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EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
TOP TIER SOFTWARE, INC.
The undersigned, Shai Agassi and Gregory Ayers, hereby certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of Top Tier Software, Inc. (the "Corporation").
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2. The Certificate of Incorporation of the corporation was originally
filed on August 22, 1996 under the name "Datasurf Inc." Pursuant to Sections
242 and 245 of the General Corporation Law of the State of Delaware (the
"General Corporation Law"), this Amended and Restated Certificate of
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Incorporation restates and integrates and further amends the provisions of the
Certificate of Incorporation of the corporation.
3. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety as follows:
"ARTICLE I
The name of the corporation is Top Tier Software, Inc.
ARTICLE II
The address of the corporation's registered office in the State of
Delaware is 9 E. Loockerman Street, Dover, County of Kent. The name of its
registered agent at such address is National Corporate Research, Ltd.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law.
ARTICLE IV
(A) Classes of Stock. This corporation is authorized to issue two
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classes of stock to be designated, respectively, "Common Stock" and "Preferred
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Stock." The total number of shares which the corporation is authorized to issue
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is 62,860,032 shares, of which 40,125,000 shares shall be Common Stock and
22,735,032 shares shall be Preferred Stock, each with a par value of $0.001.
The Preferred Stock shall consist of five series. The first series shall be
designated "Series A Preferred Stock" and shall consist of 763,740 shares. The
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second series shall be designated "Series B Preferred Stock" and shall consist
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of 6,709,264 shares. The third series shall be designated "Series C Preferred
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Stock" and shall consist of 10,500,000 shares. The fourth series shall be
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designated "Series D Preferred Stock" and shall consist of 2,008,032
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shares. The fifth series shall be designated "Series E Preferred Stock" and
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shall consist of 2,753,996 shares.
(B) Rights, Preferences and Restrictions of Preferred Stock. The
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rights, preferences, privileges, and restrictions granted to and imposed on the
Preferred Stock are as follows:
(1) Dividends.
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(a) The holders of outstanding Preferred Stock shall be entitled
to receive in any fiscal year, when and if declared by the Board of Directors,
out of any assets at the time legally available therefor, noncumulative
dividends in cash at the rate of $0.3314 per share of Series A Preferred Stock,
$0.1669 per share of Series B Preferred Stock, $0.5152 per share of Series C
Preferred Stock, $0.3984 per share of Series D Preferred Stock and $0.6681 per
share of Series E Preferred Stock per annum, before any dividend payable other
than in Common Stock or other securities and rights convertible into or
entitling the holder thereof to receive, directly or indirectly, additional
shares of Common Stock of this corporation, is paid on Common Stock. Such
dividend or distribution may be payable annually or otherwise as the Board of
Directors may from time to time determine. Dividends or distributions (other
than dividends payable solely in shares of Common Stock) may be declared and
paid upon shares of Common Stock in any fiscal year of the corporation only if
dividends shall have been paid on or declared and set apart upon all shares of
Preferred Stock at such annual rates; and no further dividends shall be paid to
holders of shares of Preferred Stock in excess of such annual rates in any
fiscal year unless at the same time equivalent dividends are paid to holders of
shares of Common Stock. The right to such dividends on shares of Preferred Stock
shall not be cumulative and no right shall accrue to holders of shares of
Preferred Stock by reason of the fact that dividends on said shares are not
declared in any prior year, nor shall any undeclared or unpaid dividend bear or
accrue interest.
(b) In the event this corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by this
corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each such case, the holders 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 shares of Common Stock of the
corporation into which their respective shares of Preferred Stock are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the corporation entitled to receive such distribution.
(2) Voting Rights.
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(a) Subject to subsection 2(b), each holder of shares of the
Preferred Stock shall be entitled to the number of votes equal to the number of
shares of Common Stock into which such shares of Preferred Stock could be
converted on the record date for the vote or consent of stockholders and shall
have voting rights and powers equal to the voting rights and powers of the
Common Stock. The holder of each share of the Preferred Stock shall be entitled
to notice of any stockholders' meeting in accordance with the Bylaws of the
corporation and
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shall vote with holders of the Common Stock upon the election of directors and
upon any other matter submitted to a vote of stockholders, except in those
matters required by law to be submitted to a class vote. Fractional votes by the
holders of Preferred Stock shall not, however, be permitted and any fractional
voting rights resulting from the above formula (after aggregating all shares
into which shares of Preferred Stock held by each holder could be converted)
shall be rounded to the nearest whole number.
(b) The holders of shares of Series A Preferred Stock, voting
separately as a class, shall elect two members of the Board of Directors of the
corporation. The holders of shares of Series B and Series C Preferred Stock,
voting together as a class, shall elect two members of the Board of Directors of
the corporation. The holders of shares of Series D Preferred Stock, voting
separately as a class, shall elect one member of the Board of Directors of the
corporation. The holders of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Common Stock, voting together as a single class, shall elect
any remaining members of the Board of Directors. If a vacancy on the Board of
Directors is to be filled by the Board of Directors, only a director or
directors elected by the same class of stockholders as those who would be
entitled to vote to fill such vacancy, if any, shall vote to fill such vacancy.
A director may be removed from the Board of Directors with or without cause by
the vote or consent of the holders of the outstanding class or series with
voting power to elect him or her in accordance with this Certificate of
Incorporation.
(3) Conversion. The holders of the Series A Preferred Stock, Series
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B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series
E Preferred Stock shall have conversion rights as follows (the "Conversion
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Rights"):
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(a) Right to Convert. Subject to Section 3(c), each share of
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Series A, Series B, Series C, Series D and Series E Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing (i) $4.143 in the case of the Series A
Preferred Stock, (ii) $2.08 in the case of the Series B Preferred Stock, (iii)
$6.44 in the case of the Series C Preferred Stock, (iv) $4.98 in the case of the
Series D Preferred Stock and (v) $8.3515 in the case of Series E Preferred Stock
by the Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
The initial Conversion Price per share shall be $4.143 for shares of Series A
Preferred Stock, $2.08 for shares of Series B Preferred Stock, $6.44 for shares
of Series C Preferred Stock, $4.98 for shares of Series D Preferred Stock and
$8.3515 for shares of Series E Preferred Stock. Such initial Conversion Price
shall be subject to adjustment as set forth in Section 3(d) below.
(b) Automatic Conversion. Each share of Series A, Series B,
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Series C, Series D or Series E Preferred Stock shall automatically be converted
into shares of Common Stock at the Conversion Price at the time in effect for
such share immediately upon the earlier of (i) the corporation's sale of its
Common Stock in a firm commitment underwritten public offering pursuant to a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with an aggregate offering price of $20,000,000 (a "Qualified
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Public
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Offering") or (ii)(A) as to the Series A, Series B and Series C Preferred Stock,
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the date specified by written consent or agreement of the holders of at least
66-2/3% of the then outstanding shares of Series A, Series B and Series C
Preferred Stock, voting together as a class; (B) as to the Series D Preferred
Stock, the date specified by written consent or agreement of the holders of at
least a majority of the then outstanding shares of Series D Preferred Stock,
voting separately as a class; and (C) as to the Series E Preferred Stock, the
date specified by written consent or agreement of the holders of at least a
majority of the then outstanding shares of Series E Preferred Stock, voting
separately as a class.
(c) Mechanics of Conversion. Before any holder of Series A,
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Series B, Series C, Series D or Series E Preferred Stock shall be entitled to
convert the same into shares of Common Stock, he shall surrender the certificate
or certificates therefor, duly endorsed, at the office of the corporation or of
any transfer agent for the Series A, Series B, Series C, Series D or Series E
Preferred Stock, and shall give written notice to the corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A, Series
B, Series C, Series D or Series E Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series A, Series B, Series C, Series D
or Series E Preferred Stock to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. If the conversion is in connection with an
underwritten offering of securities registered pursuant to the Securities Act,
the conversion may, at the option of any holder tendering Series A, Series B,
Series C, Series D or Series E Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of securities pursuant to
such offering, in which event the person(s) entitled to receive Common Stock
upon conversion of such Preferred Stock shall not be deemed to have converted
such Preferred Stock until immediately prior to the closing of such sale of
securities.
(d) Conversion Price Adjustments of Preferred Stock for Certain
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Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series
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A, Series B, Series C, Series D or Series E Preferred Stock shall be subject to
adjustment from time to time as follows:
(i) (A) If the corporation shall issue, after the date
upon which any shares of Series A, Series B, Series C, Series D or Series E
Preferred Stock were first issued (the "Purchase Date" with respect to such
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series), any Additional Stock (as defined below) without consideration or for a
consideration per share less than the Conversion Price for such series in effect
immediately prior to the issuance of such Additional Stock, the Conversion Price
for such series in effect immediately prior to each such issuance shall
automatically (except as otherwise provided in this clause (i)) be adjusted to a
price determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
and/or issuable upon conversion of Preferred Stock immediately prior to such
issuance (the "Outstanding Common") plus the number of shares of Common Stock
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that the aggregate consideration received by the corporation for such issuance
would purchase at such Conversion Price, and the denominator of which shall be
the number of Outstanding Common plus the number of shares of such Additional
Stock.
(B) In the event the Series E Preferred Stock converts into
Common Stock by reason of a Qualified Public Offering, pursuant to subsection
(b)(i) hereof and the public offering price per share is less than $16.70 (as
adjusted for any recapitalizations, stock combinations, stock dividends, stock
splits and the like), the Conversion Price for the Series E Preferred Stock
shall be adjusted to a price determined by multiplying the initial Conversion
Price by a fraction, the numerator of which shall be the initial public offering
price per share to the public and the denominator of which shall be $16.70;
provided, however, that in no event shall such Conversion Price, as adjusted
pursuant to this Section 3(d)(i)(B), be less than $4.6397.
(C) No adjustment of the Conversion Price for the Series A,
Series B, Series C, Series D or Series E Preferred Stock shall be made in an
amount less than one cent per share, provided that any adjustments which are not
required to be made by reason of this sentence shall be carried forward and
shall be either taken into account in any subsequent adjustment made prior to
three years from the date of the event giving rise to the adjustment being
carried forward, or shall be made at the end of three years from the date of the
event giving rise to the adjustment being carried forward.
(D) In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid therefor before
deducting any reasonable discounts, commissions or other expenses allowed, paid
or incurred by the corporation for any underwriting or otherwise in connection
with the issuance and sale thereof.
(E) In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined by the
Board of Directors irrespective of any accounting treatment.
(F) In the case of the issuance (whether before, on or
after the applicable Purchase Date) of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this Section 3(d)(i) and Section 3(d)(ii):
(1) The aggregate maximum number of shares of Common
Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in Sections
3(d)(i)(C) and 3(d)(i)(D)), if any, received by the corporation upon the
issuance of such options or rights plus the minimum exercise price provided in
such options or rights (without taking into account potential antidilution
adjustments) for the Common Stock covered thereby.
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(2) The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange (assuming the satisfaction
of any conditions to convertibility or exchangeability, including, without
limitation, the passage of time, but without taking into account potential
antidilution adjustments) for any such convertible or exchangeable securities or
upon the exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or exchange
thereof shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration equal to
the consideration, if any, received by the corporation for any such securities
and related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the corporation (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the consideration in each case to
be determined in the manner provided in Sections 3(d)(i)(C) and 3(d)(i)(D)).
(3) In the event of any change in the number of shares
of Common Stock deliverable or in the consideration payable to the corporation
upon exercise of such options or rights or upon conversion of or in exchange for
such convertible or exchangeable securities, including, but not limited to, a
change resulting from the antidilution provisions thereof, the Conversion Price
of each of the Series A, Series B, Series C, Series D or Series E Preferred
Stock, to the extent in any way affected by or computed using such options,
rights or securities, shall be recomputed to reflect such change, but no further
adjustment shall be made for the actual issuance of Common Stock or any payment
of such consideration upon the exercise of any such options or rights or the
conversion or exchange of such securities.
(4) Upon the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
the Conversion Price of each of the Series A, Series B, Series C, Series D and
Series E Preferred Stock, to the extent in any way affected by or computed using
such options, rights or securities or options or rights related to such
securities, shall be recomputed to reflect the issuance of only the number of
shares of Common Stock (and convertible or exchangeable securities which remain
in effect) actually issued upon the exercise of such options or rights, upon the
conversion or exchange of such securities or upon the exercise of the options or
rights related to such securities.
(5) The number of shares of Common Stock deemed issued
and the consideration deemed paid therefor pursuant to Sections 3(d)(i)(E)(1)
and (2) shall be appropriately adjusted to reflect any change, termination or
expiration of the type described in either Section 3(d)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of Common Stock
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issued (or deemed to have been issued pursuant to Section 3(d)(i)(E)) by the
corporation after the Purchase Date) other than
(A) Common Stock issued pursuant to a transaction described
in Section 3(d)(iii) hereof,
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(B) Common Stock issuable or issued to employees,
consultants or directors of the corporation directly or pursuant to a stock
option plan or restricted stock plan approved by the Board of Directors of the
corporation,
(C) Capital stock, or options or warrants to purchase
capital stock, issued to financial institutions or lessors in connection with
commercial credit arrangements, equipment financings or similar transactions,
(D) Capital stock, or options or warrants to purchase
capital stock, issued pursuant to any transaction primarily for the purpose of
(1) a joint venture, technology licensing or research and development activity,
(2) distribution or manufacture of the corporation's products or services, or
(3) any other transaction involving a corporate partner that is primarily for
the purpose other than raising capital; provided that the terms of any such
transaction are approved by the Board of Directors of the corporation,
(E) Shares of Common Stock or Preferred Stock issuable upon
exercise of warrants outstanding as of the date of this Amended and Restated
Certificate of Incorporation,
(F) Capital stock or warrants or options to purchase capital
stock issued in connection with bona fide acquisitions, mergers or similar
transactions, the terms of which are approved by the Board of Directors of the
corporation,
(G) Shares of Common Stock issued or issuable upon
conversion of the Series A, Series B, Series C, Series D or Series E Preferred
Stock,
(H) Shares of Series E Preferred Stock, and
(I) Shares of Common Stock issued or issuable in a public
offering prior to or in connection with which all outstanding shares of Series
A, Series B, Series C, Series D and Series E Preferred Stock will be converted
to Common Stock.
(iii) In the event the corporation should at any time or from time
to time after the Purchase Date fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
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for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of each of the Series A, Series B, Series C, Series D and Series E
Preferred Stock shall be appropriately decreased so that the number of shares of
Common Stock issuable on conversion of each share of such series shall be
increased in proportion to such increase of the aggregate of shares of Common
Stock outstanding and those issuable with respect to such Common Stock
Equivalents with the number of shares issuable with respect to Common Stock
Equivalents determined from time to time in the manner provided for deemed
issuances in Section 3(d)(i)(E).
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(iv) If the number of shares of Common Stock outstanding at any
time after the Purchase Date is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination, the
Conversion Price for each of the Series A, Series B, Series C, Series D and the
Series E Preferred Stock shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of each share of such series shall
be decreased in proportion to such decrease in outstanding shares.
(e) Other Distributions. In the event the corporation shall declare
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a distribution payable in securities of other persons, evidences of indebtedness
issued by the corporation or other persons, assets (excluding cash dividends) or
options or rights not referred to in Section 3(d)(iii), then, in each such case
for the purpose of this Section 3(e), the holders of Series A, Series B, Series
C, Series D and Series E Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the number of
shares of Common Stock of the corporation into which their shares of Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of the corporation entitled to receive such
distribution.
(f) Recapitalizations. If at any time or from time to time there
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shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 3 or Section 4) provision shall be made so that the holders of the
Series A, Series B, Series C, Series D and Series E Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series A, Series B,
Series C, Series D and Series E Preferred Stock the number of shares of stock or
other securities or property of the Company or otherwise, to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 3 with respect to the rights of
the holders of the Series A, Series B, Series C, Series D and Series E Preferred
Stock after the recapitalization to the end that the provisions of this Section
3 (including adjustment of the Conversion Price then in effect and the number of
shares purchasable upon conversion of the Series A, Series B, Series C, Series D
and Series E Preferred Stock) shall be applicable after that event and be as
nearly equivalent as practicable.
(g) No Impairment. The corporation will not, by amendment of its
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Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 3 and in the taking of all such action as may
be necessary or appropriate in order to protect the Conversion Rights of the
holders of Preferred Stock against impairment.
(h) No Fractional Shares and Certificate as to Adjustments.
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(i) No fractional shares shall be issued upon the conversion of
any share or shares of the Series A, Series B, Series C, Series D or Series E
Preferred Stock, and the number of shares of Common Stock to be issued shall be
rounded to the nearest whole share. Whether or not fractional shares are
issuable upon such conversion shall be determined on the
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basis of the total number of shares of Series A, Series B, Series C, Series D or
Series E Preferred Stock the holder is at the time converting into Common Stock
and the number of shares of Common Stock issuable upon such aggregate
conversion.
(ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price of Series A, Series B, Series C, Series D or Series E
Preferred Stock pursuant to this Section 3, the corporation, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Series A, Series B,
Series C, Series D or Series E Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The corporation shall, upon the written
request at any time of any holder of Series A, Series B, Series C, Series D or
Series E Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price for such series of Preferred Stock at the time in effect, and
(C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
such series of Preferred Stock.
(i) Notices of Record Date. In the event of any taking by the
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corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the corporation
shall mail to each holder of Series A, Series B, Series C, Series D or Series E
Preferred Stock, at least 20 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
(j) Reservation of Stock Issuable Upon Conversion. The corporation
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shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series A, Series B, Series C, Series D and Series E Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series A,
Series B, Series C, Series D and Series E Preferred Stock; and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Series A,
Series B, Series C, Series D and Series E Preferred Stock, in addition to such
other remedies as shall be available to the holder of such Preferred Stock, the
corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to this Certificate of
Incorporation.
(k) Notices. Any notice required by the provisions of this Section
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3 to be given to the holders of shares of Series A, Series B, Series C, Section
D or Series E Preferred Stock shall be deemed given if deposited in the United
States mail, postage prepaid, and addressed to each holder of record at his
address appearing on the books of the corporation.
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(4) Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of
the corporation, either voluntary or involuntary, the holders of the Series A,
Series B, Series C, Series D and Series E Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Common Stock by reason of
their ownership thereof, an amount per share equal to $4.143 per share for each
share of Series A Preferred Stock then held by them, $2.08 per share for each
share of Series B Preferred Stock then held by them, $6.44 per share for each
share of Series C Preferred Stock held by them, $4.98 per share for each share
of Series D Preferred Stock held by them, $8.3515 for each share of Series E
stock held by them, plus an amount equal to all declared but unpaid dividends on
the Preferred Stock. If, upon the occurrence of such event, the assets and funds
thus distributed among the holders of the Preferred Stock shall be insufficient
to permit the payment to such holders of the full preferential amount, then the
entire assets and funds of the corporation legally available for distribution
shall be distributed ratably among the holders of the Preferred Stock in
proportion to the preferential amount each such holder is otherwise entitled to
receive.
(b) Upon the completion of the distribution required by Section
B(4)(a) above, and subject to the provisions of Section B(4)(c) hereof, the
remaining assets of the corporation available for distribution to stockholders
shall be distributed among the holders of the Series A, Series B, Series C,
Series D and Series E Preferred Stock and the Common Stock pro rata based on the
number of shares of Common stock held by each (assuming conversion of all such
Series A, Series B, Series C, Series D and Series E Preferred Stock) until (i)
with respect to the holders of Series A Preferred Stock, such holders shall have
received an aggregate of $8.286 per share (including amounts paid pursuant to
Section B(4)(a) above); (ii) with respect to the holders of Series B Preferred
Stock, such holders shall have received an aggregate of $4.16 per share
(including any amounts paid pursuant to Section B(4)(a) above); (iii) with
respect to the holders of Series C Preferred Stock, such holders shall have
received an aggregate of $12.88 per share (including amounts paid pursuant to
Section B(4)(a) above); (iv) with respect to the holders of Series D Preferred
Stock, such holders shall have received an aggregate of $9.96 per share
(including any amounts paid pursuant to Section B(4)(a) above); and (v) with
respect to the holders of Series E Preferred Stock, such holders shall have
received an aggregate of $16.703 per share (including any amounts paid pursuant
to Section B(4)(a) above).
(c) In the event of any liquidation, dissolution or winding up of
the corporation, either voluntary or involuntary, that occurs on a date after
May 31, 2001, then in such event, in lieu of the distribution set forth in
Section B(4)(b) hereof, the remaining assets of the corporation available for
distribution to stockholders after completion of the distribution required by
Section B(4)(a), shall be distributed among the holders of the Series A, Series
B, Series C, Series D and Series E Preferred Stock and the Common Stock pro rata
based on the number of shares of Common Stock held by each (assuming conversion
of all such Series A, Series B, Series C, Series D and Series E Preferred Stock)
until (i) with respect to the holders of Series A Preferred Stock, such holders
shall have received an aggregate of $12.429 per share (including amounts paid
pursuant to Section B(4)(a) above); (ii) with respect to the holders of Series B
Preferred Stock, such holders shall have received an aggregate of $6.24 per
share
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(including any amounts paid pursuant to Section B(4)(a) above); (iii) with
respect to the holders of Series C Preferred Stock, such holders shall have
received an aggregate of $19.32 per share (including amounts paid pursuant to
Section B(4)(a) above); (iv) with respect to the holders of Series D Preferred
Stock, such holders shall have received an aggregate of $14.94 per share
(including any amounts paid pursuant to Section B(4)(a) above); and (v) with
respect to the holders of Series E Preferred Stock, such holders shall have
received an aggregate of $25.0545 per share (including any amounts paid pursuant
to Section B(4)(a) above).
(d) Upon a liquidation, dissolution or winding up of the
corporation, and after payment to the holders of Preferred Stock of the amounts
to which they are or may be entitled pursuant to Sections B(4)(a), B(4)(b) and
B(4)(c) above, all assets and funds of the corporation that remain legally
available for distribution to stockholders by reason of their ownership of stock
of the corporation shall be distributed ratably among the holders of Common
Stock in proportion to the number of shares of Common Stock held by them.
(e) A merger of the corporation with or into any other
corporation or corporations or a sale of all or substantially all of the assets
of the corporation, shall be treated as a liquidation, dissolution or winding up
for purposes of this Section (B)(4), excluding any consolidation or merger
effected solely to change the domicile of the corporation.
(f) In any of the events specified in (e) above, if the
consideration received by the corporation is other than cash, its value will be
deemed its fair market value. Any securities shall be valued as follows:
(i) Securities not subject to investment letter or other
similar restrictions on free marketability:
(A) If traded on a securities exchange or the Nasdaq
National Market System, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the thirty-day period
ending three (3) days prior to the closing;
(B) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices (whichever
is applicable) over the thirty-day period ending three (3) days prior to the
closing; and
(C) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined by the
corporation and the holders of at least a majority of the voting power of all
then outstanding shares of Preferred Stock.
(ii) The method of valuation of securities subject to
investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate) shall be to make an appropriate discount from the market
value determined as above in (i) (A), (B) or (C) to reflect the approximate fair
market value thereof, as mutually determined by the corporation and the holders
of at least a majority of the voting power of all then outstanding shares of
Preferred Stock.
(5) No Reissuance of Preferred Stock. No share or shares of
--------------------------------
Preferred Stock acquired by the corporation by reason of purchase, conversion or
otherwise shall be
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reissued, and all such shares shall be canceled, retired and eliminated from the
shares that the corporation shall be authorized to issue. The corporation may
from time to time take such appropriate corporate action as may be necessary to
reduce the authorized number of shares of Preferred Stock accordingly.
(6) Protective Provisions.
---------------------
(a) So long as any shares of Preferred Stock are outstanding,
the corporation shall not, without first obtaining the approval of the holders
of at least a majority of the then outstanding shares of Preferred Stock, voting
together as a class:
(i) alter or change the rights, preferences or privileges
of the shares of Series A, Series B, Series C, Series D or Series E Preferred
Stock so as to affect adversely the shares of such series;
(ii) increase or decrease (other than by conversion) the
total number of authorized shares of any series of Preferred Stock;
(iii) authorize or issue, or obligate itself to issue, any
other equity security, including any other security convertible into or
exercisable for any equity security having a preference over, or being on parity
with any series of Preferred Stock with respect to voting, dividend or upon
liquidation;
(iv) change the number of directors of the corporation; or
(v) redeem, purchase or otherwise acquire (or pay or set
aside for a sinking fund for such purpose) any share or shares of Preferred
Stock or Common Stock; provided however, that this restriction shall not apply
to (i) the repurchase of shares of Common Stock from employees, officers,
directors, consultants or other persons performing services for the corporation
or any subsidiary pursuant to which the corporation has the option to repurchase
such shares upon the occurrence of certain events, such as the termination of
employment, or (ii) the exercise by the corporation of a contractual right of
first refusal to purchase any share or shares of Preferred Stock or Common
Stock.
(b) So long as any shares of Series D Preferred Stock remain
outstanding, the corporation shall not without first obtaining the approval of
the holders of at least a majority of the then outstanding shares of Series D
Preferred Stock, voting separately as a class:
(i) alter or change the rights, preferences or privileges
of the shares of Series D Preferred Stock;
(ii) authorize, create, or issue any new class or
securities, other than an issuance pursuant to the corporation's conversion of
any of the corporation's outstanding debt to equity securities;
(iii) increase or decrease the authorized number of
directors constituting the entire Board of Directors;
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(iv) consolidate, sell or merge the corporation with or
into any entity, or enter into any other transaction in which control of the
corporation is transferred if the aggregate consideration received by the
corporation is less than $16.70 for each share of outstanding capital stock;
(v) amend or waive any provision of this Certificate of
Incorporation or the corporation's Bylaws; or
(vi) redeem, repurchase or declare a dividend with regard
to any security of the corporation prior to June 30, 2007, except for the
corporation's repurchase of capital stock granted pursuant to a stock benefit
plan.
(c) So long as any shares of Series E Preferred Stock remain
outstanding, the corporation shall not without first obtaining the approval of
the holders of at least a majority of the then outstanding shares of Series E
Preferred Stock, voting separately as a class:
(i) alter or change the rights, preferences or privileges
of the shares of Series E Preferred Stock;
(ii) authorize, create, or issue any new class or
securities, other than an issuance pursuant to the corporation's conversion of
any of the corporation's outstanding debt to equity securities;
(iii) increase or decrease the authorized number of
directors constituting the entire Board of Directors;
(iv) consolidate, sell or merge the corporation with or
into any entity, or enter into any other transaction in which control of the
corporation is transferred if the aggregate consideration received by the
corporation is less than $16.70 for each share of outstanding capital stock;
(v) amend or waive any provision of this Certificate of
Incorporation or the corporation's Bylaws;
(vi) redeem, repurchase or declare a dividend with regard
to any security of the corporation prior to June 30, 2007, except for the
corporation's repurchase of capital stock granted pursuant to a stock benefit
plan;
(vii) effects any sale, lease, assignment, transfer or
other conveyance of all or substantially all of the assets of the corporation if
the aggregate consideration received by the corporation is less than $16.70 for
each share of outstanding capital stock;
(viii) increase or decrease (other than by conversion) the
total number of authorized shares of Preferred Stock;
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(ix) adopt any new, or increase the number of shares
permitted to be granted or issued under any, stock option or stock benefit plan,
excluding shares authorized under the corporation's 2000 Stock Plan or 2000
Employee Stock Purchase Plan; or
(x) adopt any new, or any material revision of the
corporation's existing business plan.
(7) Residual Rights. All rights accruing to the outstanding shares
---------------
of this corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
(C) Common Stock.
------------
(1) Dividend Rights. Subject to the prior rights of holders of all
---------------
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
(2) Liquidation Rights. Upon the liquidation, dissolution or winding
------------------
up of the corporation, the assets of the corporation shall be distributed as
provided in Article IV(B)(4) hereof.
(3) Voting Rights. Subject to the provisions of Section B(2) hereof
-------------
each holder of shares of Common Stock shall have the right to one vote per share
of Common Stock held by such holder, and shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of this corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.
ARTICLE V
The Board of Directors of the corporation is expressly authorized to make,
alter or repeal the Bylaws of the corporation, but the stockholders may make
additional Bylaws and may alter or repeal any Bylaw whether adopted by them or
otherwise.
ARTICLE VI
Elections of directors need not be by written ballot unless otherwise
provided in the Bylaws of the corporation.
ARTICLE VII
(A) To the fullest extent permitted by the General Corporation Law, as the
same exists or as may hereafter be amended, a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director.
(B) The corporation shall indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil,
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administrative or investigative, by reason of the fact that he, his testator or
intestate is or was a director, officer or employee of the corporation or any
predecessor of the corporation, or serves or served at any other enterprise as a
director, officer or employee at the request of the corporation or any
predecessor to the corporation.
(C) Neither any amendment nor repeal of this Article VII, nor the adoption
of any provision of this corporation's Certificate of Incorporation inconsistent
with this Article VII, shall eliminate or reduce the effect of this Article VIII
in respect of any matter occurring, or any action or proceeding accruing or
arising or that, but for this Article VIII, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE VIII
The corporation is to have perpetual existence.
ARTICLE IX
The number of directors which will constitute the whole Board of Directors
of the corporation shall be seven (7).
ARTICLE X
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the corporation may be kept
(subject to any statutory provision) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of Directors in
the Bylaws of the corporation."
* * *
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The foregoing Amended and Restated Certificate of Incorporation has been
duly adopted by the corporation's Board of Directors and stockholders in
accordance with the applicable provisions of Sections 228, 242 and 245 of the
General Corporation Law of the State of Delaware, and prompt written notice was
duly given to those stockholders who did not approve the Restated Certificate of
Incorporation, as so amended, by written consent.
Executed at Palo Alto, California on this 29th day of June, 2000.
/s/ Shai Agassi
---------------------------------------------
Shai Agassi, President
/s/ Gregory Ayers
---------------------------------------------
Gregory Ayers, Secretary
