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Exhibit 99.(D)(1)
RESTATED CERTIFICATE OF INCORPORATION OF
CRESCENDO PHARMACEUTICALS CORPORATION
(Originally incorporated under the same name on June 26, 1997)
FIRST: Name. The name of this corporation is Crescendo Pharmaceuticals
Corporation (the "corporation").
SECOND: Registered Office; Registered Agent. The address of the registered
office of this corporation in the State of Delaware is 1013 Centre Road, in the
City of Wilmington, County of New Castle. The name of the registered agent of
this corporation at such address is Corporation Service Company.
THIRD: Purpose. The purpose of this corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: Authorized Capital Stock.
(A) This corporation is authorized to issue two classes of shares, which
shall be known as Class A Common Stock ("Class A Common Stock") and Class B
Common Stock ("Class B Common Stock"). The total number of shares of stock of
all classes that this corporation is authorized to issue is 6,001,000. The
total number of shares of Class A Common Stock which this corporation is
authorized to issue is 6,000,000. The total number of shares of Class B Common
Stock which this corporation is authorized to issue is 1,000. Each share of
Class A Common Stock shall have a par value of $0.01, and each share of Class B
Common Stock shall have a par value of $1.00.
Effective immediately upon the filing of this Restated Certificate of
Incorporation, each share of Common Stock, par value $1.00 per share, of this
corporation outstanding immediately prior to such filing shall be converted
into and reclassified as ten shares of Class B Common Stock.
(B) The powers, designations, preferences, and relative, participating,
optional or other special rights granted to, and the qualifications,
limitations and restrictions imposed upon, the Class A Common Stock and Class B
Common Stock and the respective holders thereof are as follows:
(1) Redemption. The shares of Class A Common Stock are redeemable and
may be redeemed as provided in (but only as provided in) Article FIFTH,
Section (F).
(2) Dividends. The holders of shares of Class A Common Stock and Class B
Common Stock shall be entitled to receive per share and without reference
such dividends as may be declared by the Board of Directors from time to
time out of funds legally available therefor. No dividend may be declared
on the Class A Common Stock unless the same per share dividend is declared
on the Class B Common Stock, and no dividend may be declared on the Class B
Common Stock unless the same per share dividend is declared on the Class A
Common Stock. Dividends may not be declared, nor may shares of Class A
Common Stock or Class B Common Stock be repurchased, or redeemed (other
than pursuant to Section (F) of Article FIFTH), if, after payment of such
dividend, or after effecting such repurchase or redemption, the amount of
this corporation's cash, cash equivalents, short-term and long-term
investments would be less than the amount of Available Funds remaining
after expenditures pursuant to the Development Agreement, as of the date of
such dividend, repurchase or redemption.
(3) Liquidation. In the event of voluntary or involuntary liquidation of
this corporation, the holders of the Class A Common Stock and Class B
Common Stock of the corporation shall be entitled to receive, on a pro rata
per share basis and without preference, all of the remaining assets of this
corporation available for distribution to its stockholders.
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(4) Voting Rights. Except as otherwise required by law or provided
herein, the holders of Class A Common Stock and Class B Common Stock shall
vote together as a single class. Each holder of Class A Common Stock and
Class B Common Stock shall have one vote for each share standing in his or
her name on all matters submitted to a vote of holders of the common
shares. At any meeting of the stockholders of this corporation, the
determination of a quorum shall be based upon the presence of shares of
Class A Common Stock and Class B Common Stock representing a majority of
the voting power of all of the shares of Class A Common Stock and Class B
Common Stock. This corporation shall not, without the affirmative vote of
the holders of a majority of the issued and outstanding shares of Class B
Common Stock, voting separately and as a class, (a) alter or change the
powers, designations, preferences and relative, participating, optional or
other special rights granted to, or the qualifications, limitations and
restrictions imposed upon, the Class A Common Stock or the Class B Common
Stock, (b) alter or change this Article FOURTH or any of Articles FIFTH,
SIXTH or SEVENTH of this Restated Certificate of Incorporation, or
otherwise make any amendment to this Restated Certificate of Incorporation
that would alter the rights of the holders of the Class B Common Stock, (c)
authorize the creation or issuance of any additional class or series of
stock, (d) undertake the voluntary dissolution, liquidation or winding up
of this corporation, (e) merge or consolidate this corporation with or into
any other corporation or entity, (f) sell, lease, exchange, transfer or
otherwise dispose of any substantial asset of this corporation or (g) alter
the bylaws of this corporation in a manner described in the last sentence
of Article EIGHTH. Furthermore, from and after the Purchase Option Exercise
Date, as defined in Article FIFTH, (i) the Board of Directors of this
corporation shall cease to be classified and the holders of the Class B
Common Stock shall be entitled to remove directors with or without cause;
(ii) the number of directors of this corporation shall be increased to a
number equal to (a) two times the maximum number of directors then
authorized pursuant to Article SEVENTH, Section (A) (counting for this
purpose both directors in office and vacant directorships), plus (b) one;
and (iii) the holders of the Class B Common Stock shall have the sole right
to elect the directors of this corporation, including directors to fill the
new directorships created pursuant to clause (ii). No new directorships
created as a result of the increase in the size of the Board of Directors
pursuant to the preceding sentence shall be filled other than by the
holders of the Class B Common Stock. From and after the Purchase Option
Exercise Date all directors shall be elected to one year terms; provided,
however, that the term of any director then in office shall not be reduced.
(5) Conversion. The Class B Common Stock shall automatically convert
into fully paid and non-assessable shares of Class A Common Stock of this
corporation at 12:01 a.m. New York time on the day immediately following
the expiration of the Purchase Option without exercise granted in Article
FIFTH. The Class B Common Stock shall convert into Class A Common Stock at
the rate of one share of Class A Common Stock for each share of Class B
Common Stock.
FIFTH: Purchase Option.
(A) Definitions. For purposes of this Restated Certificate of Incorporation,
the following terms shall have the following definitions:
(1) ALZA means ALZA Corporation and its successors, or assigns of the
Purchase Option.
(2) ALZA Common Stock means the Common Stock of ALZA or, if such Common
Stock is converted into or exchanged for another class or series of stock
of ALZA or any other corporation, such other class or series of stock.
(3) Available Funds means, as of any date of determination, $300 million
(contributed by ALZA on or about September 30, 1997), plus any investment
income earned thereon, less (i) this corporation's reasonable ongoing
administrative expenses, (ii) the Technology Fee and (iii) reserves of up
to $2 million as determined in good faith by the Board of Directors.
(4) Crescendo Product means an Identified Product, or another human
pharmaceutical product which has been recommended by ALZA and accepted by
the Board of Directors of this corporation for development as such under
the Development Agreement.
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(5) Developed Technology means any technology generated or otherwise
obtained pursuant to the Development Agreement.
(6) Developed Technology Product means any product other than a
Crescendo Product (i) covered, at the time of sale in a country, by one or
more unexpired patents issued in such country that are included in
Developed Technology and (ii) with respect to which ALZA receives any
consideration.
(7) Developed Technology Royalties means the payments made by ALZA to
this corporation with respect to sales of Developed Technology Products.
(8) Development Agreement means the Development Agreement between ALZA
and this corporation, dated as of September 5, 1997, as such agreement may
be amended or modified from time to time by amendments approved by ALZA and
the Board of Directors of this corporation.
(9) Fair Market Value means, with reference to ALZA Common Stock, (a) if
ALZA Common Stock is listed on the New York Stock Exchange or any other
securities exchange reporting closing sales prices (including without
limitation the Nasdaq National Market), the average of the closing sales
price of ALZA Common Stock on such exchange (which shall be the New York
Stock Exchange or, if ALZA Common Stock is not then traded on such
exchange, on the principal exchange on which ALZA Common Stock is then
traded), for the twenty trading days ending with the trading day that is
two trading days prior to the date of determination, (b) if ALZA Common
Stock is not listed on any securities exchange described in clause (a) but
is quoted on Nasdaq or another quotation system providing bid prices, the
average (over the twenty day period described in clause (a)) of the bid
prices for each day in such period on Nasdaq (or, if ALZA Common Stock is
not then quoted on Nasdaq, the largest quotation system on which ALZA
Common Stock is then quoted), and (c) if ALZA Common Stock is not listed on
any exchange or quoted on any quotation system, the value thereof as
determined in good faith by ALZA's board of directors.
(10) Final Purchase Option Exercise Price means the Purchase Option
Exercise Price minus (a) the amount by which this corporation's Liabilities
existing at the Purchase Option Exercise Date (other than liabilities under
the Development Agreement, Services Agreement and Technology License
Agreement) exceed the aggregate of this corporation's then existing cash,
cash equivalents and short-term and long-term investments (but excluding
from such cash, cash equivalents and short-term and long-term investments
the amount of Available Funds determined as of the Purchase Option Exercise
Date which had not, as of such date, been paid by this corporation in
accordance with the Development Agreement) and minus (b), if the Purchase
Option Exercise Price was determined based upon the provisions of clause
(c) of Section (A)(19) of this Article FIFTH, any additional amounts not
already included in the calculation set forth in Article FIFTH, Section
(A)(18) that are paid by (or due from) this corporation under the
Development Agreement from the date of the last report of such expenditures
provided by this corporation to ALZA in a Status Statement through the
Purchase Option Exercise Date pursuant to the Development Agreement.
(11) Identified Products means the following products: OROS(R)
oxybutynin, DUROS(TM) leuprolide, OROS(R) methylphenidate, IUTS
progesterone, D- TRANS(TM) testosterone matrix, E-TRANS(TM) LHRH and E-
TRANS(TM) (skin interface technology) insulin.
(12) Liabilities means, with respect to this corporation, (a) all
liabilities required to be reflected or reserved against in this
corporation's financial statements under generally accepted accounting
principles consistently applied ("GAAP"), (b) any guaranty of any
indebtedness of another person and (c) any reimbursement or similar
obligation with respect to any letter of credit issued for the account of
this corporation or as to which this corporation is otherwise liable.
Liabilities of the type described in (b) and (c) shall be valued at the
full amount of the potential liability of the corporation thereon.
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(13) License Agreement means any License Agreement between ALZA and this
corporation entered into upon the exercise by ALZA of the license option
granted to it pursuant to the License Option Agreement, as any such
agreement may be amended or modified from time to time by amendments
approved by ALZA and the Board of Directors of this corporation.
(14) License Option Agreement means the License Option Agreement between
ALZA and this corporation dated as of September 5, 1997, as such agreement
may be amended or modified from time to time by amendments approved by ALZA
and the Board of Directors of this corporation.
(15) Licensed Product means a Crescendo Product as to which the license
option under the License Option Agreement has been exercised by ALZA.
(16) Product Payments means payments made by ALZA to this corporation
under a License Agreement with respect to Licensed Products.
(17) Purchase Option Exercise Date means the date upon which ALZA
notifies this corporation in writing of its exercise of the Purchase Option
as provided in Section (C) of this Article FIFTH.
(18) Purchase Option Exercise Price means the greatest of the following:
(a) (i) 25 times the actual worldwide Product Payments, Developed
Technology Royalties and Technical Evaluation Product Payments made by
or due from ALZA to this corporation with respect to all Licensed
Products, Developed Technology Products and Technical Evaluation
Products (and, in addition, such Product Payments, Developed Technology
Royalties and Technical Evaluation Product Payments as would have been
made by or due from ALZA to this corporation if ALZA had not previously
exercised its payment buy-out option with respect to any such Licensed
Product, Developed Technology Product or Technical Evaluation Product)
for the four calendar quarters immediately preceding the quarter in
which the Purchase Option is exercised (provided, however, that for any
Licensed Product, Developed Technology Product or Technical Evaluation
Product which has not been commercially sold during each of the four
calendar quarters immediately preceding the quarter in which the
Purchase Option is exercised, the portion of the Purchase Option
Exercise Price for such Licensed Product, Developed Technology Product
or Technical Evaluation Product will be 100 times the average of the
quarterly Product Payments, Developed Technology Royalties or Technical
Evaluation Product Payments made by or due from ALZA to this
corporation for each of such calendar quarters during which such
product was commercially sold) less (ii) any amounts previously paid to
exercise any payment buy-out option for any Licensed Product, Developed
Technology Product or Technical Evaluation Product pursuant to a
License Agreement or the Development Agreement.
(b) the Fair Market Value of one million shares of ALZA Common Stock
(which number of shares shall be proportionately adjusted for any stock
dividend, split-up, combination or reclassification of the ALZA Common
Stock) determined as of the Purchase Option Exercise Date;
(c) $325 million less the total amount paid by or due from this
corporation under the Development Agreement as last reported by this
corporation to ALZA in a Status Statement through the Purchase Option
Exercise Date; and
(d) $100 million.
(19) Purchase Option Expiration Time means 11:59 p.m. New York time on
January 31, 2002; provided that such date will be extended for successive
six month periods if, as of any July 31 or January 31 beginning with July
31, 2001, this corporation has not paid (or accrued expenses for) at least
95% of all Available Funds pursuant to the Development Agreement.
Notwithstanding the foregoing sentence, the Purchase Option Expiration Time
will in no event occur later than 11:59 p.m. New York time on the 60th day
after this corporation provides ALZA with a statement that, as of the end
of any calendar
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month, there are less than $2.5 million of Available Funds remaining after
expenditures pursuant to the Development Agreement, accompanied by a report
of this corporation's independent auditors stating that nothing has come to
their attention indicating that there are $2.5 million or more of Available
Funds remaining at that date.
(20) Services Agreement means the Services Agreement between ALZA and is
corporation, dated as of September 5, 1997, as such agreement may be
amended or modified from time by amendments approved by ALZA and the Board
of Directors of this corporation.
(21) Status Statement means, as of any date, a balance sheet prepared by
the Company and delivered to ALZA dated as of such date, together with (a)
a statement and brief description of all other liabilities of this
corporation constituting Total Liabilities as of such date not reflected on
such balance sheet, (b) a statement of the amount of Available Funds
remaining as of such date, and (c) a statement of the total amounts paid by
and due from this corporation pursuant to the Development Agreement through
such date.
(22) Technical Evaluation means limited technical evaluation involving a
proprietary therapeutic agent of a third party undertaken in order to
determine the suitability of such therapeutic agent in an ALZA drug
delivery system or to induce the third party to license the therapeutic
agent to ALZA or this corporation or otherwise collaborate with ALZA and
this corporation in the development of a product.
(23) Technical Evaluation Product means a product, other than one which
becomes a Crescendo Product, for which this corporation funds a Technical
Evaluation.
(24) Technical Evaluation Product Payments means the payments made by
ALZA to this corporation with respect to sales of Technical Evaluation
Products.
(25) Technology Fee means the payments to be made over a maximum period
of three years by this corporation to ALZA in exchange for ALZA granting
this corporation a license to use certain technology relating to the
Identified Products.
(26) Technology License Agreement means the Technology LicenseAgreement
between ALZA and this corporation, dated as of September 5, 1997, as such
agreement may be amended or modified from time to time by amendments
approved by ALZA and the Board of Directors of this corporation.
(27) Total Liabilities means (a) all Liabilities, plus (b) any other
debts, liabilities or obligations, absolute or contingent, matured or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising, including all costs and expenses relating
thereto, and including those debts, liabilities and obligations arising
under any law, rule or regulation, or under any pending or threatened
action, suit or proceeding, or any order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
(B) Grant of Option. ALZA is hereby granted an exclusive irrevocable
purchase option to purchase all issued and outstanding shares of Class A Common
Stock of this corporation for the Final Purchase Option Exercise Price (the
"Purchase Option"). The Purchase Option, if exercised, must be exercised as to
all, but not less than all, issued and outstanding shares of Class A Common
Stock and may be exercised at any time at or prior to the Purchase Option
Expiration Time. ALZA shall elect, at the time of exercise of the Purchase
Option, to pay all or any portion of the Final Purchase Option Exercise Price
in cash, ALZA Common Stock (valued at its Fair Market Value determined as of
the Purchase Option Exercise Date), or any combination thereof. The Purchase
Option, together with the other rights of ALZA under this Article FIFTH and
Article SIXTH, may, at ALZA's option, be assigned or otherwise transferred to
any person or entity, including this corporation.
(C) Manner of Exercise. The Purchase Option shall be exercised, if at all,
at or before the Purchase Option Expiration Time by written notice (the
"Exercise Notice") from ALZA to this corporation stating that
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the Purchase Option is being exercised and setting forth (1) the Purchase
Option Exercise Price; (2) the portion, if any, of the Final Purchase Option
Exercise Price to be paid in cash and the portion, if any, of the Final
Purchase Option Exercise Price to be paid in ALZA Common Stock, and if any
portion of the Final Purchase Option Exercise Price is to be paid in ALZA
Common Stock, stating the Fair Market Value of such ALZA Common Stock
determined as of the Purchase Option Exercise Date; and (3) a closing date (the
"Closing Date") on which all of the issued and outstanding shares of Class A
Common Stock will be purchased. The Purchase Option shall be deemed to be
exercised as of the date of mailing by first class mail of the Exercise Notice
to this corporation at its principal offices.
(D) Closing.
(1) Closing Date; Cooperation. Except as set forth below, the Closing
Date shall be the date specified as such in the Exercise Notice, which date
specified shall be no later than 60 days after the Purchase Option Exercise
Date. The Closing Date may be extended by ALZA if, in the judgment of ALZA,
an extension of the Closing Date is necessary to obtain any governmental or
third party consent to the purchase of the Class A Common Stock, to permit
any necessary registration statement or similar filing to be declared
effective, or to permit the expiration prior to the Closing Date of any
statutory or regulatory waiting period. ALZA may extend the Closing Date
for the reasons set forth in the preceding sentence by delivering written
notice of such extension to this corporation on or prior to the previously
specified Closing Date. This corporation shall cooperate with ALZA to
effect the closing of the Purchase Option, including without limitation
seeking any required third-party or governmental consents, and filing any
applications, notifications, registration statements or the like which may
be necessary to effect the closing.
(2) Certain Restrictions Following Purchase Option Exercise Date. From
the Purchase Option Exercise Date until the Closing Date, this corporation
will not take any of the following actions (or permit any such actions to
be taken on its behalf) except with the prior written consent of ALZA:
(a) borrow money, or mortgage, remortgage, pledge, hypothecate or
otherwise encumber any of its assets;
(b) sell, lease, lend, exchange or otherwise dispose of any of its
assets, other than sales of inventory in the ordinary course of
business;
(c) pay or declare any dividends or make any distributions on or in
respect of any shares of its capital stock;
(d) default in its obligations under any material contract,
agreement, commitment or undertaking of any kind or enter into any
material contract, agreement, purchase order or other commitment; or
(e) enter into any other transaction or agreement or arrangement, or
incur any liabilities, not in the ordinary course of this corporation's
business.
(3) Determination of Final Purchase Option Exercise Price. Not later
than 15 business days following the Purchase Option Exercise Date, this
corporation shall deliver a final Status Statement to ALZA prepared as of
the Purchase Option Exercise Date. Following receipt of such Status
Statement and completion of any other investigation as ALZA shall deem
necessary or appropriate, and prior to the Closing Date, ALZA shall
determine the Final Purchase Option Exercise Price by making the
adjustments to the Purchase Option Exercise Price contemplated by Section
(A)(10) of this Article FIFTH and shall notify this corporation of such
determination.
(4) Payment of Final Purchase Option Exercise Price. On or before the
Closing Date, ALZA shall deposit the full amount of the Final Purchase
Option Exercise Price with a bank or banks or similar entities designated
by ALZA (which may include ALZA's transfer agent if shares of ALZA Common
Stock are being delivered) to pay, on ALZA's behalf, the Final Purchase
Option Exercise Price (the
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"Payment Agent"). Funds, if any, and ALZA Common Stock, if any, deposited
with the Payment Agent shall be delivered in trust for the benefit of the
holders of Class A Common Stock, and ALZA shall provide the Payment Agent
with irrevocable instructions to pay, on or after the Closing Date, the
Final Purchase Option Exercise Price for the shares of Class A Common Stock
to the holders of record thereof determined as of the Closing Date. Payment
for shares of Class A Common Stock shall be mailed to each holder at the
address set forth in this corporation's records or at the address provided
by each holder or, if no address is set forth in this corporation's records
for a holder or provided by such holder, to such holder at the address of
this corporation. As soon as practicable upon ALZA's request, this
corporation shall provide, or shall cause its transfer agent to provide, to
ALZA or to the Payment Agent, free of charge, a complete list of the record
holders of shares of Class A Common Stock, as of a specified date,
including the number of shares of Class A Common Stock held of record and
the address of each record holder as set forth in the records of this
corporation's transfer agent.
(E) Transfer of Title. Transfer of title to all of the issued and
outstanding shares of Class A Common Stock shall be deemed to occur
automatically on the Closing Date and thereafter this corporation shall be
entitled to treat ALZA as the sole holder of all of the issued and outstanding
shares of its Class A Common Stock, notwithstanding the failure of any holder
of Class A Common Stock to tender the certificates representing such shares to
the Payment Agent, whether or not such tender is required or requested by the
Payment Agent. This corporation shall instruct its transfer agent not to accept
any shares of Class A Common Stock for transfer on and after the Closing Date.
This corporation shall take all actions reasonably requested by ALZA to assist
in effectuating the transfer of shares of Class A Common Stock in accordance
with this Article FIFTH.
(F) Redemption of Class A Common Stock. At ALZA's election (which election
may be made at any time, provided it is made, by delivery of written notice
thereof to this corporation, not less than five days prior to the Closing
Date), this corporation shall, subject to applicable restrictions in the
Delaware General Corporation Law, redeem on the Closing Date all issued and
outstanding shares of Class A Common Stock for an aggregate redemption price
equal to the Final Purchase Option Exercise Price. Such redemption shall be in
lieu of ALZA paying the Final Purchase Option Exercise Price directly to the
stockholders of this corporation, and shall be subject to ALZA providing the
Final Purchase Option Exercise Price to this corporation to allow this
corporation to pay the redemption price.
SIXTH: Protective Provisions.
(A) Legend. Certificates evidencing shares of Class A Common Stock issued by
or on behalf of this corporation shall bear a legend in substantially the
following form:
"The shares of Crescendo Pharmaceuticals Corporation evidenced hereby are
subject to an option in favor of ALZA Corporation, its successors and assigns,
as described in the Restated Certificate of Incorporation of Crescendo
Pharmaceuticals Corporation to purchase such shares at a purchase price
determined in accordance with Article FIFTH thereof exercisable by notice
delivered to this corporation at or prior to the Purchase Option Expiration
Time (as defined in the Restated Certificate of Incorporation of Crescendo
Pharmaceuticals Corporation). Copies of the Restated Certificate of
Incorporation of Crescendo Pharmaceuticals Corporation are available at the
principal place of business of Crescendo Pharmaceuticals Corporation at 1454
Page Mill Road, Palo Alto, California 94304 and will be furnished to any
stockholder on request and without cost."
(B) No Conflicting Action. This corporation shall not take, nor permit any
other person or entity within its control to take, any action inconsistent with
ALZA's rights under Article FIFTH. This corporation shall not enter into any
arrangement, agreement or understanding, whether oral or in writing, that is
inconsistent with or limits or impairs the rights of ALZA and the obligations
of this corporation hereunder, including without limitation any arrangement,
agreement or understanding which imposes any obligation upon this corporation,
or deprives this corporation of any material rights, as a consequence of the
exercise of the Purchase Option or the acquisition of the outstanding Class A
Common Stock pursuant thereto.
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(C) Inspection and Visitation Rights; Status Statements. ALZA shall have the
right to inspect and copy, on reasonable notice and during regular business
hours, the books and records of this corporation. ALZA shall also have the
right to request from time to time (but not more frequently than monthly) a
Status Statement as of such date as ALZA may request. Each Status Statement
shall be sent within seven days of request by ALZA. ALZA shall also have the
right to send a non-voting representative to attend all meetings of this
corporation's Board of Directors and any committees thereof. Any
representative, if designated in writing by ALZA as such, shall receive notice
of all meetings of this corporation's Board of Directors and each committee
thereof, as well as copies of all documents and other materials provided to any
directors of this corporation in connection with any such meeting not later
than the time such materials are provided to other directors. Such
representative shall also be provided with copies of all resolutions adopted or
proposed to be adopted by unanimous written consent not later than the time
such resolutions are provided to other directors.
SEVENTH: Board of Directors.
(A) The number of directors which shall constitute the whole Board of
Directors of this corporation shall initially be three, but may be increased or
decreased from time to time by a resolution duly adopted by the Board of
Directors and shall be automatically increased as provided in Article FOURTH,
Section (B)(4).
(B) Nomination of candidates for election to the Board of Directors shall be
made as provided in the bylaws of this corporation. Election of directors need
not be by written ballot.
(C) Subject to Article FOURTH, Section (B)(4), the Board of Directors shall
be and is divided into three classes: Class I, Class II and Class III. Each
director shall serve for a term ending on the date of the third annual meeting
of stockholders following the annual meeting at which the director was elected;
provided, however, that each initial director in Class I shall hold office
until the annual meeting of stockholders in 1998; each initial director in
Class II shall hold office until the annual meeting of stockholders in 1999;
and each initial director in Class III shall hold office until the annual
meeting of stockholders in 2000. Notwithstanding the foregoing provisions of
this Article SEVENTH, each director shall serve, until his or her successor is
duly elected and qualified or until his or her death, resignation,
disqualification or removal.
(D) In the event of any increase or decrease in the authorized number of
directors, the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
(E) Except as otherwise provided in Article FOURTH, Section (B)(4), or as
required by law, newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or other cause shall be filled by
the affirmative vote of a majority of the remaining directors then in office
(and not by stockholders), even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified.
(F) The name and mailing address of each person who is to serve as a
director until the annual meeting of the stockholders entitled to vote for the
class or until a successor is elected or appointed and qualified are as
follows:
<TABLE>
<CAPTION>
Name Mailing Address Class
---- --------------- -----
<S> <C> <C>
James Butler................... 950 Page Mill Road, Palo Alto, CA 94304 I
Dr. Samuel R. Saks............. 950 Page Mill Road, Palo Alto, CA 94304 II
Dr. James W. Young............. 950 Page Mill Road, Palo Alto, CA 94304 III
</TABLE>
EIGHTH: Bylaws. In furtherance and not in limitation of the powers conferred
by statute, and subject to the next sentence, the Board of Directors and the
stockholders of this corporation are each expressly authorized
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to adopt, amend or repeal the bylaws of this corporation subject to any
particular provisions concerning amendments set forth in this Restated
Certificate of Incorporation or the bylaws of this corporation. No amendment to
the bylaws may be adopted by the stockholders without the approval of holders
of a majority of the Class B Common Stock voting separately as a class if such
amendment would affect the classification of the Board of Directors, or would
otherwise regulate the conduct of the Board's affairs or the manner in which it
may act.
NINTH: Stockholder Meetings.
(A) Special Meetings. Special meetings of the stockholders for any purpose
or purposes whatsoever may be called at any time only by the Board of
Directors, the Chairman of the Board or the President of this corporation.
(B) No Action Without Meeting. At any time when this corporation has more
than one stockholder of any class of capital stock, no action required to be
taken or which may be taken at any annual or special meeting of the
stockholders may be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action is
specifically denied. Notwithstanding the foregoing, the holder or holders of
the Class B Common Stock may take any action permitted to be taken by such
holders as a class by written consent without a meeting.
TENTH: Limitation of Liability and Indemnification of Directors.
(A) Elimination of Certain Liability of Directors. No director of this
corporation shall be personally liable to this corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director except, to the
extent provided by applicable law, for liability (i) for any breach of the
director's duty of loyalty to this 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 an
improper personal benefit. No amendment to or repeal of this Article TENTH
shall apply to or have any effect on the liability or alleged liability of any
director of this corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment.
(B) Indemnification and Insurance.
1. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), because he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of this corporation
or is or was serving at the request of this corporation as a director,
officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (including service with respect to
employee benefit plans), whether the basis of the proceeding is alleged
action in an official capacity as a director, officer, employee or agent or
in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by this corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits this corporation
to provide broader indemnification rights than that law permitted this
corporation to provide before such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, penalties, fines,
Employee Retirement Income Security Act of 1974 excise taxes or penalties,
and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith; provided, however, that
this corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person
only if the proceeding (or part thereof) was authorized by the Board of
Directors of this corporation. Such indemnification shall continue as to a
person who has ceased to be a director or officer of this corporation and
shall inure to the benefit of his or her heirs, executors and
administrators. The right to indemnification conferred by this Section
shall be a contract right which may not be retroactively amended and shall
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include the right to be paid by this corporation the expenses incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that the payment of such expenses incurred by a director
or officer in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service with respect to
an employee benefit plan) in advance of the final disposition of the
proceeding shall be made only upon delivery to this corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if ultimately it shall be determined that such director
or officer is not entitled to be indemnified under this Section or
otherwise. This corporation may, by action of its Board of Directors,
provide indemnification to employees and agents of this corporation with
the same scope and effect as the indemnification of directors and officers.
2. Right of Claimant to Bring Suit. If a claim under Paragraph 1 of this
Section is not paid in full by this corporation within ninety (90) days
after a written claim has been received by this corporation, the claimant
may at any time thereafter bring suit against this corporation to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any, has been tendered to this corporation) that the
claimant has not met the standards of conduct which make it permissible
under the Delaware General Corporation Law for this corporation to
indemnify the claimant for the amount claimed, but the burden of proving
such defense shall be on this corporation. Neither the failure of this
corporation (including its Board of Directors, independent legal counsel,
or its stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual
determination by this corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action
or create a presumption that claimant has not met the applicable standard
of conduct.
3. Nonexclusivity of Rights. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of this
Restated Certificate of Incorporation, bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise.
4. Insurance. This corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of this corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not this corporation
would have the power to indemnify such person against such expense, liability
or loss under the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned officer has executed this Restated
Certificate of Incorporation on September 4, 1997 and does hereby certify that
this Restated Certificate of Incorporation, which restates and integrates, and
also further amends, the provisions of this corporation's Certificate of
Incorporation, was duly adopted by the stockholders of this corporation in
accordance with Sections 242 and 245 of the Delaware General Corporation Law.
CRESCENDO PHARMACEUTICALS
CORPORATION
/s/ James W. Young
By: _________________________________
Dr. James W. Young
President and Chief Executive
Officer
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