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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Salon Internet, Inc.
(Exact Name of Registrant as Specified in its Charter)
California 94-3228750
(State of Incorporation) (I.R.S. Employer Identification No.)
706 Mission Street
San Francisco, California 94103
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [_]
If this Form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [X]
Securities Act registration statement file number to which this form
relates: 333-76511 (if applicable).
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name Of Each Exchange On Which
To Be So Registered Each Class Is To Be Registered
Not Applicable Not Applicable
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
(Title of class)
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Item 1. Description of Registrant's Securities to be Registered
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The information contained in "Description of Capital Stock" in
the Registrant's Registration Statement on Form S-1, as amended (Commission File
No. 333-76511), filed with the Securities and Exchange Commission (the "Form S-1
Registration Statement"), is hereby incorporated by reference.
Item 2. Exhibits
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The following exhibits are filed as part of this Registration
Statement:
1. Form of Certificate of Incorporation of the Registrant.
2. Form of Bylaws of the Registrant.
3. Third Amended and Restated Rights Agreement dated April 14,
1999, as amended to date, incorporated by reference to
Exhibit 4.1 of the Registrant's Form S-1 Registration
Statement.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Salon Internet, Inc.
Date: June 16, 1999
By:/s/ Todd Hagen
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Todd Hagen
Chief Financial Officer
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit Sequentially
Exhibit
Number ------- Numbered Page
------- -------------
<S> <C> <C>
1 Form of Certificate of Incorporation of the
Registrant.
2 Form of Bylaws of the Registrant.
3 Third Amended and Restated Rights Agreement dated
April 14, 1999, as amended to date, incorporated
by reference to Exhibit 4.1 of the Registrant's
Form S-1 Registration Statement.
</TABLE>
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EXHIBIT 1
RESTATED CERTIFICATE OF INCORPORATION
OF
SALON INTERNET, INC. DELAWARE
(Pursuant to Sections 242 and 245 of the General Corporation Law of the State of
Delaware)
Salon Internet, Inc. Delaware, a corporation organized and existing under
the General Corporation Law of the State of Delaware on April 1, 1999, (the
"Corporation") certifies as follows:
1. The Corporation's Restated Certificate of Incorporation was duly
adopted by the Board of Directors and sole stockholder by written consent in
accordance with Sections 242 and 245 of the General Corporation Law.
2. The Corporation's Certificate of Incorporation is restated to read in
full as follows:
FIRST: The name of the Corporation is Salon Internet, Inc. Delaware.
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SECOND: The address of the registered office of the Corporation in the
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State of Delaware is Incorporating Services, Ltd., 15 East North
Street, in the City of Dover, County of Kent. The name of the
registered agent at that address is Incorporating Services, Ltd.
THIRD: The purpose of the Corporation is to engage in any lawful act or
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activity for which a corporation may be organized under the
General Corporation Law of Delaware.
FOURTH:
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A. The Corporation is authorized to issue a total of 63,108,750
shares of stock in two classes designated respectively "Preferred
Stock" and "Common Stock". The total number of shares of all
series of Preferred Stock that the Corporation shall have the
authority to issue is 13,108,750 and the total number of shares
of Common Stock that the Corporation shall have the authority to
issue is 50,000,000. All of the authorized shares shall have a
par value of $0.001.
The shares of Preferred Stock may be divided into such number of
series as the Board of Directors may determine. The Board of
Directors is authorized to determine and alter the rights,
preferences, privileges and restrictions granted to and imposed
upon the Preferred Stock or any series thereof with respect to
any wholly unissued series of Preferred Stock, and to fix the
number of shares of any such series of Preferred Stock. The
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Board of Directors, within the limits and restrictions stated
in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series,
may increase or decrease (but not below the number of shares of
such series then outstanding) the number of shares of any
series subsequent to the issue of shares of that series.
FIFTH: The following provisions are inserted for the management of
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the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the
powers of the Corporation and of its directors and
stockholders:
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition
to the powers and authority expressly conferred upon them by
statute or by this Certificate of Incorporation or the Bylaws
of the Corporation, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the Bylaws so provide.
C. On and after the closing date of the first sale of the
Corporation's Common Stock pursuant to a firmly underwritten
registered public offering (the "IPO"), any action required or
permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders. Prior to such sale,
unless otherwise provided by law, any action which may
otherwise be taken at any meeting of the stockholders may be
taken without a meeting and without prior notice, if a written
consent describing such actions is signed by the holders of
outstanding shares having not less than the minimum number of
votes which would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were
present and voted.
D. Special meetings of stockholders of the Corporation may be
called only (1) by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies
in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) or (2) by
the holders of not less than ten percent (10%) of all of the
shares entitled to cast votes at the meeting.
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SIXTH:
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A. The number of directors shall initially be set at seven (7)
and, thereafter, shall be fixed from time to time
exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time
any such resolution is presented to the Board for adoption).
Upon the closing of the IPO, the directors shall be divided
into three classes with the term of office of the first
class (Class I) to expire at the first annual meeting of the
stockholders following the IPO; the term of office of the
second class (Class II) to expire at the second annual
meeting of stockholders held following the IPO; the term of
office of the third class (Class III) to expire at the third
annual meeting of stockholders; and thereafter for each such
term to expire at each third succeeding annual meeting of
stockholders after such election. Subject to the rights of
the holders of any series of Preferred Stock then
outstanding, a vacancy resulting from the removal of a
director by the stockholders as provided in Article SIXTH,
Section C below may be filled at a special meeting of the
stockholders held for that purpose. All directors shall hold
office until the expiration of the term for which elected,
and until their respective successors are elected, except in
the case of the death, resignation, or removal of any
director.
B. 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 or other cause
(other than removal from office by a vote of the
stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and
directors so chosen shall hold office for a term expiring at
the next annual meeting of stockholders at which the term of
office of the class to which they have been elected expires,
and until their respective successors are elected, except in
the case of the death, resignation, or removal of any
director. No decrease in the 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 then outstanding, any directors, or the
entire Board of Directors, may be removed from office at any
time, with or without cause, but only by the affirmative
vote of the holders of at least a majority of the voting
power of all of the then outstanding shares of capital stock
of the Corporation entitled to vote generally in the
election of directors, voting together as a single class.
Vacancies in the Board of Directors resulting from such
removal may be filled by a majority of the directors then in
office, though less than a quorum, or by the stockholders as
provided in Article SIXTH, Section A above. Directors so
chosen shall hold office for a term expiring at the next
annual meeting of stockholders at which the term of office
of
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the class to which they have been elected expires, and until
their respective successors are elected, except in the case
of the death, resignation, or removal of any director.
SEVENTH: The Board of Directors is expressly empowered to adopt,
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amend or repeal Bylaws of the Corporation. Any adoption,
amendment or repeal of Bylaws of the Corporation by the
Board of Directors shall require the approval of a majority
of the total number of authorized directors (whether or not
there exist any vacancies in previously authorized
directorships at the time any resolution providing for
adoption, amendment or repeal is presented to the Board).
The stockholders shall also have power to adopt, amend or
repeal the Bylaws of the Corporation. Any adoption,
amendment or repeal of Bylaws of the Corporation by the
stockholders shall require, in addition to any vote of the
holders of any class or series of stock of the Corporation
required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of all of
the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class.
EIGHTH: A director of the Corporation shall not be personally liable
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to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involved
intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived
an improper personal benefit.
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.
Any repeal or modification of the foregoing provisions of
this Article EIGHTH by the stockholders of the Corporation
shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such
repeal or modification.
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NINTH: The Corporation reserves the right to amend or repeal any
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provision contained in this Certificate of Incorporation in the
manner prescribed by the laws of the State of Delaware and all
rights conferred upon stockholders are granted subject to this
reservation; provided, however, that, notwithstanding any other
-------- -------
provision of this Certificate of Incorporation or any provision
of law which might otherwise permit a lesser vote or no vote, but
in addition to any vote of the holders of any class or series of
the stock of this Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders
of at least 66-2/3% of the voting power of all of the then
outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal
this Article NINTH, Article FIFTH, Article SIXTH, Article SEVENTH
or Article EIGHTH.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate to be signed by a duly authorized officer on this ____ day of
______, 1999.
SALON INTERNET, INC. DELAWARE
By:________________________________________
Todd Hagen, Chief Financial Officer, Vice
President of Finance and Administration
and Secretary
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SALON INTERNET, INC. DELAWARE
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF THE TERMS OF THE
SERIES A, SERIES B AND SERIES C PREFERRED STOCK
(Pursuant to Section 151 of the General Corporation Law of the State
of Delaware)
We, the President and the Secretary, respectively, of Salon Internet,
Inc. Delaware, organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the said Corporation, the said Board of
Directors on April 8, 1999, adopted the following resolution creating (i) a
series of 2,508,750 shares of Preferred Stock designated as Series A Preferred
Stock, (ii) a series of 1,100,000 shares of Preferred Stock designated as Series
B Preferred Stock, and (iii) a series of 4,500,000 shares of Preferred Stock
designated as Series C Preferred Stock.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, series of Preferred Stock of the Corporation be
and they hereby are created, and that the designation and amount thereof and the
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Designation and Amount. The first series of Preferred Stock shall be
----------------------
designated Series A Preferred Stock and shall be comprised of 2,508,750 shares.
The second series of Preferred Stock shall be designated Series B Preferred
Stock and shall be comprised of 1,100,000 shares. The third series of Preferred
Stock shall be designated Series C Preferred Stock and shall be comprised of
4,500,000 shares.
Relative rights, preferences, privileges and restrictions granted to
or imposed upon the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock (collectively, the "Preferred Stock") are as follows:
1. Dividends.
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(a) The holders of outstanding Series A, Series B and Series C
Preferred Stock shall be entitled to receive in any fiscal year, when and as
declared by the Board of Directors, out of any assets at the time legally
available therefor, distributions (as defined below) at the rate per annum of
$0.16 per share of Series A Preferred Stock, $0.252 per share of Series B
Preferred Stock and $0.31 per share of Series C Preferred Stock, respectively,
payable in
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preference and priority to any payment of any dividend on Common Stock. Each
share of Preferred Stock shall rank on a parity with every other Preferred share
which may be issued in the future, irrespective of series, with regard to
distributions at the respective rates fixed for such series. No distributions
shall be declared or paid or set apart for payment on the Preferred shares of
any series unless at the time a distribution shall also be declared or paid or
set apart for payment, as the case may be, on the Preferred shares of each other
series then outstanding at the respective fixed rates for such series. The right
to such distributions on Series A, Series B and Series C Preferred Stock shall
not be cumulative and no right shall accrue to holders of Preferred Stock by
reason of the fact that distributions on said shares are not declared in any
prior year, nor shall any undeclared or unpaid distribution bear or accrue
interest. After distributions shall have been paid to or declared and set apart
upon the Preferred Stock at the respective rate for each series, for any one
fiscal year of the Corporation, if the Board of Directors elects to declare
additional distributions out of any assets legally available therefor, such
additional distributions shall be declared on all shares of Preferred Stock and
Common Stock, with the amount of such distribution for each share of Preferred
Stock equal to the amount of such distribution for one share of Common Stock
multiplied by the number of shares of Common Stock into which such share of
Preferred Stock is convertible as of the record date fixed for declaration of
such distribution.
(b) For purposes of this Section 1, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or other property
without consideration, whether by way of dividend or otherwise, payable other
than in Common Stock, or the purchase or redemption of shares of the Corporation
(other than pursuant to a liquidation, dissolution or winding up of the
Corporation pursuant to Section 2 below, other than pursuant to the
Corporation's Third Amended and Restated Rights Agreement dated April 14, 1999
(the "Rights Agreement"), and other than repurchases of Common Stock held by
employees or consultants of the Corporation upon termination of their employment
or services pursuant to agreements providing for such repurchase) for cash or
other property, including any such transfer, purchase or redemption by a
subsidiary of the Corporation.
2. Preference on Liquidation.
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(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation the assets and surplus funds of the
Corporation available for distribution to shareholders shall be distributed as
follows:
(i) First, the holders of shares of the Series C Preferred Stock
then outstanding 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 Series A and Series B Preferred Stock and Common Stock by reason of
their ownership of such stock, an amount for each share of Series C Preferred
Stock then held by them equal to the sum of (a) $3.88 and (b) the aggregate
amount of all declared but unpaid dividends per share, if any, on the shares of
Series C Preferred Stock, in each case appropriately adjusted for any stock
combinations, consolidations, stock distributions, reclassifications, stock
dividends, stock splits or the like with respect to such shares (hereinafter
such amounts shall be referred as the "Series C Liquidation Preference
Amounts").
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If upon occurrence of such event of liquidation, dissolution or winding up, the
assets and property legally available to be distributed among the holders of the
Series C Preferred Stock shall be insufficient to permit the payment to such
holders of the full preferential amount aforesaid, then the entire assets and
property of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series C Preferred Stock in
proportion to their preferential amounts described above;
(ii) Second, the holders of shares of the Series A and Series B
Preferred Stock then outstanding 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 Common Stock by reason of their ownership of such
stock, an amount for each share of Series A and Series B Preferred Stock then
held by them equal to the sum of (a) $2.00 for each share of Series A Preferred
Stock, (b) $3.16 for each share of Series B Preferred Stock and (c) the
aggregate amount of all declared but unpaid dividends per share, if any, on the
shares of Series A and Series B Preferred Stock, in each case appropriately
adjusted for any stock combinations, consolidations, stock distributions,
reclassifications, stock dividends, stock splits or the like with respect to
such shares (hereinafter such amounts shall be referred as the "Series A and B
Liquidation Preference Amounts").
If upon occurrence of such event of liquidation, dissolution or
winding up, the assets and property legally available to be distributed among
the holders of the Series A and Series B Preferred Stock shall be insufficient
to permit the payment to such holders of the full preferential amount aforesaid,
then the entire assets and property of the Corporation legally available for
distribution shall be distributed ratably among the holders of the Series A and
Series B Preferred Stock in proportion to their preferential amounts described
above.
(iii) After the distributions described in subsections 2(a)(i)
and (ii) have been paid, all remaining assets available for distribution, if
any, shall be distributed ratably among the holders of Common Stock and
Preferred Stock on an as-converted basis.
(b) The merger or consolidation of the Corporation into or with
another corporation or a transaction or series of related transactions pursuant
to which merger, consolidation or transaction or series of transactions the
shareholders of the Corporation immediately prior to such merger, consolidation,
transaction or series of transactions do not own a majority of the outstanding
stock or at least 50% of the voting control of the surviving corporation
following such merger, consolidation transaction or series of transactions, or
the sale, transfer, lease or other conveyance of all or substantially all of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the Corporation as those terms are used in this Section 2; and in
any such case the liquidation preference which the holders of Preferred Stock
shall be entitled to receive shall be computed in the same manner as if the
Corporation's available assets were actually being distributed to shareholders
(even though holders of Common Stock and other classes or series of Preferred
Stock which may be issued in the future are not or may not be entitled to
receive any actual distribution upon such deemed liquidation or dissolution),
and the value of the Corporation's assets for purposes of computing the amount
of such liquidation preference shall be deemed to be (i) the fair market value
of all
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consideration proposed to be paid or exchanged for all of the Corporation's
outstanding capital stock upon any such merger or consolidation, or (ii) the
fair market value of all consideration proposed to be paid to the Corporation
upon any sale, transfer, or other conveyance of all or substantially all of the
assets of the Corporation, as applicable.
(c) Notwithstanding subsections 2(a) and (b), the holders of
Preferred Stock shall have no priority or preference with respect to
distributions made by the Corporation in connection with the repurchase of
shares of capital stock pursuant to the Rights Agreement or Common Stock issued
to or held by employees, directors or consultants upon termination of their
employment or services pursuant to agreements providing for the right of said
repurchase between the Corporation and such persons.
3. Voting Rights. In connection with any vote or consent requirement
-------------
hereunder, and except as otherwise required by law, the holder of each share of
the 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 on the record date for the vote or consent of shareholders and shall
have voting rights and powers equal to the voting rights and powers of the
Common Stock. As long as more than an aggregate of 250,000 shares of Series A
Preferred Stock (appropriately adjusted for stock combinations, consolidations,
stock distributions, reclassifications, stock dividends, stock splits and the
like) are outstanding, the holders of the Series A Preferred Stock, voting as a
single class, shall have the right to elect one member of the Board of Directors
of the Corporation. As long as more than an aggregate of 250,000 shares of
Series B Preferred Stock (appropriately adjusted for stock combinations,
consolidations, stock distributions, reclassifications, stock dividends, stock
splits and the like) are outstanding, the holders of the Series B Preferred
Stock, voting as a single class, shall have the right to elect one member of the
Board of Directors of the Corporation. As long as more than an aggregate of
250,000 shares of Series C Preferred Stock (appropriately adjusted for stock
combinations, consolidations, stock distributions, reclassifications, stock
dividends, stock splits and the like) are outstanding, the holders of the Series
C Preferred Stock, voting as a single class, shall have the right to elect one
member of the Board of Directors of the Corporation. The holders of the Common
Stock, voting as a single class, shall have the right to elect two members of
the Board of Directors of the Corporation. The holders of Common Stock and
Preferred Stock, voting as a single class, shall have the right to elect the
remaining members of the Board of Directors. The holders of the Preferred Stock
shall vote with holders of the Common Stock upon any other matter submitted to a
vote of shareholders, except those matters required by law or these articles to
be submitted to a class or series vote.
4. Conversion Rights.
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(a) Optional Conversion; Conversion Rate; Conversion Price. Each
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share of Preferred Stock shall be convertible, at the option of the holder
thereof, into shares of Common Stock at any time after the issuance of such
share. The number of shares of Common Stock into which each share of Series A,
Series B and Series C Preferred Stock may be converted shall be determined by
dividing $2.00, $3.16 and $3.88 respectively, by a price, hereinafter referred
to as the "Conversion Price," in effect for such series of Preferred Stock at
the time of the conversion.
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The Conversion Price per share of Series A Preferred Stock initially shall be
$2.00, the Conversion Price per share of Series B Preferred Stock initially
shall be $3.16, and the Conversion Price per share of Series C Preferred Stock
initially shall be $3.88, each subject to adjustment as provided in Section 5
below.
(b) Automatic Conversion.
--------------------
(i) Conversion of Preferred Shares. Each share of a given
------------------------------
series of Preferred Stock shall automatically be converted into fully paid and
nonassessable shares of Common Stock of the Corporation at the Conversion Price
then in effect for such series of Preferred Stock (subject to adjustment
pursuant to Section 5 below) at any time during the Conversion Period
immediately (as defined below) upon the earlier to occur of:
(A) the closing of a sale of the Corporation's securities
in an underwritten registered public offering on the NASDAQ National Market with
proceeds to the Corporation of at least Twenty Million Dollars ($20,000,000) and
an offering price per share to the public equal to or greater than Eleven
Dollars and Sixty-Four Cents ($11.64), appropriately adjusted for stock
dividends, stock splits, stock combinations, recapitalizations,
reclassifications, exchanges and the like ("Initial Public Offering");
(B) the date on which the holders of two-thirds of the then
outstanding shares of all series of Preferred Stock (determined on an as-
converted basis) consent in writing to such conversion; provided, that no shares
of Series C Preferred Stock shall convert pursuant to this Section 4(b)(i)(B)
unless holders of two-thirds of the then outstanding Series C Preferred Stock
consent in writing to such conversion, and provided, further, that all shares of
Series C Preferred Stock shall convert pursuant to this Section 4(b)(i)(B) if
holders of two-thirds of the then outstanding Series C Preferred Stock consent
in writing to such conversion; or
(C) at such time as there are outstanding less than an
aggregate of 250,000 shares of Series A Preferred Stock, 90,000 shares of Series
B Preferred Stock or 375,000 shares of Series C Preferred Stock, appropriately
adjusted for stock combinations, consolidations, stock distributions,
reclassifications, stock dividends, stock splits and the like.
(c) Conversion Mechanics. The holder of any shares of Preferred Stock
--------------------
may exercise the conversion rights as to such shares or any part thereof by
delivering to the Corporation during regular business hours, at the office of
any transfer agent of the Corporation for the Preferred Stock, or at the
principal 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, duly endorsed for transfer to the Corporation (if required by it),
accompanied by written notice stating that the holder elects to convert such
shares. Except as set forth above, conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is referred to
herein as the "Conversion Date." As promptly as practicable thereafter the
Corporation shall issue and deliver to or upon the written order of such holder,
at such office or other place designated by the Corporation, a certificate or
certificates for the number of full shares of Common Stock to which such holder
is entitled and a check for cash with respect to any fractional interest in a
share of Common Stock as provided in subsection 4(d) below. The
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holder shall be deemed to have become a shareholder of record for the Common
Stock on the applicable Conversion Date unless the transfer books of the
Corporation are closed on the date, in which event such holder shall be deemed
to have become a shareholder of record for the Common Stock on the next
succeeding date on which the transfer books are open. Upon conversion of only a
portion of the number of shares of Series A, Series B or Series C Preferred
Stock, as the case may be, represented by a certificate surrendered for
conversion, the Corporation shall issue and deliver to or upon the written order
of the holder of the certificate so surrendered for conversion, at the expense
of the Corporation, a new certificate for the number of shares of Series A,
Series B or Series C Preferred Stock representing the unconverted portion of the
certificate so surrendered.
(d) No Fractional Shares. No fractional shares of Common Stock or
--------------------
scrip shall be issued upon conversion of shares of Preferred Stock. If more
than one share of Preferred Stock shall be surrendered for conversion at any one
time by the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Preferred Stock so surrendered. Instead of any fractional shares of
Common Stock which would otherwise be issuable upon conversion of any shares of
Preferred Stock, the Corporation shall pay a cash adjustment in respect of such
fractional interest equal to the fair market value of such fractional interest
as determined in good faith by the Corporation's Board of Directors.
(e) Taxes. The Corporation shall pay any and all issue and other
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taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion pursuant hereto of Preferred Stock. The Corporation
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Preferred Stock so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of any such
tax, or has established, to the satisfaction of the Corporation, that such tax
has been paid.
(f) Share Reserve. The Corporation shall at all times reserve and
-------------
keep available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Preferred Stock
from time to time outstanding. The Corporation shall from time to time (subject
to obtaining necessary director and shareholder approval), in accordance with
the laws of the State of Delaware, increase the authorized amount of its Common
Stock if at any time the authorized number of shares of its Common Stock
remaining unissued shall not be sufficient to permit the conversion of all of
the shares of Preferred Stock at the time outstanding.
(g) Registration or Listing. If any shares of Common Stock to be
-----------------------
reserved for the purpose of conversion of shares of Preferred Stock require
registration or listing with, or approval of, any governmental authority, stock
exchange or other regulatory body under any federal or state law or regulation
or otherwise, before such shares may be validly issued or
6
<PAGE>
delivered upon conversion, the Corporation will in good faith and as
expeditiously as possible endeavor to secure such registration, listing or
approval, as the case may be.
(h) Status Upon Issuance. All shares of Common Stock which may be
--------------------
issued upon conversion of the shares of Preferred Stock will upon issuance by
the Corporation be validly issued, fully paid and non-assessable and free from
all taxes, liens and charges created by the Corporation with respect to the
issuance thereof.
5. Adjustments. The number of shares of Common Stock to be issued upon
-----------
conversion of the Preferred Stock shall be subject to adjustment from time to
time as follows:
(a) Stock Splits, Dividends and Combinations. In case the
----------------------------------------
Corporation shall at any time subdivide the outstanding Common Stock, or shall
issue a stock dividend on its outstanding Common Stock, the number of shares of
Common Stock issuable upon conversion of the Preferred Stock immediately prior
to each such subdivision or issuance of such stock dividend shall be
proportionately increased (with appropriate adjustments in the applicable
Conversion Price) and in case the Corporation shall at any time combine the
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Preferred Stock immediately prior to each such combination
shall be proportionately decreased (with appropriate adjustments in the
applicable Conversion Price), effective at the close of business on the date of
each such subdivision, stock dividend or combination, as the case may be.
(b) Capital Reorganizations. In case of any capital reorganization
-----------------------
(other than in connection with a merger or other reorganization in which the
Corporation is not the continuing or surviving entity) or any reclassification
of the Common Stock of the Corporation, the Preferred Stock shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the Corporation
deliverable upon conversion of the shares of Preferred Stock immediately prior
to each such reorganization or recapitalization would have been entitled upon
such reorganization, or reclassification; and, in any such case, appropriate
adjustment (as determined by the Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the holders of Preferred Stock, to the end that the
provisions set forth herein shall thereafter be applicable, as nearly as
reasonably may be, in relation to any share of stock or other property
thereafter deliverable upon the conversion.
(c) Noncash Dividends, Stock Purchase Rights, Capital Reorganizations
-----------------------------------------------------------------
and Dissolutions. In case:
- ----------------
(i) the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
(ii) the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to subscribe for or purchase any
shares of stock of any class or to receive any other rights; or
7
<PAGE>
(iii) of any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation (other than a
subdivision or combination of its outstanding shares of Common Stock),
consolidation or merger of the Corporation with or into another corporation or
conveyance of all or substantially all of the assets of the Corporation to
another corporation; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then, and in any such case, the Corporation shall cause to be mailed to the
transfer agent for Preferred Stock, and to the holders of record of the
outstanding Preferred Stock, at least ten days prior to the date hereinafter
specified, a notice stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.
(d) Other Issuances. Upon the issuance by the Corporation of any
---------------
Equity Securities (as defined below) for consideration per share of Common Stock
issued or issuable upon exchange, exercise or conversion of such Equity
Securities of less than the Conversion Price of the Series C Preferred Stock
then in effect, then the Conversion Price for the Series C Preferred Stock shall
be reduced to equal the consideration per share of Common Stock issued or
issuable upon exchange, exercise or conversion of such Equity Securities
received by the Corporation for such Equity Securities. Upon the issuance by the
Corporation, on or after the effective date of this Certificate of
Incorporation, of Equity Securities for a consideration per share of Common
Stock issued or issuable upon exchange, exercise or conversion of such Equity
Securities of less than the Conversion Price of the Series B Preferred Stock in
effect immediately prior to the time of such issue or sale, then forthwith upon
such issue or sale, the Conversion Price of Series B Preferred Stock shall be
reduced to equal the consideration per share of Common Stock issuable upon
exchange, exercise or conversion of such Equity Securities received by the
Corporation for such Equity Securities. Upon the issuance by the Corporation,
on or after the effective date of this Certificate of Incorporation, of Equity
Securities for a consideration per share of Common Stock issued or issuable upon
exchange, exercise or conversion of such Equity Securities of less than the
Conversion Price of the Series A Preferred Stock in effect immediately prior to
the time of such issue or sale, then forthwith upon such issue or sale, the
Conversion Price of Series A Preferred Stock shall be reduced to equal the
consideration per share of Common Stock issuable upon exchange, exercise or
conversion of such Equity Securities received by the Corporation for such Equity
Securities.
For purposes of this subsection 5(d) the following provisions will be
applicable:
(A) In the case of an issue or sale for cash of shares of
Common Stock, the "consideration per share" received by the Corporation therefor
shall be deemed to be
8
<PAGE>
the amount of cash received, before deducting therefrom any commissions or
expenses paid by the Corporation.
(B) In case of the issuance (otherwise than upon conversion or
exchange of obligations or shares of stock of the Corporation) of additional
shares of Common Stock for a consideration other than cash or a consideration
partly other than cash, the amount of the consideration other than cash received
by the Corporation for such shares shall be deemed to be the fair market value
of such consideration as determined in good faith by the Board of Directors.
(C) In case of the issuance by the Corporation in any manner of
any rights to subscribe for or to purchase shares of Common Stock, or any
options for the purchase of shares of Common Stock or stock convertible into
Common Stock, all shares of Common Stock or stock convertible into Common Stock
to which the holders of such rights or options shall be entitled to subscribe
for or purchase pursuant to such rights or options shall be deemed "outstanding"
as of the date of the offering of such rights or the granting of such options,
as the case may be, and the minimum aggregate consideration named in such rights
or options for the shares of Common Stock or stock convertible into Common Stock
covered thereby, plus the consideration, if any, received by the Corporation for
such rights or options, shall be deemed to be the "consideration per share"
received by the Corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares.
(D) In case of the issuance or issuances by the Corporation in
any manner of any obligations or of any shares of stock of the Corporation that
shall be convertible into or exchangeable for Common Stock, all shares of Common
Stock issuable upon the conversion or exchange of such obligations or shares
shall be deemed issued as of the date such obligations or shares are issued, and
the amount of the "consideration per share" received by the Corporation for such
additional shares of Common Stock shall be deemed to be the total of (X) the
amount of consideration received by the Corporation upon the issuance of such
obligations or shares, as the case may be, plus (Y) the minimum aggregate
consideration, if any, other than such obligations or shares, receivable by the
Corporation upon such conversion or exchange, except in adjustment of dividends.
(E) The amount of the "consideration per share" received by the
Corporation upon the issuance of any rights or options referred to in subsection
(C) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as described in subsection (D) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (A) and (B) above with respect to the consideration received by
the Corporation in case of the issuance of additional shares of Common Stock;
provided, however, that if such obligations or shares of stock so convertible or
exchangeable are issued in payment or satisfaction of any dividend upon any
stock of the Corporation other than Common Stock, the amount of the
"consideration per share" received by the Corporation upon the original issuance
of such obligations or shares or stock so convertible or exchangeable shall be
deemed to be the
9
<PAGE>
value of such obligations or shares of stock, as of the date of the adoption of
the resolution declaring such dividend, as determined by the Board of Directors
at or as of that date. On the expiration of any rights or options referred to in
subsection (C), or the termination of any right of conversion or exchange
referred to in subsection (D), or any change in the number of shares of Common
Stock deliverable upon exercise of such options or rights or upon conversion of
or exchange of such convertible or exchangeable securities, the Conversion Price
then in effect shall forthwith be readjusted to such Conversion Price as would
have obtained had the adjustments made upon the issuance of such options, rights
or convertible or exchangeable securities been made upon the basis of the
delivery of only the number of shares of common stock actually delivered or to
be delivered upon the exercise of such rights or options or upon the conversion
or exchange of such securities.
(F) Anything herein to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment of a Conversion Price
as a result of the issuance after the effective date of this Certificate of
Incorporation, (x) of shares of Common Stock (or any options, warrants or rights
to purchase such shares) to officers, directors, employees or consultants of the
Corporation or its subsidiaries pursuant to stock option or stock purchase plans
or agreements or other employee benefit plans and any shares of Common Stock
issued upon exercise or conversion pursuant to such plans or agreements, or (y)
up to 250,000 shares of Common Stock (or any options, warrants or rights to
purchase such shares), appropriately adjusted for any stock combinations,
consolidations, stock distributions, reclassifications, stock dividends, stock
splits or the like, which have been approved by the Board of Directors in
connection with an equipment leasing or other financing arrangements with banks
or other financial institutions, or (z) of shares issuable upon conversion or
exercise of securities which are outstanding as of the date of this Certificate
of Incorporation.
(G) In the event the Corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by the
Corporation or other persons or options or rights not referred to in this
Section 5, then, in each such case, the holders of the Series A, Series B and
Series C Preferred Stock shall be entitled to the distributions at the rate
provided for in Section 1 above before any distribution shall be made to the
holders of the Common Stock, and no adjustment to the Conversion Prices provided
for in this Section 5 shall be applicable
(H) For purposes of this Section 5, "Equity Securities" shall
mean any securities having voting rights in the election of the Board of
Directors not contingent upon default, or any securities evidencing an ownership
interest in the Company, or any securities convertible into or exercisable for
any shares of the foregoing, or any agreement or commitment to issue any of the
foregoing.
(e) Protection of Conversion Rights. The Corporation will not, by
-------------------------------
amendment of its Articles of Incorporation or through any reorganization,
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
10
<PAGE>
the provisions of this Section 5 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 the Series A, Series B and Series C Preferred Stock against
impairment.
(f) Certificate of Adjustment. Upon the occurrence of each
-------------------------
adjustment or readjustment of a Conversion Price pursuant to this Section 5, 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 Preferred Stock affected thereby 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 Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment or
readjustment, (B) the Conversion Price at the time in effect for the Series A,
Series B and Series C Preferred Stock as the case may be, and (C) 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 his shares.
6. Changes Affecting the Preferred Stock. So long as any shares of
-------------------------------------
Series A, Series B or Series C Preferred Stock are outstanding, the Corporation
shall not, without first obtaining the approval by vote or written consent, in
the manner provided by law, of the holders of at least a two-thirds of the total
number of shares of Preferred Stock then outstanding, voting together as a
single class, (i) alter or change any or all of the rights, preferences,
privileges and restrictions granted to or imposed upon the Series A, Series B or
Series C Preferred Stock; or (ii) increase or decrease the authorized number of
shares of Series A, Series B or Series C Preferred Stock or Common Stock; or
(iii) create any new class or series of shares of preferred stock senior to or
on a par with the Series A, Series B or Series C Preferred Stock as to voting
rights, dividends, anti-dilution protection or a distribution of assets of the
Corporation in liquidation; or (iv) sell, lease, convey, exchange, license,
transfer or otherwise dispose of all or substantially all of its assets (other
than for the purposes of securing payment of any contract or obligation); or (v)
effect any merger or consolidation with or into any other corporation such that
the shareholders of the Corporation do not own the majority of the outstanding
stock following such merger or consolidation except into or with a wholly-owned
subsidiary; or (vi) amend the provisions of this Section 6.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this _____
day of ________________, 1999.
________________________________________
Todd Hagen, Vice President of Finance
and Administration, Chief Financial
Officer and Secretary
11
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") is entered into
as of June __, 1999 by and between Salon Internet, Inc., a California
corporation ("Salon California"), and Salon Internet, Inc. Delaware, a Delaware
corporation ("Salon Delaware").
WITNESSETH:
----------
WHEREAS, Salon Delaware is a corporation duly organized and existing under
the laws of the State of Delaware;
WHEREAS, Salon California is a corporation duly organized and existing
under the laws of the State of California;
WHEREAS, on the date of this Merger Agreement, Salon Delaware has authority
to issue 50,000,000 shares of Common Stock, par value $0.001 per share (the
"Salon Delaware Common Stock"), of which 100 shares are issued and outstanding
and owned by Salon California and 13,108,750 shares of Preferred Stock, par
value $0.001 per share (the "Salon Delaware Preferred Stock), of which no shares
are issued or outstanding;
WHEREAS, on the date of this Merger Agreement, Salon California has
authority to issue 25,000,000 shares of Common Stock (the "Salon California
Common Stock"), of which _________ shares are issued and outstanding, and
16,217,500 shares of Preferred Stock (the "Salon California Preferred Stock"),
of which 15,566,269 shares are issued and outstanding;
WHEREAS, the respective Boards of Directors for Salon Delaware and Salon
California have determined that, for the purpose of effecting the
reincorporation of Salon California in the State of Delaware, it is advisable
and to the advantage of said two corporations and their shareholders that Salon
California merge with and into Salon Delaware upon the terms and conditions
herein provided; and
WHEREAS, the respective Boards of Directors of Salon Delaware and Salon
California, the shareholders of Salon California, and the sole stockholder of
Salon Delaware have adopted and approved this Merger Agreement;
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Salon California and Salon Delaware hereby agree to merge as
follows:
1. Merger. Salon California shall be merged with and into Salon
------
Delaware, and Salon Delaware shall survive the merger ("Merger"), effective upon
the date when this Merger Agreement is made effective in accordance with
applicable law (the "Effective Date").
2. Governing Documents. The Certificate of Incorporation of Salon
-------------------
Delaware shall continue to be the Certificate of Incorporation of Salon Delaware
as the surviving Corporation. Article FIRST of the Restated Certificate of
Incorporation of Salon Delaware shall be amended to read as follows:
1
<PAGE>
FIRST: The name of the Corporation is Salon.com.
-----
The Bylaws of Salon Delaware, in effect on the Effective Date, shall
continue to be the Bylaws of Salon Delaware as the surviving Corporation without
change or amendment until further amended in accordance with the provisions
thereof and applicable laws.
3. Directors and Officers. The directors and officers of Salon
----------------------
California shall become the directors and officers of Salon Delaware upon the
Effective Date and any committee of the Board of Directors of Salon California
shall become the members of such committees for Salon Delaware.
4. Succession. On the Effective Date, Salon Delaware shall succeed to
----------
Salon California in the manner of and as more fully set forth in Section 259 of
the General Corporation Law of the State of Delaware.
5. Further Assurances. From time to time, as and when required by Salon
------------------
Delaware or by its successors and assigns, there shall be executed and delivered
on behalf of Salon California such deeds and other instruments, and there shall
be taken or caused to be taken by it such further and other action, as shall be
appropriate or necessary in order to vest, perfect or confirm, of record or
otherwise, in Salon Delaware the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of Salon California, and otherwise to carry out the purposes of this
Merger Agreement and the officers and directors of Salon Delaware are fully
authorized in the name and on behalf of Salon California or otherwise to take
any and all such action and to execute and deliver any and all such deeds and
other instruments.
6. Stock of Salon California.
-------------------------
a. Common Stock. Upon the Effective Date, by virtue of the Merger
------------
and without any action on the part of the holder thereof, each two (2) shares of
Salon California Common Stock outstanding immediately prior thereto shall be
changed and converted into one fully paid and nonassessable share of Salon
Delaware Common Stock.
b. Preferred Stock. Upon the Effective Date, by virtue of the
---------------
Merger and without any action on the part of the holder thereof, each two (2)
shares of each series of Salon California Preferred Stock outstanding
immediately prior thereto shall be changed and converted into one fully paid and
nonassessable share of Salon Delaware Preferred Stock of an equivalent series.
c. Fractional Shares. No fractional shares which a Salon Delaware
-----------------
stockholder would otherwise be entitled to receive by reason of the exchange of
Salon California stock for Salon Delaware stock shall be issued. In lieu of any
fractional shares to which a holder would otherwise be entitled, Salon Delaware
shall pay cash equal to such fraction multiplied by the fair market value of the
Common Stock on the Effective Date as determined by the Board of Directors of
Salon Delaware and for the Preferred Stock, such fraction multiplied by the
Conversion Prices as defined in Article FOURTH, subparagraph 4(a) of this
Certificate of Incorporation.
2
<PAGE>
7. Stock Certificates. On and after the Effective Date, all of the
------------------
outstanding certificates which prior to that time represented shares of Salon
California stock shall be deemed for all purposes to evidence ownership of and
to represent the shares of Salon Delaware stock into which the shares of Salon
California stock represented by such certificates have been converted as herein
provided. The registered owner on the books and records of Salon Delaware or
its transfer agent of any such outstanding stock certificate shall, until such
certificate shall have been surrendered for transfer or otherwise accounted for
to Salon Delaware or its transfer agent, have and be entitled to exercise any
voting and other rights with respect to and to receive any dividend and other
distributions upon the shares of Salon Delaware stock evidenced by such
outstanding certificate as above provided.
8. Options and Warrants. Upon the Effective Date, each outstanding
--------------------
option, warrant or other right to purchase shares of Salon California stock,
including those options granted under the 1995 Stock Option Plan (the "Option
Plan") of Salon California, shall be converted into and become an option,
warrant, or right to purchase the number of shares of Salon Delaware stock
determined by dividing the number of shares of Salon California subject to the
option, warrant or right to purchase by two (2), rounded down to the nearest
whole number, at a price per share equal to the exercise price of the option,
warrant or right to purchase Salon California stock multiplied by two (2),
rounded up to the nearest whole cent, and upon the same terms and subject to the
same conditions as set forth in the Option Plans and other agreements entered
into by Salon California pertaining to such options, warrants, or rights. A
number of shares of Salon Delaware stock shall be reserved for purposes of such
options, warrants, and rights equal to the number of shares of Salon California
stock so reserved as of the Effective Date divided by two (2). As of the
Effective Date, Salon Delaware shall assume all obligations of Salon California
under agreements pertaining to such options, warrants, and rights, including the
Option Plans, and the outstanding options, warrants, or other rights, or
portions thereof, granted pursuant thereto.
9. Other Employee Benefit Plans. As of the Effective Date, Salon
----------------------------
Delaware hereby assumes all obligations of Salon California under any and all
employee benefit plans in effect as of said date or with respect to which
employee rights or accrued benefits are outstanding as of said date.
10. Outstanding Common Stock of Salon Delaware. Forthwith upon the
------------------------------------------
Effective Date, the One Hundred (100) shares of Salon Delaware Common Stock
presently issued and outstanding in the name of Salon California shall be
canceled and retired and resume the status of authorized and unissued shares of
Salon Delaware Common Stock, and no shares of Salon Delaware Common Stock or
other securities of Salon Delaware shall be issued in respect thereof.
11. Covenants of Salon Delaware. Salon Delaware covenants and agrees that
---------------------------
it will, on or before the Effective Date:
a. Qualify to do business as a foreign corporation in the State of
California, and in all other states in which Salon California is so qualified
and in which the failure so to qualify would have a material adverse impact on
the business or financial condition of Salon Delaware. In connection therewith,
Salon Delaware shall irrevocably appoint an agent for service of process as
required under the provisions of Section 2105 of the California Corporations
Code
3
<PAGE>
and under applicable provisions of state law in other states in which
qualification is required hereunder.
b. File any and all documents with the California Franchise Tax
Board necessary to the assumption by Salon Delaware of all of the franchise tax
liabilities of Salon California.
12. Amendment. At any time before or after approval and adoption by the
---------
stockholders of Salon California, this Merger Agreement may be amended in any
manner as may be determined in the judgment of the respective Boards of
Directors of Salon Delaware and Salon California to be necessary, desirable or
expedient in order to clarify the intention of the parties hereto or to effect
or facilitate the purposes and intent of this Merger Agreement.
13. Abandonment. At any time before the Effective Date, this Merger
-----------
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of either Salon California or Salon Delaware or both, notwithstanding
approval of this Merger Agreement by the sole stockholder of Salon Delaware and
the shareholders of Salon California.
14. Counterparts. In order to facilitate the filing and recording of this
------------
Merger Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved
by resolution of the Board of Directors of Salon California and Salon Delaware,
is hereby executed on behalf of each of said two corporations by their
respective officers thereunto duly authorized.
SALON INTERNET, INC. DELAWARE, a Delaware
corporation
By:_______________________________________
Michael O'Donnell, President
SALON INTERNET, INC., a California
corporation
By:_______________________________________
Michael O'Donnell, President
4
<PAGE>
CERTIFICATE OF SECRETARY
OF
SALON INTERNET, INC. DELAWARE
(a Delaware corporation)
I, Todd Hagen, the Secretary of Salon Internet, Inc. Delaware, a Delaware
corporation (the "Corporation"), hereby certify that the Agreement and Plan of
Merger to which this Certificate is attached was duly signed on behalf of the
Corporation by its President and was duly approved and adopted by a unanimous
vote of the outstanding stock entitled to vote thereon by written consent of the
sole stockholder of the Corporation dated June ____, 1999.
Executed effective on the _____ day of June, 1999.
________________________________________
Todd Hagen
<PAGE>
CERTIFICATE OF APPROVAL OF
AGREEMENT AND PLAN OF MERGER OF
SALON INTERNET, INC.
(a California corporation)
Michael O'Donnell and Todd Hagen certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of Salon Internet, Inc., a California corporation (the
"Corporation").
2. This Certificate is attached to the Agreement and Plan of Merger dated
as of June __, 1999, providing for the merger of the Corporation with and into a
Delaware corporation.
3. The Agreement and Plan of Merger in the form attached hereto (the
"Merger Agreement") was approved by the Board of Directors of the Corporation at
a meeting duly noticed and held on April 8, 1999.
4. The total number of outstanding shares of the Corporation entitled to
vote on the merger was ______________ shares of Common Stock, 5,000,000 shares
of Series A Preferred Stock, 1,898,733 shares of Series B Preferred Stock, and
8,667,536 shares of Series C Preferred Stock.
5. The principal terms of the Merger Agreement were approved by an
affirmative vote which exceeded the vote required, such vote being a majority of
the total number of outstanding shares of Common Stock, and two-thirds of the
outstanding shares of the Series A Preferred Stock, Series B Preferred Stock,
and Series C Preferred Stock voting together as a single class.
Dated: June __, 1999.
______________________________________
Michael O'Donnell, President
______________________________________
Todd Hagen, Secretary
1
<PAGE>
The undersigned, Michael O'Donnell and Todd Hagen, President and Secretary,
respectively, of Salon Internet, Inc., a California corporation, declare under
penalty of perjury under the laws of the State of California that the matters
set forth in this Certificate are true and correct of their own knowledge.
Executed at San Francisco, California, on June __, 1999.
_____________________________________________
Michael O'Donnell, President
_____________________________________________
Todd Hagen, Secretary
2
<PAGE>
CERTIFICATE OF ELIMINATION
OF
SERIES A, SERIES B AND SERIES C PREFERRED STOCK
OF
SALON.COM
(Pursuant to Section 151 of the General Corporation Law
of the State of Delaware)
Salon.com, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), certifies as
follows:
FIRST: Article FOURTH of the Certificate of Incorporation of the
-----
Corporation authorizes the issuance of 13,108,750 shares of Preferred Stock, par
value $0.001 per share (the "Preferred Stock"), of which Preferred Stock,
2,508,750 shares have been designated Series A Preferred Stock, 1,100,000 shares
have been designated Series B Preferred Stock, and 4,500,000 shares have been
designated Series C Preferred Stock pursuant to a Certificate of Designations
filed pursuant to Section 151 of the General Corporation Law of the State of
Delaware.
SECOND: The following resolution was adopted on April 8, 1999 by the
------
Board of Directors of the Corporation as required by Section 151(g) of the
General Corporation Law of the State of Delaware:
RESOLVED, that none of the authorized shares of the Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock are
outstanding and no shares of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock will be issued subject to the
Certificate of Designations previously filed with respect to such Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock.
THIRD: Pursuant to the provisions of Section 151(g) of the General
-----
Corporation Law of the State of Delaware, all matters set forth in the
Certificate of Designations with respect to such Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock are hereby eliminated from
the Certificate of Incorporation.
1
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed
by its duly authorized officer this ____ day of June, 1999.
SALON.COM
By:___________________________________
Todd Hagen, Vice President Finance and
Administration, Chief Financial Officer
and Secretary
2
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
SALON.COM
Salon.com, a Delaware corporation (the "Corporation"), hereby certifies:
1. That the Corporation's Board of Directors has duly adopted the
following resolutions:
RESOLVED, that the first paragraph of Article FOURTH of the Restated
Certificate of Incorporation is hereby amended to read in full as follows:
FOURTH: The Corporation is authorized to issue a total of 55,000,000
------
shares of stock in two classes designated respectively "Preferred
Stock" and "Common Stock." The total number of shares of all series of
Preferred Stock that the Corporation shall have the authority to issue
is 5,000,000 and the total number of shares of Common Stock that the
Corporation shall have the authority to issue is 50,000,000. All of
the authorized shares shall have a par value of $0.001.
2. That the proposed amendment has been duly adopted by the Corporation's
Board of Directors and sole stockholder in accordance with the provisions of
Sections 242 and 228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of Restated Certificate of Incorporation to be signed by a duly
authorized officer on this _____ day of June, 1999.
SALON.COM
By: ___________________________________
Todd Hagen, Vice President Finance
and Administration, Chief Financial
Officer and Secretary
<PAGE>
EXHIBIT 2
BYLAWS
OF
SALON INTERNET, INC. DELAWARE
<PAGE>
TABLE OF CONTENTS
<TABLE>
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<S> <C>
ARTICLE I STOCKHOLDERS.................................................. 1
Section 1.1 Annual Meeting............................................. 1
Section 1.2 Special Meetings........................................... 1
Section 1.3 Notice of Meetings......................................... 1
Section 1.4 Quorum..................................................... 2
Section 1.5 Conduct of the Stockholders' Meeting....................... 2
Section 1.6 Conduct of Business........................................ 2
Section 1.7 Notice of Stockholder Business............................. 2
Section 1.8 Proxies and Voting......................................... 3
Section 1.9 Stock List................................................. 3
ARTICLE II BOARD OF DIRECTORS............................................ 4
Section 2.1 Number and Term of Office.................................. 4
Section 2.2 Vacancies and Newly Created Directorships.................. 4
Section 2.3 Removal.................................................... 4
Section 2.4 Regular Meetings........................................... 5
Section 2.5 Special Meetings........................................... 5
Section 2.6 Quorum..................................................... 5
Section 2.7 Participation in Meetings by Conference Telephone.......... 5
Section 2.8 Conduct of Business........................................ 5
Section 2.9 Powers..................................................... 5
Section 2.10 Compensation of Directors.................................. 6
Section 2.11 Nomination of Director Candidates.......................... 6
ARTICLE III COMMITTEES.................................................... 7
Section 3.1 Committees of the Board of Directors....................... 7
Section 3.2 Conduct of Business........................................ 8
ARTICLE IV OFFICERS...................................................... 8
Section 4.1 Generally.................................................. 8
Section 4.2 Chairman of the Board...................................... 8
Section 4.3 President.................................................. 8
Section 4.4 Vice President............................................. 8
Section 4.5 Treasurer.................................................. 9
Section 4.6 Secretary.................................................. 9
Section 4.7 Delegation of Authority.................................... 9
Section 4.8 Removal.................................................... 9
Section 4.9 Action With Respect to Securities of Other Corporations.... 9
ARTICLE V STOCK......................................................... 9
Section 5.1 Certificates of Stock...................................... 9
Section 5.2 Transfers of Stock......................................... 9
Section 5.3 Record Date................................................ 9
</TABLE>
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TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
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<S> <C>
Section 5.4 Lost, Stolen or Destroyed Certificates................... 10
Section 5.5 Regulations.............................................. 10
ARTICLE VI NOTICES..................................................... 10
Section 6.1 Notices.................................................. 10
Section 6.2 Waivers.................................................. 10
ARTICLE VII MISCELLANEOUS............................................... 10
Section 7.1 Facsimile Signatures..................................... 10
Section 7.2 Corporate Seal........................................... 11
Section 7.3 Reliance Upon Books, Reports and Records................. 11
Section 7.4 Fiscal Year.............................................. 11
Section 7.5 Time Periods............................................. 11
ARTICLE VIII INDEMNIFICATION OF DIRECTORS AND OFFICERS................... 11
Section 8.1 Right to Indemnification................................. 11
Section 8.2 Right of Claimant to Bring Suit.......................... 12
Section 8.3 Non-Exclusivity of Rights................................ 12
Section 8.4 Indemnification Contracts............................... 12
Section 8.5 Insurance................................................ 13
Section 8.6 Effect of Amendment...................................... 13
ARTICLE IX AMENDMENTS.................................................. 13
Section 9.1 Amendment of Bylaws...................................... 13
</TABLE>
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<PAGE>
SALON INTERNET, INC. DELAWARE
A DELAWARE CORPORATION
BYLAWS
ARTICLE I
STOCKHOLDERS
------------
Section 1.1 Annual Meeting. An annual meeting of the stockholders, for the
--------------
election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Board of
Directors shall each year fix, which date shall be within thirteen months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 1.2 Special Meetings. Special meetings of the stockholders, for
----------------
any purpose or purposes prescribed in the notice of the meeting, may be called
only (i) by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there
exists any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board of Directors for adoption) or (ii) by the
holders of not less than 10% of all shares entitled to cast votes at the
meeting, voting together as a single class and shall be held at such place, on
such date, and at such time as they shall fix. Business transacted at special
meetings shall be confined to the purpose or purposes stated in the notice.
Section 1.3 Notice of Meetings. Written notice of the place, date, and
------------------
time of all meetings of the stockholders shall be given, not less than ten (10)
nor more than sixty (60) days before the date on which the meeting is to be
held, to each stockholder entitled to vote at such meeting, except as otherwise
provided herein or required by law (meaning, here and hereinafter, as required
from time to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 1.4 Quorum. At any meeting of the stockholders, the holders of a
------
majority of all of the shares of the stock entitled to vote at the meeting,
present in person or by proxy, shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number may be
required by law.
<PAGE>
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
Section 1.5 Conduct of the Stockholders' Meeting. At every meeting of the
------------------------------------
stockholders, the Chairman, if there is such an officer, or if not, the
President of the Corporation, or in his absence the Vice President designated by
the President, or in the absence of such designation any Vice President, or in
the absence of the President or any Vice President, a chairman chosen by the
majority of the voting shares represented in person or by proxy, shall act as
Chairman. The Secretary of the Corporation or a person designated by the
Chairman shall act as Secretary of the meeting. Unless otherwise approved by the
Chairman, attendance at the stockholders' meeting is restricted to stockholders
of record, persons authorized in accordance with Section 8 of these Bylaws to
act by proxy, and officers of the Corporation.
Section 1.6 Conduct of Business. The Chairman shall call the meeting to
--------------------
order, establish the agenda, and conduct the business of the meeting in
accordance therewith or, at the Chairman's discretion, it may be conducted
otherwise in accordance with the wishes of the stockholders in attendance. The
date and time of the opening and closing of the polls for each matter upon which
the stockholders will vote at the meeting shall be announced at the meeting.
The Chairman shall also conduct the meeting in an orderly manner, rule on
the precedence of and procedure on, motions and other procedural matters, and
exercise discretion with respect to such procedural matters with fairness and
good faith toward all those entitled to take part. The Chairman may impose
reasonable limits on the amount of time taken up at the meeting on discussion in
general or on remarks by any one stockholder. Should any person in attendance
become unruly or obstruct the meeting proceedings, the Chairman shall have the
power to have such person removed from participation. Notwithstanding anything
in the Bylaws to the contrary, no business shall be conducted at a meeting
except in accordance with the procedures set forth in this Section 1.6 and
Section 1.7, below. The Chairman of a meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Section 1.6 and
Section 1.7, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
Section 1.7 Notice of Stockholder Business. At an annual or special
------------------------------
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before a
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
properly brought before the meeting by or at the direction of the Board of
Directors, (c) properly brought before an annual meeting by a stockholder, or
(d) properly brought before a special
2
<PAGE>
meeting by a stockholder, but if, and only if, the notice of a special meeting
provides for business to be brought before the meeting by stockholders. For
business to be properly brought before a meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder proposal to be presented at an
annual meeting shall be received at the Corporation's principal executive
offices not less than 120 calendar days in advance of the date that the
Corporation's (or the Corporation's predecessor's) proxy statement was released
to stockholders in connection with the previous year's annual meeting of
stockholders, except that if no annual meeting was held in the previous year or
the date of the annual meeting has been changed by more than 30 calendar days
from the date contemplated at the time of the previous year's proxy statement,
or in the event of a special meeting, notice by the stockholder to be timely
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the meeting was mailed or such
public disclosure was made. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual or
special meeting (a) a brief description of the business desired to be brought
before the annual or special meeting and the reasons for conducting such
business at the special meeting, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the class
and number of shares of the Corporation which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in such business.
Section 1.8 Proxies and Voting. At any meeting of the stockholders, every
------------------
stockholder entitled to vote may vote in person or by proxy authorized by an
instrument in writing or by a transmission permitted by law filed in accordance
with the procedure established for the meeting. No stockholder may authorize
more than one proxy for his shares.
Each stockholder shall have one vote for every share of stock entitled to
vote which is registered in his or her name on the record date for the meeting,
except as otherwise provided herein or required by law.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast.
Section 1.9 Stock List. A complete list of stockholders entitled to vote
----------
at any meeting of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the number of shares
registered in his or her name, shall be open to the examination of any such
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the place
where the meeting is to be held.
3
<PAGE>
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
ARTICLE II
BOARD OF DIRECTORS
------------------
Section 2.1 Number and Term of Office. The number of directors shall
-------------------------
initially be seven (7) and, thereafter, shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption). Upon the closing of the
first sale of the Corporation's common stock pursuant to a firmly underwritten
registered public offering (the "IPO"), the directors shall be divided into
three classes, with the term of office of the first class to expire at the first
annual meeting of stockholders held after the IPO, the term of office of the
second class to expire at the second annual meeting of stockholders held after
the IPO, the term of office of the third class 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 after such
election. A vacancy resulting from the removal of a director by the stockholders
as provided in Article II, Section 2.3 below may be filled at special meeting of
the stockholders held for that purpose. All directors shall hold office until
the expiration of the term for which elected and until their respective
successors are elected, except in the case of the death, resignation or removal
of any director.
Section 2.2 Vacancies and Newly Created Directorships. 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 or other cause (other than removal
from office by a vote of the stockholders) may be filled only by a majority vote
of the directors then in office, though less than a quorum, and directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Section 2.3 Removal. Subject to the rights of holders of any series of
------
Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, with or without cause, but
only by the affirmative vote of the holders of at least a majority of the voting
power of all of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class. Vacancies in the Board of Directors resulting from such removal
may be filled by a majority of the directors then in office, though less than a
quorum, or by the stockholders as provided in Article II, Section 2.1 above.
Directors so chosen shall hold office until the new annual meeting of
stockholders.
4
<PAGE>
Section 2.4 Regular Meetings. Regular meetings of the Board of Directors
----------------
shall be held at such place or places, on such date or dates, and at such time
or times as shall have been established by the Board of Directors and publicized
among all directors. A notice of each regular meeting shall not be required.
Section 2.5 Special Meetings. Special meetings of the Board of Directors
----------------
may be called by one-third of the directors then in office (rounded up to the
nearest whole number) or by the chief executive officer and shall be held at
such place, on such date, and at such time as they or he or she shall fix.
Notice of the place, date, and time of each such special meeting shall be given
each director by whom it is not waived by mailing written notice not fewer than
five (5) days before the meeting or by telegraphing or personally delivering the
same not fewer than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
Section 2.6 Quorum. At any meeting of the Board of Directors, a majority
------
of the total number of authorized directors shall constitute a quorum for all
purposes. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof.
Section 2.7 Participation in Meetings by Conference Telephone. Members of
-------------------------------------------------
the Board of Directors, or of any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
Section 2.8 Conduct of Business. At any meeting of the Board of Directors,
-------------------
business shall be transacted in such order and manner as the Board may from time
to time determine, and all matters shall be determined by the vote of a majority
of the directors present, except as otherwise provided herein or requited by
law. Action may be taken by the Board of Directors without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
Section 2.9 Powers. The Board of Directors may, except as otherwise
------
required by law, exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:
(a) To declare dividends from time to time in accordance with law;
(b) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(c) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or non-
negotiable, secured or unsecured, and to do all things necessary in connection
therewith;
5
<PAGE>
(d) To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any officer upon any
other person for the time being;
(e) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(f) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(g) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and
(h) To adopt from time to time regulations, not inconsistent with
these bylaws, for the management of the Corporation's business and affairs.
Section 2.10 Compensation of Directors. Directors, as such, may receive,
-------------------------
pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.
Section 2.11 Nomination of Director Candidates. Subject to the rights of
---------------------------------
holders of any class or series of Preferred Stock then outstanding, nominations
for the election of Directors may be made by the Board of Directors or a proxy
committee appointed by the Board of Directors or by any stockholder entitled to
vote in the election of Directors generally. However, any stockholder entitled
to vote in the election of Directors generally may nominate one or more persons
for election as Directors at a meeting only if timely notice of such
stockholder's intent to make such nomination or nominations has been given in
writing to the Secretary of the Corporation. To be timely, a stockholder
nomination for a director to be elected at an annual meeting shall be received
at the Corporation's principal executive offices not less than 120 calendar days
in advance of the date that the Corporation's (or the Corporation's
Predecessor's) Proxy statement was released to stockholders in connection with
the previous year's annual meeting of stockholders, except that if no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than 30 calendar days from the date contemplated at the time of
the previous year's proxy statement, or in the event of a nomination for
director to be elected at a special meeting, notice by the stockholders to be
timely must be received not later than the close of business on the tenth day
following the day on which such notice of the date of the special meeting was
mailed or such public disclosure was made. Each such notice shall set forth: (a)
the name and address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation entitled to vote
for the election of Directors on the date of such notice and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (c) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons
6
<PAGE>
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the stockholder; (d) such other information regarding each
nominee proposed by such stockholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to serve as a director
of the Corporation if so elected.
In the event that a person is validly designated as a nominee in accordance
with this Section 2.11 and shall thereafter become unable or unwilling to stand
for election to the Board of Directors, the Board of Directors or the
stockholder who proposed such nominee, as the case may be, may designate a
substitute nominee upon delivery, not fewer than five days prior to the date of
the meeting for the election of such nominee, of a written notice to the
Secretary setting forth such information regarding such substitute nominee as
would have been required to be delivered to the Secretary pursuant to this
Section 2.11 had such substitute nominee been initially proposed as a nominee.
Such notice shall include a signed consent to serve as a director of the
Corporation, if elected, of each such substitute nominee.
If the chairman of the meeting for the election of Directors determines
that a nomination of any candidate for election as a Director at such meeting
was not made in accordance with the applicable provisions of this Section 2.11,
such nomination shall be void; provided, however, that nothing in this Section
2.11 shall be deemed to limit any voting rights upon the occurrence of dividend
arrearages provided to holders of Preferred Stock pursuant to the Preferred
Stock designation for any series of Preferred Stock.
ARTICLE III
COMMITTEES
----------
Section 3.1 Committees of the Board of Directors. The Board of Directors,
------------------------------------
by a vote of a majority of the whole Board, may from time to time designate
committees of the Board, with such lawfully delegable powers and duties as it
thereby confers, to serve at the pleasure of the Board and shall, for those
committees and any others provided for herein, elect a director or directors to
serve as the member or members, designating, if it desires, other directors as
alternate members who may replace any absent or disqualified member at any
meeting of the committee. Any committee so designated may exercise the power and
authority of the Board of Directors to declare a dividend, to authorize the
issuance of stock or to adopt a certificate of ownership and merger pursuant to
Section 253 of the Delaware General Corporation Law if the resolution which
designates the committee or a supplemental resolution of the Board of Directors
shall so provide. In the absence or disqualification of any member of any
committee and any alternate member in his place, the member or members of the
committee present at the meeting and not disqualified from voting, whether or
not he or she or they constitute a quorum, may by unanimous vote appoint another
member of the Board of Directors to act at the meeting in the place of the
absent or disqualified member.
Section 3.2 Conduct of Business. Each committee may determine the
-------------------
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as
7
<PAGE>
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third of the authorized members shall
constitute a quorum unless the committee shall consist of one or two members, in
which event one member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present. Action may be taken by any
committee without a meeting if all members thereof consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of
such committee.
ARTICLE IV
OFFICERS
--------
Section 4.1 Generally. The officers of the Corporation shall consist of a
---------
President, one or more Vice Presidents, a Secretary and a Treasurer. The
Corporation may also have, at the discretion of the Board of Directors, a
Chairman of the Board and such other officers as may from time to time be
appointed by the Board of Directors. Officers shall be elected by the Board of
Directors, which shall consider that subject at its first meeting after every
annual meeting of stockholders. Each officer shall hold office until his or her
successor is elected and qualified or until his or her earlier resignation or
removal. The Chairman of the Board, if there shall be such an officer, and the
President shall each be members of the Board of Directors. Any number of offices
may he held by the same person.
Section 4.2 Chairman of the Board. The Chairman of the Board, if there
---------------------
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or prescribed by
these bylaws.
Section 4.3 President. The President shall be the chief executive officer
---------
of the Corporation. Subject to the provisions of these bylaws and to the
direction of the Board of Directors, he or she shall have the responsibility for
the general management and control of the business and affairs of the
Corporation and shall perform all duties and have all powers which are commonly
incident to the office of chief executive or which are delegated to him or her
by the Board of Directors. He or she shall have power to sign all stock
certificates, contracts and other instruments of the Corporation which are
authorized and shall have general supervision and direction of all of the other
officers, employees and agents of the Corporation.
Section 4.4 Vice President. Each Vice President shall have such powers and
--------------
duties as may be delegated to him or her by the Board of Directors. One Vice
President shall be designated by the Board to perform the duties and exercise
the powers of the President in the event of the President's absence or
disability.
Section 4.5 Treasurer. Unless otherwise designated by the Board of
---------
Directors, the Chief Financial Officer of the Corporation shall be the
Treasurer. The Treasurer shall have the responsibility for maintaining the
financial records of the Corporation and shall have custody of all monies and
securities of the Corporation. He or she shall make such disbursements of the
funds of the Corporation as are authorized and shall render from time to time an
account of all
8
<PAGE>
such transactions and of the financial condition of the Corporation. The
Treasurer shall also perform such other duties as the Board of Directors may
from time to time prescribe.
Section 4.6 Secretary. The Secretary shall issue all authorized notices
---------
for, and shall keep, or cause to be kept, minutes of all meetings of the
stockholders, the Board of Directors, and all committees of the Board of
Directors. He or she shall have charge of the corporate books and shall perform
such other duties as the Board of Directors may from time to time prescribe.
Section 4.7 Delegation of Authority. The Board of Directors may from time
-----------------------
to time delegate the powers or duties of any officer to any other officers or
agents, notwithstanding any provision hereof.
Section 4.8 Removal. Any officer of the Corporation may be removed at any
-------
time, with or without cause, by the Board of Directors.
Section 4.9 Action With Respect to Securities of Other Corporations.
-------------------------------------------------------
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other corporation.
ARTICLE V
STOCK
-----
Section 5.1 Certificates of Stock. Each stockholder shall be entitled to a
---------------------
certificate signed by, or in the name of the Corporation by, the President or a
Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer
or an Assistant Treasurer, certifying the number of shares owned by him or her.
Any of or all the signatures on the certificate may be facsimile.
Section 5.2 Transfers of Stock. Transfers of stock shall be made only upon
------------------
the transfer books of the Corporation kept at an office of the Corporation or by
transfer agents designated to transfer shares of the stock of the Corporation.
Except where a certificate is issued in accordance with Section 4 of Article V
of these bylaws, an outstanding certificate for the number of shares involved
shall be surrendered for cancellation before a new certificate is issued
therefor.
Section 5.3 Record Date. The Board of Directors may fix a record date,
-----------
which shall not be more than sixty (60) nor fewer than ten (10) days before the
date of any meeting of stockholders, nor more than sixty (60) days prior to the
time for the other action hereinafter described, as of which there shall be
determined the stockholders who are entitled: to notice of or to vote at any
meeting of stockholders or any adjournment thereof; to receive payment of any
dividend or other distribution or allotment of any rights; or to exercise any
rights with respect to any change, conversion or exchange of stock or with
respect to any other lawful action.
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Section 5.4 Lost, Stolen or Destroyed Certificates. In the event of the
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loss, theft or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of Directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of
a satisfactory bond or bonds of indemnity.
Section 5.5 Regulations. The issue, transfer, conversion and registration
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of certificates of stock shall be governed by such other regulations as the
Board of Directors may establish.
ARTICLE VI
NOTICES
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Section 6.1 Notices. Except as otherwise specifically provided herein or
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required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance be
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the mails, postage paid, or by sending such notice by prepaid
telegram, mailgram, telecopy or commercial courier service. Any such notice
shall be addressed to such stockholder, director, officer, employee or agent at
his or her last known address as the same appears on the books of the
Corporation. The time when such notice shall be deemed to be given shall be the
time such notice is received by such stockholder, director, officer, employee or
agent, or by any person accepting such notice on behalf of such person, if hand
delivered, or the time such notice is dispatched, if delivered through the mails
or be telegram or mailgram.
Section 6.2 Waivers. A written waiver of any notice, signed by a
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stockholder, director, officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer, employee
or agent. Neither the business nor the purpose of any meeting need be specified
in such a waiver.
ARTICLE VII
MISCELLANEOUS
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Section 7.1 Facsimile Signatures. In addition to the provisions for use of
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facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
Section 7.2 Corporate Seal. The Board of Directors may provide a suitable
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seal, containing the name of the Corporation, which seal shall be in the charge
of the Secretary. If and when so directed by the Board of Directors or a
committee thereof, duplicates of the seal may be kept and used by the Treasurer
or by an Assistant Secretary or Assistant Treasurer.
Section 7.3 Reliance Upon Books, Reports and Records. Each director, each
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member of any committee designated by the Board of Directors, and each officer
of the
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Corporation shall, in the performance of his duties, be fully protected in
relying in good faith upon the books of account or other records of the
Corporation, including reports made to the Corporation by any of its officers,
by an independent certified public accountant, or by an appraiser selected with
reasonable care.
Section 7.4 Fiscal Year. The fiscal year of the Corporation shall be as
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fixed by the Board of Directors.
Section 7.5 Time Periods. In applying any provision of these bylaws which
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require that an act be done or not done a specified number of days prior to an
event or that an act be done during a period of a specified number of days prior
to an event, calendar days shall be used, the day of the doing of the act shall
be excluded, and the day of the event shall be included.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
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Section 8.1 Right to Indemnification. Each person who was or is made a
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party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative, is or was a director, officer or employee of
the Corporation or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, or of a Partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or employee or in any other capacity
while serving as a director, officer or employee, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by Delaware Law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said Law permitted the Corporation
to provide prior to such amendment) against all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
amounts paid or to be paid in settlement and amounts expended in seeking
indemnification granted to such person under applicable law, this bylaw or any
agreement with the Corporation) reasonably incurred or suffered by such person
in connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer or employee and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
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that, except as provided in Section 8.2 of this Article VIII, the Corporation
shall indemnify any such person seeking indemnity in connection with an action,
suit or proceeding (or part thereof) initiated by such person only if (a) such
indemnification is expressly required to be made by law, (b) the action, suit or
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation, (c) such indemnification is provided by the Corporation, in its
sole discretion, pursuant to the powers vested in the Corporation under the
Delaware General Corporation Law, or (d) the action, suit or proceeding (or part
thereof) is brought to establish or enforce a right to indemnification under an
indemnity agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law. Such right shall be a
contract right and shall include the right to be paid by the Corporation
expenses incurred in
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defending any such proceeding in advance of its final disposition; provided,
however, that, unless the Delaware General Corporation Law then so prohibits,
the payment of such expenses incurred by a director or officer of the
Corporation in his or her capacity as a director or officer (and not in any
other capacity in which service was or is tendered by such person while a
director or officer, including, without limitation. service to an employee
benefit plan) in advance of the final disposition of such proceeding, shall be
made only upon delivery to the Corporation of an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced if it should be
determined ultimately that such director or officer is not entitled to be
indemnified under this Section or otherwise.
Section 8.2 Right of Claimant to Bring Suit. If a claim under Section 1 of
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this Article VIII is not paid in full by the Corporation within ninety (90) days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if such suit is not frivolous or brought in bad faith,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. The burden of proving such claim shall be on the claimant. It shall be a
defense to any such action (other then an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to this
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct.
Section 8.3 Non-Exclusivity of Rights. The rights conferred on any person
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in Sections 1 and 2 shall not be exclusive of any other right which such persons
may have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, bylaw, agreement, vote of stockholders or disinterested directors
or otherwise.
Section 8.4 Indemnification Contracts. The Board of Directors is
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authorized to enter into a contract with any director, officer, employee or
agent of the Corporation, or any person serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including employee
benefit plans, providing for indemnification rights equivalent to or, if the
Board of Directors so determinates, greater than, those provided for in this
Article VIII.
Section 8.5 Insurance. The Corporation shall maintain insurance to the
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extent reasonably available, at its expense, to protect itself and any such
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have
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the power to indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law.
Section 8.6 Effect of Amendment. Any amendment, repeal or modification of
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any provision of this Article VIII by the stockholders and the directors of the
Corporation shall not adversely affect any right or protection of a director or
officer of the Corporation existing at the time of such amendment, repeal or
modification.
ARTICLE IX
AMENDMENTS
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Section 9.1 Amendment of Bylaws. The Board of Directors is expressly
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empowered to adopt, amend or repeal Bylaws of the Corporation. Any adoption,
amendment or repeal of Bylaws of the Corporation by the Board of Directors shall
require the approval of a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any resolution providing for adoption, amendment or repeal is
presented to the Board). The stockholders shall also have power to adopt, amend
or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of
By-Laws of the Corporation by the stockholders shall require, in addition to any
vote of the holders of any class or series of stock of the Corporation required
by law or by this Certificate of Incorporation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
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CERTIFICATE OF SECRETARY
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I hereby certify that I am the duly elected and acting Secretary of Salon
Internet, Inc. Delaware, a Delaware corporation (the "Corporation"), and that
the foregoing Bylaws, comprising thirteen (13) pages, constitute the Bylaws of
the Corporation as duly adopted on June ___, 1999, by the unanimous written
consent of the Board of Directors of the Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name on ________________,
199____.
___________________________________
Todd Hagen
