dividend or distribution shall be deemed to be the fair market
value of such property as determined in good faith by the Board.
2.3 Payment on Conversion. If the Corporation shall have
declared but unpaid dividends with respect to any Preferred Stock, then
immediately prior to, and upon a conversion of any of the Preferred Stock as
provided in Section 5, the Corporation shall, subject to the legal availability
of funds and assets therefor, pay in cash to the holder of the shares of
Preferred Stock being converted the full amount of any dividends declared and
unpaid on such shares.
3. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the funds and
assets of the Corporation that may be legally distributed to the Corporation's
stockholders (the "Available Funds and Assets") shall be distributed to
stockholders in the following manner:
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3.1 Liquidation Preferences. The holders of each share of Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock then
outstanding shall be entitled to be paid, out of the Available Funds and Assets,
and prior and in preference to any payment or distribution (or any setting apart
of any payment or distribution) of any Available Funds and Assets on any shares
of Common Stock, an amount per share equal to the Original Issue Price for each
such series of Preferred Stock, respectively, plus all declared but unpaid
dividends thereon. If upon any liquidation, dissolution or winding up of the
Corporation, the Available Funds and Assets shall be insufficient to permit the
payment to holders of the Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
Series G Preferred Stock of their full preferential amounts described in this
Section, then all of the Available Funds and Assets shall be distributed among
the holders of the then outstanding Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred
Stock and Series G Preferred Stock pro rata, on an equal priority, pari passu
basis, in the ratio of 1.65 : 2.50 : 5.00 : 6.00 : 10.00 : 12.50 for the Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock,
respectively.
3.2 Participation Rights. If there are any Available Funds and
Assets remaining after the payment or distribution (or the setting aside for
payment or distribution) to the holders of the Preferred Stock of their full
preferential amounts described above in this Section 3, then all such remaining
Available Funds and Assets shall be distributed among the holders of the then
outstanding Common Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
Series G Preferred Stock pro rata according to the number of shares of Common
Stock held by such holders (where, for this purpose, holders of shares of Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock will be
deemed to hold, in lieu of their Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred
Stock and Series G Preferred Stock, the greatest whole number of shares of
Common Stock, rounded upward, then issuable upon conversion in full of such
shares of Preferred Stock pursuant to Section 5) until such time as each holder
of then outstanding Series B Preferred Stock shall have received, in
distributions made under this Section 3, an aggregate amount equal to $3.50 per
share of Series B Preferred Stock held by such holder, each holder of then
outstanding Series C Preferred Stock shall have received, in distributions made
under this Section 3, an aggregate amount equal to $5.303 per share of Series C
Preferred Stock held by such holder, each holder of then outstanding Series D
Preferred Stock shall have received, in distributions made under this Section 3,
an aggregate amount equal to $10.606 per share of Series D Preferred Stock held
by such holder, each holder of then outstanding Series E Preferred Stock shall
have received, in distributions made under this Section 3, an aggregate amount
equal to $12.7272 per share of Series E Preferred Stock held by such holder,
each holder of then outstanding Series F Preferred Stock shall have received, in
distributions made under this Section 3, an aggregate amount equal to $21.2121
per share of Series F Preferred Stock held by such holder and each holder of
then outstanding Series G Preferred Stock shall have received, in distributions
made under this Section 3, an aggregate amount equal to $26.5151 per share of
Series G Preferred Stock held by
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such holder (in each case, such aggregate dollar amount to include all amounts
previously paid to such holder pursuant to Section 3.1).
3.3 Common Stock. After all distributions set forth in Section
3.1 and 3.2 have been paid, then the holders of then outstanding Common Stock
shall be entitled to receive all the remaining Available Funds and Assets (if
any) pro rata according to the number of outstanding shares of Common Stock then
held by each of them.
3.4 Merger or Sale of Assets. A consolidation or merger of the
Corporation with or into any other corporation or corporations in which the
holders of the Corporation's outstanding shares immediately before such
consolidation or merger do not, immediately after such consolidation or merger,
retain stock representing a majority of the voting power of the surviving
corporation (or its parent) of such consolidation or merger; or a sale of all or
substantially all of the assets of the Corporation, shall each be deemed to be a
liquidation, dissolution or winding up of the Corporation as those terms are
used in this Section 3.
3.5 Non-Cash Consideration. If any assets of the Corporation
distributed to stockholders in connection with any liquidation, dissolution, or
winding up of the Corporation are other than cash, then the value of such assets
shall be their fair market value as determined by the Board in good faith,
except that any securities to be distributed to stockholders in a liquidation,
dissolution, or winding up of the Corporation shall be valued as follows:
(a) The method of valuation of securities which are then
freely tradeable under the Securities Act shall be as follows:
(i) if the securities are then traded on a
national securities exchange or the Nasdaq National Market (or a similar
national quotation system), then the value shall be deemed to be the average of
the closing prices of the securities on such exchange or system over the 30-day
period ending three (3) days prior to the distribution; and
(ii) if actively traded over-the-counter, then
the value shall be deemed to be the average of the closing bid prices over the
30-day period ending three (3) days prior to the distribution; and
(iii) if there is no active public market, then
the value shall be the fair market value thereof, as determined in good faith by
the Board of Directors of the Corporation.
(b) The method of valuation of securities which are not
then freely tradeable under the Securities Act shall be to make an appropriate
discount from the market value determined as above in subparagraphs (a)(i), (ii)
or (iii) of this Section 3.5 in order to reflect the approximate fair market
value of such non-freely tradeable securities, as determined in good faith by
the Board.
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4. VOTING RIGHTS.
4.1 Common Stock. Each holder of shares of Common Stock shall be
entitled to one (1) vote for each share thereof held.
4.2 Preferred Stock. Each holder of shares of Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which such shares of Preferred Stock could be
converted pursuant to the provisions of Section 5 at the record date for the
determination of the stockholders entitled to vote on such matters or, if no
such record date is established, the date such vote is taken or any written
consent of stockholders is solicited.
4.3 General. Subject to the foregoing provisions of this
Section 4, each holder of Preferred Stock shall have full voting rights and
powers equal to the voting rights and powers of the holders of Common Stock, and
shall be entitled to notice of any stockholders' meeting in accordance with the
bylaws of the Corporation (as in effect at the time in question) and applicable
law, and shall be entitled to vote, together with the holders of Common Stock,
with respect to any question upon which holders of Common Stock have the right
to vote, except as may be otherwise provided by applicable law. Except as
otherwise expressly provided herein or as required by law, and except for the
vote of the Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and Series G
Preferred Stock provided for in Article IV Section 6 hereof, the holders of
Preferred Stock and the holders of Common Stock shall vote together and not as
separate classes.
5. CONVERSION RIGHTS. The outstanding shares of Preferred Stock shall be
convertible into Common Stock as follows:
5.1 Optional Conversion.
(a) At the option of the holder thereof, each share of
Preferred Stock shall be convertible, at any time or from time to time prior to
the close of business on the business day before any date fixed for redemption
of such share, into fully paid and nonassessable shares of Common Stock as
provided herein.
(b) Each holder of Preferred Stock who elects to convert
the same into shares of Common Stock shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or any
transfer agent for the Preferred Stock or Common Stock, and shall give written
notice to the Corporation at such office that such holder elects to convert the
same and shall state therein the number of shares of Preferred Stock being
converted. Thereupon, the Corporation shall promptly issue and deliver at such
office to such holder a certificate or certificates for the number of shares of
Common Stock to which such holder is entitled upon such conversion. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the certificate or certificates
representing the shares of Preferred Stock to be converted, and the person
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such shares of Common
Stock on such date.
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5.2 Automatic Conversion.
(a) Automatic Conversion Event. Each share of Preferred
Stock shall automatically be converted into fully paid and nonassessable shares
of Common Stock immediately prior to the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
filed under the Securities Act, covering the offer and sale of Common Stock for
the account of the Corporation in which the aggregate public offering price
(before deduction of underwriters' discounts and commissions) equals or exceeds
$25,000,000 and the public offering price per share of which equals or exceeds,
for each share of Series B Preferred Stock and Series C Preferred Stock to so
automatically be converted, $2.50, or, for each share of Series D Preferred
Stock and Series E Preferred Stock to so automatically be converted, $7.50, or,
for each share of Series F Preferred Stock to so automatically be converted,
$10.00, or, for each share of Series G Preferred Stock to so automatically be
converted, $13.40, in each case before deduction of underwriters' discounts and
commissions (in each case, such price per share of Common Stock to be
appropriately adjusted to reflect Common Stock Events occurring after the date
of the filing of this Amended and Restated Certificate of Incorporation, as
defined in Section 5.4).
(b) Effect of Automatic Conversion. Upon the occurrence
of the event specified in Section 5.2(a), the outstanding shares of Preferred
Stock shall be converted into Common Stock automatically without the need for
any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided, however, that the Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless the certificates evidencing such shares of Preferred Stock are
either delivered to the Corporation or its transfer agent as provided below, or
the holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon the occurrence of such automatic
conversion of the Preferred Stock, the holders of Preferred Stock shall
surrender the certificates representing such shares at the office of the
Corporation or any transfer agent for the Preferred Stock or Common Stock.
Thereupon, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the shares of Preferred Stock surrendered were convertible on the date on
which such automatic conversion occurred.
5.3 Conversion Price. Each share of Preferred Stock shall be
convertible in accordance with Section 5.1 or Section 5.2 into the number of
shares of Common Stock which results from dividing the Original Issue Price for
such series of Preferred Stock by the conversion price for such series of
Preferred Stock that is in effect at the time of conversion (the "Conversion
Price"). The initial Conversion Price for the Series B Preferred Stock shall be
$0.825, the initial Conversion Price for the Series C Preferred Stock shall be
$1.25, the initial Conversion Price for the Series D Preferred Stock shall be
$2.50, the initial Conversion Price for the Series E Preferred Stock shall be
the Original Issue Price for the Series E Preferred Stock, the initial
Conversion Price for the Series F Preferred Stock shall be the Original Issue
Price for the Series F Preferred Stock and the initial Conversion Price for the
Series G Preferred Stock shall be
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the Original Issue Price for the Series G Preferred Stock. The Conversion Price
of each series of Preferred Stock shall be subject to adjustment from time to
time as provided below.
5.4 Adjustment Upon Common Stock Event. Upon the happening of a
Common Stock Event (as hereinafter defined) after the date of the filing of this
Amended and Restated Certificate of Incorporation, the Conversion Price of the
Series B Preferred Stock, the Conversion Price of the Series C Preferred Stock,
the Conversion Price of the Series D Preferred Stock, the Conversion Price of
the Series E Preferred Stock, the Conversion Price of the Series F Preferred
Stock and the Conversion Price of the Series G Preferred Stock shall,
simultaneously with the happening of such Common Stock Event, be adjusted by
multiplying the Conversion Price of such series of Preferred Stock in effect
immediately prior to such Common Stock Event by a fraction, (a) the numerator of
which shall be the number of shares of Common Stock issued and outstanding
immediately prior to such Common Stock Event, and (b) the denominator of which
shall be the number of shares of Common Stock issued and outstanding immediately
after such Common Stock Event, and the product so obtained shall thereafter be
the Conversion Price for such series of Preferred Stock. The Conversion Price
for a series of Preferred Stock shall be readjusted in the same manner upon the
happening of each subsequent Common Stock Event. As used herein, the term
"Common Stock Event" means (i) the issue by the Corporation of additional shares
of Common Stock as a dividend or other distribution on outstanding Common Stock,
(ii) a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock, or (iii) a combination of the outstanding
shares of Common Stock into a smaller number of shares of Common Stock.
5.5 Adjustments for Other Dividends and Distributions. If, at
any time, or from time to time, after the Original Issue Date, the Corporation
pays a dividend or makes another distribution to the holders of the Common Stock
payable in securities of the Corporation other than shares of Common Stock, then
in each such event provision shall be made so that the holders of the Preferred
Stock shall receive upon conversion thereof, in addition to the number of shares
of Common Stock receivable upon conversion thereof, the amount of securities of
the Corporation which they would have received had their Preferred Stock been
converted into Common Stock on the date of such event (or such record date, as
applicable) and had they thereafter, during the period from the date of such
event (or such record date, as applicable) to and including the conversion date,
retained such securities receivable by them as aforesaid during such period,
subject to all other adjustments called for during such period under this
Section 5 with respect to the rights of the holders of the Preferred Stock or
with respect to such other securities by their terms.
5.6 Adjustment for Reclassification, Exchange, Substitution,
Reorganizations, Mergers and Consolidations.
(a) If, at any time, or from time to time, after the
Original Issue Date, the Common Stock issuable upon the conversion of the
Preferred Stock is changed into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification or
otherwise (other than by a Common Stock Event or a stock dividend,
reorganization, merger or consolidation provided for elsewhere in this Section
5), then, in each such event, each holder of Preferred Stock shall have the
right thereafter to convert such stock into the kind and amount of stock and
other securities and property receivable upon such
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recapitalization, reclassification or other change by holders of the number of
shares of Common Stock into which such shares of Preferred Stock could have been
converted immediately prior to such recapitalization, reclassification or
change, all subject to further adjustment as provided herein or with respect to
such other securities or property by the terms thereof.
(b) If at any time or from time to time after the
Original Issue Date there is a reorganization of the Corporation (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 5) or a merger or consolidation of
the Corporation with or into another corporation (except an event which is
governed under subsection 3.4), then, as a part of such reorganization, merger
or consolidation, provision shall be made so that the holders of the Preferred
Stock thereafter shall be entitled to receive, upon conversion of the Preferred
Stock, the number of shares of stock or other securities or property of the
Corporation, or of such successor corporation resulting from such
reorganization, merger or consolidation, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such reorganization,
merger or consolidation. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 5 with respect to the
rights of the holders of the Preferred Stock after the reorganization, merger or
consolidation to the end that the provisions of this Section 5 (including
adjustment of the Conversion Price then in effect and number of shares issuable
upon conversion of the Preferred Stock) shall be applicable after that event and
be as nearly equivalent to the provisions hereof as may be practicable. This
subsection 5.6(b) shall similarly apply to successive reorganizations, mergers
and consolidations.
(c) Notwithstanding anything to the contrary set forth
herein, the Corporation shall not be required to make any adjustment to the
Conversion Price of the Series B Preferred Stock, the Conversion Price of the
Series C Preferred Stock, the Conversion Price of the Series D Preferred Stock,
the Conversion Price of the Series E Preferred Stock, the Conversion Price of
the Series F Preferred Stock and the Conversion Price of the Series G Preferred
Stock in the case of the issuance of any shares of Common Stock or Preferred
Stock, Options, Convertible Securities or other securities issued in or pursuant
to the merger of Transmeta Corporation, a California corporation, with and into
the Corporation.
5.7 Sale of Shares Below Conversion Price.
(a) Adjustment Formula. If at any time, or from time to
time, after the Original Issue Date, the Corporation issues or sells, or is
deemed by the provisions of this Section 5.7 to have issued or sold, Additional
Shares of Common Stock (as hereinafter defined), otherwise than in connection
with a Common Stock Event as provided in Section 5.4, a dividend or distribution
as provided in Section 5.5 or a recapitalization, reclassification or other
change as provided in Section 5.6(a), or a reorganization, merger or
consolidation as provided for in Section 5.6(b), for an Effective Price (as
hereinafter defined) that is less than the Conversion Price for a series of
Preferred Stock in effect immediately prior to such issue or sale, then, and in
each such case, the Conversion Price for such series of Preferred Stock shall be
reduced, as of the close of business on the date of such issue or sale, to the
price obtained by multiplying such Conversion Price by a fraction:
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(i) The numerator of which shall be the sum of
(A) the number of Common Stock Equivalents Outstanding (as
hereinafter defined), but excluding from Common Stock
Equivalents, solely for purposes of the calculation to be made
under this Section 5.7(a), Rights or Options (as hereinafter
defined) outstanding and unexercised, immediately prior to such
issue or sale of Additional Shares of Common Stock, plus (B) the
quotient obtained by dividing the Aggregate Consideration
Received (as hereinafter defined) by the Corporation for the
total number of Additional Shares of Common Stock so issued or
sold (or deemed so issued and sold pursuant to the provisions of
Section 5.7(c) hereof) by the Conversion Price for such series
of Preferred Stock in effect immediately prior to such issue or
sale; and
(ii) The denominator of which shall be the sum
of (A) the number of Common Stock Equivalents Outstanding, but
excluding from Common Stock Equivalents, solely for purposes of
the calculation to be made under this Section 5.7(a), Rights or
Options outstanding and unexercised, immediately prior to such
issue or sale of Additional Shares of Common Stock, plus (B) the
number of Additional Shares of Common Stock so issued or sold
(or deemed so issued and sold pursuant to the provisions of
Section 5.7(c) hereof).
(b) Certain Definitions. For the purpose of making any
adjustment required under this Section 5.7:
(i) "Additional Shares of Common Stock" shall
mean all shares of Common Stock issued by the Corporation, whether or not
subsequently reacquired or retired by the Corporation, other than: (A) shares of
Common Stock issued or issuable upon conversion of Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock,
Series F Preferred Stock or Series G Preferred Stock; and (B) shares of Common
Stock (or options, warrants or rights therefor) issued to employees, officers,
or directors of, or contractors, consultants or advisers to, the Corporation or
any Subsidiary pursuant to stock purchase or stock option plans, stock bonuses
or awards, warrants, contracts or other arrangements (collectively, the
"Awards") that are approved by (i) one or more officers of the Corporation to
whom authority to grant the Awards has been delegated in accordance with the
Corporation's applicable equity incentive plan and which Award(s) in question
are issued to a person who is not then a Director of the Corporation or officer
of the Corporation who performs policy-making functions for the Corporation or
(ii) the Board of Directors of the Corporation; and (C) shares of Common Stock
or options, warrants or rights therefor issued to equipment lessors, real estate
lessors, banks and other financial institutional lenders to, the Corporation or
any Subsidiary, and to entities in connection with a contractual relationship of
joint venture or strategic partnering (as such relationship is so determined by
the Board in good faith on a case-by-case basis), in each case pursuant to stock
purchase agreements or stock warrants that are approved by the Board.
(ii) The "Aggregate Consideration Received" by
the Corporation for any issue or sale (or deemed issue or sale) of securities
shall (A) to the extent it consists of cash, be computed at the gross amount of
cash received by the Corporation before deduction of any underwriting or similar
commissions, compensation or concessions paid or
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allowed by the Corporation in connection with such issue or sale and without
deduction of any expenses payable by the Corporation; (B) to the extent it
consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board; and (C) if Additional Shares
of Common Stock, Convertible Securities or Rights or Options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Corporation for a
consideration which covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the Board to be
allocable to such Additional Shares of Common Stock, Convertible Securities or
Rights or Options.
(iii) "Common Stock Equivalents Outstanding"
shall mean the number of shares of Common Stock that is equal to the sum of (A)
all shares of Common Stock of the Corporation that are outstanding at the time
in question, plus (B) all shares of Common Stock of the Corporation issuable
upon conversion of all shares of Preferred Stock or other Convertible Securities
that are outstanding at the time in question, plus (C) all shares of Common
Stock of the Corporation that are issuable upon the exercise of Rights or
Options that are outstanding at the time in question assuming the full
conversion or exchange into Common Stock of all such Rights or Options that are
Rights or Options to purchase or acquire Convertible Securities into or for
Common Stock.
(iv) "Convertible Securities" shall mean stock
or other securities convertible into or exchangeable for shares of Common Stock.
(v) The "Effective Price" of Additional Shares
of Common Stock shall mean the quotient determined by dividing the total number
of Additional Shares of Common Stock issued or sold, or deemed to have been
issued or sold, by the Corporation under this Section 5.7, into the Aggregate
Consideration Received, or deemed to have been received, by the Corporation
under this Section 5.7, for the issue of such Additional Shares of Common Stock;
and
(vi) "Rights or Options" shall mean warrants,
options or other rights to purchase or acquire shares of Common Stock or
Convertible Securities other than (A) options, warrants or rights therefor that
have been issued, or are reserved for issuance, to employees, officers, or
directors of, or contractors, consultants or advisers to, the Corporation or any
Subsidiary pursuant to stock purchase or stock option plans, stock bonuses or
awards, warrants, contracts or other arrangements (collectively, the "Awards")
that are approved by (i) one or more officers of the Corporation to whom
authority to grant the Awards has been delegated in accordance with the
Corporation's applicable equity incentive plan and which Award(s) in question
are issued to a person who is not then a Director of the Corporation or officer
of the Corporation who performs policy-making functions for the Corporation or
(ii) the Board of Directors of the Corporation and (B) shares of Common Stock or
options, warrants or rights therefor issued to equipment lessors, real estate
lessors, banks and other financial institutional lenders to, the Corporation or
any Subsidiary, and to entities in connection with a contractual relationship of
joint venture or strategic partnering (as such relationship is so determined by
the Board in good faith on a case-by-case basis), in each case pursuant to stock
purchase agreements or stock warrants that are approved by the Board.
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(c) Deemed Issuances. For the purpose of making any
adjustment to the Conversion Price of the Preferred Stock required under this
Section 5.7, if the Corporation issues or sells any Rights or Options or
Convertible Securities and if the Effective Price of the shares of Common Stock
issuable upon exercise of such Rights or Options and/or the conversion or
exchange of Convertible Securities (computed without reference to any additional
or similar protective or antidilution clauses) is less than the Conversion Price
then in effect for a series of Preferred Stock, then the Corporation shall be
deemed to have issued, at the time of the issuance of such Rights, Options or
Convertible Securities, that number of Additional Shares of Common Stock that is
equal to the maximum number of shares of Common Stock issuable upon exercise or
conversion of such Rights, Options or Convertible Securities upon their issuance
and to have received, as the Aggregate Consideration Received for the issuance
of such shares, an amount equal to the total amount of the consideration, if
any, received by the Corporation for the issuance of such Rights or Options or
Convertible Securities, plus, in the case of such Rights or Options, the minimum
amounts of consideration, if any, payable to the Corporation upon the exercise
in full of such Rights or Options, plus, in the case of Convertible Securities,
the minimum amounts of consideration, if any, payable to the Corporation (other
than by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion or exchange thereof; provided that:
(i) if the minimum amounts of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, then the Corporation shall be deemed to have received the minimum
amounts of consideration without reference to such clauses;
(ii) if the minimum amount of consideration
payable to the Corporation upon the exercise of Rights or Options or the
conversion or exchange of Convertible Securities is reduced over time or upon
the occurrence or non-occurrence of specified events other than by reason of
antidilution or similar protective adjustments, then the Effective Price shall
be recalculated using the figure to which such minimum amount of consideration
is reduced; and
(iii) if the minimum amount of consideration
payable to the Corporation upon the exercise of such Rights or Options or the
conversion or exchange of Convertible Securities is subsequently increased, then
the Effective Price shall again be recalculated using the increased minimum
amount of consideration payable to the Corporation upon the exercise of such
Rights or Options or the conversion or exchange of such Convertible Securities.
No further adjustment of the Conversion Price, adjusted upon the issuance of
such Rights or Options or Convertible Securities, shall be made as a result of
the actual issuance of shares of Common Stock upon the exercise of any such
Rights or Options or the conversion or exchange of any such Convertible
Securities. If any such Rights or Options or the conversion rights represented
by any such Convertible Securities shall expire without having been fully
exercised, then the Conversion Price as adjusted upon the issuance of such
Rights or Options or Convertible Securities shall be readjusted to the
Conversion Price which would have been in effect had an adjustment been made on
the basis that the only shares of Common Stock so issued were the shares of
Common Stock, if any, that were actually issued or sold on the exercise of such
Rights
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or Options or rights of conversion or exchange of such Convertible Securities,
and such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation for the granting of
all such Rights or Options, whether or not exercised, plus the consideration
received for issuing or selling all such Convertible Securities actually
converted or exchanged, plus the consideration, if any, actually received by the
Corporation (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities) on the conversion or exchange of such
Convertible Securities, provided that such readjustment shall not apply to prior
conversions of Preferred Stock.
5.8 Certificate of Adjustment. In each case of an adjustment or
readjustment of the Conversion Price for a series of Preferred Stock, the
Corporation, at its expense, shall cause its Chief Financial Officer to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to each registered
holder of the Preferred Stock at the holder's address as shown in the
Corporation's books.
5.9 Fractional Shares. No fractional shares of Common Stock
shall be issued upon any conversion of Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall pay the holder cash equal to the product of such fraction
multiplied by the Common Stock's fair market value as determined in good faith
by the Board as of the date of conversion.
5.10 Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of the Preferred Stock, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
5.11 Notices. Any notice required by the provisions of this
Section 5 to be given to the holders of shares of the Preferred Stock shall be
deemed given upon the earlier of actual receipt or deposit in the United States
mail, by certified or registered mail, return receipt requested, postage
prepaid, addressed to each holder of record at the address of such holder
appearing on the books of the Corporation.
5.12 No Impairment. The Corporation shall not avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but shall at all times in good faith
assist in carrying out all such action as may be reasonably necessary or
appropriate in order to protect the conversion rights of the holders of the
Preferred Stock against impairment.
6. RESTRICTIONS AND LIMITATIONS.
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6.1 Approval of Holders of the Series B Preferred Stock. So long
as any shares of Series B Preferred Stock remain outstanding, the Corporation
shall not, without the approval, by vote or written consent, of the holders of a
majority of the Series B Preferred Stock then outstanding, voting as a single
class:
(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series B Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series B Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series B Preferred Stock;
(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series B Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such merger or consolidation holding less than majority of
the voting power of the stock of the surviving corporation immediately after
such merger or consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
6.2 Approval of Holders of the Series C Preferred Stock. If, and
so long as, any shares of Series C Preferred Stock are outstanding, the
Corporation shall not, without the approval, by vote or written consent, of the
holders of a majority of the Series C Preferred Stock then outstanding, voting
as a single class:
(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series C Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series C Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series C Preferred Stock;
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(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series C Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such merger or consolidation holding less than majority of
the voting power of the stock of the surviving corporation immediately after
such merger or consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
6.3 Approval of Holders of the Series D Preferred Stock. If, and
so long as, any shares of Series D Preferred Stock are outstanding, the
Corporation shall not, without the approval, by vote or written consent, of the
holders of a majority of the Series D Preferred Stock then outstanding, voting
as a single class:
(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series D Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series D Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series D Preferred Stock;
(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series D Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such merger or consolidation holding less than majority of
the voting power of the stock of the surviving corporation immediately after
such merger or consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
6.4 Approval of Holders of the Series E Preferred Stock. If, and
so long as, any shares of Series E Preferred Stock are outstanding, the
Corporation shall not, without the approval, by vote or written consent, of the
holders of a majority of the Series E Preferred Stock then outstanding, voting
as a single class:
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(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series E Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series E Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series E Preferred Stock;
(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series E Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such merger or consolidation holding less than majority of
the voting power of the stock of the surviving corporation immediately after
such merger or consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
6.5 Approval of Holders of the Series F Preferred Stock. If, and
so long as, any shares of Series F Preferred Stock are outstanding, the
Corporation shall not, without the approval, by vote or written consent, of the
holders of a majority of the Series F Preferred Stock then outstanding, voting
as a single class:
(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series F Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series F Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series F Preferred Stock;
(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series F Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such
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merger or consolidation holding less than majority of the voting power of the
stock of the surviving corporation immediately after such merger or
consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
6.6 Approval of Holders of the Series G Preferred Stock. If, and
so long as, any shares of Series G Preferred Stock are outstanding, the
Corporation shall not, without the approval, by vote or written consent, of the
holders of a majority of the Series G Preferred Stock then outstanding, voting
as a single class:
(a) amend its Certificate of Incorporation in any manner
that would alter or change any of the rights, preferences, privileges or
restrictions of the Series G Preferred Stock;
(b) amend its Certificate of Incorporation in any other
manner that would materially and adversely affect the rights, preferences and
privileges of the Series G Preferred Stock;
(c) reclassify any outstanding shares of securities of
the Corporation into shares having rights, preferences or privileges on a parity
with or having preference over the Series G Preferred Stock;
(d) authorize or issue any other stock having rights or
preferences on a parity with or having preference over the Series G Preferred
Stock as to dividend rights or liquidation preferences;
(e) merge or consolidate with or into any corporation if
such merger or consolidation would result in the stockholders of the Corporation
immediately prior to such merger or consolidation holding less than majority of
the voting power of the stock of the surviving corporation immediately after
such merger or consolidation; or
(f) sell or otherwise dispose of all or substantially
all the Corporation's assets in a single transaction or series of related
transactions.
7. MISCELLANEOUS
7.1 No Reissuance of Preferred Stock. No share or shares of
Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.
7.2 Consent to Certain Transactions. Each holder of shares of
Preferred Stock shall, by virtue of such holder's acceptance of a stock
certificate evidencing Preferred Stock, be deemed to have consented, for
purposes of Sections 502, 503 and 506 of the California Corporations Code, to
all Permitted Repurchases.
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ARTICLE V
In furtherance of and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, amend or
repeal the Bylaws of this corporation, subject to the right of the stockholders
entitled to vote with respect thereto, in accordance with the provisions of such
Bylaws, to alter and repeal the Bylaws adopted or amended by the Board of
Directors. Notwithstanding any other provisions of law, this Certificate of
Incorporation or the Bylaws, each as amended, and notwithstanding the fact that
a lesser percentage may be specified by law, this Certificate of Incorporation
or the Bylaws, the affirmative vote of the holders of at least sixty six and
two-thirds percent (66 2/3%) of the outstanding voting stock then entitled to
vote at an election of directors, voting together as a single class, shall be
required to alter, change, amend, repeal or adopt any provision inconsistent
with this Article V.
ARTICLE VI
For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
(A) The conduct of the affairs of the corporation shall be managed under
the direction of the Board of Directors. The number of directors shall be fixed
from time to time exclusively by resolution of the Board of Directors.
(B) Notwithstanding the foregoing provision of this Article VI, each
director shall hold office until such director's successor is elected and
qualified, or until such director's earlier death, resignation or removal. No
decrease in the authorized number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
(C) Subject to the rights of the holders of any series of Preferred
Stock, any vacancy occurring in the Board of Directors for any cause, and any
newly created directorship resulting from any increase in the authorized number
of directors, shall, unless (i) the Board of Directors determines by resolution
that any such vacancies or newly created directorships shall be filled by the
stockholders, or (ii) as otherwise provided by law, be filled only by the
affirmative vote of a majority of the directors then in office, although less
than a quorum, or by a sole remaining director, and not by the stockholders. Any
director elected in accordance with the preceding sentence shall hold office for
the remainder of the full term of the director for which the vacancy was created
or occurred.
(D) Subject to the rights of the holders of any series of Preferred
Stock then outstanding, and unless otherwise required by law, any director or
the entire Board of Directors of the Corporation may be removed only for cause
and only by the affirmative vote of the holders of at least sixty six and
two-thirds percent (66 2/3%) of the shares then entitled to vote at an election
of directors.
(E) Classification of Board of Directors:
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(1) The provisions of this Article VI, Section (E) are subject
to the rights of the holders of any series of Preferred Stock to elect
additional directors under specified circumstances. As used in this Article VI,
Section (E), the term "INITIAL PUBLIC OFFERING" shall mean the initial public
offering of the corporation pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock to the public.
(2) Prior to the closing of the Initial Public Offering, or in
the event that the corporation is prohibited from dividing its board of
directors into three classes in accordance with subsection (3) below through the
operation of Section 2115 of the California General Corporation Law, at each
annual meeting of stockholders, each director shall be elected for a term of
office to expire at the first succeeding annual meeting of stockholders after
his or her election, or until such director's earlier death, resignation or
removal.
(3) Following the closing of the Initial Public Offering, unless
otherwise provided pursuant to subsection (2) above, the directors shall be
divided, with respect to the time for which they severally hold office, into
three classes designated as Class I, Class II and Class III, respectively.
Directors shall be assigned to each class in accordance with a resolution or
resolutions adopted by the Board of Directors (the "BOARD CLASSIFICATION
RESOLUTIONS"), with the number of directors in each class to be divided as
equally as reasonably possible. No one class shall have more than one director
more than any other class. The term of office of the Class I directors shall
expire at the corporation's first annual meeting of stockholders following the
closing of the Initial Public Offering, the term of office of the Class II
directors shall expire at the corporation's second annual meeting of
stockholders following the closing of the Initial Public Offering, and the term
of office of the Class III directors shall expire at the corporation's third
annual meeting of stockholders following the closing of the Initial Public
Offering. At each annual meeting of stockholders commencing with the first
annual meeting of stockholders following the closing of the Initial Public
Offering, each director elected to succeed a director of the class whose term
then expires shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after his or her election, or until
such director's earlier death, resignation or removal.
(4) In the event that, at any annual meeting of stockholders
following the closing of the Initial Public Offering, the directors are elected,
pursuant to subsection (2) above, for a term of office to expire at the first
succeeding annual meeting of stockholders after their election (the
"Non-Classified Board Meeting"), then, with respect to the first annual meeting
of stockholders (the "SUCCEEDING MEETING") following the Non-Classified Board
Meeting respecting which the corporation is no longer prohibited through the
operation of Section 2115 of the California General Corporation Law from
dividing its board of directors into three classes, the directors shall again be
divided, with respect to the time for which they severally hold office, into
three classes designated as Class I, Class II and Class III, respectively, and
shall be assigned to each class in accordance with the Board Classification
Resolutions previously adopted, and as the same may be subsequently modified.
The term of office of the Class I directors shall expire at the Succeeding
Meeting, the term of office of the Class II directors shall expire at the
corporation's first annual meeting of stockholders following the Succeeding
Meeting, and the term of office of the Class III directors shall expire at the
corporation's second annual meeting of stockholders following the Succeeding
Meeting. At each annual meeting of stockholders
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commencing with the Succeeding Meeting, each director elected to succeed a
director of the class whose term then expires shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
his or her election, or until such director's earlier death, resignation or
removal.
(5) In the event of any increase or decrease in the authorized
number of directors, (i) each director then serving as such shall nevertheless
continue as a director of the class of which he is a member and (ii) the newly
created or eliminated directorships resulting from such increase or decrease
shall be apportioned by the Board of Directors among the three classes of
directors so as to ensure that no one class has more than one director more than
any other class. To the extent possible, consistent with the foregoing rule, any
newly created directorships shall be added to those classes whose terms of
office are to expire at the latest dates following such allocation, and any
newly eliminated directorships shall be subtracted from those classes whose
terms of office are to expire at the earliest dates following such allocation,
unless otherwise provided from time to time by resolution adopted by the Board
of Directors.
(F) Election of directors need not be by written ballot unless the
Bylaws of the corporation shall so provide.
(G) Following the closing of the Initial Public Offering, no action
shall be taken by the stockholders of the corporation except at an annual or
special meeting of stockholders called in accordance with the Bylaws of the
corporation, and no action shall be taken by the stockholders by written
consent.
(H) Advance notice of stockholder nominations for the election of
directors of the corporation and of business to be brought by stockholders
before any meeting of stockholders of the corporation shall be given in the
manner provided in the Bylaws of the corporation. Business transacted at special
meetings of stockholders shall be confined to the purpose or purposes stated in
the notice of meeting.
(I) Following the closing of the Initial Public Offering,
notwithstanding any other provisions of law, this Certificate of Incorporation
or the Bylaws, each as amended, and notwithstanding the fact that a lesser
percentage may be specified by applicable law, this Certificate of Incorporation
or the Bylaws, the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the corporation's outstanding voting stock then
entitled to vote at an election of directors, voting together as a single class,
shall be required to alter, change, amend, repeal or adopt any provision
inconsistent with this Article VI.
ARTICLE VII
To the fullest extent permitted by law, no director of the corporation
shall be personally liable for monetary damages for breach of fiduciary duty as
a director. Without limiting the effect of the preceding sentence, if the
Delaware General Corporation Law is hereafter amended to authorize the further
elimination or limitation of the liability of a director, then the liability of
a director of the corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended. Neither
any amendment nor repeal of this Article VII, nor the adoption of any provision
of this Certificate of Incorporation inconsistent
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with this Article VII, shall eliminate, reduce or otherwise adversely affect any
limitation on the personal liability of a director of the corporation existing
at the time of such amendment, repeal or adoption of such an inconsistent
provision.
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