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EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
XPEED NETWORKS, INC.
ARTICLE I
The name of the corporation is Xpeed Networks, Inc. (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of Delaware
is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19805.
The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
The purpose of this Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
The Corporation is authorized to issue two classes of shares designated,
respectively, Common Stock with a par value of $0.0001 per share (the "Common
Stock") and Preferred Stock with a par value of $0.0001 per share (the
"Preferred Stock"). The Corporation is authorized to issue 20,000,000 shares of
Common Stock and 6,567,000 shares of Preferred Stock.
The Preferred Stock shall be divided into series. The first series of
Preferred Stock will be comprised of 867,000 shares designated as "Series A
Preferred Stock." The second series of Preferred Stock will be comprised of
3,000,000 shares designated as "Series B Preferred Stock." The third series of
Preferred Stock will be comprised of 2,700,000 shares designated as "Series C
Preferred Stock."
The rights, preferences, privileges and restrictions granted to or imposed
upon the Common Stock and Preferred Stock are as follows:
A. Dividends. The holders of Series A, Series B, and Series C Preferred
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Stock shall be entitled, when and if declared by the board of directors of the
Corporation, to dividends out of assets of the Corporation legally available
therefor at the rate of $0.05, $0.04, and $0.60 per share per annum,
respectively. Dividends on the Series A, and Series B, and Series C Preferred
Stock shall be payable in preference and prior to any payment of any dividend on
the Common Stock. Thereafter, the holders of Common Stock and Preferred Stock
shall be entitled, when and if declared by the board of directors of the
Corporation, to dividends out of assets of the Corporation legally available
therefor. The right to dividends on shares of the Common Stock and Preferred
Stock shall not be cumulative, and no right shall accrue to holders of Common
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Stock or Preferred Stock by reason of the fact that dividends on said shares are
not declared in any prior period.
B. Liquidation Preference.
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1. Preference. In the event of any liquidation, dissolution or
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winding up of the Corporation, either voluntarily or involuntarily, the holders
of Series A, Series B, and Series C 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 Common Stock, an amount equal
to $0.60, $2.00, and $7.50 per share, respectively, plus a further amount equal
to any dividends declared but unpaid on such shares.
If upon such liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation are insufficient to provide for the
cash payment described above to the holders of Preferred Stock, such assets as
are legally available shall be distributed ratably among the holders of the
Series A, Series B, and Series C Preferred Stock in proportion to the
preferential amount each such holder is otherwise entitled to receive.
After the payment or setting apart of payment to the holders of the
Preferred Stock of the preferential amounts so payable to them, the holders of
Common Stock shall be entitled to receive the remaining assets of the
Corporation.
2. Consolidation or Merger. A consolidation or merger of the
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Corporation with or into any other corporation or corporations, or a sale of all
or substantially all of the assets of the Corporation, or any other corporate
reorganization, in which the stockholders of the Corporation immediately prior
to such consolidation, merger or reorganization, own less than fifty percent
(50%) of the voting power immediately after such consolidation, merger or
reorganization or any transaction or series of related transactions in which in
excess of fifty percent (50%) of the corporation's voting power is transferred,
shall be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section IV.B.
3. Noncash Distributions. If any of the assets of the Corporation are
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to be distributed other than in cash under this Section IV.B or for any purpose,
then the board of directors of the Corporation shall promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the holders of Preferred Stock. The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each holder of shares of
Preferred Stock of the appraiser's valuation.
C. Conversion. The holders of the Preferred Stock shall have conversion
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rights as follows (the "Conversion Rights"):
1. Right to Convert. Each share of Preferred Stock shall be
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convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Preferred Stock. The conversion prices of the
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Preferred Stock are set forth below in Section IV.C.3.
2. Automatic Conversion. Each share of Preferred Stock shall
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automatically be converted into Common Stock immediately upon the closing of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, at a public offering price (prior
to deduction of underwriting commissions and offering expenses) equal or greater
than $10.00 per share (as adjusted for stock splits, stock dividends and stock
combinations) and the aggregate gross proceeds to the Corporation and/or any
selling stockholders of which exceed $30,000,000. In addition, each share of
Series C Preferred Stock shall automatically be converted into Common Stock
immediately upon the receipt by the Corporation of notice of the election of the
holders of the outstanding shares of Series C Preferred Stock to so convert such
shares.
3. Conversion Prices. The number of shares of Common Stock into which
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each share of Preferred Stock will be converted will be equal to the price at
which the first share of the series is issued (the "Original Purchase Price")
divided by the applicable Conversion Price (as hereinafter defined). The initial
Series A Conversion Price shall be equal to the Original Purchase Price of such
share. The initial Series B Conversion Price shall be equal to the Original
Purchase Price of such share. The initial Series C Conversion Price shall be
equal to the Original Purchase Price of such share. The Conversion Prices shall
be subject to adjustment from time to time as follows:
(a) If the Corporation shall issue shares of Common Stock to the
holders of Common Stock as a dividend or stock split, or in the event that the
Corporation reduces the number of outstanding shares of Common Stock in a
reverse stock split or stock combination, then the Conversion Prices shall be
adjusted such that the holders of shares of Preferred Stock shall receive, upon
conversion of the Preferred Stock, that number of shares of Common Stock that
such holder would have owned following such dividend, stock split, reverse stock
split or stock combination if such conversion had occurred immediately prior to
the record date for such stock split, stock dividend, reverse stock split or
stock combination of the Common Stock, as the case may be. If the Corporation
shall issue shares of Preferred Stock to the holders of Preferred Stock as a
stock dividend or stock split, or in the event that the Corporation reduces the
number of outstanding shares of Preferred Stock in a reverse stock split or
stock combination, then the Conversion Prices shall be adjusted such that the
holder of shares of Preferred Stock shall receive, upon conversion of the
Preferred Stock, the number of shares of Common Stock that such holder would
have owned if such conversion had occurred immediately prior to the record date
for such stock split, stock dividend, reverse stock split or stock combination
of the Preferred Stock, as the case may be. In the event of a reclassification
or other similar transaction as a result of which shares of Common Stock are
converted into another security, then the Conversion Prices shall be determined
such that the holders of shares of Preferred Stock shall receive, upon
conversion of such Preferred Stock, the number of such securities that such
holder would have owned following such conversion of the Common Stock into
another security if such conversion had occurred immediately prior to the record
date of such reclassification or other similar transaction. No adjustments with
respect to dividends (other than stock dividends) shall
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be made upon conversion of any share of Preferred Stock.
(b) Upon the issuance by the Corporation of Equity Securities (as
defined below) at a consideration per share less than the Series B Conversion
Price of the Series B Preferred Stock in effect immediately prior to the time of
such issue or sale, other than an issuance of stock or securities pursuant to
Section IV.C.3.(a) above or the issuance of shares of Common Stock upon
conversion of any shares of Preferred Stock, then forthwith upon such issue or
sale, such Series B Conversion Price shall be reduced to a price (calculated to
the nearest hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied
by the Series B Conversion Price in effect immediately prior to such
adjustment, (y) the number of shares of Common Stock issuable upon
conversion or exchange of any obligations or securities of the Corporation
outstanding immediately prior to such adjustment multiplied by the Series B
Conversion Price in effect immediately prior to such adjustment, and (z) an
amount equal to the aggregate "consideration actually received" by the
Corporation upon such issue or sale; by
(ii) the sum of the number of shares of Common Stock outstanding
immediately after such issue or sale and the number of shares of Common
Stock issuable upon conversion or exchange of any such obligations or
securities of the Corporation outstanding immediately after such issue or
sale.
(c) Upon the issuance by the Corporation of Equity Securities (as
defined below) at a consideration per share less than the Series C Conversion
Price of the Series C Preferred Stock in effect immediately prior to the time of
such issue or sale, other than an issuance of stock or securities pursuant to
Section IV.C.3.(a) above or the issuance of shares of Common Stock upon
conversion of any shares of Preferred Stock, then forthwith upon such issue or
sale, such Series C Conversion Price shall be reduced to a price (calculated to
the nearest hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied
by the Series C Conversion Price in effect immediately prior to such
adjustment, (y) the number of shares of Common Stock issuable upon
conversion or exchange of any obligations or securities of the Corporation
outstanding immediately prior to such adjustment multiplied by the Series C
Conversion Price in effect immediately prior to such adjustment, and (z) an
amount equal to the aggregate "consideration actually received" by the
Corporation upon such issue or sale; by
(ii) the sum of the number of shares of Common Stock outstanding
immediately after such issue or sale and the number of shares of Common
Stock issuable upon conversion or exchange of any such obligations or
securities of the Corporation
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outstanding immediately after such issue or sale.
(d) For purposes of this Section IV.C.3, the following provisions
shall be applicable:
The term "Equity Securities" as used in this Section IV.C.3 shall mean any
shares of Common Stock, or any obligation, or any share of stock or other
security of the Corporation convertible into or exchangeable for Common Stock,
except for shares of Common Stock or options to purchase Common Stock issued or
granted to officers, directors or employees of the Corporation and its
subsidiaries either pursuant to any stock purchase or stock option plan or other
incentive stock arrangement approved by the Corporation's Board of Directors.
The case of an issue or sale for cash of shares of Common Stock, the
"consideration actually received" by the Corporation therefor shall be deemed to
be the amount of cash received, before deducting therefrom any commissions or
expenses paid by the Corporation.
In case of the issuance (otherwise than upon conversion or exchange of
obligations or securities of the Corporation) of additional shares of Common
Stock for a consideration other than cash or a consideration partly other than
cash, the amount of consideration other than cash received by the Corporation
for such shares shall be deemed to be the value of such consideration as
determined in good faith by the Board of Directors.
In case of the issuance by the Corporation in any manner of any rights to
subscribe for or to purchase shares of Common Stock, or any options for the
purchase of shares of Common Stock or stock convertible into Common Stock, all
shares of Common Stock or stock convertible into Common Stock to which the
holders of such rights or options shall be entitled to subscribe for or purchase
pursuant to such rights or options shall be deemed "outstanding" as of the date
of the offering of such rights or the granting of such options, as the case may
be, and the minimum aggregate consideration named in such rights or options for
the shares of Common Stock or stock convertible into Common Stock covered
thereby, plus the consideration, if any, received by the Corporation for such
rights or options, shall be deemed to be the "consideration actually received"
by the Corporation (as of the date of the offering of such rights or the
granting of such options, as the case may be) for the issuance of such shares.
In case of the issuance or issuances by the Corporation in any manner of
any obligations or of any securities of the Corporation that shall be
convertible into or exchangeable for Common Stock, all shares of Common Stock
issuable upon the conversion or exchange of such obligations or securities shall
be deemed issued as of the date such obligations or securities are issued, and
the amount of the "consideration actually received" by the Corporation for such
additional shares of Common Stock shall be deemed to be the total of (x) the
amount of consideration received by the Corporation upon the issuance of such
obligations or securities, plus (y) the minimum aggregate consideration, if any,
other than such obligations or shares, receivable by the Corporation upon such
conversion or exchange, except in adjustment of dividends.
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4. Mechanics of Conversion. Before any holder of Preferred Stock
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shall be entitled to convert the same into shares of Common Stock, such holder
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Preferred Stock and
shall give written notice to the Corporation at such office that he elects to
convert the same (except that no such written notice of election to convert
shall be necessary in the event of an automatic conversion pursuant to Section
IV.C.1 hereof). The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Preferred Stock a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled. Such conversion shall be deemed to have been made immediately
before the close of business on the date of such surrender of the shares of
Preferred Stock to be converted (except that in the case of an automatic
conversion pursuant to Section IV.C.1 such conversion shall be deemed to have
been made immediately before the closing of the offering referred to in Section
IV.C.1), 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 at such time.
5. Fractional Shares. In lieu of any fractional shares to which the
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holder of Preferred Stock would otherwise be entitled, the Corporation shall pay
cash equal to such fraction multiplied by the fair market value of one share of
Preferred Stock as determined by the board of directors of the Corporation.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Preferred Stock of each
holder at the time converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.
6. No Impairment. The Corporation will not, through any
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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 IV.C. This
provision shall not restrict the Corporation's right to amend its Certificate of
Incorporation with the requisite stockholder consent.
7. 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 Preferred Stock at least twenty (20) days prior to
such record date, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend or distribution or right, and the amount
and character of such dividend, distribution or right.
8. Notices. Any notice required by the provisions of this Section IV.C to be
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given to the holder of shares of 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
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the books of the Corporation.
D. Voting Rights.
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1. The holder of each share of Preferred Stock shall be entitled to
the number of votes equal to the number of shares of Common Stock into which
each share of Preferred Stock could be converted on the record date for the vote
or consent of stockholders and, except as otherwise required by law, shall have
voting rights and powers equal to the voting rights and powers of the Common
Stock. The holder of each share of Preferred Stock shall be entitled to notice
of any stockholders' meeting in accordance with the bylaws of the Corporation
and 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 those
matters required by law to be submitted to a class vote. Fractional votes shall
not, however, be permitted and any fractional voting rights resulting from the
above formula (after aggregating all shares of Common Stock into which shares of
Preferred Stock held by each holder could be converted) shall be rounded to the
nearest whole number (with one-half rounded upward to one).
2. For so long as at least 1,000,001 shares of Series C Preferred
Stock shall remain outstanding, the holders of a majority of the outstanding
shares of Series C Preferred Stock shall be entitled to elect one member of the
Board of Directors of the Company.
E. Protective Provisions.
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1. Series A Preferred Stock. So long as any Series A Preferred Stock
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shall be outstanding, the Corporation shall not without first obtaining the
approval of the holders of more than 50 percent of the outstanding Series A
Preferred Stock:
(a) alter or change the rights, preferences or privileges of the
Series A Preferred Stock materially and adversely; or
(b) create any new class of shares having preference over or
being on parity with the Series A Preferred Stock.
2. Series B Preferred Stock. So long as any Series B Preferred Stock
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shall be outstanding, the Corporation shall not without first obtaining the
approval of the holders of more than 50 percent of the outstanding Series B
Preferred Stock:
(a) alter or change the rights, preferences or privileges of the
Series B Preferred Stock materially and adversely;
(b) create any new class of shares having preference over or
being on parity with the Series B Preferred Stock; or
(c) increase the authorized number of shares of Preferred Stock.
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3. Series C Preferred Stock. So long as at least 1,000,001 shares of
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Series C Preferred Stock shall be outstanding, the Corporation shall not without
first obtaining the approval of the holders of more than 50 percent of the
outstanding Series C Preferred Stock:
(a) alter or change the rights, preferences or privileges of the
Series C Preferred Stock materially and adversely; or
(b) create any new class of shares having preference over or being
on parity with the Series C Preferred Stock; or
(c) increase the authorized number of shares of Preferred Stock;
provided that the covenants set forth in this Section IV.E.3 shall terminate
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upon the closing of the first sale to the public by the Company of its Common
Stock pursuant to a firmly underwritten offering registered under the Securities
Act of 1933, as amended.
F. Residual Rights. All rights accruing to the outstanding shares of the
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Corporation not expressly provided for to the contrary herein shall be vested
with the Common Stock.
ARTICLE V
The name and mailing address of the incorporator are as follows:
Stephen M. Welles
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
ARTICLE VI
A. Number of Directors . The number of directors, which constitutes the
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whole Board of Directors of the Corporation, shall be designated in the Bylaws
of the Corporation.
B. Election of Directors . Elections of directors need not be by written
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ballot except and to the extent provided in the Bylaws of the Corporation.
ARTICLE VII
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of the Corporation, but the stockholders may make additional Bylaws
and may alter or repeal any Bylaw whether adopted by them or otherwise.
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ARTICLE VIII
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, 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 Delaware General Corporation
Law or (iv) for any transaction from which the director derived any improper
personal benefit, and to the extent such exemption from liability or limitation
thereof is not permitted under the Delaware General Corporation law as the same
exists or may hereafter be amended. If the Delaware General Corporation Law is
amended after the filing of this Certificate of Incorporation 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 Delaware General
Corporation Law, as so amended. Any repeal or modification of this Article VIII
shall not adversely affect any right or protection of a director of the
Corporation existing hereunder with respect to any act or omission occurring
prior to such repeal or modification.
ARTICLE IX
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 of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this right.
* * *
The undersigned incorporator hereby acknowledges that the above Certificate
of Incorporation of Xpeed Networks, Inc. is the act and deed of such
incorporator and that the facts stated therein are true.
Dated: July 20, 2000 /s/ Stephen M. Welles
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Stephen M. Welles
Incorporator
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