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EXHIBIT 3.2
COVAD COMMUNICATIONS GROUP, INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Covad Communications Group, Inc., a Delaware corporation, hereby
certifies as follows:
The Certificate of Incorporation of Covad Communications Group, Inc.
(the "CORPORATION") was filed in the office of the Secretary of State of the
State of Delaware on July 14, 1997. The Certificate of Incorporation was amended
on February 11, 1998. The Certificate of Incorporation was subsequently amended
and restated on February 23, 1998, May 20, 1998, August 28, 1998 and January 6,
1999. The Certificate of Incorporation is hereby amended and restated pursuant
to Section 242 and Section 245 of the Delaware General Corporation Law. All
amendments to the Certificate of Incorporation reflected herein have been duly
authorized and adopted by the Corporation's Board of Directors and stockholders
in accordance with the provisions of Sections 242 and 245 of the Delaware
General Corporation Law.
This Amended and Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of the
Corporation. The text of the Certificate of Incorporation is amended hereby to
read as herein set forth in full:
ARTICLE I
The name of the corporation is Covad Communications Group, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, zip code 19801. The name of its registered
agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business or purpose to be conducted or promoted by
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.
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ARTICLE IV
The Corporation is authorized to issue two classes of shares to be
designated, respectively, "Common Stock" and "Preferred Stock." The number of
shares of Common Stock authorized to be issued is Two Hundred Million
(200,000,000), of which Ten Million (10,000,000) shares are hereby designated as
Class B Common Stock ("Class B Common"). The number of shares of Preferred Stock
authorized to be issued is Five Million (5,000,000). The Common Stock and the
Preferred Stock shall each have a par value of $.001 per share.
The Board of Directors is authorized, subject to limitations prescribed
by law and the provisions of this Article IV, to provide for the issuance of the
Preferred Stock in series and, by filing a certificate 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, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall include,
but not be limited to, determination of the following: (a) the number of shares
constituting that series and the distinctive designation of that series; (b) the
dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and the relative rights of
priority, if any, of payment of dividends on shares of that series; (c) whether
that series shall have voting rights in addition to the voting rights provided
by law, and, if so, the terms of such voting rights; (d) whether that series
shall have conversion privileges, and, if so, the terms and conditions of such
conversion, including provision for adjustment of the conversion rate in such
events as the Board of Directors shall determine; (e) whether or not the shares
of that series shall be redeemable and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of redemption, which amount
may vary under different conditions and at different redemption dates; (f)
whether that series shall have a sinking fund for the redemption or Purchase of
shares of that series and, if so, the terms and amount of such sinking fund; (g)
the rights of the shares of that series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and the relative
rights of priority, if any, of payment of shares of that series; and (h) any
other relative or participating rights, preferences and limitations of that
series.
ARTICLE V
SECTION 1. CLASS B COMMON STOCK. Subject to the conversion and voting
rights of the Class B Common described below, the rights (including, but not
limited to, rights to dividends and rights upon liquidation), preferences,
privileges and restrictions of the Common Stock and the Class B Common shall be
identical in all respects, except as follows:
(A) VOTING RIGHTS. Holders of Class B Common shall not be entitled
to vote such shares for the election of directors or on any other matter except
changes or amendments to this Article V and except as required by law, provided,
however, that no such change or amendment shall provide additional voting rights
to the holders of Class B Common.
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(B) CONVERSION.
(I) RIGHT TO CONVERT. Each share of Class B Common shall be
convertible, at the option of the holder thereof, at any time one year after the
Original Issuance Date (as defined in Section l(b)(viii)(B) hereof), at the
office of the Corporation or any transfer agent for the Class B Common, into
such whole number of shares of Common Stock as shall be obtained by multiplying
the number of shares of Class B Common being convened by the "Class B Common
Conversion Rate" (as hereinafter defined), so long as, after giving effect to
such conversion, the total number of "Voting Shares" (as defined in Section
1(b)(viii)(C) hereof) held by such holder, together with all of its "Affiliates"
(as defined in Section 1(b)(viii)(A) hereof), shall be less than ten percent
(10%) (by voting power) of the total number of Voting Shares then issued and
outstanding. The Class B Common Conversion Rate shall be one (1) divided by the
"Class B Common Conversion Price" (as hereinafter defined). The Class B Common
Conversion Price shall initially be one (1); provided, however, that such Class
B Common Conversion Price shall be subject to adjustment as set forth in Section
1(b)(v) hereof. No conversion of shares of Class B Common that would have the
effect of giving the holder, together with all of its Affiliates, an aggregate
number of Voting Shares equal to or greater than ten percent (10%) (by voting
power) of the total number of Voting Shares then issued and outstanding shall be
effected pursuant to this Section l(b)(i). The holder of any shares of Class B
Common Stock exercising the aforesaid right to convert such shares into shares
of Common Stock shall be entitled to payment of all declared but unpaid
dividends, if any, payable on or with respect to such shares of Class B Common
up to and including the "Conversion Dates" (as hereinafter defined).
(II) CONVERSION UPON TRANSFER. Upon any sale, disposition, assignment
or transfer (each, a "Transfer") of any share of Class B Common by the holder
thereof, after one year from the Original Issuance Date, other than a Transfer
to an Affiliate of such holder, such shares of Class B Common so Transferred
shall, by virtue of, and simultaneously with, the occurrence of the Transfer,
without any action on the part of the transferee, be automatically converted
into such whole number of fully paid and nonassessable of Common Stock as shall
be obtained by multiplying the number of shares of Class B Common so Transferred
by the Class B Common Conversion Rate. The holder of any shares of Class B
Common converted into Common Stock pursuant to this Section 1(b)(ii) shall be
entitled to payment of declared but unpaid dividends, if any, payable on or with
respect to such shares of Class B Common up to and including the Conversion
Daft.
(III) MECHANICS OF CONVERSION. The holder of any shares of Class B
Common may exercise the conversion rights pursuant to Section 1(b)(i) hereof as
to any part thereof by delivering to the Corporation during regular business
hours, at the office of the Corporation or at such other place as may be
designated by the Corporation, the certificate or certificates for the shares to
be converted, duty endorsed or assigned in blank, accompanied by a written
notice stating that the holder elects to convert such shares and stating the
name or names (with address) in which the certificate or certificates for the
shares of Common Stock are to be issued. Conversion shall be deemed to have been
effected (A) with respect to conversion under Section l(b)(i) hereof, on the
date when the aforesaid delivery is made and (B) with respect to conversion
under Section 1(b)(ii) hereof, on the
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date of occurrence of the Transfer, and such date, in either case, is referred
to herein as the "Conversion Date". As promptly as practicable after the
Conversion Date, and in the case of Section l(b)(ii) hereof, upon the delivery
to the Corporation during regular business hours, at the office of the
Corporation or at such other place as may be designated by the Corporation or at
such other place as may be designated by the Corporation, of the certificate or
certificates for the shares to be converted, duty endorsed or assigned in blank,
the Corporation shall issue and deliver to or upon the written order of such
holder, to the place designated by such holder, a certificate or certificates
for the number of full shares of Common Stock as provided in Section l(b)(i) and
(ii) hereof, and a check or cash in payment of all declared but unpaid dividends
(to the extent permissible under law), if any, payable with respect to the
shares of Class B Common so converted up to and including the Conversion Date.
The person in whose name the certificate or certificates for Common Stock are to
be issued shall be deemed to have become a stockholder of record on the
applicable Conversion Date unless the transfer books of the Corporation are
closed on that date, in which event such person shall be deemed to have become a
stockholder of record on the next succeeding date on which the transfer books
are open, but the Class B Common Conversion Rate shall be that in effect on the
Conversion Date. Upon conversion of only a portion of the number of shares
covered by a certificate representing shares of Class B Common surrendered for
conversion, the Corporation shall issue and deliver to or upon the written order
of the holder of the certificate as surrendered for conversion, at the expense
of the Corporation, a new certificate covering the number of shares of Class B
Common representing the unconverted portion of the certificates so surrendered,
which new certificate shall entitle the holder thereof to dividends on the
shares of Class B Common represented thereby to the same extent as if the
certificate theretofore covering such unconverted shares had not been
surrendered for conversion.
(IV) NO FRACTIONAL SHARES. No fractional shares of Common Stock or
scrip shall be issued upon conversion of shares of Class B Common. The number of
full shares of Common Stock issuable upon conversion of Class B Common
surrendered by a holder thereof of Class B Common surrendered by a holder
thereof for conversion shall be computed on the basis of the aggregate number of
share of Class B Common so surrendered, rounded to the next higher whole number.
(V) ADJUSTMENTS TO CONVERSION PRICE. The Class B Common Conversion
Price shall be subject to adjustment from time to time as follows:
(A) If the number of shares of Common Stock outstanding 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, following
the record date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend, subdivision or split-up, the
Class B Common Conversion Price shall be appropriately decreased so
that the number of shares of Common Stock issuable on conversion of
each share of Class B Common shall be increased in proportion to such
increase in outstanding shares.
(B) If the number of shares of Common Stock outstanding is
decreased by a combination of the outstanding shares of Common Stock,
then, following the record date for combination, the Class B Common
Conversion Price
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shall be appropriately increased so that the number of shares of
Common Stock issuable on conversion of each share of Class B Common
shall be decreased in proportion to such decrease in outstanding
shares.
(C) In case of any capital reorganization, or any
reclassification of the capital stock of the Corporation (other than a
change in par value or from par value to no par value or from no par
value to par value or 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
corporation and which does not result in any change in the Common
Stock) or of the sale or other disposition of all or substantially all
the properties and assets of the Corporation as an entirety to any
other person, such shares of Class B Common 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 of the
Corporation resulting from such consolidation or surviving such merger
or to which such properties and assets shall have been sold or
otherwise disposed, to which the holder of the number of shares of
Common Stock deliverable (immediately prior to the time of such
reorganization, reclassification, consolidation, merger, sale or other
disposition) upon conversion of such share would have been entitled
upon such reorganization, reclassification, consolidation, merger,
sale or other disposition. The provisions of this Section 1(b)(v)(C)
shall similarly apply to successive reorganization, reclassifications,
consolidations, mergers, sales or other dispositions.
(D) In the event the Corporation at any time or from time to
time makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive any distribution payable in
securities or assets of the Corporation other than shares of Common
Stock, then, and in each such event, provision shall be made so that
the holders of Class B Common shall receive upon conversion thereof,
in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities or assets of the Corporation which
they would have received had their Class B Common been converted into
Common Stock on the date of such event and had they thereafter, during
the period from the date of such event to and including the date of
conversion, retained such securities or assets receivable by them as
aforesaid during such period, subject to all other adjustments called
for during such period under this paragraph (v).
(E) All calculations under this paragraph (v) shall be made to
the nearest one hundredth (1/100) of a share.
(VI) RESERVATION OF SHARES. The Corporation shall at all times
when the Class B Common shall be outstanding, reserve and keep available out of
its authorized but unissued stock, for the purpose of effecting the conversion
of the Class B Common, such number of its duly authorized shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding Class B Common; 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 Class B Common, the Corporation
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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 the purpose.
(VII) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurence of each
adjustment or readjustment of the Class B Common Conversion Price pursuant to
Section 1(b)(v), the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Class B Common a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Class B Common, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Class B Common Conversion Price 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 Class B Common.
(VIII) DEFINITIONS.
(A) "Affiliate" shall mean, as to any person or entity, a person
or entity that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such person or entity. In addition, with respect to AT&T
Venture Fund II, LP, Special Partners Fund, LP and Special Partners
Fund International, LP (the "AT&T Entities"), only for the purposes of
this Certificate of Incorporation, AT&T Corp., all Affiliates of AT&T
Corp., each of the other AT&T Entities and all owners of equity
interests in the AT&T Entities shall be deemed to be Affiliates of
each of the AT&T Entities.
(B) "Original Issuance Date" shall mean, with respect to a share
of Class B Common, the date that the share of the Series C-1 Preferred
Stock or Series D-1 Preferred Stock of the Corporation, as the case
may be, from which such share of Class B Common was previously
automatically converted upon the closing of the Corporation's
underwritten initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended,
was originally issued.
(C) "Voting Shares" shall mean any shares of the Corporation's
capital stock entitled to vote in any election of directors of the
Corporation.
ARTICLE VI
The Corporation is to have perpetual existence.
ARTICLE VII
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
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ARTICLE VIII
The number of directors which will constitute the whole Board of
Directors of the Corporation shall be as designated in the Bylaws of the
Corporation. Effective upon the filing of this Amended and Restated Certificate
of Incorporation with the Secretary of State of the State of Delaware (the
"Filing Date"), the directors shall be divided into three classes, with the term
of office of the first class, which class shall initially consist of two (2)
directors, to expire at the first annual meeting of stockholders held after the
IPO; the term of office of the second class, which class shall initially consist
of three (3) directors, to expire at the second annual meeting of stockholders
held after the IPO; the term of office of the third class, which class shall
initially consist of three (3) directors, to expire at the third annual meeting
of stockholders held after the IPO; and thereafter for each such term to expire
at each third succeeding annual meeting of stockholders held after such
election.
In the event of an increase in the authorized number of directors, the
newly created directorship shall be assigned to one of the above-referenced
classes in accordance with resolutions adopted by the board of directors. No
decrease in the authorized number of directors shall have the effect of
shortening the term of any incumbent director.
ARTICLE IX
The election of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
ARTICLE X
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 provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE XI
Stockholders of the Corporation may not take action by written consent
in lieu of a meeting.
ARTICLE XII
1. 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 liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
2. The Corporation shall 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 or she, or his or her testator or intestate is or was
a director or officer 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.
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3. Neither any amendment nor repeal of this Article, nor the
adoption of any provision of this Corporation's Certificate of Incorporation
inconsistent with this Article, shall eliminate or reduce the effect of this
Article in respect of any matter occurring, or any action or proceeding accruing
or arising or that, but for this Article, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE XIII
Except as provided in Article XII above, the Corporation reserves the
right to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by Robert E. Knowling, Jr., the President and Chief Executive Officer of
the Corporation, and attested by Dhruv Khanna, the Secretary of the Corporation.
The signatures below shall constitute the affirmation and acknowledgment under
penalties of perjury, that the facts herein stated are true.
Dated: January 27, 1999
COVAD COMMUNICATIONS GROUP, INC.
By: /s/ ROBERT E. KNOWLING, JR.
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Robert E. Knowling, Jr.
President and Chief Executive Officer
ATTEST:
/s/ DHRUV KHANNA
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Dhruv Khanna
Secretary
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