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EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VNUS MEDICAL TECHNOLOGIES, INC.
The undersigned, Brian E. Farley, hereby certifies that:
1. He is the duly elected and acting President of VNUS Medical
Technologies, Inc., a Delaware Corporation.
2. This Corporation was originally incorporated under the name "VNUS
Medical Technologies, Inc.," and the original Certificate of Incorporation of
this Corporation was filed with the Secretary of State of Delaware on January 4,
1995 and was amended and restated on August 5, 1996, May 2, 1997 and February
24, 1999.
3. This Amended and Restated Certificate of Incorporation has been duly
adopted by this Corporation's Board of Directors and stockholders in accordance
with the applicable provisions of Section 242 and 245 of the General Corporation
Law of the State of Delaware, and the Corporation's stockholders have given
their written consent in accordance with Section 228 of the General Corporation
Law of the State of Delaware.
4. The Certificate of Incorporation of this Corporation shall be amended
and restated to read in full as follows:
ARTICLE I.
The name of this Corporation is VNUS Medical Technologies, Inc. (the
"Corporation").
ARTICLE II.
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street Wilmington, County of New Castle, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
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 Delaware.
ARTICLE IV.
The Corporation is authorized to issue two classes of capital stock
Preferred Stock, $0.001 par value per share, and Common Stock, $0.001 par value
per share. The total number of shares of Common Stock which the Corporation
shall have the authority to issue is 100,000,000. The total number of shares of
Preferred Stock which the Corporation shall have the authority to
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issue is 22,641,055 shares, of which 2,537,500 shares have been designated
Series A-1 Preferred Stock, 2,030,000 shares have been designated Series A-2
Preferred Stock, 1,015,000 shares have been designated Series A-3 Preferred
Stock, 1,691,667 shares have been designated Series B Preferred Stock, 6,616,888
shares have been designated Series C Preferred Stock and 8,750,000 shares have
been designated Series D Preferred Stock.
Upon the filing in the Office of the Secretary of State of the State of
Delaware of this Amended and Restated Certificate of Incorporation, each
currently issued and outstanding share of Common Stock, par value $0.001 per
share of the Corporation shall be converted into 42/100ths of a share of validly
issued, fully paid and non-assessable Common Stock, par value $0.001 per share
of the Corporation, and at the close of business on such date, each holder of
record of Common Stock shall, without further action, be and become the holder
of 42/100ths of a share of Common Stock for each share of Common Stock held of
record immediately prior thereto; provided, however, that no fractional shares
of Common Stock shall be issued and in the event the conversion would result in
the issuance of a fractional share of Common Stock, this Corporation shall, in
lieu of issuing any fractional shares, pay the holder otherwise entitled to such
fractional share a sum in cash equal to the fair market value (as determined in
good faith by the Board of Directors) of such fraction on the date of
conversion.
The Corporation shall from time co time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit conversion of the Preferred
Stock.
The relative powers, preferences, special rights, qualifications,
limitations and restrictions granted to or imposed on the respective classes of
the shares of capital stock or the holders thereof are as follows:
A. Dividends or Preferred Stock. The holders of the Series A-1 Preferred
Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
any funds legally available therefor, dividends at an annual rate of $.005,
$.015, $.045, $.06, $.085 and $0.10, respectively. Dividends on the Preferred
Stock shall be payable in preference and prior to any payment of any dividend on
the Common Stock. Thereafter, holders of Preferred Stock and Common Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of any funds legally available therefor, dividends; provided, however, that no
dividend or distribution shall be declared or paid on any shares of Common Stock
or Preferred Stock unless at the same time an equivalent dividend or
distribution is declared or paid on all outstanding shares of Common Stock and
Preferred Stock, and provided further that any dividend or distribution on
Preferred Stock shall be payable at the same rate per share as would be payable
on the shares of Common Stock which the holder of Preferred Stock would be
entitled to receive if he had converted the shares of Preferred Stock into
Common Stock immediately prior to the record date of such distribution.
"Distribution" in this Section A means the transfer of cash or property without
consideration, whether by way of dividend or otherwise or the purchase or
redemption of shares of the Corporation for cash or property (except
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the purchase of shares of Common Stock from employees, directors or consultants
pursuant to restricted stock purchase agreements). The right to dividends on
shares of Common Stock and Preferred Stock shall not be cumulative, and no right
shall accrue to holders of Common Stock or Preferred Stock by reason of the fact
that dividends on said shares are not declared in any prior period.
B. Liquidation Preference. In the event of any liquidation, dissolution,
or winding up of the Corporation, either voluntary or involuntary, distributions
to the stockholders of the Corporation shall be made in the following manner:
1. Preferred Stock Preference. The holders of Preferred Stock shall
be entitled to receive, prior and in preference to any distribution of any of
the assets or surplus funds of the Corporation to the holders of the Common
Stock by reason of their ownership of such shares, an amount equal to the
applicable per share conversion price as defined below for each share of Series
A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
plus an amount equal to any declared but unpaid dividends per share of Series
A-1 Preferred Stock, Series A-2 Preferred Stock. Series A-3 Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
with respect to such liquidation, dissolution or winding up. If the assets and
funds thus distributed among the holders of the Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed among the holders of the
Preferred Stock in proportion to the aggregate liquidation preference of the
shares of Preferred Stock then held by them.
2. Remaining Assets. If the assets of the Corporation available for
distribution to the Corporation's stockholders exceed the aggregate amount
payable to the holders of the Preferred Stock pursuant to Section B(1) hereof
(such assets being hereafter referred to as the "Remaining Assets"), then after
the payments required by Section B(1) shall have been made or irrevocably set
apart, such Remaining Assets shall be distributed pro rata among the holders of
the Preferred Stock and the Common Stock on a per share basis, treating all
shares of Preferred Stock convertible into shares of Common Stock as if
converted; provided, however, that after the receipt by each share of Preferred
Stock of distributions equal, in the aggregate, to two (2) times its purchase
price, then all Remaining Assets shall be distributed equally among the holders
of the Common Stock on a per-share basis.
3. Reorganization or Merger. A merger or reorganization of the
Corporation with or into any other corporation or corporations or a sale of all
or substantially all of the assets or outstanding stock of the corporation, in
which transaction the Corporation's stockholders immediately prior to such
transaction own immediately after such transaction less than 50% of the equity
securities of the surviving corporation or its parent, shall be deemed to be a
liquidation within the meaning of this Section B and the proceeds payable in
such transaction shall be divided among the stockholders in accordance with this
Section B; provided that the holders of Preferred Stock and Common Stock shall
be paid in cash or in securities received or in a combination thereof (which
combination shall be in the same proportions as the consideration
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received in the transaction). Any securities to be delivered to the holders of
the Preferred Stock and Common Stock upon a merger, reorganization or sale of
substantially all of the assets of the Corporation shall be valued as follows:
(a) If traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the 30-day period ending three (3)business days prior to the
closing;
(b) If actively traded over the counter, the value shall be
deemed to be the average of the closing bid prices over the 30-day period ending
three (3) business days prior to the closing; and
(c) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by the Corporation and its
holders of not less than a majority of the outstanding shares of Preferred
Stock, provided that if the Corporation and the holders of a majority of the
outstanding shares of Preferred Stock are unable to reach agreement, then by
independent appraisal by a nationally recognized investment banker hired and
paid by the Corporation, but acceptable to the holders of a majority of the
outstanding shares of Preferred Stock.
C. Voting Rights. Except as otherwise acquired by law or by Section E or
Article V hereof, the holders of the Common Stock and Preferred Stock shall vote
together as a single class on all matters presented to the stockholders. The
holder of each share of Common Stock issued and outstanding shall have one vote
and the holder of each share of Preferred Stock shall be entitled to the number
of votes equal to the number of shares of Common Stock into which such share of
Preferred Stock could be converted at the record date for determination of the
stockholders entitled to vote on such matters, or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited, such votes to be counted together with all other
shares of the Corporation having general voting power and not separately as a
class. Fractional votes by the holders of Preferred Stock shall not, however, be
permitted and any fractional voting rights shall (after aggregating all shares
into which shares of Preferred Stock held by each holder could be converted) be
rounded to the nearest whole number.
D. Conversion. The holders of the Preferred Stock have conversion rights
as follows (the "Conversion Rights"):
1. Right to Convert. Each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Preferred Stock, into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing the Issuance Price (as hereinafter
defined) by the Conversion Price, determined as hereinafter provided, in effect
at the time of the conversion (the "Conversion Rate"). The "Issue Price" for
Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock shall be $.10, $.30, $.90, $1.20, $1.70 and $2.00 per share, respectively.
The price at which shares of Common Stock shall be deliverable upon conversion
(thc "Conversion Price") for Series A-1 Preferred Stock, Series A-2 Preferred
Stock,
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Series A-3 Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock shall initially be $.10, $.30, $.90, $1.20, $1.70
and $2.00 per share, respectively, of Common Stock. Such initial Conversion
Price shall be subject to adjustment as provided in Section D(5) below.
2. Automatic Conversion. Each share of each series of Preferred
Stock shall automatically be converted into shares of Common Stock at the then
effective Conversion Price of such series immediately prior to the closing of a
firm commitment underwritten public Offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of the Corporation with an
aggregate offering price to the public of not less than $15,000,000 at an
issuance price of at least $4.25 per share (appropriately adjusted for stock
splits, stock dividends, recapitalizations and similar events). In the event of
the automatic conversion of the Preferred Stock upon a public offering as
aforesaid, the person(s) entitled to receive the Common Stock issuable upon such
conversion of Preferred Stock shall not be deemed to have converted such
Preferred Stock until immediately prior to the closing of such sale of
securities. Notwithstanding the foregoing provisions of this Section D(2), no
automatic conversion of the Preferred Stock shall be effected unless and until
such conversion will not violate any laws, rules, regulations, orders or other
legal requirements of any governing body (such as, without limitation,
compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended) and such conversion shall be held in abeyance pending compliance with
any such requirements, provided that the holders of Preferred Stock will use
their best efforts to comply with such requirements.
3. Mechanics of Conversion. Before any holder of Preferred Stock
shall be entitled to convert the same into full shares of Common Stock and to
receive certificates therefore such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same;
provided, however, that in the event of an automatic conversion pursuant to
Section D(2), the outstanding shares of Preferred Stock shall be converted
automatically without 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, and provided further that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such automatic conversion unless the certificates evidencing
such shares of Preferred Stock are either delivered to the Corporation or its
transfer agent as provided above, or the holder notifies the Corporation or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement reasonably satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection with such
certificates. The Corporation shall, as soon as practicable after such delivery,
or such agreement and indemnification in the case of a lost certificate, issue
and deliver at such office to such holder of Preferred Stock a certificate or
certificates, for the number of shares of Common Stock to which the holder shall
be entitled as aforesaid and a check payable to the holder in the amount of any
cash amounts payable as the result of a conversion into fractional shares of
Common Stock. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of
Preferred Stock to be converted, or in the case of automatic conversion on the
date of
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closing of the offering and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on such date.
4. Fractional Shares. In lieu of any fractional shares to which the
holder of Preferred Stock would otherwise be entitled, the Corporation shall pay
cash equal to such fraction multiplied by the then effective Conversion Price.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Preferred Stock of each
holder at the time converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.
5. Adjustment of Conversion Price. The Conversion Price of each
series of Preferred Stock shall be subject to adjustment from time to time as
follows:
(a) If the Corporation shall issue (or, pursuant to
paragraph D(5)(a)(iii) hereof, shall be deemed to have issued) any Common Stock
other than "Excluded Stock" (as defined below) for a consideration per share
less than the Conversion Price for any series of Preferred Stock in effect
immediately prior to the issuance of such Common Stock (excluding stock
dividends, subdivisions, split-ups, combinations, dividends or recapitalizations
which are covered by Subsections D(5)(c)(d)(e) and (f), the Conversion Price for
such series of Preferred Stock in effect immediately after each such issuance
shall forthwith (except as provided in this Section D(5)) be adjusted to a price
equal to the quotient obtained by dividing:
An amount equal to the sum of:
(x) the total number of shares of Common Stock
outstanding (including any shares of Common Stock issuable upon conversion of
such series of Preferred Stock, or deemed to have been issued pursuant to
subdivision (iii) of this clause (a) and to clause (b) below) immediately prior
to such issuance multiplied by the Conversion Price for such series of Preferred
Stock in effect immediately prior to such issuance, plus
(y) the consideration received by the Corporation upon
such issuance,
By the total number of shares of Common Stock outstanding
immediately prior to such issuance of Common Stock (including any shares of
Common Stock issuable upon conversion of such series of Preferred Stock or
deemed to have been issued pursuant to subdivision (iii) of this clause (a) and
to clause (b) below) plus the number of shares of Common Stock actually issued
in the transaction which resulted in the adjustment pursuant to this Subsection
D(5)(a).
For the purposes of any adjustment of the Conversion Price for any
series of Preferred Stock pursuant to this clause (a), the following provisions
shall bc applicable:
(i) In the case of the issuance of Common Stock for cash,
the consideration shall be determined to be the amount of cash paid therefor
after deducting any
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discounts or commissions paid or incurred by the Corporation in connection with
the issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as mutually determined by the
Corporation and the holders of not less than a majority of the outstanding
shares of Preferred Stock, provided that if the Corporation and the holders of a
majority of the outstanding shares of Preferred Stock are unable to reach
agreement, then by independent appraisal by a nationally recognized investment
banker hired and paid by the Corporation, but acceptable to the holders of a
majority of the outstanding shares of Preferred Stock.
(iii) In the case of the issuance of (x) options to
purchase or rights to subscribe for Common Stock (other than Excluded Stock),
(y) securities by their terms convertible into or exchangeable for Common Stock
(other than Excluded Stock), or (z) options to purchase or rights to subscribe
for such convertible or exchangeable securities:
(A) the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been issued at the time such
options or rights were issued and for a consideration equal to the consideration
(determined in the manner provided in subdivisions (i) and (ii) above), if any,
received by the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the Common Stock
covered thereby;
(B) the aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options or rights were
issued and for a consideration equal to the consideration received by the
Corporation for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
additional minimum consideration, if any, to be received by the Corporation upon
the conversion or exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be determined in the manner
provided in subdivisions (i) and (ii) above);
(C) on any change in the number of shares of
Common Stock deliverable upon exercise of any such options or rights or
conversion of or exchange for such convertible or exchangeable securities, or on
any change in the minimum purchase price of such options, rights or securities,
other than a change resulting from the antidilution provisions of such options,
rights or securities, the Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained had the adjustment made upon (x)
the issuance of such options, rights or securities not exercised, converted or
exchanged prior to such change or
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(y) the options or rights related to such securities not converted or exchanged
prior to such change, as the case may be, been made upon the basis of such
change; and
(D) on the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained had the adjustment made upon the
issuance of such options, rights, convertible or exchangeable securities or
options or rights related to such convertible or exchangeable securities, as the
case may be, been made upon the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such convertible or exchangeable
securities or upon the exercise of the options or rights related to such
convertible or exchangeable securities, as the case may be.
(b) "Excluded Stock" shall mean:
(i) all shares of Common Stock and Preferred Stock
issued and outstanding, and all shares of Preferred Stock issuable upon exercise
of warrants, as of February 24, 1999 [This is the date of the last Restated
Certificate], and all shares of Common Stock issuable upon conversion of such
Preferred Stock; and
(ii) up to 2,500,000 shares of Common Stock or other
securities hereafter issued to employees or consultants as part of an incentive
program; and
(iii) up to 100,000 shares of Common Stock and up to
100,000 shares of Series D Preferred Stock issued after February 24, 1999 upon
exercise of warrants issued pursuant to equipment leasing or similar
arrangements approved by the Corporation's Board of Directors and all shares of
Common Stock issuable upon conversion of such Series D Preferred Stock.
All outstanding shares of Excluded Stock
(including shares issuable upon conversion of the Preferred Stock) shall be
deemed to be outstanding for all purposes of the computations of Subsections
D(5)(a) above.
(c) If the number of shares of Common Stock outstanding at
any time after the date hereof is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, on the date such payment is made or such change is effective, the
Conversion Price of each series of Preferred Stock shall be appropriately deemed
so that the number of shares of Common Stock issuable on conversion of any
shares of each series of Preferred Stock shall be increased in proportion to
such increase of outstanding shares.
(d) If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, on the effective date of such combination, the
Conversion Price of each series of Preferred Stock shall be appropriately
increased so that the number of shares of Common Stock issuable on
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conversion of any shares of each series of Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.
(e) In case the Corporation shall declare a cash dividend
upon its Common Stock payable otherwise than out of retained earnings or shall
distribute to holders of its Common Stock shares of its capital stock (other
than Common Stock), stock or other securities of other persons, evidences of
indebtedness issued by the Corporation or other persons, assets (excluding cash
dividends) or options or rights (excluding options to purchase and rights to
subscribe for Common Stock or other securities of the Corporation convertible
into or exchangeable for Common Stock), then, in each such case, the holders of
shares of Preferred Stock shall, concurrent with the distribution to holders of
Common Stock, receive a like distribution based upon the number of shares of
Common Stock into which Preferred Stock is then convertible.
(f) In case, at any time after the date hereof, of any
capital reorganization, or any reclassification of the stock of the Corporation
(other than as a result of a stock dividend or subdivision, split-up or
combination of shares), or the consolidation or merger of the Corporation with
or into another person (other than a consolidation or merger in which the
Corporation is the continuing entity and which does not result in any change in
the Common Stock), the shares of Preferred Stock shall, after such
reorganization, reclassification, consolidation, merger, sale or other
disposition, be convertible into the kind and number of shares of stock or other
securities or property of the Corporation or otherwise to which such holder
would have been entitled if immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other disposition such holder
had converted its shares of Preferred Stock into Common Stock. The provisions of
this clause (f) shall similarly apply to successive reorganizations,
reclassification, consolidations, mergers, sales or other dispositions.
(g) All calculations under this Section D shall be made to
the nearest cent or to the nearest one hundredth (1/100) of a share, as the case
may be.
6. Minimal Adjustments. No adjustment in the Conversion Price for
any series of Preferred Stock need be made if such adjustment would result in a
change in the Conversion Price of less than $0.01. Any adjustment of less than
$0.01 which is not made shall be carried forward and shall be made at the time
of and together with any subsequent adjustment which, on a cumulative basis,
amounts to an adjustment of $0.01 or more in the Conversion Price.
7. No Impairment. The Corporation will not through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section D and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of each series of Preferred Stock against
impairment. This provision shall not restrict the
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Corporation's right to amend its Certificate of Incorporation with the requisite
stockholder consent.
8. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Rate for any series of Preferred
Stock pursuant to this Section D, the Corporation, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of such series of Preferred Stock
a certificate from the Corporation's independent accountants setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon written request
at any time of any holder of any series of Preferred Stock, furnish or cause to
be furnished to such holder a like certificate from the Corporation's
independent accountants setting forth (i) all such adjustments and
readjustments, (ii) the Conversion Rate at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of such holder's shares of
Preferred Stock.
9. Notices of Record-Date and Proposed Liquidation Distribution. In
the event of any taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property or to receive
any other right, the Corporation shall mail to each holder of Preferred Stock at
least thirty (30) days prior to such record date, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution or right, and the amount and character of such dividend,
distribution or right. In the event of a liquidation distribution pursuant to
Section B hereof, the Corporation shall mail to each holder of Preferred Stock
at least thirty (30) days prior to the date of such distribution a notice (i)
certifying as to (x) the anticipated aggregate proceeds available for
distribution to holders of Preferred Stock and Common Stock, (y) the amount
expected to be distributed pursuant to Section B in respect of each share of
each outstanding series of Preferred Stock and each share of Common Stock and
(z) the amount expected to be distributed pursuant to Section B in respect of
each share of each outstanding series of Preferred Stock if the holder of each
such share of Preferred Stock converted such share of Preferred Stock into
Common Stock immediately prior to the liquidation distribution and (ii) stating
that in connection with such liquidation distribution the holders of shares of
each series of Preferred Stock may prior to such liquidation distribution
convert their shares of such series of Preferred Stock into Common Stock at the
applicable Conversion Rate for such series.
10. Notices. Any notice required by the provisions of this Section
D to be given to the holder of shares of the Preferred Stock shall be deemed
given if deposited in the United States mail, postage prepaid, and addressed to
each holder of record at such holder's address appearing on the Corporation's
books.
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E. Covenants.
1. Matters Submitted to Preferred Stockholder Vote. In addition to
any other rights provided by law, so long as shares of Preferred Stock shall be
outstanding, the Corporation shall not, without first obtaining the affirmative
vote or written consent of the holders of not less than a majority of the
outstanding shares of Preferred Stock (voting or consenting together as a single
class):
(a) Certificate and Bylaws. Amend or repeal any provision
of, or add any provision to, the Corporation's Amended and Restated Certificate
of Incorporation or Bylaws if such action would adversely alter or change the
preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of, such shares of Preferred Stock; provided, however, that any such
amendment that adversely affects shares of a series of Preferred Stock in a
different manner than shares of other series of Preferred Stock must also be
approved by the holders of a majority of the shares of the affected series;
(b) Section 305. Do any act or thing which would result in
taxation of the holders of Preferred Stock under Section 305 of the Internal
Revenue Code of 1986, as amended (or any successor provision of such Code as
such provision may be amended);
(c) Authorized Shares; Dividends; Redemption. Increase or
decrease the authorized number of shares of Preferred Stock or Common Stock,
authorize the payment of dividends on Common Stock or Preferred Stock, or
authorize any redemption of shares of Common Stock or Preferred Stock;
(d) Merger and Reorganization. Merge or consolidate with or
into any other corporation or corporations, sell or transfer all or
substantially all of its assets, liquidate or dissolve or effect any
recapitalization, reclassification or reorganization of the outstanding capital
stock; provided, however that, the Corporation shall not, without first
obtaining the affirmative vote or written consent of the holders of a majority
of the outstanding shares of Series C Preferred Stock, merge, consolidate with
or into any other corporation or corporations, sell or transfer all or
substantially all of its assets, or enter into any other transaction in which
control of the Corporation is transferred, the proceeds of which merger,
consolidation, sale of assets or other transaction would result in a
distribution per share of Series C Preferred Stock of less than twice the Series
C Preferred Stock Issuance Price;
(e) Priority. Authorize or issue any shares of any class or
series of stock having any preference or priority superior to any such
preference or priority of such shares of a series of Preferred Stock;
(f) Board of Directors. Authorize an increase in the number
of members of the Corporation's Board of Directors.
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2. Designation of Directors.
(a) The holders of the Series C Preferred Stock shall be
entitled, as a group voting as a separate class (the "Series C Class"), to elect
one (1) member of the Board of Directors of the Corporation and to remove from
office such director. The remaining members of the Board of Directors shall be
elected, and may be removed from office, by both the holders of the Common Stock
and the holders of the Preferred Stock, voting together as a single class.
(b) In the case of any vacancy in the office of a director
occurring among the directors elected by the Series C Class pursuant to
subsection (a) of this Section E(2), the holders of a majority of the shares of
that class may elect a successor or successors to hold the office for the
unexpired term of the director or directors whose place or places shall be
vacant. Any director who shall have been elected by the Series C Class or any
director so elected as provided in the preceding sentence hereof, may be removed
during the aforesaid term of office, whether with or without cause, only by the
affirmative vote of the holders of a majority of the outstanding shares of the
Series C Class.
F. Authorized Preferred Stock Following Initial Public Offering.
Immediately prior to the closing of the Corporation's initial public offering of
its Common Stock 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 (the "Initial Public Offering") all Shares of Preferred Stock
authorized and issued pursuant to the first paragraph of this Article IV shall
be converted to Common Stock and the Preferred Stock, along with all of its
powers, preference, special rights, qualifications, limitations and
restrictions, shall be cancelled and shall no longer be issuable by the
Corporation. Immediately following the closing of the Initial Public Offering,
the Corporation shall thereafter be authorized to issue 50,000,000 shares of
Preferred Stock, par value $0.001 per share, which may be issued from time to
time in one or more series and the Board of Directors will be authorized, by
filing a certificate (a "Preferred Stock Designation") pursuant to the Delaware
General Corporation Law, to fix or alter from time to time the designation,
powers, preferences and rights (voting or otherwise) granted upon, and the
qualifications, limitations or restrictions of, any wholly unissued series of
Preferred Stock; and to establish from time to time the number of shares
constituting any such series or any of them; and to increase or decrease the
number of shares of any series subsequent to the issuance of shares of that
series, but not below the number of shares of such series then outstanding. In
case the number of shares of any series shall be decreased in accordance with
the foregoing sentence, the shares constituting such decrease shall resume the
status that they had prior to the adoption of the resolution originally fixing
the number of shares of such series.
ARTICLE V.
A. In furtherance and not in limitation of the powers conferred by
statute, subject to any restrictions set forth herein, the Board of Directors of
the Corporation is expressly authorized to make, adopt, alter, amend or repeal
Bylaws of the Corporation by resolutions adopted by the affirmative vote of a
majority of the entire Board of Directors, subject to any bylaw requiring the
affirmative vote of a larger percentage of the members of the Board of
Directors.
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B. Stockholders may not make, adopt, alter, amend, change or repeal the
Bylaws of the Corporation except upon the affirmative vote of at least 75% of
the votes entitled to be cast by the holders of all outstanding shares then
entitled to vote generally in the election of directors, voting together as a
single class.
ARTICLE VI.
The Board of Directors shall have that number of directors set out in
the Bylaws of the Corporation as adopted or as set from time to time by a duly
adopted amendment thereto by the Directors or stockholders of the Corporation.
The initial number of directors which constitute the whole Board of Directors of
the Corporation shall be five (5).
ARTICLE VII.
Effective upon the closing of the Initial Public Offering, the Board of
Directors shall be divided into three classes, as nearly equal in number as
possible. The initial classification of directors shall be determined in
accordance with a resolution or resolutions adopted by the Board of Directors.
The term of office of the first class to expire at the first annual meeting of
stockholders or any special meeting in lieu thereof following the Initial Public
Offering, the term of office of the second class to expire at the second annual
meeting of stockholders or any special meeting in lieu thereof following the
Initial Public Offering and the term of office of the third class to expire at
the third annual meeting of stockholders or any special meeting in lieu thereof
following the Initial Public Offering. At each annual meeting of stockholders or
special meeting in lieu thereof following such initial classification, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of the
stockholders or special meeting in lieu thereof after their election and until
their successors are duly elected and qualified. The foregoing provisions shall
become effective only when the Corporation becomes a listed Corporation within
the meaning of Section 301.5 of the California Corporations Code. Directors need
not be stockholders unless so required by the certificate of incorporation or
these bylaws, wherein other qualifications for directors may be prescribed.
Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office even though less than a quorum, or by a sole remaining director,
and not by the stockholders. In the event of any increase or decrease in the
authorized number of directors, (a) each director then serving as such shall
nevertheless continue as a director of the class of which he or she is a member
until the expiration of his or her current term or his or her prior death,
retirement, removal or resignation and (b) the newly created or eliminated
directorships resulting from such increase or decrease shall if reasonably
possible 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 reasonably possible, consistent with the
foregoing rule, any newly created directorships shall be added to those classes
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whose terms of office are to expire at the latest dates following such
allocation and 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 for from time to time by resolution
adopted by a majority of the directors then in office, although less than a
quorum. In the event of a vacancy in the Board of Directors, the remaining
directors, except as otherwise provided by law, may exercise the powers of the
full Board of Directors until the vacancy is filled. Notwithstanding the
foregoing, each director shall serve until his or her successor is duly elected
and qualified or until his or her death, resignation or removal. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.
No person entitled to vote at an election for directors may cumulate
votes to which such person is entitled, unless, at the time of such election,
the Corporation is subject to Section 2115(b) of the CGCL and is not a "listed"
Corporation or ceases to be a "listed" Corporation under Section 301.5 of the
CGCL. During this time, every stockholder entitled to vote at an election for
directors may cumulate such stockholder's vote and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which such stockholder's shares are otherwise entitled, or
distribute the stockholder's votes on the same principle among as many
candidates as such stockholder thinks fit. No stockholder, shall be entitled to
so cumulate such stockholder's votes unless (i) the names of such candidate or
candidates have been placed in nomination prior to the voting and (ii) the
stockholder has given notice at the meeting, prior to the voting, of such
stockholder's intention to cumulate such stockholder's votes. If any stockholder
has given proper notice to cumulate votes, all stockholders may cumulate their
votes for any candidates who have been properly placed in nomination. Under
cumulative voting, the candidates receiving the highest number of votes, up to
the number of directors to be elected, are elected.
This Article VII shall become effective only when the Corporation is a
"listed" Corporation within the meaning of Section 301.5 of the California
Corporations Code.
ARTICLE VIII.
Elections of directors need not be by written ballot unless a
stockholder demands election by written ballot at the meeting and before voting
begins or unless otherwise provided in the Bylaws of the Corporation.
ARTICLE IX.
Following the closing of the Initial Public Offering, no action shall be
taken by the stockholders except at an annual or special meeting of stockholders
and the stockholders may not take action by written consent.
ARTICLE X.
A. To the fullest extent permitted by the Delaware General Corporation
Law, as the same exists or as may hereafter be amended, a director of the
Corporation shall not be personally
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liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.
B. The Corporation may indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director, officer or employee of
the Corporation or any predecessor of the Corporation, or serves or served at
any other enterprise as a director, officer or employee at the request of the
Corporation or any predecessor to the Corporation.
C. Neither any amendment nor repeal of this Article IX, nor the adoption
of any provision of this Corporation's Certificate of Incorporation inconsistent
with this Article IX, shall eliminate or reduce the effect of this Article IX in
respect of any matter occurring, or any action or proceeding accruing or arising
or that, but for this Article IX, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE XI.
The Corporation is to have perpetual existence.
ARTICLE XII.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any statutory provision) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of Directors in
the Bylaws of the Corporation."
ARTICLE XIII.
To the fullest extent permitted by the General Corporation Law of the
State of Delaware, this Certificate of Incorporation may be amended by the Board
of Directors, with respect to corrections not affecting the rights, preferences
and privileges of the Corporation's stockholders.
The corporation reserves the right to amend and repeal any provision
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware. All rights herein conferred are granted subject
to this reservation. Notwithstanding the foregoing, no amendment, alteration,
change or repeal may be made to Article Fifth, Article Seventh, Article Eighth
or this Article Twelfth without the affirmative vote of the holders of at least
75% of the outstanding voting stock of the corporation voting together as a
single class.
* * *
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The foregoing Amended and Restated Certificate of Incorporation has been
duly adopted by this Corporation's Board of Directors and stockholders in
accordance with the applicable provisions of Section 228, 242 and 245 of the
General Corporation Law of the State of Delaware.
Executed at ________________, California on October ___, 2000.
------------------------------------
Brian E. Farley, President
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Connie Sauer, Secretary
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