<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 9, 2000.
REGISTRATION NO. 333-94351
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
CALDERA SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7372 87-0617393
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
-------------------------
240 WEST CENTER STREET
OREM, UT 84057
TELEPHONE: (801) 765 4999
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------
RANSOM H. LOVE
CHIEF EXECUTIVE OFFICER
CALDERA SYSTEMS, INC.
240 WEST CENTER STREET
OREM, UT 84057
TELEPHONE: (801) 765-4999
FACSIMILE: (801) 765-1313
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
AGENT FOR SERVICE)
-------------------------
COPIES TO:
<TABLE>
<S> <C>
RICHARD R. PLUMRIDGE, ESQ. KENNETH L. GUERNSEY, ESQ.
JOHN E. HAYES III, ESQ. JAMIE E. CHUNG, ESQ.
DAVID J. KENDALL, ESQ. STEVE R. DAETZ, ESQ.
TROY M. KELLER, ESQ. ERIN A. SAWYER, ESQ.
BROBECK, PHLEGER & HARRISON LLP COOLEY GODWARD LLP
370 INTERLOCKEN BOULEVARD, SUITE 500 ONE MARITIME PLAZA, 20TH FLOOR
BROOMFIELD, CO 80021 SAN FRANCISCO, CA 94111-3580
(303) 410-2000 (415) 693-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an estimate of the costs and expenses, other
than the underwriting discounts and commissions, payable by the Registrant in
connection with the issuance and distribution of the common stock being
registered.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 15,180
NASD fee.................................................... 6,250
NASDAQ listing fee.......................................... 5,000
Legal fees and expenses..................................... 400,000
Accounting fees and expenses................................ 500,000
Printing expenses........................................... 350,000
Directors and officers insurance premiums related to this
offering.................................................. 600,000
Blue sky fees and expenses.................................. 10,000
Transfer Agent and Registrar fees and expenses.............. 15,000
Miscellaneous............................................... 98,570
----------
Total..................................................... $2,000,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's certificate of incorporation in effect as of the date
hereof, and the registrant's amended and restated certificate of incorporation
to be in effect upon the closing of this offering (collectively, the
"Certificate") provides that, except to the extent prohibited by the Delaware
General Corporation Law, as amended (the "DGCL"), the registrant's directors
shall not be personally liable to the registrant or its stockholders for
monetary damages for any breach of fiduciary duty as directors of the
registrant. Under the DGCL, the directors have a fiduciary duty to the
registrant which is not eliminated by this provision of the Certificate and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available. In addition, each director will
continue to be subject to liability under the DGCL for breach of the director's
duty of loyalty to the registrant, for acts or omissions which are found by a
court of competent jurisdiction to be not in good faith or involving intentional
misconduct, for knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are prohibited by DGCL. This provision
also does not affect the directors' responsibilities under any other laws, such
as the Federal securities laws or state or Federal environmental laws. The
registrant intends to obtain liability insurance for its officers and directors
prior to the closing of this offering.
Section 145 of the DGCL empowers a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this provision
shall not eliminate or limit the liability of a director: (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 involve intentional misconduct or a
knowing violation of law, (iii) arising under Section 174 of the DGCL, or (iv)
for any transaction from which the director derived an improper personal
benefit. The DGCL provides further that the indemnification permitted thereunder
shall not be deemed exclusive of any other rights to which the directors and
officers may be entitled under the corporation's bylaws, any agreement, a vote
of stockholders or otherwise. The Certificate eliminates the personal liability
of directors to the fullest extent permitted by Section 102(b)(7) of the DGCL
and provides that the registrant shall fully indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person is or was a director or
officer of the registrant, or is or was serving at the request of the registrant
as a director or officer of another corporation, partnership, joint venture,
trust,
II-1
<PAGE> 3
employee benefit plan or other enterprise, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate. The registrant is not aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In the three fiscal years preceding the filing of this registration
statement, the Registrant has issued the following securities that were not
registered under the Securities Act:
(i) On August 31, 1998, the Registrant issued to The Canopy Group,
Inc. 16,000,000 shares of common stock in exchange for $20,892,674.
(ii) From December 1998 through January 31, 2000, the Registrant
granted options to purchase an aggregate of 5,472,649 shares of common
stock under its 1998 Stock Option Plan and 1999 Omnibus Stock Incentive
Plan with a weighted average exercise price of $3.28
(iii) On July 27, 1999, the Registrant issued and sold 5,333,333
shares of common stock to MTI Technology Corporation at a purchase price of
$1.13 per share.
(iv) On August 19, 1999, under the terms of Secured Convertible
Promissory Note dated September 1, 1998, $5,273,974 owed to The Canopy
Group was converted into 5,273,974 shares of the Registrant's common stock.
(v) On January 4, 2000, the Registrant issued 16,834 shares of common
stock to United Systems Engineers in exchange for services rendered and
agreed to issue an additional 16,833 shares of common stock to United
Service Engineers upon the completion of services to be rendered, pursuant
to Regulation S under the Securities Act of 1933, as amended.
(vi) On December 30, 1999, the Registrant issued and exchanged
5,273,974 shares of Series A convertible preferred stock for the same
number of shares of common stock held by The Canopy Group, Inc. The
Registrant also issued and exchanged 1,322,172 shares of Series A
convertible preferred stock for the same number of shares of common stock
held by MTI Technology Corporation.
(vii) In December 1999 and January 2000, the Registrant sold a total
of 5,000,000 shares of Series B convertible preferred stock at a purchase
price of $6.00 per share to ten accredited investors.
(viii) In December 1999, the Registrant issued and sold 106,356 shares
of common stock to Troll Tech AS in exchange for 159 shares of common stock
of Troll Tech AS.
(ix) In January 2000, the Registrant issued and sold 200,000 shares of
common stock to Evergreen Internet, Inc. in exchange for 592,592 shares of
common stock of Evergreen Internet, Inc.
(x) In January 2000, the Registrant issued and sold 1,250,000 shares
of common stock to Lineo, Inc. in exchange for 3,238,437 shares of common
stock of Lineo, Inc.
No underwriters were involved in the foregoing sales of securities. Except
as noted such sales were deemed to be exempt under the Securities Act in
reliance upon Section 4(2) thereof relative to sales by an issuer not involving
any public offering, or, in the case of options to purchase common stock, Rule
701 under the Securities Act. All of the foregoing securities are deemed
restricted securities for purposes of the Securities Act.
II-2
<PAGE> 4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1* Form of Underwriting Agreement.
3.1 Certificate of Incorporation.
3.2 Form of Amended and Restated Certificate of Incorporation to
be in effect upon the closing of the offering.
3.3 Bylaws.
3.4 Form of Amended and Restated Bylaws to be in effect upon the
closing of this offering.
4.1 Specimen Common Stock certificate.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1** Conversion Agreement, dated December 30, 1999, between the
Registrant, The Canopy Group, Inc. and MTI Technology
Corporation.
10.2** Form of Series B Preferred Stock Purchase Agreement between
the Registrant and the Series B investors.
10.3** 1998 Stock Option Plan.
10.4** 1999 Omnibus Stock Incentive Plan.
10.5** 2000 Employee Stock Purchase Plan.
10.6** Secured Convertible Promissory Note, dated September 1,
1998, by the Registrant in favor of The Canopy Group, Inc.
10.7** Security Agreement, dated September 1, 1998, between the
Registrant and The Canopy Group, Inc.
10.8** Asset Purchase and Sale Agreement, dated September 1, 1998,
between Caldera, Inc. and the Registrant.
10.9** Amended and Restated Asset Purchase Agreement, dated as of
September 1, 1998, between Caldera, Inc. and the Registrant.
10.10** Stock Purchase Agreement, dated July 27, 1999, by and among
the Registrant, The Canopy Group, Inc. and MTI Technology
Corporation.
10.11** Stock Purchase Agreement, dated January 6, 2000, between the
Registrant and Lineo, Inc.
10.12** Form of Second Amended and Restated Investors Rights
Agreement by and among the Registrant and the holders of the
Series A and Series B convertible preferred stock.
10.13** Form of Indemnification Agreement by and between the
Registrant and its outside directors.
10.14** GNU General Public License.
10.15+** Computer Software Distribution Agreement, dated December 14,
1998, between the Registrant and Navarre Corporation.
10.16+** OEM Reciprocal License Agreement, dated January 6, 2000,
between the Registrant and Evergreen Internet, Inc.
10.17+** Sun Community Source License version 2.3 dated January 7,
2000 between the Registrant and Sun Microsystems, Inc.
10.18+** Sun Community Source License version 2.7, dated January 7,
2000, between the Registrant and Sun Microsystems, Inc.
10.19** Lease Agreement, dated September 1, 1998, between the
Registrant and Caldera, Inc.
10.20** Assignment and Extension of Lease, dated October 6, 1999,
between the Registrant and Voxel, Inc.
10.21** Form of Voting Agreement between the Registrant and the
holders of the Series A and Series B convertible preferred
stock.
10.22** Secured Promissory Note, dated December 29, 1999, by the
Registrant in favor of The Canopy Group.
10.23** Assignment of Lease, dated January 21, 2000, between the
Registrant and Nextpage L.C.
10.24 Form of Delaware Indemnification Agreement by and between
the Registrant and its outside directors.
23.1 Consent of Brobeck Phleger & Harrison LLP (included in
Exhibit 5.1).
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23.2** Consent of Arthur Andersen LLP.
24.1 Powers of Attorney (see Signature Page on Page II-5).
27** Financial Data Schedule.
</TABLE>
- -------------------------
* To be filed by amendment.
** Previously filed.
+ Application has been made to the Commission to seek confidential treatment of
certain provisions. Omitted material for which confidential treatment has
been requested has been filed separately with the Commission.
(b) FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or the notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Orem, State of Utah, on
this 9th day of March, 2000.
CALDERA SYSTEMS, INC.
By: /s/ RANSOM H. LOVE
------------------------------------
Name: Ransom H. Love
Title: President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned directors and/or officers of Caldera Systems, Inc. (the
"Company"), hereby severally constitute and appoint Ransom H. Love, Chief
Executive Officer, and Alan Hansen, Chief Financial Officer, and each of them
individually, with full powers of substitution and resubstitution, our true and
lawful attorneys, with full powers to them and each of them to sign for us, in
our names and in the capacities indicated below, the registration statement on
Form S-1 filed with the Securities and Exchange Commission, and any and all
amendments to said registration statement (including post-effective amendments),
and any registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, in connection with the registration under
the Securities Act of 1933, as amended, of equity securities of the Company, and
to file or cause to be filed the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as each of them might
or could do in person, and hereby ratifying and confirming all that said
attorneys, and each of them, or their substitute or substitutes, shall do or
cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated below:
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<C> <S> <C>
/s/ RANSOM H. LOVE President, Chief Executive March 9, 2000
- --------------------------------------------------- Officer and Director
Ransom H. Love (Principal Executive Officer)
/s/ ALAN HANSEN Chief Financial Officer March 9, 2000
- --------------------------------------------------- (Principal Financial and
Alan Hansen Accounting Officer)
* Chairman of the Board of March 9, 2000
- --------------------------------------------------- Directors
Ralph J. Yarro III
* Director March 9, 2000
- ---------------------------------------------------
Dale R. Boyd
* Director March 9, 2000
- ---------------------------------------------------
John R. Egan
</TABLE>
II-5
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<C> <S> <C>
* Director March 9, 2000
- ---------------------------------------------------
Edward E. Iacobucci
* Director March 9, 2000
- ---------------------------------------------------
Carl S. Ledbetter
* Director March 9, 2000
- ---------------------------------------------------
Raymond J. Noorda
* Director March 9, 2000
- ---------------------------------------------------
Thomas P. Raimondi, Jr.
*By: /s/ RANSOM H. LOVE
---------------------------------------------
Ransom H. Love
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ------- DESCRIPTION
<S> <C>
1.1* Form of Underwriting Agreement.
3.1 Certificate of Incorporation.
3.2 Form of Amended and Restated Certificate of Incorporation to
be in effect upon the closing of the offering.
3.3 Bylaws.
3.4 Form of Amended and Restated Bylaws to be in effect upon the
closing of this offering.
4.1 Specimen Common Stock certificate.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1** Conversion Agreement, dated December 30, 1999, between the
Registrant, The Canopy Group, Inc. and MTI Technology
Corporation.
10.2** Form of Series B Preferred Stock Purchase Agreement between
the Registrant and the Series B investors.
10.3** 1998 Stock Option Plan.
10.4** 1999 Omnibus Stock Incentive Plan.
10.5** 2000 Employee Stock Purchase Plan.
10.6** Secured Convertible Promissory Note, dated September 1,
1998, by the Registrant in favor of The Canopy Group, Inc.
10.7** Security Agreement, dated September 1, 1998, between the
Registrant and The Canopy Group, Inc.
10.8** Asset Purchase and Sale Agreement, dated September 1, 1998,
between Caldera, Inc. and the Registrant.
10.9** Amended and Restated Asset Purchase Agreement, dated as of
September 1, 1998, between Caldera, Inc. and the Registrant.
10.10** Stock Purchase Agreement, dated July 27, 1999, by and among
the Registrant, The Canopy Group, Inc. and MTI Technology
Corporation.
10.11** Stock Purchase Agreement, dated January 6, 2000, between the
Registrant and Lineo, Inc.
10.12** Form of Second Amended and Restated Investors Rights
Agreement by and among the Registrant and the holders of the
Series A and Series B convertible preferred stock.
10.13** Form of Indemnification Agreement by and between the
Registrant and its outside directors.
10.14** GNU General Public License.
10.15+** Computer Software Distribution Agreement, dated December 14,
1998, between the Registrant and Navarre Corporation.
10.16+** OEM Reciprocal License Agreement, dated January 6, 2000,
between the Registrant and Evergreen Internet, Inc.
10.17+** Sun Community Source License version 2.3 dated January 7,
2000 between the Registrant and Sun Microsystems, Inc.
10.18+** Sun Community Source License version 2.7, dated January 7,
2000, between the Registrant and Sun Microsystems, Inc.
10.19** Lease Agreement, dated September 1, 1998, between the
Registrant and Caldera, Inc.
10.20** Assignment and Extension of Lease, dated October 6, 1999,
between the Registrant and Voxel, Inc.
10.21** Form of Voting Agreement between the Registrant and the
holders of the Series A and Series B convertible preferred
stock.
10.22** Secured Promissory Note, dated December 29, 1999, by the
Registrant in favor of The Canopy Group.
10.23** Assignment of Lease, dated January 21, 2000, between the
Registrant and Nextpage L.C.
10.24 Form of Delaware Indemnification Agreement by and between
the Registrant and its outside directors.
23.1 Consent of Brobeck Phleger & Harrison LLP (included in
Exhibit 5.1).
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ------- DESCRIPTION
<S> <C>
23.2** Consent of Arthur Andersen LLP.
24.1 Powers of Attorney (see Signature Page on Page II-5).
27** Financial Data Schedule.
</TABLE>
- -------------------------
* To be filed by amendment.
** Previously filed.
+ Application has been made to the Commission to seek confidential treatment of
certain provisions. Omitted material for which confidential treatment has
been requested has been filed separately with the Commission.
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
CALDERA SYSTEMS, INC.
The undersigned, a corporation (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes thereinafter stated, under the provisions and subject to the
requirements of the Delaware General Corporation Law (the "DGCL") hereby
certifies the following:
ARTICLE I
The name of the Corporation is Caldera Systems, Inc. (the
"Corporation").
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, and the name of the registered agent at such address is
The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the DGCL.
ARTICLE IV
The name and mailing address of the Sole Incorporator is as follows:
Caldera Systems, Inc.
Attention: Ransom H. Love
President and Chief Executive Officer
240 West Center Street
Orem, UT 84057
ARTICLE V
The total number of shares of capital stock which the Corporation shall
have authority to issue is one hundred million of which twenty-five million
shall be shares of preferred stock, (hereinafter called the "Preferred Stock"),
and seventy-five million shall be shares of common stock, (hereinafter called
the "Common Stock"). The Preferred Stock shall have a par value of one-tenth of
one cent ($0.001) and the Common Stock shall have a par value of one-tenth of
one cent ($0.001) per share.
<PAGE> 2
The designation, powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of each class of stock, and the express grant of authority
to the Board of the Corporation (the "Board") to amend this Certificate of
Incorporation to fix the designation, powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, of each share of the Preferred Stock which are not
fixed by this Certificate of Incorporation, are as follows:
A. PREFERRED STOCK
1. Designation; Consideration.
(a) Designation. There are hereby created out of the authorized and
unissued shares of Preferred Stock of the Corporation (i) a series of Preferred
Stock designated as the "Series A Convertible Preferred Stock," which series
shall consist of 6,596,146 shares of Series A Convertible Preferred Stock and
(ii) a series of Preferred Stock designated as the "Series B Convertible
Preferred Stock," which series shall consist of 5,000,000 shares of Series B
Convertible Preferred Stock. Shares of the Series A Convertible Preferred Stock
are referred to hereinafter as the "Series A Preferred." Shares of Series B
Convertible Preferred Stock are referred to hereinafter as the "Series B
Preferred," and together with the Series A Preferred, the "Preferred Stock."
Once duly issued for the consideration called for by resolution of the Board,
shares of the Preferred Stock shall be deemed fully paid and nonassessable.
(b) Restrictions on Reissuance. All shares of the Preferred Stock,
purchased, redeemed, converted into Common Stock (as provided herein) or
otherwise acquired by the Corporation shall be retired and canceled and shall
not be reissued.
(c) Stated Value Per Share. The initial "Series A Stated Value Per
Share" shall be $4.03 per share. The initial "Series B Stated Value Per Share"
shall be $6.00 per share.
(d) Rank. The Series A Preferred and Series B Preferred shall, with
respect to dividend rights, rights upon liquidation, winding up or dissolution,
and redemption rights, rank on parity with each other and prior to any other
class or series of capital stock of the Corporation, including, without
limitation, all classes of the Common Stock and any other series of the
preferred stock hereinafter created. (All of such classes or series of capital
stock of the Corporation to which the Preferred Stock ranks prior, including,
without limitation, other series of Preferred Stock, the Common Stock, and
including, without limitation, junior securities convertible into or
exchangeable for other junior securities or phantom stock representing junior
securities, are collectively referred to herein in this Section V.A. as "Junior
Securities.").
2. Dividends.
(a) General Obligation. Subject to the provisions of this Paragraph
V.A.2.(a), the record holders of the Preferred Stock shall be entitled to
receive when, as and if declared by the Board and to the extent permitted under
the DGCL, to cumulative and accruing preferential dividends on the shares of
Preferred Stock outstanding, at the rate per share with respect to the Series A
Preferred of 8% per annum, compounded annually, of the Series A Stated Value Per
Share (the "Series A Accruing Dividends") and at the rate per share with respect
to the Series B
2
<PAGE> 3
Preferred of 8% per annum, compounded annually, of the Series B Stated Value Per
Share (the "Series B Accruing Dividends" and together the with Series A Accruing
Dividends, the "Accruing Dividends"); provided, however, solely for purposes of
this Paragraph 2(a), the Series A Stated Value Per Share shall be deemed to be
$6.00 (subject to adjustment as provided herein). No dividends shall be paid on
any share of Common Stock unless a dividend (including the Accruing Dividends)
is paid with respect to all outstanding shares of Preferred Stock in an amount
for each such share of Preferred Stock equal to or greater than the aggregate
amount of such dividends for all shares of Common Stock into which each such
share of Preferred Stock could then be converted.
(b) Payment of Dividends. Any dividend on the Preferred Stock declared
but unpaid as provided in Paragraph V.A.2.(a) shall be paid in cash or property
as determined by the Board. Dividends may be declared and paid at any time to
the holders of record on the record date for such dividend payment.
(c) Non-Cash Dividends. Whenever a dividend of the Corporation shall be
payable in property other than cash, the value of such dividend shall be deemed
to be the fair market value of such property as determined in good faith by the
Board.
3. Liquidation.
(a) General. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, each holder of shares of Series A
Preferred and Series B Preferred then outstanding shall be entitled to receive,
on a pari passu basis based on the Series A Stated Value Per Share and Series B
Stated Value Per Share, as the case may be, out of the assets of the Corporation
legally available for distribution to the shareholders of the Corporation
(whether representing capital or surplus) (the "Available Assets"), before any
payment or distribution shall be made on the Common Stock or any other Junior
Security, but after distribution of such assets among, or payment thereof over
to, creditors of the Corporation, (A) with respect to the Series A Preferred, an
amount for each share held by such holder equal to the greater of (i) the sum of
(1) the Series A Stated Value Per Share plus (2) an amount equal to all Series A
Accruing Dividends unpaid thereon (whether or not declared), computed to the
date payment thereof is made available plus (3) any other dividends declared but
unpaid thereon, and (ii) the amount that such holder of the Series A Preferred
would hold had all shares of Preferred Stock been converted to Common Stock
immediately prior to the time of the liquidation, dissolution or winding up of
the Corporation (the greater of (i) and (ii) being sometimes referred to as the
"Series A Liquidation Preference Payment" and such amount with respect to all
shares of Series A Preferred Stock in the aggregate being sometimes referred to
as the "Series A Liquidation Preference Payments"); and (B) with respect to the
Series B Preferred, an amount for each share held by such holder equal to the
greater of (i) the sum of (1) the Series B Stated Value Per Share plus (2) an
amount equal to all Series B Accruing Dividends unpaid thereon (whether or not
declared), computed to the date payment thereof is made available plus (3) any
other dividends declared but unpaid thereon, and (ii) the amount that such
holder of the Series B Preferred would hold had all shares of Preferred Stock
been converted to Common Stock immediately prior to the time of the liquidation,
dissolution or winding up of the Corporation (the greater of (i) and (ii) being
sometimes referred to as the "Series B Liquidation Preference
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Payment" and such amount with respect to all shares of Series B Preferred Stock
in the aggregate being sometimes referred to as the "Series B Liquidation
Preference Payments").
(b) If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the Available Assets shall be insufficient to
permit the payment to holders of the Series A Preferred and Series B Preferred
their full Series A Liquidation Preference Payments and Series B Liquidation
Preference Payments, then all Available Assets shall be distributed among the
holders of the then outstanding Series A Preferred and Series B Preferred pro
rata, on an equal priority, based upon the Series A Stated Value Per Share and
the Series B Stated Value Per Share.
(c) Upon any liquidation, dissolution or winding up of the Corporation,
immediately after the holders of Preferred Stock have been paid in full the
Series A Liquidation Preference Payments and Series B Liquidation Preference
Payments (as applicable), the remaining net assets of the Corporation available
for distribution shall be distributed among the holders of Junior Securities.
(d) An Acquisition (as defined below) of the Corporation shall be deemed
to be a liquidation, dissolution or winding up of the Corporation within the
meaning of the provisions of this Paragraph 3. For purposes thereof, the term
"Acquisition" shall mean (i) the consolidation or merger of the Corporation into
or with any other entity or entities which results in the exchange of
outstanding shares of the Corporation for securities or other consideration
issued or paid or caused to be issued or paid by any such entity or affiliate
thereof (except (x) a consolidation or merge into a subsidiary or (y) a merger
in which the Corporation is the surviving corporation and the holders of the
Corporation's voting stock outstanding immediately prior to the transaction
constitute a majority of the holders of voting stock outstanding immediately
following the transaction), (ii) the sale or transfer by the Corporation of all
or substantially all its assets in a transaction or a series of related
transactions, or (V) the sale or transfer by the Corporation's stockholders of
capital stock in a transaction or a series of related transactions representing
a majority of the voting power at elections of directors of the Corporation.
.
(e) If any assets of the Corporation distributed to stockholders in
connection with any liquidation, dissolution or winding up of the Corporation
are other than cash, then the value of such assets shall be their fair market
value as determined by the Board in good faith.
(f) Written notice of such liquidation, dissolution or winding up,
stating a payment date and the place where said payments shall be made, shall be
given not less than 20 days prior to the payment date stated therein, to the
holders of record of Preferred Stock, in accordance with the notice provisions
of Paragraph V.A.9 below.
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4. Voting Rights.
(a) Relative to Other Classes. The holders of the Preferred Stock shall
be entitled to notice of all shareholders meetings in accordance with the
Corporation's bylaws, and except as otherwise required by law, the holders of
the Preferred Stock shall be entitled to vote on all matters submitted to the
shareholders of the Corporation for a vote, including the election of directors,
together with the holders of the Common Stock voting together as a single class,
and each share of Preferred Stock (including fractional shares) shall be
entitled to one vote for each whole share of Common Stock that would be issuable
upon conversion of such share on the record date set by the Board for
determining eligibility of holders of Preferred Stock to participate in the
action being taken.
(b) Relative to Other Series. Notwithstanding any provision of the DGCL
granting the holders of the outstanding shares of a class or series rights to
vote as a separate voting group or any other provision of this Certificate of
Incorporation, the holders of the Preferred Stock shall not have the right to
vote as a separate voting group or series with respect to any matter submitted
to the holders of the Preferred Stock (or any series thereof) and shall vote
together as a class on each such matter; provided, however, that except with
respect to matters approved in accordance with Paragraph V.A.4.(c) and/or
Paragraph V.A.5.(b)(i)(B) below, the Corporation shall not amend, alter or
repeal any provision of the Corporation's Certificate of Incorporation in a
manner that would adversely affect the powers, preferences or special rights of
a particular series of Preferred Stock, without the affirmative vote or consent
of such adversely affected series, voting as a separate series.
(c) At any time when at least 25% of the shares of Preferred Stock
originally issued by the Corporation are outstanding, except where the vote or
written consent of the holders of a greater number of shares of the Corporation
is required by law or by the Certificate of Incorporation, and without the
approval of the holders of at least a majority of the then outstanding shares of
Preferred Stock, given in writing or by vote at a meeting, consenting or voting
(as the case may be) together as a class (and not as separate series), the
Corporation shall not:
(i) Sell, abandon, transfer, lease or otherwise dispose of all or
substantially all of its properties or assets;
(ii) Merge or consolidate with or into, or permit any subsidiary to
merge or consolidate with or into, any other corporation, corporations, entity
or entities; or
(iii) Liquidate, dissolve or wind up the Corporation.
5. Conversion Rights.
(a) Optional Conversion.
(i) At any time and from time to time, any holder of Preferred Stock
may convert all or any of the shares of Preferred Stock held by such holder into
fully paid and non-assessable shares of Common Stock as provided herein.
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(ii) Any holder of shares of Preferred Stock desiring to convert any
portion thereof into Common Stock shall surrender each certificate representing
one or more shares of such Preferred Stock to be converted, duly endorsed in
favor of the Corporation or in blank, at the principal business office of the
Corporation (or such other place as may be designated by the Corporation), and
shall give written notice to the Corporation at that office of its election to
convert the same on a signed Election to Convert Preferred Stock into Common
Stock which is set forth on Exhibit A attached hereto setting forth therein the
name or names (with the address or addresses) in which the shares of Common
Stock are to be issued. No conversion under this Paragraph V.A.5.(a) shall be
effective until the shares of Preferred Stock to be converted have been
surrendered to the Corporation in compliance with this Paragraph V.A.5.(a)(ii)
(the date of such surrender being an "Optional Conversion Date").
(b) Automatic Conversion.
(i) Each share of Preferred Stock shall automatically be converted
into fully paid and non-assessable shares of Common Stock, as provided herein,
(A) immediately prior to the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended, covering the offer and sale of Common Stock
for the account of the Corporation at a price per share equal to or greater than
$8.00 and in which the aggregate public offering price (before deduction of
underwriters' discounts and qualifications) equals or exceeds $25,000,000, or
(B) upon the Corporation's receipt of the written consent of the holders of not
less than 75% of the then outstanding shares of the Preferred Stock, voting or
consenting (as the case may be) together as a class, to the conversion of all of
the then outstanding shares of the Preferred Stock under this Paragraph
V.A.5.(b) (each such event an "Automatic Conversion Event," the date of each
such event an "Automatic Conversion Date," and each Optional Conversion Date and
each Automatic Conversion Date, individually, a "Conversion Date").
(ii) Upon the occurrence of any Automatic Conversion Event, the
outstanding shares of Preferred Stock shall be converted into Common Stock
automatically without the need for any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless (A) the certificates
evidencing such shares of Preferred Stock are delivered to the principal
business office of the Corporation (or such other place as may be designated by
the Corporation) as provided below, or (B) the holder notifies the Corporation
(or such other party as may be designated by the Corporation) that such
certificates have been lost, stolen, destroyed or mutilated and the holder
complies with the provisions of Paragraph V.A.8. Upon the occurrence of an
Automatic Conversion Event, the holders of Preferred Stock shall surrender the
certificates representing such shares at the principal business office of the
Corporation (or such other place as may be designated by the Corporation), and
shall thereby become entitled to receive, at such office and in its name as
shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
Preferred Stock surrendered were convertible on the date on which the Automatic
Conversion Event occurred.
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(c) Conversion Price. Each share of the Preferred Stock shall be
convertible in accordance with Paragraph V.A.5.(a) or V.A.5.(b) above into the
number of shares of Common Stock which results from dividing either the Series A
Stated Value Per Share and/or the Series B Stated Value Per Share, as the case
may be, by the Conversion Price for such series of Preferred Stock that is in
effect at the time of conversion. The "Conversion Price" for each share of
Preferred Stock shall mean, initially, with respect to the Series A Preferred,
the Series A Stated Value Per Share and, with respect to the Series B Preferred,
the Series B Stated Value Per Share for such share. The Conversion Price for
each share of Preferred Stock shall be subject to adjustment from time to time
as provided below. Following each adjustment of the Conversion Price with
respect to a share of the Preferred Stock, such adjusted Conversion Price shall
remain in effect until a further adjustment of such Conversion Price hereunder.
(d) Action by Corporation in Relation to Conversion.
(i) As soon as possible after a Conversion Date (but in any event
within fifteen business days in the case of Paragraph V.A.5.(d)(i)(A) below),
the Corporation shall deliver to the converting holder:
(A) a certificate or certificates representing the number of
shares of Common Stock issuable by reason of such conversion in
such name or names and such denomination or denominations as the
converting holder has specified;
(B) payment of the amount payable under Paragraph V.A.5.(d)(iv)
below with respect to such conversion; and
(C) a certificate representing any shares of Preferred Stock
which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion
but which (in the case of an optional conversion) were not
converted.
(ii) The issuance of certificates for shares of Common Stock upon
conversion of shares of Preferred Stock shall be made without charge to the
holders of such Preferred Stock for any issuance tax in respect thereof or other
cost incurred by the Corporation in connection with such conversion and the
related issuance of shares of Common Stock.
(iii) The Corporation shall not close its books against the transfer
of Preferred Stock or of Common Stock issued or issuable upon conversion of the
Preferred Stock in any manner which interferes with the timely conversion of
Preferred Stock. The Corporation shall assist and cooperate (but the Corporation
shall not be required to expend substantial efforts or funds) with any holder of
Preferred Stock required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of shares of
Preferred Stock hereunder (including, without limitation, making any filings
required to be made by the Corporation).
(iv) If any fractional interest in a share of Common Stock would,
except for the provisions of this Paragraph V.A.5.(d)(iv), be deliverable upon
any conversion of shares of a
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holder's Preferred Stock, the Corporation, in lieu of delivering the fractional
share therefor, shall pay an amount to the holder thereof equal to an amount
bearing the same ratio to the fair market value of a whole share of Common
Stock, as determined in good faith by the Board, as the fractional interest to
which the shareholder would otherwise be entitled bears to a whole share of
Common Stock.
(v) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon the conversion of the Preferred Stock, not less than
the number of shares of Common Stock issuable upon the conversion of all
outstanding shares of Preferred Stock. All shares of Common Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to ensure that all such shares of
Common Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance).
(e) Adjustments for Certain Events.
(i) Adjustment Upon Common Stock Event. Upon the happening of a
Common Stock Event (as hereinafter defined), the Conversion Price for each
series of the Preferred Stock shall, simultaneously with the happening of such
Common Stock Event, be adjusted by multiplying the Conversion Price for such
series in effect immediately prior to such Common Stock Event by a fraction, (A)
the numerator of which shall be the number of shares of Common Stock issued and
outstanding immediately prior to such Common Stock Event, and (B) the
denominator of which shall be the number of shares of Common Stock issued and
outstanding immediately after such Common Stock Event, and the product so
obtained shall thereafter be the Conversion Price for such shares. The
Conversion Price for each share of the Preferred Stock shall be readjusted in
the same manner upon the happening of each subsequent Common Stock Event. As
used herein, the term the "Common Stock Event" shall mean at any time or from
time to time after the original date of issuance of the Preferred Stock (the
"Issuance Date"), (X) the issuance by the Corporation of additional shares of
Common Stock as a dividend or other distribution on outstanding Common Stock,
(Y) a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock, or (Z) a combination of the outstanding shares
of Common Stock into a smaller number of shares of Common Stock.
(ii) Adjustments for Other Dividends and Distributions. If at any
time or from time to time after the Issuance Date the Corporation pays a
dividend or makes another distribution to the holders of the Common Stock
payable in securities of the Corporation, other than an event constituting a
Common Stock Event, then in each such event, provision shall be made so that the
holders of the Preferred Stock shall receive upon the Conversion Date, in
addition to the number of shares of Common Stock receivable upon the Conversion
Date, the amount of securities of the Corporation which they would have received
had their Preferred Stock been converted into Common Stock on the date of such
dividend or distribution (or record date for such dividend or distribution, as
applicable) and had they thereafter, during the period from the date of such
dividend or distribution (or such record date, as applicable) to and
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including the Conversion Date, retained such securities receivable by them as
aforesaid during such period, subject to all other adjustments called for during
such period under this Paragraph V.A.5. with respect to the rights of the
holders of the Preferred Stock or with respect to such other securities by their
terms.
(iii) Adjustment for Recapitalization, Reclassification, Exchange
and Substitution. If at any time or from time to time after the Issuance Date
the Common Stock issuable upon the conversion of the Preferred Stock is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than by a
Common Stock Event or a stock dividend, reorganization, merger, consolidation or
sale of assets provided for elsewhere in this Paragraph V.A.5.), then in any
such event each holder of the Preferred Stock shall have the right thereafter to
convert such stock into the kind and amount of stock and other securities and
property receivable upon such recapitalization, reclassification or other change
by holders of the number of shares of Common Stock into which such shares of the
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(iv) Adjustment for Reorganizations, Mergers and Consolidations. If
at any time or from time to time after the Issuance Date there is a
reorganization of the Corporation (other than a recapitalization, subdivision,
dividend, combination, reclassification or exchange of shares provided for
elsewhere in this Paragraph V.A.5.(e)), a merger or consolidation of the
Corporation with or into another entity, or a sale of all or substantially all
of the assets of the Corporation, then, as a part of such reorganization,
merger, consolidation or sale of all or substantially all of the assets,
provision shall be made so that the holders of the Preferred Stock thereafter
shall be entitled to convert the Preferred Stock into the amount and kind of
shares of stock or other securities or property of the Corporation, or of such
successor corporation resulting from such reorganization, merger, consolidation
or sale of assets, receivable by a holder of the number of shares of Common
Stock into which such shares of the Preferred Stock could have been converted
immediately prior to such reorganization, merger, consolidation or sale of
assets. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Paragraph V.A.5.(e) with respect to the
rights of the holders of the Preferred Stock after the reorganization, merger,
consolidation or sale of assets to the end that the provisions of this Paragraph
V.A.5.(e) (including adjustment of the Conversion Price then in effect and
number of shares issuable upon conversion of the Preferred Stock) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable. This Paragraph V.A.5.(e)(iv) shall similarly apply to
successive reorganizations, mergers, consolidations and sales of assets.
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(f) Sale of Shares of Common Stock Below Preferred Stock Conversion
Price.
(i) Preferred Stock Conversion Price Adjustment Formula. If at any
time or from time to time after the Issuance Date the Corporation issues or
sells, or is deemed by the provisions of this Paragraph V.A.5.(f) to have issued
or sold, Additional Shares of Common Stock (as hereinafter defined), otherwise
than in connection with a Common Stock Event as provided in Paragraph
V.A.5.(e)(i), a dividend or distribution as provided in Paragraph V.A.5.(e)(ii),
a recapitalization, reclassification or other change as provided in Paragraph
V.A.5.(e)(V) or a reorganization, merger, consolidation or sale of assets as
provided in Paragraph V.A.5.(e)(iv), for an Effective Price (as hereinafter
defined) that is less than the Conversion Price for a share of the Series A
Preferred and/or the Series B Preferred in effect immediately prior to such
issue or sale (or deemed issue or sale), then, and in each such case, the
Conversion Price for the applicable shares of Series A Preferred and/or the
Series B Preferred shall be reduced, as of the close of business on the date of
such issue or sale, to the Adjusted Price (which shall be the new Conversion
Price after any such adjustment).
(ii) Certain Definitions. For the purpose of making any adjustment
required under this Paragraph V.A.5.(f):
(A) The "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Corporation, whether
or not subsequently reacquired or retired by the
Corporation, other than:
(1) shares of Common Stock issued or issuable upon
conversion of the outstanding shares of the Series A
Preferred and Series B Preferred;
(2) up to 6,700,000 shares of Common Stock (or options,
warrants or rights therefor) granted or issued
hereafter to employees, officers, directors,
contractors, consultants or advisers to the Corporation
or any majority-owned subsidiary of the Corporation
pursuant to incentive agreements, stock purchase or
stock option plans, stock bonuses or awards, warrants,
contracts or other arrangements that are approved by
the Board;
(3) shares of such Common Stock issued upon exercise or
conversion of any option, warrant or other convertible
security outstanding as of the Issuance Date;
(4) shares of Common Stock issued pursuant to an Automatic
Conversion Event; and
(5) in connection with (i) any borrowings, direct or
indirect, from financial institutions or other persons
by the Corporation, whether or not presently
authorized, including
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any type of loan or payment evidenced by any type of
debt instrument, if such borrowing, loan or debt
instrument is approved by the Board, (ii) any
transaction with vendors or customers or to other
persons in similar commercial situations with the
Corporation if such issuance is approved by the Board,
or (iii) obtaining lease financing, whether issued to a
lessor, guarantor or other person if such issuance is
approved by the Board; provided that the aggregate
number of shares of Common Stock deemed issued pursuant
to (i), (ii) and (iii) above does not exceed five
percent (5%) of the aggregate number of shares of
Common Stock then outstanding plus the aggregate number
of shares of Common Stock issuable upon the exercise,
conversion or exchange of any Common Stock Equivalents
Outstanding.
(B) The "Aggregate Consideration Received" by the Corporation
for any issue or sale (or deemed issue or sale) of
securities shall (1) to the extent it consists of cash, be
computed at the gross amount of cash received by the
Corporation before deduction of any reasonable underwriting
or similar commissions, compensation or concessions paid or
allowed by the Corporation in connection with such issue or
sale and without deduction of any reasonable expenses
payable by the Corporation; (2) to the extent it consists
of property other than cash, be computed at the fair value
of that property as determined in good faith by the Board;
and (3) if Additional Shares of Common Stock, Convertible
Securities or Rights or Options to purchase either
Additional Shares of Common Stock or Convertible Securities
are issued or sold together with other stock or securities
or other assets of the Corporation for a consideration
which covers both, be computed as the portion of the
consideration so received that may be reasonably determined
in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities
or Rights or Options.
(C) The "Common Stock Equivalents Outstanding" shall mean the
number of shares of Common Stock that is equal to the sum
of (1) all shares of Common Stock of the Corporation that
are outstanding at the time in question, plus (2) all
shares of Common Stock of the Corporation issuable upon
conversion of all shares of Preferred Stock or other
Convertible Securities that are outstanding at the time in
question, plus (3) all shares of Common Stock of the
Corporation that are issuable upon the exercise of Rights
or Options that are outstanding at the time in question
assuming the full conversion or exchange into shares of the
Common Stock of
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all such Rights or Options that are Rights or Options to
purchase or acquire Convertible Securities.
(D) The "Convertible Securities" shall mean stock or other
securities convertible into or exchangeable for shares of
the Common Stock.
(E) The "Effective Price" of Additional Shares of Common Stock
shall mean the quotient determined by dividing the total
number of Additional Shares of Common Stock issued or sold,
or deemed to have been issued or sold, by the Corporation
under this Paragraph V.A.5.(f), into the Aggregate
Consideration Received, or deemed to have been received, by
the Corporation under this Paragraph V.A.5.(f), for the
issue of such Additional Shares of Common Stock;
(F) The "Rights or Options" shall mean warrants, options or
other rights to purchase or acquire shares of the Common
Stock or Convertible Securities.
(G) The "Adjusted Price" shall be equal to a price determined
by multiplying the applicable Conversion Price then in
effect by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately
prior to the issuance of Additional Shares of Common Stock
plus the number of shares of Common Stock that the
Aggregate Consideration Received by the Corporation for
such issuance would purchase at such applicable Conversion
Price (prior to adjustment), and the denominator of which
shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of
shares of such Additional Shares of Common Stock.
(iii) Deemed Issuances. For the purpose of making any adjustment to
the Conversion Price of any share of Preferred Stock required under this
Paragraph V.A.5.(f), if the Corporation issues or sells any Rights or Options or
Convertible Securities and if the Effective Price of the shares of Common Stock
issuable upon exercise of such Rights or Options and/or the conversion or
exchange of Convertible Securities (computed without reference to any additional
or similar protective or antidilution clauses) is less than the Conversion Price
then in effect for such series of Preferred Stock, then the Corporation shall be
deemed to have issued, at the time of the issuance of such Rights or Options or
Convertible Securities, that number of Additional Shares of Common Stock that is
equal to the maximum number of shares of Common Stock issuable upon exercise or
conversion of such Rights or Options or Convertible Securities upon their
issuance and to have received, as the Aggregate Consideration Received for the
issuance of such shares, an amount equal to the total amount of the
consideration, if any, received by the Corporation for the issuance of such
Rights or Options or Convertible Securities, plus, in the case of such Rights or
Options, the minimum amounts of consideration, if any, payable to the
Corporation upon the exercise in full of such Rights or Options, plus, in the
case of Convertible
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Securities, the minimum amounts of consideration, if any, payable to the
Corporation (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities) upon the conversion or exchange thereof;
provided that:
(A) if the minimum amounts of such consideration cannot be
ascertained, but are a function of antidilution or similar
protective clauses, then the Corporation shall be deemed to
have received the minimum amounts of consideration without
reference to such clauses;
(B) if the minimum amount of consideration payable to the
Corporation upon the exercise of Rights or Options or the
conversion or exchange of Convertible Securities is reduced
over time or upon the occurrence or non-occurrence of
specified events other than by reason of antidilution or
similar protective adjustments, then the Effective Price
shall be recalculated using the figure to which such
minimum amount of consideration is reduced; and
(C) if the minimum amount of consideration payable to the
Corporation upon the exercise of such Rights or Options or
the conversion or exchange of Convertible Securities is
subsequently increased, then the Effective Price shall
again be recalculated using the increased minimum amount of
consideration payable to the Corporation upon the exercise
of such Rights or Options or the conversion or exchange of
such Convertible Securities.
No further adjustment of the Conversion Price for a share of the Preferred
Stock, adjusted upon the issuance of such Rights or Options or Convertible
Securities, shall be made as a result of the actual issuance of shares of Common
Stock on the exercise of any such Rights or Options or the conversion or
exchange of any such Convertible Securities. If any such Rights or Options or
the conversion rights represented by any such Convertible Securities shall
expire without having been fully exercised, then the Conversion Price for a
share of the Preferred Stock as adjusted upon the issuance of such Rights or
Options or Convertible Securities shall be readjusted to the Conversion Price
for such series which would have been in effect had an adjustment been made on
the basis that the only shares of Common Stock deemed to have been issued were
the shares of Common Stock, if any, that were actually issued or sold on the
exercise of such Rights or Options or rights of conversion or exchange of such
Convertible Securities, and such shares of Common Stock deemed to have been
issued, if any, were issued or sold for the consideration actually received by
the Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such Rights or Options,
whether or not exercised, plus the consideration received for issuing or selling
all such Convertible Securities actually converted or exchanged, plus the
consideration, if any, actually received by the Corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion or exchange of such Convertible Securities,
provided
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that such readjustment shall not apply to conversions of Preferred Stock made
prior such readjustment.
6. Rights to Distributions. If at any time the Corporation shall declare
a distribution payable in securities of any other person, evidence of
indebtedness issued by the Corporation or any other person, assets (excluding
cash dividends) or options or rights to purchase any such securities or
evidences of indebtedness, pro-rata to all of the record holders of any class of
Junior Securities, then, in each such case the holder of the Preferred Stock
shall be entitled to a proportionate share of any such distribution as though
the holders of the Preferred Stock were the holders of the number of Common
Stock of the Corporation in which their respective shares of Preferred Stock are
convertible as of the date of the record date fixed for the determination of the
holders of the Common Stock of the Corporation entitled to receive such
distribution.
7. Transfer. The Corporation shall keep at its principal office a
register for the registration of issuances and transfers of Preferred Stock.
Upon the surrender of any certificate representing Preferred Stock at such
place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of Preferred Stock represented by the surrendered
certificate. Each such new certificate shall be registered in such name and
shall represent such number of shares of Preferred Stock as is requested by the
holder of the surrendered certificate and shall be substantially identical in
form to the surrendered certificate, and dividends shall accrue on the Preferred
Stock represented by such new certificate from the date to which dividends have
been fully paid on such Preferred Stock represented by the surrendered
certificate.
8. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an appropriate affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of Preferred Stock, and in the case of any
such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor, its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of Preferred Stock represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Preferred Stock
represented by such new certificate from the date to which dividends have been
fully paid on the shares of Preferred Stock represented by such lost, stolen,
destroyed or mutilated certificate.
9. Notices.
(a) Immediately upon any adjustment of the applicable Conversion
Price, the Corporation shall give written notice thereof to all holders of the
applicable series of Preferred Stock, setting forth in reasonable detail and
certifying the calculation of such adjustment.
14
<PAGE> 15
(b) The Corporation shall give written notice to all holders of
Preferred Stock at least 10 days prior to the date on which the Corporation
closes its books or fixes a record date (i) with respect to any dividend or
distribution upon Common Stock, (ii) with respect to any pro rata subscription
offer to holders of Common Stock or (iii) for determining rights to vote with
respect to any liquidation.
(c) Except as otherwise expressly provided hereunder, all notices
referred to in this Article V shall be in writing and shall be delivered by
registered or certified mail, return receipt requested and postage prepaid, or
by reputable overnight courier service, charges prepaid, and shall be deemed to
have been given the third day following the date when so mailed or the date
designated for delivery when so sent by courier (i) to the Corporation, at its
principal executive offices and (ii) to any stockholder, at such holder's
address as it appears in the stock records of the Corporation (unless otherwise
indicated by any such holder).
10. No Impairment. The Corporation shall not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Preferred against
impairment.
B. COMMON STOCK
1. Dividends. Subject to the rights of the holders of the Preferred
Stock, and subject to any other provisions of this Certificate of Incorporation,
holders of shares of the Common Stock shall be entitled to receive such
dividends and other distributions in cash, stock or property of the Corporation
as may be declared thereon by the Board from time to time out of assets or funds
of the Corporation legally available therefor.
2. Liquidation; Dissolution. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation and after payment or provision for payment to the
holders of each series of the Preferred Stock of all amounts required in
accordance with Paragraph V.A, the remaining assets and funds of the Corporation
shall be divided among and paid to the holders of the Common Stock.
3. Voting.
(a) At every meeting of the shareholders every holder of shares of the
Common Stock shall be entitled to one vote in person or by proxy for each share
of such Common Stock standing in his name on the stock transfer records of the
Corporation.
(b) No shareholder shall have the right to cumulate votes in the
election of directors.
4. Preemptive Rights. No holder of shares of the Common Stock of the
Corporation shall, as such holder, be entitled as of right to subscribe for,
purchase or receive any part of any new or additional issue of stock of any
class, whether now or hereafter authorized, or of bonds, debentures or other
securities convertible into or exchangeable for stock, but all such additional
15
<PAGE> 16
shares of stock of any class, or bonds, debentures or other securities
convertible into or exchangeable for stock, may be issued and disposed of by the
Board on such terms and for such consideration, so far as may be permitted by
law, and to such persons, as the Board in its absolute discretion may deem
advisable.
ARTICLE VI
A director of the Corporation shall, to the fullest extent permitted
by the DGCL as it now exists or as it may hereafter be amended, not be
personally liable 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 involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
or (iv) for any transaction from which the director derived any improper
personal benefit. If the DGCL is amended, after approval by the stockholders of
this Article V, to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.
Any amendment, repeal or modification of this Article V, or the
adoption of any provision of this Certificate of Incorporation inconsistent with
this Article V by the stockholders of the Corporation shall not apply to or
adversely affect any right or protection of a director of the Corporation
existing at the time of such amendment, repeal, modification or adoption.
ARTICLE VII
To the fullest extent permitted by applicable law, the Corporation
is authorized to provide indemnification of (and advancement of expenses to)
agents of the Corporation (and any other persons to which State law permits the
Corporation to provide indemnification) through Bylaw provisions, agreements
with such agents or other persons, vote of stockholders or disinterested
directors or otherwise, in excess of the indemnification and advancement
otherwise permitted by Section 145 of the DGCL, subject only to limits created
by applicable State law (statutory or non-statutory), with respect to actions
for breach of duty to the Corporation, its stockholders, and others.
Any amendment, repeal or modification of the foregoing provision of
this Article VII shall not adversely affect any right or protection of a
director, officer, agent, or other person existing at the time of, or increase
the liability of any director of this Corporation with respect to any acts or
omissions of such director, officer or agent occurring prior to, such amendment,
repeal, modification or adoption.
ARTICLE VIII
The Corporation reserves the right to adopt, amend, alter,
supplement, rescind or repeal in any respect any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute or applicable law, and all rights conferred upon stockholders herein are
granted subject to this reservation.
16
<PAGE> 17
ARTICLE IX
Subject to the provisions of Article V hereof, the Board of
Directors may from time to time adopt, amend, alter, supplement, rescind or
repeal any or all of the Bylaws of the Corporation without any action on the
part of the stockholders; provided, however, that the stockholders may adopt,
amend or repeal any Bylaw adopted by the Board of Directors, and no amendment or
supplement to the Bylaws adopted by the Board of Directors shall vary or
conflict with any amendment or supplement adopted by the stockholders.
ARTICLE X
Subject to the provisions of Article V, the number of directors of
the Corporation shall be set from time to time by resolution of the Board of
Directors.
ARTICLE XI
Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
ARTICLE XII
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any statutory requirements) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of Directors
or in the Bylaws of the Corporation.
17
<PAGE> 18
IN WITNESS WHEREOF, this Certificate of Incorporation has been executed
by Caldera Systems, Inc. as of this 3rd day of March, 2000.
CALDERA SYSTEMS, INC.
(A UTAH CORPORATION)
By: /s/ RANSOM H. LOVE
-----------------------------------------
Ransom H. Love, President and Chief
Executive Officer
18
<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CALDERA SYSTEMS, INC.
(Pursuant to Sections 228, 242 and 245 of the
General Corporation Law of the State of Delaware)
Caldera Systems, Inc. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"General Corporation Law"),
DOES HEREBY CERTIFY:
FIRST: That the Corporation filed its original Certificate of
Incorporation with the Secretary of State of Delaware on March 6, 2000, under
the name Caldera Systems, Inc.
SECOND: That the Board of Directors duly adopted resolutions
proposing to amend and restate the Certificate of Incorporation of the
Corporation, declaring said amendment and restatement to be advisable and in the
best interests of the Corporation and its stockholders, and authorizing the
appropriate officers of the Corporation to solicit the consent of the
stockholders of the issued and outstanding Common Stock, $0.001 par value, and
Preferred Stock, $0.001 par value, voting as a single class and as separate
classes, all in accordance with the applicable provisions of Sections 228, 242
and 245 of the General Corporation Law of the State of Delaware;
THIRD: That the resolution setting forth the proposed amendment and
restatement is as follows:
"RESOLVED, that the Amended and Restated Certificate of
Incorporation of the Corporation be amended and restated in its entirety as
follows:
ARTICLE I
Name
The name of the Corporation is Caldera Systems, Inc.
ARTICLE II
Registered Office
The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle, and the name of the registered agent at such
address is The Corporation Trust Company.
1.
<PAGE> 2
ARTICLE III
Powers/Term
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law. The Corporation is to have perpetual existence.
ARTICLE IV
Capital Stock
A. Classes of Stock. The Corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares which the Corporation is authorized to issue
is 100,000,000 shares. 75,000,000 shares, par value $0.001 per share, shall be
Common Stock and 25,000,000 shares, par value $0.001 per share, shall be
Preferred Stock. The consideration for the issuance of the shares shall be paid
to or received by the Corporation in full before their issuance and shall not be
less than the par value per share. The number of authorized shares of Common
Stock may be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of a majority of the
stock of the Corporation entitled to vote, irrespective of the provisions of
Section 242(b)(2) of the General Corporation Law of Delaware.
B. Common Stock.
(1) General. All shares of Common Stock will be identical and will
entitle the holders thereof to the same rights, powers and privileges. The
rights, powers and privileges of the holders of the Common Stock are subject to
and qualified by the rights of holders of any then outstanding Preferred Stock.
(2) Dividends. Dividends may be declared and paid on the Common
Stock from funds lawfully available therefor as and when determined by the Board
of Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
(3) Dissolution, Liquidation or Winding Up. In the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, each issued and outstanding share of Common
Stock shall entitle the holder thereof to receive an equal portion of the net
assets of the Corporation available for distribution to the holders of Common
Stock, subject to any preferential rights of any then outstanding Preferred
Stock.
(4) Voting Rights. Except as otherwise required by law or this
Amended and Restated Certificate of Incorporation, each holder of Common Stock
shall have one vote in respect of each share of stock held of record by such
holder on the books of the Corporation for the election of directors and on all
matters submitted to a vote of stockholders of the Corporation. Except as
otherwise required by law or provided herein, holders of Preferred Stock
2.
<PAGE> 3
shall vote together with holders of Common Stock as a single class, subject to
any special or preferential voting rights of any then outstanding Preferred
Stock. There shall be no cumulative voting.
(5) Redemption. The Common Stock is not redeemable.
C. Preferred Stock. The Board of Directors is authorized, subject to
limitations prescribed by law, by the rules of a national securities exchange,
if applicable, and by the provisions of this ARTICLE IV, to provide for the
issuance of the shares of Preferred Stock in series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish from time
to time the number of shares to be included in each such series, and to fix the
designation, powers, preferences, and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(1) The number of shares constituting that series and the
distinctive designation of that series;
(2) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of that
series;
(3) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
(4) Whether that series shall have conversion privileges, and, if
so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;
(5) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different conditions
and at different redemption dates;
(6) Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and amount of such
sinking fund;
(7) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights or priority, if any, of payment of shares
of that series; and
(8) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
3.
<PAGE> 4
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
D. Preemptive Rights. No holder of any of the shares of any class or
series of stock or of options, warrants or other rights to purchase shares of
any class or series of stock or of other securities of the Corporation shall
have any preemptive right to purchase or subscribe for any unissued stock of any
class or series, or any unissued bonds, certificates of indebtedness, debentures
or other securities convertible into or exchangeable for stock of any class or
series or carrying any right to purchase stock of any class or series; but any
such unissued stock, bonds, certificates or indebtedness, debentures or other
securities convertible into or exchangeable for stock or carrying any right to
purchase stock may be issued pursuant to resolution of the Board of Directors of
the Corporation to such persons, firms, corporations or associations, whether or
not holders thereof, and upon such terms as may be deemed advisable by the Board
of Directors in the exercise of its sole discretion.
ARTICLE V
Directors
A. Number. The number of directors of the Corporation shall be such
number, not less than five (5) nor more than fifteen (15) (exclusive of
directors, if any, to be elected by holders of preferred stock of the
Corporation, voting separately as a class), as shall be set forth from time to
time in the bylaws. Vacancies in the Board of Directors of the Corporation,
however caused, and newly created directorships shall be filled by a vote of a
majority of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for a term expiring at the annual meeting
of stockholders at which the term of the class to which the director has been
chosen expires and when the director's successor is elected and qualified.
B. Removal of Directors. Notwithstanding any other provisions of
this Certificate or the bylaws of the Corporation, any director or the entire
Board of Directors of the Corporation may be removed, at any time, but only for
cause and only by the affirmative vote of the holders of not less than a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this purpose as
one class) cast at a meeting of the stockholders called for that purpose.
Notwithstanding the foregoing, whenever the holders of any one or more series of
preferred stock of the Corporation shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the preceding
provisions of this ARTICLE V shall not apply with respect to the director or
directors elected by such holders of preferred stock.
ARTICLE VI
Stockholder Meetings
4.
<PAGE> 5
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation. The stockholders of the
Corporation may not take any action by written consent in lieu of a meeting.
ARTICLE VII
Limitation of Directors' Liability
Except to the extent that the General Corporation Law of Delaware
prohibits the elimination or limitation of liability of directors for breaches
of fiduciary duty, no director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, notwithstanding any provision of law imposing such
liability. If the General Corporation Law is amended after approval by the
stockholders of this ARTICLE VII to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as so
amended. No amendment to or repeal of this provision shall apply to or have any
effect on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
such amendment.
ARTICLE VIII
Indemnification
The Corporation may, to the fullest extent permitted by Section 145
of the General Corporation Law of Delaware, as amended from time to time,
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was, or has agreed to become, a director or officer of the Corporation, or
is or was serving, or has agreed to serve, at the request of the Corporation, as
a director, officer or trustee of, or in a similar capacity with, another
corporation, partnership, joint venture, trust or other enterprise (including
any employee benefit plan) (all such persons being referred to hereafter as an
"Indemnitee"), or by reason of any action alleged to have been taken or omitted
in such capacity, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
on his behalf in connection with such action, suit or proceeding and any appeal
therefrom.
Indemnification may include payment by the Corporation of expenses
in defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by the Indemnitee to repay
such payment if it is ultimately determined that such person is not entitled to
indemnification under this ARTICLE VIII, which undertaking may be accepted
without reference to the financial ability of such person to make such
repayment.
5.
<PAGE> 6
The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the Corporation.
The indemnification rights provided in this ARTICLE VIII (i) shall
not be deemed exclusive of any other rights to which Indemnitees may be entitled
under any law, agreement or vote of stockholders or disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs, executors and
administrators of such persons. The Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than, those
set forth in this ARTICLE VIII.
ARTICLE IX
Amendment of Bylaws
In furtherance of and not in limitation of powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
adopt, repeal, alter, amend and rescind the bylaws of the Corporation by vote of
a majority of the Board of Directors. In addition, the bylaws may be amended by
the affirmative vote of the holders of at least two-thirds of the outstanding
shares of voting stock of the Corporation entitled to vote at an election of
directors.
ARTICLE X
Amendment of Certificate
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute and this
Amended and Restated Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation. Notwithstanding the
foregoing, the provisions set forth in ARTICLES V, VI, VII, VIII, IX and this
ARTICLE X may not be repealed, altered, amended or rescinded in any respect
unless the same is approved by the affirmative vote of the holders of not less
than two-thirds of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for this
purpose as a single class) cast at a meeting of the stockholders called for that
purpose (provided that notice of such proposed repeal, alteration, amendment or
rescission is included in the notice of such meeting).
* * *
FOURTH: That said amendments were duly adopted in accordance with
the provisions of Section 242 and 245 of the General Corporation Law.
6.
<PAGE> 7
IN WITNESS WHEREOF, this Amended and Restated Certificate of
Incorporation has been signed by the President and the Secretary of the
Corporation this __th day of March, 2000.
-----------------------------------------
Ransom H. Love
President and Chief Executive Officer
-----------------------------------------
Alan J. Hansen
Secretary
7.
<PAGE> 1
EXHIBIT 3.3
B Y L A W S
OF
CALDERA SYSTEMS, INC.
A DELAWARE CORPORATION
2000
<PAGE> 2
T A B L E O F C O N T E N T S
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 1 OFFICES...................................................................1
1.1 Business Offices..........................................................1
1.2 Registered Office.........................................................1
ARTICLE 2 STOCKHOLDERS..............................................................1
2.1 Annual Stockholder Meeting................................................1
2.2 Special Stockholder Meetings..............................................1
2.3 Place of Stockholder Meeting..............................................2
2.4 Notice of Stockholder Meeting.............................................2
2.5 Fixing of Record Date.....................................................3
2.6 Stockholder List..........................................................4
2.7 Stockholder Quorum and Voting Requirements................................4
2.8 Proxies...................................................................4
2.9 Voting of Shares..........................................................5
2.10 Corporation's Acceptance of Votes.........................................5
2.11 Informal Action by Stockholders...........................................6
2.12 Voting for Directors......................................................7
2.13 Stockholder's Rights to Inspect Corporate Records.........................7
2.14 Furnishing Financial Statements to a Stockholder..........................9
2.15 Information Respecting Shares.............................................9
ARTICLE 3 BOARD OF DIRECTORS........................................................9
3.1 General Powers............................................................9
3.2 Number, Tenure, and Qualifications of Directors...........................9
3.3 Regular Meetings of the Board of Directors...............................10
3.4 Special Meetings of the Board of Directors...............................10
3.5 Notice and Waiver of Notice of Special Director Meetings.................10
3.6 Director Quorum..........................................................10
3.7 Manner of Acting.........................................................11
3.8 Director Action Without a Meeting........................................11
3.9 Removal of Directors.....................................................11
3.10 Board of Director Vacancies..............................................11
3.11 Director Compensation....................................................12
3.12 Director Committees......................................................12
3.13 Director's Rights to Inspect Corporate Records...........................13
3.14 General Standards of Conduct for Directors...............................14
ARTICLE 4 OFFICERS.................................................................15
4.1 Number of Officers.......................................................15
4.2 Appointment and Term of Office...........................................15
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
4.3 Removal of Officers......................................................15
4.4 Chairman of the Board....................................................15
4.5 Chief Executive Officer..................................................15
4.6 President................................................................16
4.7 Vice Presidents..........................................................16
4.8 Secretary................................................................16
4.9 Treasurer................................................................17
4.10 Assistant Secretaries and Assistant Treasurers...........................17
4.11 Salaries.................................................................17
4.12 General Standards of Conduct for Officers................................17
ARTICLE 5 LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, FIDUCIARIES, AND AGENTS.......................................18
5.1 Limitation of Liability of Directors and Officers........................18
5.2 Indemnification of Directors and Officers................................18
5.3 Effect of Repeal or Modification of Article V............................18
5.4 Insurance................................................................18
ARTICLE 6 CERTIFICATES FOR SHARES AND THEIR TRANSFER...............................19
6.1 Certificates for Shares..................................................19
6.2 Shares Without Certificates..............................................19
6.3 Registration of Transfer of Shares.......................................20
6.4 Restrictions on Transfer of Shares Permitted.............................20
6.5 Acquisition of Shares....................................................21
ARTICLE 7 DISTRIBUTIONS............................................................21
7.1 Distributions............................................................21
ARTICLE 8 CORPORATE SEAL...........................................................21
8.1 Corporate Seal...........................................................21
ARTICLE 9 FISCAL YEAR..............................................................21
9.1 Fiscal Year..............................................................21
ARTICLE 10 AMENDMENTS...............................................................22
10.1 Amendments...............................................................22
</TABLE>
-ii-
<PAGE> 4
BYLAWS
OF
CALDERA SYSTEMS, INC.
ARTICLE 1
OFFICES
1.1 Business Offices. The principal office of CALDERA SYSTEMS, Inc., a
Delaware corporation (the "Corporation"), shall be located at any place either
within or outside the State of Delaware, as designated in the Corporation's
Certificate of Incorporation or the Corporation's most recent annual report on
file with the Delaware Secretary of State providing such information. The
Corporation may have such other offices, either within or outside the State of
Delaware as the Board of Directors may designate or as the business of the
Corporation may require from time to time. The Corporation shall maintain at its
principal office a copy of those records specified in Section 2.13 of Article II
of these Bylaws.
1.2 Registered Office. The registered office of the Corporation required
by the Delaware General Corporation Law shall be located within the State of
Delaware. The address of the registered office may be changed from time to time.
ARTICLE 2
STOCKHOLDERS
2.1 Annual Stockholder Meeting. An annual meeting of the Stockholders
shall be held each year on the date, at the time, and at the place, fixed by the
Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting.
2.2 Special Stockholder Meetings. Special meetings of the Stockholders
may be called, for any purposes described in the notice of the meeting, by the
president, or by the Board of Directors, and shall be called by the president at
the request of the holders of not less than one-tenth of all outstanding votes
of the Corporation entitled to be cast on any issue at the meeting.
2.3 Place of Stockholder Meeting. The Board of Directors may designate
any place, either within or outside the State of Delaware, as the place for any
annual meeting of the
<PAGE> 5
Stockholders and for any special meeting of the Stockholders called by the Board
of Directors. The president of the Corporation or any Stockholder or any group
of Stockholders of the Corporation holding at least ten percent (10%) of all of
the voting shares of the Corporation may designate any place, within or outside
the State of Delaware, as the place for any special meeting of the Stockholders
called by the president or the group of Stockholders. If no designation is made
by the Board of Directors, the president, or the Stockholders, as the case may
be, the place of the meeting shall be the principal office of the Corporation.
2.4 Notice of Stockholder Meeting.
(a) Required Notice. Written notice stating the place, day, and hour
of any annual or special Stockholder meeting shall be delivered not less than
ten nor more than sixty days before the date of the meeting, either personally
or by mail, by or at the direction of the Board of Directors, the president, or
other persons calling the meeting, to each Stockholder of record entitled to
vote at such meeting, and to any other Stockholder entitled by the Delaware
General Corporation Law or the Corporation's Certificate of Incorporation to
receive notice of the meeting. Notice shall be deemed to be effective when
mailed.
Notice shall not be required to be given to any Stockholder to whom:
(i) A notice of two consecutive annual meetings, and all notices
of meetings or of the taking of action by written consent without a meeting
during the period between the two consecutive annual meetings, have been mailed,
addressed to the Stockholder at the Stockholder's address as shown on the
records of the Corporation, and have been returned undeliverable; or
(ii) At least two payments, if sent by first class mail, of
dividends or interest on securities during a twelve month period, have been
mailed, addressed to the Stockholder at the Stockholder's address as shown on
the records of the Corporation, and have been returned undeliverable.
If a Stockholder to whom notice is not required delivers to the
Corporation a written notice setting forth the Stockholder's current address, or
if another address for the Stockholder is otherwise made known to the
Corporation, the requirement that notice be given to the Stockholder is
reinstated.
(b) Adjourned Meeting. If any Stockholder meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place, if the new date, time, or place is announced at the meeting before
adjournment. However, if the adjournment is for more than 30 days, or if after
the adjournment a new record date for the adjourned meeting is or must be fixed
(see Section 2.5 of these Bylaws), then notice must be given pursuant to the
requirements of paragraph (a) of this Section 2.4 to Stockholders of record who
are entitled to vote at the meeting.
(c) Waiver of Notice. Any Stockholder may waive notice of a meeting
(or any notice required by the Delaware General Corporation Law, the
Corporation's Certificate of
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Incorporation, or these Bylaws), by a writing signed by the Stockholder, which
is delivered to the Corporation (either before or after the date and time stated
in the notice as the date or time when any action will occur or has occurred)
for inclusion in the minutes or filing with the Corporation's records.
A Stockholder's attendance at a meeting:
(i) Waives objection to lack of notice or defective notice of
the meeting, unless the Stockholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting; and
(ii) Waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the Stockholder objects to considering the matter when it is
presented.
(d) Contents of Notice. Notice of any special meeting of the
Stockholders shall include a description of the purpose or purposes for which
the meeting is called. Except as provided in this Section 2.4(d), in the
Certificate of Incorporation, or in the Delaware General Corporation Law, notice
of an annual meeting of the Stockholders need not include a description of the
purpose or purposes for which the meeting is called.
2.5 Fixing of Record Date. For the purpose of determining Stockholders
of any voting group entitled to notice of or to vote at any meeting of
Stockholders, or Stockholders entitled to take action without a meeting or to
demand a special meeting, or Stockholders entitled to receive payment of any
distribution or dividend, or in order to make a determination of Stockholders
for any other proper purpose, the Board of Directors may fix in advance a date
as the record date. Such record date shall not be more than seventy days prior
to the date on which the particular action, requiring such determination of
Stockholders, is to be taken. If no record date is so fixed by the Board of
Directors, the record date shall be at the close of business:
(a) with respect to an annual meeting of the Stockholders or any
special meeting of the Stockholders called by the Board of Directors or any
person or group specifically authorized by these Bylaws to call a meeting of the
Stockholders, as of the close of business on the day before the first notice is
delivered to Stockholders;
(b) with respect to a special Stockholder meeting demanded by the
Stockholders, on the earliest date of any of the demands pursuant to which the
meeting is called, or 60 days prior to the date the first of the written demands
is received by the Corporation, whichever is later;
(c) with respect to actions taken in writing without a meeting
(pursuant to Section 2.11 of these Bylaws), on the date the first Stockholder
delivers to the Corporation a signed written consent upon which the action is
taken;
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(d) with respect to a distribution to Stockholders (other than one
involving a repurchase or reacquisition of shares), on the date the Board of
Directors authorizes the distribution; and
(e) with respect to the payment of a share dividend, on the date the
Board of Directors authorizes the share dividend.
When a determination of Stockholders entitled to vote at any meeting
of Stockholders has been made as provided in this Section, such determination
shall apply to any adjournment thereof unless the Board of Directors fixes a new
record date, which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
2.6 Stockholder List. The secretary shall make a complete record of the
Stockholders entitled to vote at each meeting of Stockholders, arranged in
alphabetical order within each class or series, with the address of and the
number of shares held by each. The list must be arranged by voting group (if
such exists; see Section 2.7 of these Bylaws) and within each voting group by
class or series of shares. The Stockholder list must be available for inspection
by any Stockholder, beginning on the earlier of ten days before the meeting for
which the list was prepared or two business days after notice of the meeting is
given and continuing through the meeting and any adjournments. The list shall be
available at the Corporation's principal office or at a place identified in the
notice of the meeting in the city where the meeting is to be held. A
Stockholder, his agent, or attorney is entitled on written demand to inspect
and, subject to the requirements of Section 2.13 of these Bylaws, to inspect and
copy the list during regular business hours and during the period it is
available for inspection. The Corporation shall maintain the Stockholder list in
written form or in another form capable of conversion into written form within a
reasonable time.
2.7 Stockholder Quorum and Voting Requirements. If the Certificate of
Incorporation or the Delaware General Corporation Law provide for voting by a
single voting group on a matter, action on that matter is taken when voted upon
by that voting group.
Shares entitled to vote as a separate voting group may take action
on a matter at a meeting only if a quorum of those shares exists with respect to
that matter. Unless the Certificate of Incorporation, a Bylaw adopted by the
Stockholders pursuant to the Delaware General Corporation Law, or the Delaware
General Corporation Law provide otherwise, at least two-thirds (2/3) of the
votes entitled to be cast on the matter by the voting group constitutes a quorum
of that voting group for action on that matter.
If the Certificate of Incorporation or the Delaware General
Corporation Law provide for voting by two or more voting groups on a matter,
action on that matter is taken only when voted upon by each of those voting
groups counted separately. One voting group may vote on a matter even though
another voting group entitled to vote on the matter has not voted.
Once a share is represented for any purpose at a meeting, including
the purpose of determining that a quorum exists, it is deemed present for quorum
purposes for the remainder of
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the meeting and for any adjournment of that meeting, unless a new record date is
or must be set for that adjourned meeting.
If a quorum exists, action on a matter (other than the election of
directors) by a voting group is approved if at least two-thirds (2/3) of the
votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless the Certificate of Incorporation, a Bylaw adopted by
the Stockholders pursuant to the Delaware General Corporation Law, or the
Delaware General Corporation Law require a greater number of affirmative votes.
2.8 Proxies. At all meetings of Stockholders, a Stockholder may vote in
person or by a proxy executed in any lawful manner. Such proxy shall be filed
with the Corporation before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution unless otherwise
provided in the proxy.
2.9 Voting of Shares. Unless otherwise provided in the Certificate of
Incorporation, each outstanding share entitled to vote shall be entitled to one
vote, and each fractional share shall be entitled to a corresponding fractional
vote, upon each matter submitted to a vote at a meeting of Stockholders.
Except as provided by specific court order, no shares of the
Corporation held by another corporation, if a majority of the shares entitled to
vote for the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting of the Corporation or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting. However, the power of the Corporation to vote any
shares, including its own shares, held by it in a fiduciary capacity is not
hereby limited.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders thereof and a sum sufficient to redeem the
shares has been deposited with a bank, trust company, or other financial
institution under an irrevocable obligation to pay the holders the redemption
price on surrender of the shares.
2.10 Corporation's Acceptance of Votes.
(a) If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation corresponds to the name of a
Stockholder, the Corporation, if acting in good faith, is entitled to accept the
vote, consent, waiver, proxy appointment, or proxy appointment revocation and
give it effect as the act of the Stockholder.
(b) If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation does not correspond to the name of
a Stockholder, the Corporation, if acting in good faith, is nevertheless
entitled to accept the vote, consent, waiver, proxy appointment, or proxy
appointment revocation and give it effect as the act of the Stockholder if:
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(i) The Stockholder is an entity as defined in the Delaware
General Corporation Law and the name signed purports to be that of an officer or
agent of the entity;
(ii) the name signed purports to be that of an administrator,
executor, guardian, or conservator representing the Stockholder and, if the
Corporation requests, evidence of fiduciary status acceptable to the Corporation
has been presented with respect to the vote, consent, waiver, proxy appointment,
or proxy appointment revocation;
(iii) the name signed purports to be that of a receiver or
trustee in bankruptcy of the Stockholder and, if the Corporation requests,
evidence of this status acceptable to the Corporation has been presented with
respect to the vote, consent, waiver, proxy appointment, or proxy appointment
revocation;
(iv) the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the Stockholder and, if the Corporation
requests, evidence acceptable to the Corporation of the signatory's authority to
sign for the Stockholder has been presented with respect to the vote, consent,
waiver, proxy appointment, or proxy appointment revocation;
(v) two or more persons are the Stockholder as cotenants or
fiduciaries and the name signed purports to be the name of at least one of the
cotenants or fiduciaries and the person signing appears to be acting on behalf
of all the cotenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy
appointment, or proxy appointment revocation is otherwise proper under rules
established by the Corporation that are not inconsistent with the provisions of
this Section 2.10.
(c) If shares of the Corporation are registered in the names of two
or more persons, or if two or more persons have the same fiduciary relationship
respecting the same shares, unless the secretary is given written notice to the
contrary and furnished with a copy of the instrument creating the relationship,
their acts with respect to voting shall have the following effect:
(i) If only one votes, the act binds all;
(ii) if more than one vote, the act of the majority so voting
binds all;
(iii) if more than one vote, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionately; and
(iv) if the instrument so filed or the registration of the
shares shows that any tenancy is held in unequal interests, a majority or even
split for the purpose of this Section 2.10 shall be a majority or even split in
interest.
(d) The Corporation is entitled to reject a vote, consent, waiver,
proxy appointment, or proxy appointment revocation if the secretary or other
officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the Stockholder.
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(e) The Corporation and its officer or agent who accepts or rejects
a vote, consent, waiver, proxy appointment, or proxy appointment revocation in
good faith and in accordance with the standards of this Section 2.10 are not
liable in damages to the Stockholder for the consequences of the acceptance or
rejection.
(f) Corporate action based on the acceptance or rejection of a vote,
consent, waiver, proxy appointment, or proxy appointment revocation under this
Section 2.10 is valid unless a court of competent jurisdiction determines
otherwise.
2.11 Informal Action by Stockholders.
(a) Unless otherwise provided in the Certificate of Incorporation,
any action which may be taken at any annual or special meeting of Stockholders
may be taken without a meeting and without prior notice if one or more consents
in writing, setting forth the action so taken, are signed by the holders of
outstanding shares having not less than the minimum number of votes necessary to
authorize or take the action at a meeting at which all shares entitled to vote
thereon were present and voted.
(b) Unless written consents of all Stockholders entitled to vote
have been obtained, the Corporation shall give notice of any Stockholder
approval without a meeting at least ten days before the consummation of the
action authorized by the approval to:
(i) Those Stockholders entitled to vote who have not consented
in writing; and
(ii) those Stockholders not entitled to vote and to whom the
Delaware General Corporation Law requires notice be given.
Such notice shall contain or be accompanied by the same material
that would have been required if a formal meeting had been called to consider
the action.
(c) Any Stockholder giving a written consent, or the Stockholders'
proxyholder, or a transferee of the shares or a personal representative of the
Stockholder or their respective proxyholder, may revoke the consent by a signed
writing describing the action and stating that the Stockholder's prior consent
is revoked, if the writing is received by the Corporation prior to the
effectiveness of the action.
(d) Action taken pursuant to this Section 2.11 is not effective
unless all written consents on which the Corporation relies for the taking of
action are received by the Corporation within a sixty day period and are not
revoked. Action thus taken is effective as of the date the last written consent
necessary to effect the action is received by the Corporation, unless all the
written consents necessary to effect the action specify a later date as the
effective date of action. If the Corporation has received written consents
signed by all Stockholders entitled to vote with respect to the action, the
effective date of the action may be any date that is specified in all the
written consents as the effective date of the action. The writing may be
received by the Corporation by electronically transmitted facsimile or other
form of
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communication providing the Corporation with a complete copy thereof, including
a copy of the signature.
(e) Notwithstanding Subsection (a) of this Section 2.11, directors
may not be elected by written consent except by unanimous written consent of all
shares entitled to vote for the election of directors.
(f) Action taken under this Section 2.11 has the same effect as
action taken at a meeting of Stockholders and may be so described in any
document.
2.12 Voting for Directors. At each election of directors, unless
otherwise provided in the Certificate of Incorporation or the Delaware General
Corporation Law, every Stockholder entitled to vote at the election has the
right to vote, in person or by proxy, all of the votes to which the
Stockholder's shares are entitled for as many persons as there are directors to
be elected and for whose election the Stockholder has the right to vote.
Unless otherwise provided in the Certificate of Incorporation or the
Delaware General Corporation Law, directors are elected by at least two-thirds
(2/3) of the votes cast by the shares entitled to be voted in the election, at a
meeting at which a quorum is present.
2.13 Stockholder's Rights to Inspect Corporate Records.
(a) Minutes and Accounting Records. The Corporation shall keep as
permanent records minutes of all meetings of its Stockholders and Board of
Directors, a record of all actions taken by its Stockholders or Board of
Directors without a meeting, a record of all actions taken on behalf of the
Corporation by a committee of the Board of Directors in place of the Board of
Directors, and a record of all waivers of notices of meetings of its
Stockholders, meetings of the Board of Directors, or any meetings of committees
of the Board of Directors. The Corporation shall maintain appropriate accounting
records.
(b) Absolute Inspection Rights of Records Required at Principal
Office. If a Stockholder gives the Corporation written notice of the
Stockholder's demand at least five business days before the date on which the
Stockholder wishes to inspect and copy, a Stockholder (or the Stockholder's
agent or attorney) has the right to inspect and copy, during regular business
hours, any of the following records, all of which the Corporation is required to
keep at its principal office:
(i) The Corporation's Certificate of Incorporation currently in
effect;
(ii) the Corporation's Bylaws currently in effect;
(iii) the minutes of all Stockholders' meetings, and records of
all action taken by Stockholders without a meeting, for the past three years;
(iv) all written communications within the past three years to
Stockholders as a group or to the holders of any class or series of shares as a
group;
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(v) a list of the names and business addresses of the
Corporation's current officers and directors;
(vi) the Corporation's most recent annual report delivered to
the Delaware Secretary of State; and
(vii) all financial statements prepared for periods ending
during the last three years that a Stockholder could request pursuant to the
Delaware General Corporation Law.
(c) Conditional Inspection Right. If a Stockholder gives the
Corporation a written demand made in good faith and for a proper purpose at
least five business days before the date on which the Stockholder wishes to
inspect and copy, the Stockholder describes with reasonable particularity the
Stockholder's purpose and the records the Stockholder desires to inspect, and
the records are directly connected with the Stockholder's purpose, the
Stockholder (or the Stockholder's agent or attorney) is entitled to inspect and
copy, during regular business hours at a reasonable location specified by the
Corporation, any of the following records of the Corporation:
(i) Excerpts from:
(A) Minutes of any meeting of the Board of Directors,
records of any action of a committee of the Board of
Directors while acting on behalf of the Corporation in place
of the Board of Directors;
(B) minutes of any meeting of the Stockholders;
(C) records of action taken by the Stockholders without a
meeting; and
(D) waivers of notices of any meeting of the Stockholders,
of any meeting of the Board of Directors, or of any meeting
of a committee of the Board of Directors;
(ii) accounting records of the Corporation; and
(iii) the record of the Corporation's Stockholders referred to
in the Delaware General Corporation Law.
(d) Copy Costs. The right to copy records includes, if reasonable,
the right to receive copies made by photographic, xerographic, or other means.
The Corporation may impose a reasonable charge, payable in advance, covering the
costs of labor and material, for copies of any documents provided to a
Stockholder. The charge may not exceed the estimated cost of production or
reproduction of the records.
(e) Stockholder Includes Beneficial Owner. For purposes of this
Section 2.14, the term "Stockholder" shall include a beneficial owner whose
shares are held in a voting trust and any other beneficial owner who establishes
beneficial ownership.
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2.14 Furnishing Financial Statements to a Stockholder. Upon the written
request of any Stockholder, the Corporation shall mail to the Stockholder its
most recent annual or quarterly financial statements showing in reasonable
detail its assets and liabilities and the results of its operations.
2.15 Information Respecting Shares. Upon the written request of any
Stockholder, the Corporation, at its own expense, shall mail to the Stockholder
information respecting the designations, preferences, limitations, and relative
rights applicable to each class of shares, the variations determined for each
series, and the authority of the Board of Directors to determine variations for
any existing or future class or series. The Corporation may comply by mailing
the Stockholder a copy of its Certificate of Incorporation containing such
information.
ARTICLE 3
BOARD OF DIRECTORS
3.1 General Powers. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Corporation managed under,
the direction of the Board of Directors, subject to any limitation set forth in
the Certificate of Incorporation or in any agreement authorized by the Delaware
General Corporation Law.
3.2 Number, Tenure, and Qualifications of Directors.
(a) Number. The number of directors of the Corporation shall be not
less than three (3) nor more than fifteen (15) except in the event that there
are less than three (3) Stockholders of the Corporation entitled to vote for the
election of directors in which case the number of directors may equal the number
of such voting Stockholders of the Corporation. Within this range, the
Stockholders or the Board of Directors initially shall fix the number of
directors of the Corporation. Thereafter, again within this range, the number of
directors of the Corporation may be changed and re-established, from time to
time, by the Stockholders or the Board of Directors of the Corporation.
Alternatively, if the Stockholders of the Corporation elect a new Board of
Directors of the Corporation and the total number of directors elected are
within the range set by this Section 3.2 but are more or less than the number of
directors of the Corporation previously fixed by the Stockholders or the Board
of Directors of the Corporation, then such number of directors shall be deemed
to be the fixed number of directors of the Corporation (until such time as the
Stockholders or the Board of Directors of the Corporation change said number of
directors by the methods described herein) even though such number has not been
expressly fixed by resolution of the Stockholders or the Board of Directors of
the Corporation. Notwithstanding a change in the number of directors of the
Corporation implemented by any of the methods described in this Section 3.2, no
decrease in the number of directors of the Corporation may shorten the term of
any incumbent director.
(b) Tenure. Each director shall hold office until the next annual
meeting of Stockholders or until removed. However, if a director's term expires,
the director shall continue
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to serve until the director's successor shall have been elected and qualified,
or until there is a decrease in the number of directors.
(c) Qualifications. Directors need not be residents of the State of
Delaware or Stockholders of the Corporation unless the Certificate of
Incorporation so prescribe.
3.3 Regular Meetings of the Board of Directors. The Board of Directors
may provide, by resolution, the time and place, either within or outside the
State of Delaware, for the holding of regular meetings, which shall be held
without other notice than such resolution.
3.4 Special Meetings of the Board of Directors. Special meetings of the
Board of Directors may be called by or at the request of one (1) of the
directors, who may fix any place, either within or outside the State of
Delaware, as the place for holding the meeting.
3.5 Notice and Waiver of Notice of Special Director Meetings. Unless the
Certificate of Incorporation provide for a longer or shorter period, special
meetings of the Board of Directors must be preceded by at least two days notice,
either orally or in writing, of the date, time, and place of the meeting.
Notice of any meeting of the Board of Directors shall be deemed to
be effective at the earliest of: (1) When received; (2) five days after it is
mailed; or (3) the date shown on the return receipt if sent by registered or
certified mail, return receipt requested, and the receipt is signed by or on
behalf of the director.
A director may waive notice of any meeting. Except as in this
Section 3.5 provided, the waiver must be in writing and signed by the director
entitled to the notice. The waiver shall be delivered to the Corporation for
filing with the corporate records, but delivery and filing are not conditions to
its effectiveness.
The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except when a director attends a meeting for the
express purpose of objecting to the transaction of any business and at the
beginning of the meeting, or promptly upon arrival, the director objects to
holding the meeting or transacting business at the meeting because of lack of
notice or defective notice, and does not thereafter vote for or assent to action
taken at the meeting.
A director who attends a special meeting to object to lack of notice
shall not be deemed to be present for quorum purposes.
3.6 Director Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, unless the Certificate of Incorporation require a greater number.
A majority of the number of directors prescribed by resolution (or
if no number is prescribed, the number in office immediately before the meeting
begins) shall constitute a quorum for the transaction of business at any meeting
of the Board of Directors, unless the Certificate of Incorporation require a
greater number.
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3.7 Manner of Acting. The act of the majority of the directors present
at a meeting at which a quorum is present when the vote is taken shall be the
act of the Board of Directors, unless the Certificate of Incorporation require a
greater percentage.
Unless the Certificate of Incorporation provide otherwise, any or
all directors may participate in a regular or special meeting by, or conduct the
meeting through the use of, any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A director
participating in a meeting by this means is deemed to be present in person at
the meeting.
A director who is present at a meeting of the Board of Directors
when corporate action is taken is considered to have assented to the action
taken, unless:
(a) The director objects at the beginning of the meeting, or
promptly upon arrival, to holding it or transacting business at the meeting;
(b) the director contemporaneously requests his dissent or
abstention as to any specific action to be entered into the minutes of the
meeting; or
(c) the director causes written notice of a dissent or abstention as
to any specific action to be received by the presiding officer of the meeting
before its adjournment or by the Corporation promptly after adjournment of the
meeting.
The right of dissent or abstention as to a specific action is not
available to a director who votes in favor of the action taken.
3.8 Director Action Without a Meeting. Unless the Certificate of
Incorporation or the Delaware General Corporation Law provide otherwise, any
action required or permitted to be taken by the Board of Directors at a meeting
may be taken without a meeting if all the directors consent to the action in
writing. Action is taken by consents at the time the last director signs a
writing describing the action taken, unless, prior to that time, any director
has revoked a consent by a writing signed by the director and received by the
secretary. Action taken by consents is effective when the last director signs
the consent, unless the Board of Directors establishes a different effective
date. Action taken by consents has the same effect as action taken at a meeting
of directors and may be described as such in any document.
3.9 Removal of Directors. The Stockholders may remove one or more
directors at a meeting called for that purpose if notice has been given that a
purpose of the meeting is such removal. The removal may be with or without
cause, unless the Certificate of Incorporation provide that directors may only
be removed with cause. If a director is elected by a voting group of
Stockholders, only the Stockholders of that voting group may participate in the
vote to remove the director. If cumulative voting is in effect, a director may
not be removed if the number of votes sufficient to elect the director under
cumulative voting is voted against the director's removal. If cumulative voting
is not in effect, a director may be removed only if the number of votes cast to
remove the director exceeds the number of votes cast not to remove the director.
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3.10 Board of Director Vacancies.
(a) Unless the Certificate of Incorporation provide otherwise, if a
vacancy occurs on the Board of Directors, including a vacancy resulting from an
increase in the number of directors:
(i) The Stockholders may fill the vacancy;
(ii) the Board of Directors may fill the vacancy; or
(iii) if the directors remaining in office constitute fewer than
a quorum of the board, they may fill the vacancy by the affirmative vote of a
majority of all the directors remaining in office.
(b) Unless the Certificate of Incorporation provide otherwise, if
the vacant office was held by a director elected by a voting group of
Stockholders:
(i) If one or more directors were elected by the same voting
group, only they are entitled to vote to fill the vacancy if it is filled by the
directors; and
(ii) only the holders of shares of that voting group are
entitled to vote to fill the vacancy if it is filled by the Stockholders.
A vacancy that will occur at a specific later date, because of a
resignation effective at a later date, may be filled before the vacancy occurs,
but the new director may not take office until the vacancy occurs.
If a director's term expires, the director shall continue to serve
until the director's successor is elected and qualified or until there is a
decrease in the number of directors. The term of a director elected to fill a
vacancy expires at the next Stockholders' meeting at which directors are
elected.
3.11 Director Compensation. Unless otherwise provided in the Certificate
of Incorporation, by resolution of the Board of Directors, each director may be
paid his expenses, if any, of attendance at each meeting of the Board of
Directors, and may be paid a stated salary as a director or a fixed sum for
attendance at each meeting of the Board of Directors or both. No such payment
shall preclude any director from serving the Corporation in any capacity and
receiving compensation therefor.
3.12 Director Committees.
(a) Creation of Committees. Unless the Certificate of Incorporation
provide otherwise, the Board of Directors may create an Executive Committee and
such other committees as the Board of Directors deems appropriate and appoint
members of the Board of Directors to serve on them. Each committee must have two
or more members, who serve at the pleasure of the Board of Directors.
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(b) Selection of Members. The creation of a committee and
appointment of members to it must be approved by the greater of:
(i) A majority of all the directors in office when the action is
taken; or
(ii) the number of directors required by the Certificate of
Incorporation to take such action, or if not specified in the Certificate of
Incorporation the number required by Section 3.7 of these Bylaws to take action.
(c) Required Procedures. Sections 3.4 through 3.9 of these Bylaws,
which govern meetings, action without a meeting, notice, waiver of notice, and
quorum and voting requirements of the Board of Directors, apply to committees
and their members as well.
(d) Authority. Unless limited by the Certificate of Incorporation,
each committee may exercise those aspects of the authority of the Board of
Directors which the Board of Directors confers upon such committee in the
resolution creating the committee.
(e) Authority of Executive Committee. The Executive Committee shall
have, and may exercise all powers of the Board of Directors with respect to the
management of the business and affairs of the Corporation during the intervals
between the meetings of the Board of Directors, unless otherwise limited by the
Board of Directors. Provided, however, the Executive Committee shall not have
the power to fill vacancies on the Board of Directors or to amend these Bylaws.
3.13 Director's Rights to Inspect Corporate Records.
(a) Absolute Inspection Rights of Records Required at Principal
Office. If a director gives the Corporation written notice of the director's
demand at least five business days before the date on which the director wishes
to inspect and copy, the director (or the director's agent or attorney) has the
right to inspect and copy, during regular business hours, any of the following
records, all of which the Corporation is required to keep at its principal
office:
(i) The Corporation's Certificate of Incorporation currently in
effect;
(ii) the Corporation's Bylaws currently in effect;
(iii) the minutes of all Stockholders' meetings, and records of
all action taken by Stockholders without a meeting, for the past three years;
(iv) all written communications within the past three years to
Stockholders as a group or to the holders of any class or series of shares as a
group;
(v) a list of the names and business addresses of the
Corporation's current officers and directors;
(vi) the Corporation's most recent annual report delivered to
the Secretary of State; and
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(vii) all financial statements prepared for periods ending
during the last three years that a Stockholder could request.
(b) Conditional Inspection Right. In addition, if a director gives
the Corporation a written demand made in good faith and for a proper purpose at
least five business days before the date on which the director wishes to inspect
and copy, the director describes with reasonable particularity the director's
purpose and the records the director desires to inspect, and the records are
directly connected with the director's purpose, the director (or the director's
agent or attorney) is entitled to inspect and copy, during regular business
hours at a reasonable location specified by the Corporation, any of the
following records of the Corporation:
(i) Excerpts from:
(A) Minutes of any meeting of the Board of Directors,
records of any action of a committee of the Board of
Directors while acting on behalf of the Corporation in place
of the Board of Directors;
(B) minutes of any meeting of the Stockholders;
(C) records of action taken by the Stockholders without a
meeting; and
(D) waivers of notices of any meeting of the Stockholders,
of any meeting of the Board of Directors, or of any meeting
of a committee of the Board of Directors;
(ii) accounting records of the Corporation; and
(iii) the record of the Corporation's Stockholders referred to
in the Delaware General Corporation Law.
(c) Copy Costs. The right to copy records includes, if reasonable,
the right to receive copies made by photographic, xerographic, or other means.
The Corporation may impose a reasonable charge, payable in advance, covering the
costs of labor and material, for copies of any documents provided to the
director. The charge may not exceed the estimated cost of production or
reproduction of the records.
3.14 General Standards of Conduct for Directors. The standards of
conduct for the directors of the Corporation shall be as follows:
(a) Each director shall discharge his or her duties as a director,
including duties as a member of a committee, (i) in good faith, (ii) with the
care an ordinarily prudent person in a like position would exercise under
similar circumstances, and (iii) in a manner the director reasonably believes to
be in the best interests of the Corporation. The Board of Directors and
Stockholders of the Corporation understand that the members of the Board of
Directors may have other business interests, activities and responsibilities
that take a substantial portion of their time and attention. Accordingly, the
members of the Board of Directors are required to devote to the business of the
Corporation in fulfillment of their respective
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responsibilities as a director of the Corporation only the time and attention
that they shall unilaterally deem necessary in order to fulfill their
responsibilities as a director.
(b) In discharging his or her duties, a director is entitled to rely
on information, opinions, reports, or statements including financial statements
and other financial data, if prepared or presented by:
(i) one or more officers or employees of the Corporation whom
the director reasonably believes to be reliable and competent in the matters
presented;
(ii) legal counsel, public accountants, or other persons as to
matters the director reasonably believes are within the person's professional or
expert competence; or
(iii) a committee of the board of directors of which the
director is not a member, if the director reasonably believes the committee
merits confidence.
(c) A director is not acting in good faith if he or she has
knowledge concerning the matter in question that makes reliance otherwise
permitted by paragraph (b) of this Section 3.15 unwarranted.
(d) A director is not liable for any action taken, or any failure to
take any action as a director, if the duties of the director have been performed
in compliance with this Section 3.15.
(e) The standards of conduct set forth in this Section 3.14, or any
breach of such standards, shall not affect the right or power of the Corporation
to indemnify any individual pursuant to Article 5 of these Bylaws.
ARTICLE 4
OFFICERS
4.1 Number of Officers. The officers of the Corporation shall be a
president, a secretary, and a treasurer, each of whom shall be appointed by the
Board of Directors. Such other officers and assistant officers as may be deemed
necessary, including any chairman of the board, chief executive officer and any
vice presidents, may be appointed by the Board of Directors. If specifically
authorized by the Board of Directors, an officer may appoint one or more
officers or assistant officers. The same individual may simultaneously hold more
than one office in the Corporation.
4.2 Appointment and Term of Office. The officers of the Corporation
shall be appointed by the Board of Directors for such term as is determined by
the Board of Directors. The designation of a specified term does not grant to
the officer any contract rights, and the Board of Directors can remove the
officer at any time prior to the end of such term. If no term is specified, each
officer shall hold office until the officer resigns, dies, or until removed in
the manner provided in Section 4.3 of these Bylaws.
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4.3 Removal of Officers. Any officer or agent may be removed by the
Board of Directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer or agent shall not of itself create contract rights.
4.4 Chairman of the Board. The chairman of the board, if any, shall have
the following powers and duties:
(a) To be the senior officer of the Corporation and, in addition to
the duties specified in this Section 4.4, to perform such duties as may be
assigned to him by the Board of Directors;
(b) to preside at all meetings of the Stockholders of the
Corporation;
(c) to preside at all meetings of the Board of Directors;
(d) to be a member of the Executive Committee, if any.
4.5 Chief Executive Officer. The chief executive officer, if there be
such an officer, shall possess all of the powers that the Board of Directors may
see fit to delegate to the chief executive officer and he or she shall perform
all of the duties that may be prescribed by the Board of Directors from time to
time.
4.6 President. The president shall be the principal executive officer of
the Corporation and, subject to the control of the Board of Directors, shall, in
general, supervise and control all of the business and affairs of the
Corporation. The president shall when present and in the absence of the chairman
of the board of the Corporation preside at all meetings of the Stockholders and
of the Board of Directors. The president may sign, with the secretary or any
other proper officer of the Corporation authorized by the Board of Directors,
certificates for shares of the Corporation, the issuance of which shall have
been authorized by a resolution of the Board of Directors, and deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the Board of Directors from time to time. The president shall be a
member of the Executive Committee, if any, of the Corporation.
4.7 Vice Presidents. If appointed, in the absence of the president or in
the event of his death, inability, or refusal to act, the vice president (or in
the event there be more than one vice president, the vice presidents in the
order designated at the time of their election, or in the absence of any
designation, then in the order of their appointment) shall perform the duties of
the president, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the president. If there is no vice president, then
the treasurer shall perform such duties of the president. Any vice president may
sign, with the secretary or an assistant secretary, certificates for shares of
the Corporation the issuance of which have been authorized by
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resolution of the Board of Directors; and shall perform such other duties as
from time to time may be assigned to him or her by the president or by the Board
of Directors.
4.8 Secretary. The secretary shall:
(a) Keep the minutes of the proceedings of the Stockholders and of
the Board of Directors and the other records and information of the Corporation
required to be kept, in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law;
(c) be custodian of the corporate records and of any seal of the
Corporation;
(d) when requested or required, authenticate any records of the
Corporation;
(e) keep a register of the post office address of each Stockholder
which shall be furnished to the secretary by such Stockholder;
(f) sign with the chairman of the board, president, or a
vice-president, certificates for shares of the Corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors;
(g) have general charge of the stock transfer books of the
Corporation; and
(h) in general perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him or
her by the president or by the Board of Directors.
4.9 Treasurer. The treasurer shall:
(a) Have charge and custody of and be responsible for all funds and
securities of the Corporation;
(b) receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the name
of the Corporation in such banks, trust companies, or other depositaries as
shall be selected by the Board of Directors; and
(c) in general perform all of the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him or
her by the president or by the Board of Directors.
If required by the Board of Directors, the treasurer shall give a
bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
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4.10 Assistant Secretaries and Assistant Treasurers. The assistant
secretaries, when authorized by the Board of Directors, may sign, with the
chairman of the board, president or a vice president, certificates for shares of
the Corporation, the issuance of which shall have been authorized by a
resolution of the Board of Directors. The assistant treasurers shall, if
required by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of Directors shall
determine. The assistant secretaries and assistant treasurers, in general, shall
perform such duties as shall be assigned to them by the secretary or the
treasurer, respectively, or by the president or the Board of Directors.
4.11 Salaries. The salaries of the officers shall be fixed from time to
time by the Board of Directors.
4.12 General Standards of Conduct for Officers. The standards of conduct
for the officers of the Corporation shall be as follows:
(a) Each officer with discretionary authority shall discharge his or
her duties under that authority (i) in good faith, (ii) with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances, and (iii) in a manner the officer reasonably believes to be in
the best interests of the Corporation.
(b) In discharging his or her duties, an officer is entitled to rely
on information, opinions, reports, or statements including financial statements
and other financial data, if prepared or presented by:
(i) one or more officers or employees of the Corporation whom
the officer reasonably believes to be reliable and competent in the matters
presented; or
(ii) legal counsel, public accountants, or other persons as to
matters the officer reasonably believes are within the person's professional or
expert competence.
(c) An officer is not acting in good faith if he or she has
knowledge concerning the matter in question that makes reliance otherwise
permitted by paragraph (b) of this Section 5.12 unwarranted.
(d) An officer is not liable for any action taken, or any failure to
take any action as an officer if the duties of the office have been performed in
compliance with this Section 5.12.
(e) The standards of conduct set forth in this Section 5.12, or any
breach of such standards, shall not affect the right or power of the Corporation
to indemnify any individual pursuant to Article 6 of these Bylaws.
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ARTICLE 5
LIMITATION OF LIABILITY AND INDEMNIFICATION OF
DIRECTORS, OFFICERS, EMPLOYEES, FIDUCIARIES, AND AGENTS
5.1 Limitation of Liability of Directors and Officers. The personal
liability of the directors and officers of the Corporation to the Corporation or
its Stockholders, or to any third person, shall be eliminated or limited to the
fullest extent as from time to time permitted by Delaware law.
5.2 Indemnification of Directors and Officers. Unless otherwise provided
in the Certificate of Incorporation, the Corporation shall indemnify any
individual made a party to a proceeding because the individual is or was a
director or officer of the Corporation against liability incurred in such
proceeding to the fullest extent as from time to time permitted by Delaware law.
5.3 Effect of Repeal or Modification of Article V. Any repeal or
modification of this Article V by the Stockholders of the Corporation shall not
adversely affect any right or protection of any person existing at the time of
such repeal or modification.
5.4 Insurance. The Corporation may purchase and maintain liability
insurance on behalf of a person who is or was a director, officer, employee,
fiduciary, or agent of the Corporation, or who, while serving as a director,
officer, employee, fiduciary, or agent of the Corporation, is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee, fiduciary, or agent of another foreign or domestic corporation or
other person, or of an employee benefit plan, against liability asserted against
or incurred by him or her in that capacity or arising from his or her status as
a director, officer, employee, fiduciary, or agent, whether or not the
Corporation would have power to indemnify him or her against the same liability
under the Delaware General Corporation Law. Insurance may be procured from any
insurance company designated by the Board of Directors, whether the insurance
company is formed under the laws of the State of Delaware or any other
jurisdiction of the United States or elsewhere, including any insurance company
in which the Corporation has an equity or any other interest through stock
ownership or otherwise.
ARTICLE 6
CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 Certificates for Shares.
(a) Content. Certificates representing shares of the Corporation
shall, at a minimum, state on their face the name of the Corporation and that
the Corporation is organized under the laws of the State of Delaware; the name
of the person to whom issued; and the number and class of shares and the
designation of the series, if any, the certificate represents; and be in such
form as is determined by the Board of Directors. Such certificates shall be
signed by the chairman of board, president or a vice president and by the
secretary or an assistant secretary and
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may be sealed with the corporate seal or a facsimile thereof. The signatures of
the officers may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the Corporation itself or an
employee of the Corporation. Each certificate for shares shall be consecutively
numbered or otherwise identified. The certificates may contain any other
information the Corporation considers necessary or appropriate.
(b) Legend as to Class or Series. If the Corporation is authorized
to issue different classes of shares or different series within a class, the
designations, preferences, limitations, and relative rights applicable to each
class, the variations in preferences, limitations, and relative rights
determined for each series, and the authority of the Board of Directors to
determine variations for any existing or future class or series must be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the Corporation
will furnish the Stockholder this information on request in writing and without
charge.
(c) Stockholder List. The name and address of the person to whom the
shares represented are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation.
(d) Transferring Shares. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed, or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the Corporation as the Board of Directors may prescribe.
6.2 Shares Without Certificates.
(a) Issuing Shares Without Certificates. Unless the Certificate of
Incorporation provide otherwise, the Board of Directors may authorize the
issuance of some or all of the shares of any or all classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the Corporation.
(b) Information Statement Required. Within a reasonable time after
the issuance or transfer of shares without certificates, the Corporation shall
send the Stockholder a written statement containing, at a minimum, the name of
the Corporation and that it is organized under the laws of the State of
Delaware; the name of the person to whom issued; and the number and class of
shares and the designation of the series, if any, of the issued shares. If the
Corporation is authorized to issue different classes of shares or different
series within a class, the written statement shall describe the designations,
preferences, limitations, and relative rights applicable to each class, the
variations in preferences, limitations, and relative rights determined for each
series, and the authority of the Board of Directors to determine variations for
any existing or future class or series.
6.3 Registration of Transfer of Shares. Registration of the transfer of
shares of the Corporation shall be made only on the stock transfer books of the
Corporation. In order to register a transfer, the record owner shall surrender
the shares to the Corporation for cancellation,
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properly endorsed by the appropriate person or persons with reasonable
assurances that the endorsements are genuine and effective. Unless the
Corporation has established a procedure by which a beneficial owner of shares
held by a nominee is to be recognized by the Corporation as the owner, the
person in whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all purposes.
6.4 Restrictions on Transfer of Shares Permitted. The Board of Directors
or the Stockholders may impose restrictions on the transfer or registration of
transfer of shares (including any security convertible into, or carrying a right
to subscribe for or acquire shares). A restriction does not affect shares issued
before the restriction was adopted unless the holders of the shares are parties
to the restriction agreement or voted in favor of the registration or otherwise
consented to the restriction.
(a) A restriction on the transfer or registration of transfer of
shares may be authorized:
(i) To maintain the Corporation's status when it is dependent on
the number or identity of its Stockholders;
(ii) to preserve entitlements, benefits, or exemptions under
federal, state, or local laws; and
(iii) for any other reasonable purpose.
(b) A restriction on the transfer or registration of transfer of
shares may:
(i) Obligate the Stockholder first to offer the Corporation or
other persons, separately, consecutively, or simultaneously, an opportunity to
acquire the restricted shares;
(ii) obligate the Corporation or other persons, separately,
consecutively, or simultaneously, to acquire the restricted shares;
(iii) require, as a condition to a transfer or registration,
that any one or more persons, including the Corporation or any of its
Stockholders, approve the transfer or registration, if the requirement is not
manifestly unreasonable; or
(iv) prohibit the transfer or the registration of a transfer of
the restricted shares to designated persons or classes of persons, if the
prohibition is not manifestly unreasonable.
A restriction on the transfer or registration of transfer of shares
is valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this Section 6.4 and its existence is noted
conspicuously on the front or back of the certificate, or if the restriction is
contained in the information statement required by Section 6.2 of these Bylaws
with regard to shares issued without certificates. Unless so noted, a
restriction is not enforceable against a person without knowledge of the
restriction.
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6.5 Acquisition of Shares. The Corporation may acquire its own shares,
and, unless otherwise provided in the Certificate of Incorporation, the shares
so acquired constitute authorized but unissued shares.
If the Certificate of Incorporation prohibit the reissuance of
acquired shares, the number of authorized shares shall be reduced by the number
of shares acquired, effective upon amendment of the Certificate of
Incorporation, which amendment shall be adopted by the Stockholders or the Board
of Directors without Stockholder action. Appropriate Certificate of Amendment
must be delivered to the Delaware Secretary of State and must set forth:
(a) The name of the Corporation;
(b) the reduction in the number of authorized shares, itemized by
class and series;
(c) the total number of authorized shares, itemized by class and
series, remaining after reduction of the shares; and
(d) a statement that the amendment was adopted by the Board of
Directors without Stockholder action and that Stockholder action was not
required if such be the case.
ARTICLE 7
DISTRIBUTIONS
7.1 Distributions. The Board of Directors may authorize, and the
Corporation may make, distributions (including dividends on its outstanding
shares) in the manner and upon the terms and conditions provided by law and in
the Certificate of Incorporation.
ARTICLE 8
CORPORATE SEAL
8.1 Corporate Seal. The Board of Directors may provide a corporate seal
which may be circular in form and have inscribed thereon any designation
including the name of the Corporation, Delaware as the state of incorporation,
and the words "Corporate Seal."
ARTICLE 9
FISCAL YEAR
9.1 Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
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ARTICLE 10
AMENDMENTS
10.1 Amendments. The Corporation's Board of Directors may amend these
Bylaws, except to the extent that the Certificate of Incorporation, these
Bylaws, or the Delaware General Corporation Law reserve this power exclusively
to the Stockholders in whole or in part. However, the Board of Directors may not
adopt, amend, or repeal a Bylaw that fixes a Stockholder quorum or voting
requirement that is greater than required by the Delaware General Corporation
Law.
If authorized by the Certificate of Incorporation, the Stockholders
may adopt, amend, or repeal a Bylaw that fixes a greater quorum or voting
requirement for Stockholders, or voting groups of Stockholders, than is required
by the Delaware General Corporation Law. Any such action shall comply with the
provisions of the Delaware General Corporation Law.
The Corporation's Stockholders may amend or repeal the Corporation's
Bylaws even though the Bylaws may also be amended or repealed by the
Corporation's Board of Directors.
ADOPTED as of the 3rd day of March, 2000.
/s/ ALAN HANSEN
--------------------------------------------
ALAN HANSEN, Secretary
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EXHIBIT 3.4
AMENDED AND RESTATED
BYLAWS
OF
CALDERA SYSTEMS, INC.
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held at such place as may be fixed from time to time by the
Board of Directors, or at such other place either within or without the State of
Delaware as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held at such
date and time as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting. At each annual meeting, the
stockholders shall elect directors to succeed those directors whose terms expire
in that year and shall transact such other business as may properly be brought
before the meeting.
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to vote
at such meeting not less than ten (10) nor more than sixty (60) days before the
date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make available, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten 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
<PAGE> 2
be held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, may only be called by the Chairman of the Board or a majority of the
Board.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not fewer than ten (10) nor more than sixty (60) days
before the date of the meeting, to each stockholder entitled to vote at such
meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, either the Chairman of the
Board, or the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted that might have been
transacted at the meeting as originally notified. If the adjournment is for more
than thirty (30) days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of applicable statute
or of the certificate of incorporation, a different vote is required, in which
case such express provision shall govern and control the decision of such
question.
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three (3) years from its date, unless the proxy provides for a longer
period.
Section 11. Nominations for election to the Board of Directors must
be made by the Board of Directors or by a committee appointed by the Board of
Directors for such purpose or by any stockholder of any outstanding class of
capital stock of the corporation entitled to vote for the election of directors.
Nominations by stockholders must be preceded by notification in writing received
by the secretary of the corporation not less than one-hundred twenty (120) days
prior to any meeting of stockholders called for the election of directors. Such
notification shall contain the written consent of each proposed nominee to serve
as a director if so elected and the
2
<PAGE> 3
following information as to each proposed nominee and as to each person, acting
alone or in conjunction with one or more other persons as a partnership, limited
partnership, syndicate or other group, who participates or is expected to
participate in making such nomination or in organizing, directing or financing
such nomination or solicitation of proxies to vote for the nominee:
(a) the name, age, residence, address, and business address of
each proposed nominee and of each such person;
(b) the principal occupation or employment, the name, type of
business and address of the corporation or other organization in which such
employment is carried on of each proposed nominee and of each such person;
(c) the amount of stock of the corporation owned beneficially,
either directly or indirectly, by each proposed nominee and each such person;
and
(d) a description of any arrangement or understanding of each
proposed nominee and of each such person with each other or any other person
regarding future employment or any future transaction to which the corporation
will or may be a party.
The presiding officer of the meeting shall have the authority to
determine and declare to the meeting that a nomination not preceded by
notification made in accordance with the foregoing procedure shall be
disregarded.
Section 12. At any meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (a) pursuant to
the corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the corporation who is a stockholder of
record at the time of giving of the notice provided for in this Bylaw, who shall
be entitled to vote at such meeting and who complies with the notice procedures
set forth in this Bylaw.
For business to be properly brought before any meeting by a
stockholder pursuant to clause (c) above of this Section 12, the stockholder
must have given timely notice thereof in writing to the secretary of the
corporation. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the corporation not less than
one hundred twenty (120) days prior to the date of the meeting. A stockholder's
notice to the secretary shall set forth as to each matter the stockholder
proposes to bring before the meeting (a) a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting, (b) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, and the name
and address of the beneficial owner, if any, on whose behalf the proposal is
made, (c) the class and number of shares of the corporation which are owned
beneficially and of record by such stockholder of record and by the beneficial
owner, if any, on whose behalf of the proposal is made and (d) any material
interest of such stockholder of record and the beneficial owner, if any, on
whose behalf the proposal is made in such business.
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<PAGE> 4
Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at a meeting except in accordance with the
procedures set forth in this Section 12. The presiding officer of the 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
procedures prescribed by this Section 12, and if such person should so
determine, such person shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 12, a stockholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 12.
Section 13. Effective upon the closing of the corporation's initial
public offering of securities pursuant to a registration statement filed under
the Securities Act of 1933, as amended, the stockholders of the Corporation may
not take action by written consent without a meeting but must take any such
actions at a duly called annual or special meeting in accordance with these
Bylaws and the Certificate of Incorporation.
ARTICLE III
DIRECTORS
Section 1. The number of directors of this corporation that shall
constitute the whole board shall be determined by resolution of the Board of
Directors; provided, however, that no decrease in the number of directors shall
have the effect of shortening the term of an incumbent director.
Section 2. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, even if less than a quorum, or by a sole
remaining director, and the directors so chosen shall hold office until the next
election of the class for which such directors were chosen and until their
successors are duly elected and qualified or until earlier resignation or
removal. If there are no directors in office, then an election of directors may
be held in the manner provided by statute.
Section 3. The business of the corporation shall be managed by or
under the direction of its Board of Directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the certificate of incorporation or by these bylaws directed or required
to be exercised or done by the stockholders.
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<PAGE> 5
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the
Chairman of the Board or the president on twelve (12) hours' notice to each
director by phone, fax or electronic mail; special meetings shall be called by
the Chairman of the Board, the president or secretary in like manner and on like
notice on the written request of a majority of the Board unless the Board
consists of only one director, in which case special meetings shall be called by
the Chairman of the Board, the president or secretary in like manner and on like
notice on the written request of the sole director.
Section 8. At all meetings of the board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any 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 in a meeting shall
constitute presence in person at the meeting.
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<PAGE> 6
COMMITTEES OF DIRECTORS
Section 11. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one (1) or more committees, each
committee to consist of one (1) or more of the directors of the corporation. The
board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee.
In the absence of disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the bylaws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.
Section 12. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice (except as provided in Section 7 of Article III of
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these Bylaws), but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telephone, telegram or facsimile.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
Board of Directors and shall be a president, a chief financial officer and a
secretary. The Board of Directors may elect from among its members a Chairman of
the Board. The Board of Directors may also choose one or more vice-presidents,
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these bylaws
otherwise provide.
Section 2. The Board of Directors at its first meeting after each
annual meeting of stockholders shall choose a president, a chief financial
officer, and a secretary and may choose vice presidents.
Section 3. The Board of Directors may appoint such other officers
and agents as it shall deem necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers of the corporation shall be
fixed by the Board of Directors or any committee established by the Board of
Directors for such purpose. The salaries of agents of the corporation shall,
unless fixed by the Board of Directors, be fixed by the president or any
vice-president of the corporation.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
Board of Directors may be removed at any time by the affirmative vote of a
majority of the Board of Directors. Any vacancy occurring in any office of the
corporation shall be filled by the Board of Directors.
THE CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board, if any, shall preside at all
meetings of the Board of Directors and of the stockholders at which he/she shall
be present. He/she shall have and may exercise such powers as are, from time to
time, assigned to him/her by the Board and as may be provided by law.
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<PAGE> 8
Section 7. In the absence of the Chairman of the Board, the
president, shall preside at all meetings of the Board of Directors and of the
stockholders at which he shall be present. He shall have and may exercise such
powers as are, from time to time, assigned to him by the Board and as may be
provided by law.
THE PRESIDENT AND VICE-PRESIDENTS
Section 8. The president shall be the chief executive officer of the
corporation and in the absence of the Chairman of the Board, he/she shall
preside at all meetings of the stockholders and the Board of Directors; he/she
shall have general and active management of the business of the corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect.
Section 9. The president or any vice president shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.
Section 10. In the absence of the president or in the event of his
inability or refusal to act, the vice-president, if any, (or in the event there
be more than one vice-president, the vice-presidents in the order designated by
the directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 11. The secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He/she shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
president, under whose supervision he/she shall be. He/she shall have custody of
the corporate seal of the corporation and he/she, or an assistant secretary,
shall have authority to affix the same to any instrument requiring it and when
so affixed, it may be attested by his signature or by the signature of such
assistant secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his signature.
Section 12. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election) shall,
in the absence of the secretary or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the secretary
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<PAGE> 9
and shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
THE CHIEF FINANCIAL OFFICER
Section 13. The chief financial officer shall be the chief financial
officer of the corporation, shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
Section 14. He/she shall disburse the funds of the corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Chief Financial Officer and of the financial condition
of the corporation.
Section 15. If required by the Board of Directors, he/she shall give
the corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his/her office and for the
restoration to the corporation, in case of his/her death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his/her control
belonging to the corporation.
Section 16. The treasurer or an assistant treasurer, in the order
determined by the Board of Directors (or if there be no such determination, then
in the order of their election) shall, in the absence of the Chief Financial
Officer or in the event of his inability or refusal to act, perform the duties
and exercise the powers of the Chief Financial Officer and shall perform such
other duties and have such other powers as the Board of Directors may from time
to time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by,
the Chairman of the Board of Directors, or the president or a vice-president and
the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by him/her
in the corporation.
Certificates may be issued for partly paid shares and in such case
upon the face or back of the certificates issued to represent any such partly
paid shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
If the corporation shall be authorized to issue more than one class
of stock or more than one series of any class, the powers, designations,
preferences and relative,
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participating, optional or other special rights of each class of stock or series
thereof and the qualification, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificate that the corporation shall issue to represent such class or
series of stock, provided that, except as otherwise provided in section 202 of
the General Corporation Law of Delaware, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate that the
corporation shall issue to represent such class or series of stock, a statement
that the corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
Any of or all the signatures on the certificate may be facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he/she were such
officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 2. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his/her
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 3. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 4. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60)
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days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 5. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SEAL
Section 5. The Board of Directors may adopt a corporate seal having
inscribed thereon the name of the corporation, the year of its organization and
the words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
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INDEMNIFICATION
Section 6. The corporation shall, to the fullest extent authorized
under the laws of the State of Delaware, as those laws may be amended and
supplemented from time to time, indemnify any director made, or threatened to be
made, a party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of being a director of the
corporation or a predecessor corporation or, at the corporation's request, a
director or officer of another corporation, provided, however, that the
corporation shall indemnify any such agent in connection with a proceeding
initiated by such agent only if such proceeding was authorized by the Board of
Directors of the corporation. The indemnification provided for in this Section 6
shall: (i) not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in their official
capacities and as to action in another capacity while holding such office, (ii)
continue as to a person who has ceased to be a director, and (iii) inure to the
benefit of the heirs, executors and administrators of such a person. The
corporation's obligation to provide indemnification under this Section 6 shall
be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by the corporation or
any other person.
Expenses incurred by a director of the corporation in defending a
civil or criminal action, suit or proceeding by reason of the fact that he is or
was a director of the corporation (or was serving at the corporation's request
as a director or officer of another corporation) shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation as authorized by relevant sections of the
General Corporation Law of Delaware. Notwithstanding the foregoing, the
corporation shall not be required to advance such expenses to an agent who is a
party to an action, suit or proceeding brought by the corporation and approved
by a majority of the Board of Directors of the corporation which alleges willful
misappropriation of corporate assets by such agent, disclosure of confidential
information in violation of such agent's fiduciary or contractual obligations to
the corporation or any other willful and deliberate breach in bad faith of such
agent's duty to the corporation or its stockholders.
The foregoing provisions of this Section 6 shall be deemed to be a
contract between the corporation and each director who serves in such capacity
at any time while this bylaw is in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing with respect to
any state of facts then or theretofore existing or any action, suit or
proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.
The Board of Directors in its discretion shall have power on behalf
of the corporation to indemnify any person, other than a director, made a party
to any action, suit or proceeding by reason of the fact that he, his testator or
intestate, is or was an officer or employee of the corporation.
To assure indemnification under this Section 6 of all directors,
officers and employees who are determined by the corporation or otherwise to be
or to have been
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"fiduciaries" of any employee benefit plan of the corporation which may exist
from time to time, Section 145 of the General Corporation Law of Delaware shall,
for the purposes of this Section 6, be interpreted as follows: an "other
enterprise" shall be deemed to include such an employee benefit plan, including
without limitation, any plan of the corporation which is governed by the Act of
Congress entitled "Employee Retirement Income Security Act of 1974," as amended
from time to time; the corporation shall be deemed to have requested a person to
serve an employee benefit plan where the performance by such person of his
duties to the corporation also imposes duties on, or otherwise involves services
by, such person to the plan or participants or beneficiaries of the plan; excise
taxes assessed on a person with respect to an employee benefit plan pursuant to
such Act of Congress shall be deemed "fines."
ARTICLE VIII
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted by the affirmative vote of holders of at least 66-2/3%
vote of the outstanding voting stock of the corporation. These bylaws may also
be altered, amended or repealed or new bylaws may be adopted by the Board of
Directors, when such power is conferred upon the Board of Directors by the
certificate of incorporation. The foregoing may occur at any regular meeting of
the stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new bylaws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal bylaws is conferred upon
the Board of Directors by the certificate of incorporation it shall not divest
or limit the power of the stockholders to adopt, amend or repeal bylaws.
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CERTIFICATE OF ADOPTION BY THE
SECRETARY OF
CALDERA SYSTEMS, INC.
The undersigned, Alan Hansen, hereby certifies that he is the duly
elected and acting Secretary of Caldera Systems, Inc., a Delaware corporation
(the "Corporation"), and that the Bylaws attached hereto constitute the Bylaws
of said Corporation as duly adopted by the Board of Directors on
_________________, 2000.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name
as of the _______ day of __________________, 2000.
-----------------------------------------
Alan Hansen
Secretary
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<PAGE> 1
EXHIBIT 4.1
COMMON STOCK [CALDERA LOGO] COMMON STOCK
CALDERA
systems
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CALDERA SYSTEMS, INC.
That Certifies that CUSIP 128780 10 3
SEE REVERSE FOR
CERTAIN DEFINITIONS
is the owner of
fully paid and non-assessable shares of common stock of the par value of one
hundredth of one cent ($0.001) per share of Caldera Systems, Inc. transferable
on the books of the Corporation by the holder hereof in person or by duly
authorized attorney upon surrender of this certificate properly endorsed. This
certificate is not valid unless countersigned by the Transfer Agent.
Witness the facsimile signatures of its duly authorized officers.
Dated
/s/ ALAN HANSEN /s/ RANSOM H. LOVE
- ------------------------------ ------------------------------
SECRETARY PRESIDENT
<PAGE> 2
CALDERA SYSTEMS, INC.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR
SERIES THEREOF OF THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE
CORPORATION OR THE TRANSFER AGENT.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM- as tenants in common UNIF GIFT MIN ACT-______________ Custodian_______________
(Cust) (Minor)
TEN ENT- as tenants by the entireties
under Uniform Gifts to Minors
JT TEN- as joint tenants with
right of survivorship and Act____________________________________
not as tenants in common (State)
UNIF TRF MIN ACT-_____________ Custodian (until age_____)
(Cust)
_______under Uniform Transfers to Minors
(Minor)
Act_____________________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, _________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
________________________________________________________________________________
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
_____________________________________________________________________Attorney to
transfer the said stock on the books of the within-named Corporation with full
power of substitution in the premises.
Dated,_____________________________
X_______________________________________
NOTICE: THE SIGNATURE TO THIS
ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE, IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR
ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED:_________________________________
THE SIGNATURE(S) MUST BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION
PROGRAM) PURSUANT TO S.E.C. RULE
17Ad-15.
<PAGE> 1
EXHIBIT 5.1
March 9, 2000
Caldera Systems, Inc.
240 West Center Street
Orem, UT 84057
Re: Caldera Systems, Inc. Registration Statement on Form S-1
for 5,750,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Caldera Systems, Inc., a Delaware
corporation (the "Company"), in connection with the proposed issuance and sale
by the Company of up to 5,750,000 shares of the Company's Common Stock (the
"Shares"), par value $.001, pursuant to the Company's Registration Statement No.
333-94351 on Form S-1 (the "Registration Statement") filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Act").
This opinion is being furnished in accordance with the
requirements of Item 16(a) of Form S-1 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the issuance and
sale of the Shares. Based on such review, we are of the opinion that the Shares
have been duly authorized, and if, as and when issued in accordance with the
Registration Statement and the related prospectus (as amended and supplemented
through the date of issuance) will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus which is part of the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act,
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder, or Item 509 of Regulation S-K.
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Caldera Systems, Inc.
Page 2
This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
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EXHIBIT 10.24
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into this ___ day of _________, ____, between Caldera Systems, Inc., a Delaware
corporation (the "Company"), and _____________________ ("Indemnitee").
A. Indemnitee, as a member of the Company's Board of Directors and/or an
officer of the Company, performs valuable services for the Company;
B. The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for corporate directors, officers, employees,
controlling persons, agents and fiduciaries, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.
C. The Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
controlling persons, agents and fiduciaries to expensive litigation risks at the
same time as the availability and coverage of liability insurance has been
severely limited.
D. The stockholders of the Company have adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of the Company to the maximum extent authorized by Section 145 of the
Delaware Corporations Code, as amended ("Code").
E. Indemnitee does not regard the current protection available for the
Company's directors, officers, employees, controlling persons, agents and
fiduciaries as adequate under the present circumstances, and Indemnitee and
other directors, officers, employees, controlling persons, agents and
fiduciaries of the Company may not be willing to serve or continue to serve in
such capacities without additional protection.
F. The Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Company and its directors, officers, employees,
controlling persons, agents or fiduciaries with respect to indemnification of
such directors.
G. The Company (i) desires to attract and retain the involvement of
highly qualified individuals, such as Indemnitee, to serve the Company and, in
part, in order to induce Indemnitee to be involved with the Company, and (ii)
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.
H. In view of the considerations set forth above, the Company desires
that Indemnitee be indemnified by the Company as set forth herein.
NOW, THEREFORE, in consideration of Indemnitee's service to the Company,
the parties hereto agree as follows:
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1. INDEMNITY OF INDEMNITEE. The Company hereby agrees to indemnify
Indemnitee to the fullest extent permitted by law, even if such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation (the "Certificate"), the Company's Bylaws
or by statute. In the event of any change after the date of this Agreement in
any applicable law, statute or rule which expands the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
employee, controlling person, agent or fiduciary, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its Board of Directors or an officer, employee, agent or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder except as set forth
in Section 9(a) hereof.
2. Additional Indemnity. The Company hereby agrees to hold harmless and
indemnify the Indemnitee:
(a) against any and all expenses incurred by Indemnitee, as set
forth in Section 3(a) below; and
(b) otherwise to the fullest extent not prohibited by the
Certificate, the Bylaws or the Code.
3. INDEMNIFICATION RIGHTS.
(a) Indemnification of Expenses. The Company shall indemnify and
hold harmless Indemnitee, together with Indemnitee's partners, affiliates,
employees, agents and spouse and each person who controls any of them or who may
be liable within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "Securities Act"), or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to the fullest extent permitted by law if
Indemnitee was or is or becomes a party to or witness or other participant in,
or is threatened to be made a party to or witness or other participant in, any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
and the Company believe might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") against any and
all expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation, judgments,
fines, penalties and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of any payments under this Agreement
(collectively, hereinafter "Expenses"), including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses,
incurred by Indemnitee by reason of (or arising in part out of) any event or
occurrence related to the fact that Indemnitee is or was a director, officer,
employee,
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controlling person, agent or fiduciary of the Company or any subsidiary of the
Company, or is or was serving at the request of the Company as a director,
officer, employee, controlling person, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action or inaction on the part of Indemnitee while serving in such
capacity including, without limitation, any and all losses, claims, damages,
expenses and liabilities, joint or several (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit, proceeding or any claim asserted) under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, which relate directly or indirectly to
the registration, purchase, sale or ownership of any securities of the Company
or to any fiduciary obligation owed with respect thereto (hereinafter an
"Indemnification Event"). Such payment of Expenses shall be made by the Company
as soon as practicable but in any event no later than 25 days after written
demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 2 shall be subject to the condition
that the Reviewing Party (as described in Section 11(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel as defined in Section 11(d) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) and Indemnitee
acknowledges and agrees that the obligation of the Company to make an advance
payment of Expenses to Indemnitee pursuant to Section 4(a) (an "Expense
Advance") shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). Indemnitee's obligation to reimburse the Company for any Expense
Advance shall be unsecured and no interest shall be charged thereon. If there
has not been a Change in Control (as defined in Section 11(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3(e) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
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(c) Contribution. If the indemnification provided for in Section
3(a) above for any reason is held by a court of competent jurisdiction to be
unavailable to an Indemnitee in respect of any losses, claims, damages, expenses
or liabilities referred to therein, then the Company, in lieu of indemnifying
Indemnitee thereunder, shall contribute to the amount paid or payable by
Indemnitee as a result of such losses, claims, damages, expenses or liabilities
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and Indemnitee, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and Indemnitee in connection
with the action or inaction which resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable considerations.
In connection with the registration of the Company's securities, the relative
benefits received by the Company and Indemnitee shall be deemed to be in the
same respective proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the Indemnitee, in each case as
set forth in the table on the cover page of the applicable prospectus, bear to
the aggregate public offering price of the securities so offered. The relative
fault of the Company and Indemnitee shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or Indemnitee and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and Indemnitee agree that it would not be just and equitable
if contribution pursuant to this Section 3(c) were determined by pro rata or per
capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. In connection with the registration of the Company's securities, in
no event shall an Indemnitee be required to contribute any amount under this
Section 3(c) in excess of the lesser of (i) that proportion of the total of such
losses, claims, damages or liabilities indemnified against equal to the
proportion of the total securities sold under such registration statement which
is being sold by Indemnitee or (ii) the proceeds received by Indemnitee from its
sale of securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.
(d) Survival Regardless of Investigation. The indemnification and
contribution provided for herein will remain in full force and effect regardless
of any investigation made by or on behalf of Indemnitee or any officer,
director, employee, agent or controlling person of Indemnitee.
(e) Change in Control. After the date hereof, the Company agrees
that if there is a Change in Control of the Company (other than a Change in
Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control) then,
with respect to all matters thereafter arising concerning the rights of
Indemnitee to payments of Expenses under this Agreement or any other agreement
or under the Company's Certificate or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 11(d) hereof) shall be selected
by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other
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things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to abide by such opinion and to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all reasonable expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
(f) Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise, including, without limitation, the dismissal of an
action without prejudice, in the defense of any action, suit, proceeding,
inquiry or investigation referred to in Section 3(a) hereof or in the defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection herewith.
4. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than ten
business days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall give the
Company notice in writing in accordance with Section 15 of this Agreement as
soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement.
(c) No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in each of the Company's policies. The Company
shall thereafter take all necessary or desirable action to cause such
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insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such action, suit, proceeding, inquiry or investigation in accordance with the
terms of such policies.
(e) Selection of Counsel. In the event the Company shall be
obligated hereunder to pay the Expenses of any Claim, the Company shall be
entitled to assume the defense of such Claim, with counsel approved by the
Indemnitee (which approval shall not be unreasonably withheld) upon the delivery
to Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Claim; provided that (i) Indemnitee shall have the right to
employ Indemnitee's counsel in any such Claim at Indemnitee's expense and (ii)
if (A) the employment of counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there is a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee's counsel shall be
at the expense of the Company.
5. NONEXCLUSIVITY. The indemnification provided by this Agreement shall
be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the General Corporation Law of the
State of Delaware, or otherwise. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action Indemnitee took or did
not take while serving in an indemnified capacity even though Indemnitee may
have ceased to serve in such capacity.
6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against any
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder.
7. PARTIAL INDEMNIFICATION. If any Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for any portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.
8. MUTUAL ACKNOWLEDGEMENT. The Company and Indemnitee acknowledge that
in certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors, officers, employees, controlling
persons, agents or fiduciaries under this Agreement or otherwise. Each
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy to
indemnify Indemnitee.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
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(a) Claims Initiated by Indemnitee. To indemnify or advance expenses
to any Indemnitee with respect to Claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except (i) with respect to actions or
proceedings to establish or enforce a right to indemnify under this Agreement or
any other agreement or insurance policy or under the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events, (ii) in specific cases if the Board of Directors has
approved the initiation or bringing of such Claim, or (iii) as otherwise
required under Section 145 of the Delaware General Corporation Law, regardless
of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be; or
(b) Claims Under Section 16(b). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Exchange Act or any similar
successor statute; or
(c) Claims Excluded Under Section 145 of the Delaware General
Corporation Law. To indemnify Indemnitee if (i) Indemnitee did not act in good
faith or in a manner reasonably believed by such Indemnitee to be in or not
opposed to the best interests of the Company, or (ii) with respect to any
criminal action or proceeding, Indemnitee had reasonable cause to believe
Indemnitee's conduct was unlawful, or (iii) Indemnitee shall have been adjudged
to be liable to the Company unless and only to the extent the court in which
such action was brought shall permit indemnification as provided in Section
145(b) of the Delaware General Corporation Law.
10. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against any
Indemnitee, any Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of five years from the date of
accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such five-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.
11. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent, control person, or fiduciary of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee, control person, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
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(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on any Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if any Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
(c) For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
(A) who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power
of the Company's then outstanding Voting Securities, increases his or her
beneficial ownership of such securities by 5% or more over the percentage so
owned by such person, or (B) becomes the "beneficial owner" (as defined in Rule
13d-3 under said Exchange Act), directly or indirectly, of securities of the
Company representing more than 20% of the total voting power represented by the
Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
transactions) all or substantially all of the Company's assets.
(d) For purposes of this Agreement, "Independent Legal Counsel"
shall mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 3(d) hereof, who shall not have otherwise performed
services for the Company or any Indemnitee within the last three years (other
than with respect to matters concerning the right of any Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall mean
any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to
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the particular Claim for which Indemnitee are seeking indemnification, or
Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall mean
any securities of the Company that vote generally in the election of directors.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
13. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether any Indemnitee continues to serve as a director, officer,
employee, agent, controlling person, or fiduciary of the Company or of any other
enterprise, including subsidiaries of the Company, at the Company's request.
14. ATTORNEYS' FEES. In the event that any action is instituted by an
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, any Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action if Indemnitee is ultimately successful in
such action, and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the Company
under this Agreement to enforce or interpret any of the terms of this Agreement,
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in
defense of such action (including costs and expenses incurred with respect to
Indemnitee counterclaims and cross-claims made in such action), and shall be
entitled to the advancement of Expenses with respect to such action, unless, as
a part of such action, a court having jurisdiction over such action determines
that the Indemnitee's material defenses to such action were made in bad faith or
were frivolous.
15. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five calendar days after deposit with the U.S.
Postal Service or other applicable postal service, if delivered by first class
mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business
day after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if deliverable by facsimile transmission, with copy by
first class mail, postage
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prepaid, and shall be addressed if to Indemnitee, at Indemnitee's address as set
forth beneath Indemnitee's signature to this Agreement and if to the Company at
the address of its principal corporate offices (attention: Chief Executive
Officer) or at such other address as such party may designate by ten calendar
days' advance written notice to the other party hereto.
16. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
17. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
18. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed and enforced in accordance with the laws of the State of
Delaware, as applied to contracts between Delaware residents, entered into and
to be performed entirely within the State of Delaware, without regard to the
conflict of laws principles thereof.
19. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
20. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by all parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
21. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
22. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving the Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries.
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23. CORPORATE AUTHORITY. The Board of Directors of the Company has
approved the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
COMPANY:
CALDERA SYSTEMS, INC.,
a Delaware corporation
By:
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Ransom H. Love,
President
Address:
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INDEMNITEE:
Signature:
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Name:
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Address:
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