<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1998
REGISTRATION NO. 333-1762
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CORVAS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
----------------------
Delaware 33-0238812
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3030 Science Park Road
San Diego, California 92121
(619) 455-9800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------------
Randall E. Woods
President and Chief Executive Officer
CORVAS INTERNATIONAL, INC.
3030 Science Park Road
San Diego, California 92121
(619) 455-9800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
Copies to:
M. Wainwright Fishburn, Jr., Esq.
Barbara L. Borden, Esq.
Alexander A. Fitzpatrick, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1200
San Diego, California 92121
(619) 550-6000
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, CHECK THE FOLLOWING BOX. /X/
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. / /
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. / /
IN ADDITION TO THE OTHER MATTERS SET FORTH IN THIS POST-EFFECTIVE AMENDMENT
NO. 1 (THE "AMENDMENT"), THE AMENDMENT IS BEING FILED TO DEREGISTER 2,250,000
SHARES OF COMMON STOCK (THE "DEREGISTERED SHARES") OF CORVAS INTERNATIONAL, INC.
COVERED BY THE FORM S-3 REGISTRATION STATEMENT NO. 333-1762 (THE "REGISTRATION
STATEMENT"). THE DEREGISTERED SHARES ARE NO LONGER RESTRICTED SECURITIES AND
ARE THEREFORE NO LONGER REQUIRED TO BE OFFERED BY THE HOLDERS THEREOF IN
REGISTERED RESALE TRANSACTIONS DESCRIBED IN THE PROSPECTUS FILED AS PART OF THE
REGISTRATION STATEMENT.
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<PAGE>
PROSPECTUS
4,400,000 SHARES
CORVAS INTERNATIONAL, INC.
COMMON STOCK
-------------------
This Prospectus relates to 4,400,000 shares (the "Shares") of Common Stock,
par value $0.001 per share (the "Common Stock"), of Corvas International, Inc.
("Corvas" or the "Company"), of which 3,000,000 shares are issuable upon the
exercise of certain outstanding warrants. The Shares may be offered by certain
stockholders of the Company (the "Selling Stockholders") from time to time in
transactions on the Nasdaq National Market, in privately negotiated transactions
or a combination of such methods of sale, at fixed prices that may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
the Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). See "Selling Stockholders" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear
certain expenses (including fees and expenses of one counsel to the Selling
Stockholders not to exceed $12,500) in connection with the registration and sale
of the Shares being offered by the Selling Stockholders. The Company has agreed
to indemnify the Selling Stockholders against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended. See "Plan of
Distribution."
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "CVAS." The last reported sales price of the Company's Common
Stock on the Nasdaq National Market on June 26, 1998 was $4.09 per share.
--------------------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 6 OF THIS PROSPECTUS.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 26, 1998
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN OR INCORPORATED
HEREIN BY REFERENCE, THE DISCUSSION IN THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT COULD CAUSE
OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN THE SECTIONS ENTITLED "THE COMPANY" AND "RISK FACTORS," AS WELL AS
THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS AND ANY DOCUMENTS INCORPORATED
HEREIN BY REFERENCE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the Commission's following Regional Offices: Chicago Regional Office, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661; and New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. In addition, the Commission maintains a World Wide Web
site at http://www.sec.gov that contains reports, proxy and information
statements, and other information regarding registrants that file electronically
with the Commission. In addition, the Common Stock is listed on the Nasdaq
National Market and similar documents and information concerning the Company are
available for inspection and copying at the offices of the National Association
of Securities Dealers, Inc., 1735 "K" Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which are omitted in accordance with the rules
and regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules thereto, which may be
inspected without charge at, and copies thereof may be obtained at prescribed
rates from, the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998, the Company's Form 8-K dated October 8, 1997 and
the Company's Form 8-A dated December 13, 1991, filed with the Commission are
hereby incorporated by reference into this Prospectus except as superseded or
modified herein.
All documents filed with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be
2.
<PAGE>
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written request of
such person, a copy of any and all of the documents that have been or later are
incorporated by reference herein (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Such
requests should be directed to the Principal Financial Officer at the Company's
principal executive offices at 3030 Science Park Road, San Diego, California
92121, telephone number (619) 455-9800.
3.
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THE COMPANY
Corvas International, Inc. ("Corvas" or the "Company") is a
biopharmaceutical firm engaged in the design and development of a new generation
of therapeutic agents for the treatment of blood clot formation (thrombosis),
inflammation, cancer and other diseases. In 1998, Corvas and its strategic
partners expect to conduct clinical trials on four Corvas developed drug
candidates that target major cardiovascular diseases (such as heart attack, deep
vein thrombosis ("DVT") and pulmonary embolism) and acute inflammation
associated with reperfusion injury in ischemic stroke. Corvas has developed its
portfolio of drug candidates by integrating its in-depth knowledge of the
biology of thrombosis and, more generally, vascular biology, with advanced and
proprietary drug discovery and design technologies.
The Company's planned 1998 clinical trials for four of its drug candidates
include: (i) three early stage trials currently being conducted by Corvas, and a
Phase II trial to be conducted by Corvas, which it anticipates will start in
late 1998, for Corvas' proprietary drug for the prevention of DVT (NAPc2); (ii)
a Phase I trial recently completed by Pfizer Inc. ("Pfizer") for an anti-
inflammatory drug (NIF); (iii) a Phase I trial for an orally active thrombin
inhibitor, which Schering Corporation ("Schering-Plough") commenced in June
1998; and (iv) a Phase I trial to be conducted by Corvas for a subcutaneously-
available drug for acute cardiovascular indications (NAP5), which Corvas
anticipates will start in the last quarter of 1998 or the first quarter of 1999.
Corvas' programs are based on three technology platforms: medicinal
chemistry, novel biologics discovery and vascular proteomics. Corvas' medicinal
chemistry programs, which have produced drug candidates demonstrating oral
activity, are the source of the Company's synthetic drug molecules. Corvas'
platform of novel biologics discovery, including gene discovery, cloning,
expression and mutagenesis, enables Corvas to identify and improve upon
naturally-occurring novel proteins as drug candidates. The Company believes its
newest technology platform, vascular proteomics, may enable it to identify
unique markers on the endothelium, the layer of cells that line blood vessels
and serve as gatekeepers, regulating the exposure of the underlying tissue to
oxygen, nutrients and drugs, which will allow it to selectively target
therapeutic treatments to specific tissues.
ANTITHROMBOTIC PROGRAMS. Corvas has focused its antithrombotic programs on
the development of both synthetic drug molecules and drugs based on naturally-
occurring, small molecule proteins that inhibit blood clot formation. Serine
proteases are key enzymes in the blood coagulation cascade and the Company's
programs are directed at inhibiting the activity of such proteases. The Company
is developing drug candidates that are each designed to inhibit one of these key
proteases in the coagulation cascade: thrombin, Factor Xa or Factor VIIa. The
Company, with Schering-Plough, has been developing orally active thrombin
inhibitors since late 1994. In 1995, Corvas conducted an initial human safety
study of an early generation orally active thrombin inhibitor. In this Phase I
study, the compound demonstrated oral activity and was well tolerated in normal
male volunteers. Schering-Plough began a Phase I trial in June 1998 on an
advanced generation orally active thrombin inhibitor.
The primary goal of the Factor Xa program is to develop safe and effective
orally active drugs to be used in clinical indications, such as chronic arterial
thrombosis. These indications may not be readily addressed by other protease
inhibitor drugs. The Company is developing these Factor Xa inhibitors in
collaboration with Schering-Plough.
The Company's scientists have discovered a class of naturally-occurring
small protein anticoagulants which inhibit either Factor Xa or Factor VIIa
complexed with its non-enzymatic co-factor, Tissue Factor ("Factor VIIa/TF").
In 1997, Corvas completed a Phase I clinical trial on healthy male volunteers
who were administered a single escalating dose of NAPc2, a member of the NAP
family that inhibits Factor VIIa/TF. Corvas is currently conducting a second
early stage trial, in which NAPc2 is being administered subcutaneously to
patients with disseminated intravascular coagulation ("DIC"), in order to
examine the safety, tolerability and pharmacokinetics in patients with an active
coagulation disorder. The initial clinical use for NAPc2 is anticipated to be
the prevention of DVT, the formation of blood clots in the veins of the legs
following orthopedic surgery. Corvas filed an Investigational New Drug
Application ("IND") in the first quarter of 1998, and is currently conducting
its third early stage NAPc2 trial, in which NAPc2 is being administered
subcutaneously to healthy human volunteers at three, 48
4.
<PAGE>
hour intervals over eight days. This single-center U.S. trial precedes a
planned multi-centered Phase II dose-finding trial directed at DVT beginning in
late 1998. A fourth early stage trial is being conducted in healthy male
volunteers to determine if recombinant Factor VIIa (Novoseven) can serve to
reverse the anticoagulant effects of NAPc2. To date, Corvas has not partnered
with any collaborators on this program and has retained all rights to this
compound. However, if the Phase II trial is successful, the Company may attempt
to enter into a collaborative agreement in connection with this program.
Corvas has developed another NAP drug, NAP5, which is a subcutaneously
available Factor Xa inhibitor. In the fourth quarter of 1998 or the first
quarter of 1999, Corvas plans to conduct a Phase I clinical trial which will
target NAP5 to treat acute cardiovascular indications such as DVT, pulmonary
embolism, myocardial infarction (heart attack) or unstable angina. Schering-
Plough has the option at the end of the Phase I trial to elect to assume
development of NAP5, subject to milestones and certain other payments to Corvas.
ANTI-INFLAMMATORY PROGRAM. Corvas' anti-inflammatory program is directed
at the development of drugs that prevent the acute inflammatory response that
often occurs after a stroke and can exacerbate damage to affected areas of the
brain. The Company's anti-inflammatory program has led to the discovery of a
family of Neutrophil Inhibitory Factors (NIF). These proteins block certain
white blood cell (neutrophil) functions associated with inflammation. In 1995,
Corvas entered into an option agreement with Pfizer to collaborate on the
development of NIF. In 1997, Pfizer exercised its option to enter into a
license and development agreement in connection with the NIF program. In
February 1998, Pfizer initiated a Phase I clinical trial to assess the safety,
tolerability, pharmokinetics and pharmacodynamics of a NIF protein in healthy
volunteers. Pfizer is expected to conduct additional safety and tolerability
studies in stroke patients later this year.
NEW DRUG PROGRAMS. The Company believes that it can leverage its
proprietary combinatorial chemistry approach developed in connection with its
antithrombotic program to develop therapeutics outside the antithrombotic
field. This technology allows the Company to develop synthetic libraries
dedicated to mechanism-based inhibitors specifically targeted at cysteine and
serine proteases. The Company is currently using this new technology to
develop two new programs. This combinatorial approach is being applied in a
proprietary program focused on the identification of inhibitors of urokinase
plasminogen activator ("uPA"). This protease has been associated with tumor
metastasis and the generation of new blood vessels (angiogenesis) in certain
solid tumors. The second of these new development programs, performed in
collaboration with Schering-Plough, is directed at a serine protease thought
to be responsible for replication of the hepatitis C virus. Several lead
compounds have been identified in each program, and are currently being
optimized and evaluated in relevant biological models.
NEW TECHNOLOGY PLATFORM. Corvas' newest, and emerging, technology platform
is in the area of vascular proteomics. In 1997, Corvas entered into an option
agreement with Vascular Genomics Inc. ("VGI") pursuant to which Corvas has the
right through June 2000 to acquire VGI, and the exclusive right to conduct
research and development during the option period using the VGI-developed
technology. VGI has a portfolio of technology, patents and patent applications
which the Company believes to be important in identifying unique sites on the
endothelium. Protein markers, unique to the cell surfaces of the endothelium in
specific organs and that distinguish tumors from healthy tissue, are known to
exist. Corvas' program objectives include (i) identifying markers on the
vascular endothelium associated with solid tumor cancers and then using these
markers for selective targeting of therapeutics to such vasculature and (ii)
understanding and exploiting the mechanism by which molecules are transported
across the endothelium, for the purpose of enhancing delivery of therapeutic
drugs to organs and tissues.
RECENT DEVELOPMENTS
In April 1998, Schering-Plough exercised the first of its options to extend
funding through May 1999 for the Company's development of an orally active
inhibitor of a key protease thought to be responsible for hepatitis C
replication. The one-year extension will provide approximately an additional
$1,600,000 in funding to the Company from Schering-Plough for this program.
5.
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In May 1998, the Company began a Phase I clinical trial to determine
whether NAPc2 is safe and well-tolerated following repeated subcutaneous
administrations in healthy volunteers. This is the third early stage clinical
trial on NAPc2.
In May 1998, Corvas began a fourth early stage NAPc2 trial on healthy male
volunteers to determine if recombinant Factor VIIa (Novoseven) can serve to
reverse the anticoagulant effects of NAPc2.
In June 1998, Schering-Plough notified the Company that Schering-Plough had
started a Phase I clinical trial on an oral antithrombotic drug candidate
discovered by the Company. The Phase I clinical trial triggered a $1,000,000
milestone payment under the Company's collaboration agreement with Schering-
Plough.
The Company is in the process of raising funds through an offer reducing
the exercise price of 3,000,000 shares subject to outstanding warrants for a
45 day period in order to induce the exercise of the warrants to purchase at
least 1,900,000 shares before the February 2002 expiration date. There is no
assurance that the offering will be successful or that the Company will not
elect to accept the exercise of fewer than 1,900,000 shares.
CORVAS-Registered Trademark- is a registered trademark, and the Corvas
logo, and CORSEVIN M-TM- are trademarks of the Company. NOVOSEVEN-Registered
Trademark- is a registered trademark of Novo Nordisk A/S.
6.
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RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS SET
FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS. THE FOLLOWING RISK FACTORS SHOULD
BE CONSIDERED CAREFULLY IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS AND IN ANY DOCUMENTS INCORPORATED HEREIN BY REFERENCE BEFORE
PURCHASING THE COMMON STOCK OFFERED HEREBY.
EARLY STAGE OF DEVELOPMENT
The Company is at an early stage of development and its primary sources of
revenue are from research funding, license fees and milestone payments from its
collaborations. To date, Corvas has completed early stage Phase I clinical
trials for only four product candidates, NIF, NAPc2, CVS-1123 and CORSEVIN M.
The Company's product candidates will require significant additional
development, clinical trials, regulatory approval and additional investment
prior to their commercialization, if any. The Company and its collaborative
partners and licensees do not expect to be able to market any of these product
candidates for a number of years, if at all. There is no assurance that the
Company's and its collaborative partners' and licensees' product development
efforts will progress any further or be successfully completed. In addition,
there is no assurance that the potential products will be capable of being
produced in commercial quantities at reasonable costs, that required regulatory
approvals can be obtained or that any potential products, if introduced, will be
successfully marketed or will be profitable to the Company.
CONTINUING OPERATING LOSSES; ACCUMULATED DEFICIT
The Company has experienced significant operating losses since its
inception in 1987. At March 31, 1998, the Company had an accumulated deficit of
approximately $71,066,000. The Company expects to incur substantial additional
operating losses over the next several years as the Company attempts to expand
its clinical trial and research and development efforts. Substantially all of
the Company's revenues to date have consisted of revenues from research funding
and milestones from collaborative agreements, license fees and interest income.
To achieve profitable operations, the Company, alone or with others, must
successfully develop, manufacture and market its current product candidates and
identify, develop, manufacture and market additional future products, all of
which will require regulatory approval. See "-- Uncertainties of Regulatory
Approval; Government Regulation."
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
The Company's operations to date have consumed substantial amounts of
cash. Negative cash flow from operations is expected to continue in the
foreseeable future. The Company will require substantial funds to conduct
research and development on, and preclinical and clinical testing of, its
product candidates and any future products, to market and sell such products
and, if necessary, to establish commercial scale manufacturing facilities.
The Company's future capital requirements will depend on many factors,
including, but not limited to, the following: the continued scientific
progress in its drug discovery programs; the magnitude of such programs; the
progress and results of preclinical testing and clinical trials; the costs
involved in complying with the regulatory process; the costs involved in
filing, prosecuting, maintaining and enforcing patent claims; the competing
technological and market developments; the changes in its existing research
relationships; the ability of the Company to establish and maintain
collaborative or licensing arrangements; the cost of manufacturing scale-up;
and the effectiveness of activities and arrangements of the Company or its
collaborative partners to commercialize the Company's products. The Company
intends to seek such additional funding either through collaborative
arrangements or through public or private financings. The Company is in the
process of raising funds through an offer to reduce the exercise price of
3,000,000 shares subject to outstanding warrants for a 45 day period in order
to induce the exercise of the warrants to purchase at least 1,900,000 shares
before the February 2002 expiration date. There is no assurance that the
offering will be successful or that the Company will not elect to accept the
exercise of fewer than 1,900,000 shares. Whether or not the offering is
successful, the Company will have to raise additional capital through another
financing means. There is no assurance that additional financing will be
available, or, if available, that it will be available on a timely basis or
on acceptable terms. If additional funds are raised by issuing securities,
further dilution, possibly substantial, to existing stockholders will likely
result. If adequate funds are not available,
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the Company may be required to delay, scale back or discontinue one or more of
its drug discovery programs, clinical trials, or other aspects of its
operations, or obtain funds through arrangements with collaborative partners or
others that may require the Company to relinquish rights to certain of its
technologies, product candidates or products that the Company would not
otherwise relinquish or at prices below that at which the Company would
otherwise choose to relinquish such rights.
RELIANCE ON COLLABORATIVE PARTNERS AND LICENSORS
Corvas has relied, and will continue to rely, on certain established
pharmaceutical companies interested in its technology to fund a portion of its
research and development expenses. The Company has entered into collaborative
research agreements with collaborative partners whereby such partners provide
capital in exchange for certain technology, product, manufacturing and marketing
rights related to the collaborative research, and other consideration.
To date, Corvas has entered into collaborative agreements with Pfizer for
the development of NIF and with Schering-Plough for (i) the discovery and
commercialization of orally active thrombin inhibitor drugs for the prevention
and treatment of chronic cardiovascular disorders, (ii) the discovery and
commercialization of orally active Factor Xa inhibitor drugs for the prevention
and treatment of chronic cardiovascular disorders, and (iii) the discovery and
commercialization of an orally active inhibitor of a hepatitis C protease for
the prevention and treatment of hepatitis C infections. As a result, the Company
is dependent on Pfizer and Schering-Plough with respect to the regulatory
filings relating to, and the clinical testing of, the Company's product
candidates and future product candidates developed under these collaborations
and license arrangements. At any time Pfizer or Schering-Plough may, based on
data obtained in these clinical trials or otherwise, elect to halt or repeat
these trials or conduct clinical trials using different formulations of these
product candidates. Any of these actions could result in delays or the
discontinuation of the clinical development of compounds covered by these
collaborations. Furthermore, the Company can not control the amount and timing
of resources dedicated by these collaborators. There is no assurance that
(i) the interests of the Company will continue to coincide with those of its
collaborators, or (ii) that the collaborators will continue the development of
any of the Company's product candidates, or (iii) that the collaborators will
not develop independently, or with third parties, products that could compete
with the Company's future products, or (iv) that disagreements between the
Company and its collaborators over rights, technology, other proprietary
interests or otherwise will not occur. Further, there is no assurance that the
collaborative agreements will be extended at the end of their respective terms.
If any of the Company's collaborators breaches or terminates its agreement with
the Company, or fails to conduct its collaborative activities in a timely
manner, the research program under the applicable collaborative agreement, or
the development and commercialization of product candidates subject to such
collaboration, as well as the Company's immediate liquidity and capital
resources may be adversely affected. There is no assurance that the Company's
existing collaborations will be successful, that the Company will receive any
further milestones or other payments pursuant to the collaborative agreements,
that the collaborations will continue since these collaborative agreements are
terminable at the option of the collaborator upon certain events, that the
collaborations will be commercially successful or that any products derived
therefrom will be profitable for the Company. If the strategic alliances are
not continued or successful, the Company's business, financial condition,
prospects and results of operations could be materially and adversely affected.
The Company's licenses include relationships with Ortho-Clinical
Diagnostics Inc. ("Ortho"), a Johnson and Johnson company, for the exclusive
manufacture and worldwide sales and marketing by Ortho of diagnostic tests
containing recombinant human tissue factor and with Centocor, Inc.
("Centocor") for the exclusive right to license and commercialize certain
monoclonal antibody products developed by Corvas. Although Centocor has
publicly disclosed that it is developing CORSEVIN M and is in the process of
evaluating protocols for additional clinical trials, to date, Centocor has
not informed Corvas that it has commenced any additional clinical trials on
CORSEVIN M and there is no assurance that Centocor will pursue the
commercialization of this Corvas-developed drug.
Corvas has also established collaborations with scientists at a number of
leading U.S. and European academic and clinical research centers to further its
technology and product development objectives. These collaborations are
generally conducted pursuant to agreements which give the Company a license, or
the option to
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negotiate a license, to certain technology, patent rights or materials which may
be valuable to the Company. These agreements may require the Company to fund
research or to pay license fees or milestone payments and, upon commercial sale
of certain products, royalties.
Corvas also expects to rely on additional collaborative arrangements to
develop and commercialize some of its product candidates in the future. There
is no assurance that the Company will be able to negotiate acceptable
collaborative or license arrangements or that such arrangements or its existing
arrangements will be successful. In addition, collaborative partners may pursue
alternative technologies or develop alternative compounds either on their own or
in collaboration with others, including the Company's competitors, as a means of
developing treatments for the diseases targeted by any collaborative programs.
UNPREDICTABILITY OF CONDUCTING PRECLINICAL AND CLINICAL TRIALS
Before obtaining required regulatory approvals for the commercial sale of
any of the Company's product candidates, the Company must demonstrate through
preclinical testing and clinical trials to the U.S. Food and Drug Administration
(the "FDA"), or any applicable foreign or state regulatory agency's
satisfaction, that each product candidate is safe and effective for use in
indications for which approval is requested. The results from preclinical
testing and early clinical trials may not be predictive of results obtained in
large clinical trials. Companies in the pharmaceutical and biotechnology
industries have suffered significant setbacks in various stages of clinical
trials, even in advanced clinical trials after promising results had been
obtained in earlier trials.
The development of safe and effective products is highly uncertain and
subject to numerous risks. Product candidates that may appear to be promising
in development may not reach the market for a number of reasons. Product
candidates may be found to be ineffective or to cause harmful side effects
during clinical trials, may take longer to progress through clinical trials than
had been anticipated, may fail to receive necessary regulatory approvals, may
prove impracticable to manufacture in commercial quantities at reasonable cost
and with acceptable quality, may not be subject to patient reimbursement from
third-party payors such as Medicare or may fail to achieve market acceptance.
Completion of research, preclinical testing and clinical trials may take several
years, and the length of time varies substantially with the type, complexity,
novelty and intended use of the product. In addition, data obtained from
preclinical and clinical activities are susceptible to varying interpretations,
which could delay, limit or prevent regulatory approval. Delays or rejections
may be encountered based upon many factors, including changes in regulatory
policy during the period of product development. There is no assurance that any
of the Company's development programs will be successfully completed, that any
regulatory applications to conduct clinical trials will be approved by the FDA
or other regulatory authorities or that clinical trials will commence or proceed
as planned.
The Company and its collaborative partners are in the process of conducting
or have recently completed clinical trials on three Corvas-developed drug
candidates, NAPc2, NIF and an advanced generation orally active thrombin
inhibitor. Corvas has received interim data from each of the trials and is in
the process of evaluating some of such data. After the trials are completed and
the data are fully analyzed, the Company or its collaborative partners may
conclude that one or more of the product candidates are ineffective, cause
harmful side effects or cannot be administered as planned, or conclude that
additional early stage trials are required in order to further evaluate the
product candidate. There is a risk that the outcomes of these trials will not
be favorable and a risk that a product candidate with promising results in prior
animal and human studies may fail.
All of the Company's product candidates are subject to extensive regulation
and will require approval from the FDA and other regulatory agencies prior to
commercial sale. The cost to the Company of conducting clinical trials for any
product candidate can vary dramatically based on a number of factors, including
the order and timing of clinical indications pursued and the extent of
development and financial support, if any, from collaborators. See "-- Future
Capital Needs; Uncertainty of Additional Funding" and "-- Uncertainties of
Regulatory Approval; Government Regulation."
9.
<PAGE>
In addition, because the Company will, in a number of cases, rely on its
contractual rights to access data collected by others in phases of its clinical
trials, the Company is dependent on the continued satisfaction by such parties
of their contractual obligations to provide such access and to cooperate with
the Company in the execution of successful filings with the FDA. There is no
assurance that the FDA will permit such reliance or that such data will prove
reliable. If the Company were unable to rely on clinical data collected by
others, the Company may be required to repeat clinical trials, which could
significantly delay commercialization and require significantly greater capital,
which may or may not be available to the Company.
The rate of completion of the Company's clinical trials is dependent upon,
among other factors, the number of patients to be included in the trial and the
rate of patient enrollment. Patient enrollment is a function of many factors,
including the size of the patient population, the nature of the protocol, the
proximity of patients to clinical sites and the eligibility criteria for the
study. More advanced studies requiring patients with particular clinical
indications may require longer enrollment periods. Delays in planned patient
enrollment may result in delays in commencement of clinical trials and increased
costs, which could have a material adverse effect on the Company's business,
financial condition, prospects and results of operations.
RISKS RELATED TO THE VASCULAR GENOMICS INC. OPTION
In June 1997, Corvas entered into an option agreement with VGI pursuant to
which the Company has the option through June 2000 to acquire all of the stock
of VGI in exchange for Corvas Common Stock or, in certain circumstances at the
option of the Company, a combination of cash and 633,600 shares of Corvas Common
Stock. The maximum aggregate purchase price ranged from $14,352,000 to
$19,960,000 as of March 31, 1998. In addition, under the option agreement,
Corvas makes certain monthly option payments and under a related research and
development agreement, VGI is required to pay to Corvas certain amounts to
sponsor its research and development expenses related to VGI's vascular
targeting technology. There is no assurance that the goals of the Company's
research and development efforts in connection with the VGI technology will be
achieved or that the technology will enable Corvas or any future collaborator to
selectively target therapeutics to tumor vasculature. If the Company elects to
exercise its option, the acquisition will be dilutive to existing Corvas
stockholders. The Company may have to decide whether to exercise the option
before it is able to further assess whether the VGI technology will have any
commercial value or provide any return on investment to Corvas. Further, if
Corvas elects not to exercise its option, VGI may require Corvas to purchase
19.9% of its outstanding stock for $3,960,000 in Corvas Common Stock, which
would result in additional dilution to existing stockholders.
UNCERTAINTIES OF REGULATORY APPROVAL; GOVERNMENT REGULATION
The developing, testing, manufacturing, labeling, advertising, promotion,
export, sale and distribution and marketing of the Company's product candidates
are subject to extensive regulation by numerous governmental authorities in the
U.S. and other countries. Any drug developed by the Company must undergo
rigorous preclinical and clinical testing and an extensive regulatory approval
process mandated by the FDA, certain state regulatory agencies and equivalent
foreign authorities before it can be marketed in such jurisdiction. These
processes can take a number of years and require the expenditure of substantial
resources, which may or may not be available to the Company. Products, if any,
resulting from the Company's existing research and development programs are not
expected to be commercially available for a number of years, if at all. See "-
Future Capital Needs, Uncertainty of Additional Funding."
The activities required before a pharmaceutical agent may be marketed in
the U.S. begin with preclinical testing. Preclinical tests include laboratory
evaluation of product chemistry and animal studies to assess the potential
safety and efficacy of the product and its formulations. The results of these
studies must be submitted to the FDA as part of an IND, which must be reviewed
and become effective pursuant to FDA regulations before proposed clinical
testing can begin. Typically, clinical testing involves a three-phase process.
In Phase I, clinical trials are conducted with a small number of subjects to
determine the early safety profile and the pattern of drug distribution and
metabolism. In Phase II, clinical trials are conducted with groups of patients
afflicted with a specified disease in order to determine preliminary efficacy,
optimal dosages and expanded evidence of safety. In
10.
<PAGE>
Phase III, large scale, multi-center, comparative clinical trials are
conducted with patients afflicted with a target disease in order to provide
enough data for the statistical proof of efficacy and safety required by the
FDA and others. The results of the preclinical and clinical testing are then
submitted to the FDA, for a pharmaceutical product in the form of a New Drug
Application ("NDA"), or for a biological product in the form of a Biology
License Application ("BLA"), for approval to commence commercial sales. In
responding to an NDA or BLA, the FDA may grant marketing approval, request
additional information or deny the application if it determines that the
application does not demonstrate, to the satisfaction of the FDA, that the
product is safe and effective for its labeled indications. For approved
products, the FDA requires that adverse effects be reported to the FDA and
may also require post-marketing testing to monitor for adverse effects, which
can involve significant expense.
The time required for completing such testing and obtaining such approvals
is uncertain and approval itself may not be obtained. To date, early stage
human clinical testing has been conducted on five Corvas product candidates,
NIF, NAPc2, CVS-1123, an advanced generation orally active thrombin inhibitor
and CORSEVIN M. Further testing of NIF by Pfizer, NAPc2 by Corvas, orally
active thrombin inhibitors by Schering-Plough and the Company's other product
candidates in research and development may reveal undesirable and unintended
side effects or other characteristics that may prevent or limit their commercial
use. The FDA or the Company and its collaborators may decide to discontinue or
to suspend clinical trials at any time if the subjects or patients who are
participating in such trials are being exposed to unacceptable health risks.
There is no assurance that the Company will not encounter problems in clinical
trials that will cause the FDA, the Company or a collaborator to delay or to
suspend clinical trials. Furthermore, there is no assurance that any of the
Company's products will be approved by the FDA, state or local authorities or
equivalent foreign authorities for any indication. Even if regulatory approval
of a product candidate is granted, such approval may entail limitations on the
indicated uses for which the product may be marketed. In addition, a marketed
product, its manufacturer and the facilities in which the product is
manufactured are subject to continual review and periodic inspections. Later
discovery of previously unknown problems with a product, manufacturer or
facility may result in liability for the Company, or restrictions on such
product or manufacturer, including withdrawal of the product from the market,
which would have a material adverse effect on the Company's business, financial
condition, prospects and results of operations. See "- Unpredictability of
Conducting Preclinical and Clinical Trials" and "- Risk of Product Liability;
Uncertainty of Availability of Insurance."
TECHNOLOGICAL CHANGE AND COMPETITION
The Company is engaged in a rapidly evolving field. Competition from other
biotechnology companies, pharmaceutical companies and research and academic
institutions is intense and expected to increase. There is no assurance that
the Company's competitors will not succeed in developing products based on the
Company's technology or other technologies which are more effective than
technologies or products being developed by the Company, or which would render
the Company's technology and products obsolete and noncompetitive.
Many of the Company's competitors may have substantially greater financial,
technical and human resources than the Company. In addition, many of these
competitors may have significantly greater experience than the Company in
undertaking preclinical testing and clinical trials of new pharmaceutical
products and obtaining regulatory approvals of human therapeutic products. The
Company's competitors may succeed in obtaining FDA approval for products more
rapidly than the Company. Furthermore, if the FDA permits the Company to
commence commercial sales of products, the Company will compete with respect to
manufacturing efficiency and sales and marketing capabilities, areas in which it
has limited or no experience and where many of its competitors have
significantly greater experience. See "-- Manufacturing Limitations" and "--
Absence of Sales or Marketing Experience."
Products under development by the Company address an array of markets. The
Company's competition will be determined in part by the potential indications
for which the Company's compounds are developed and approved. For certain of
the Company's potential product candidates, an important factor in competition
may be the timing of market introduction of its, or competitive, products.
Accordingly, the relative speed with which Corvas or its collaborators can
develop products, complete the clinical trials and the regulatory approval
processes, and supply
11.
<PAGE>
commercial quantities of the products to the market is expected to be an
important competitive factor. The Company expects that competition among
products approved for sale will be based on, among other things, product
efficacy, safety, reliability, availability, price and patent position.
DEPENDENCE ON QUALIFIED PERSONNEL
The Company's success is highly dependent on its ability to attract and
retain qualified scientific and management personnel. The loss of the services
of the principal members of the Company's management and scientific staff may
impede the Company's ability to commercialize its products. In order to
commercialize its products, the Company must maintain and expand its personnel,
particularly in the areas of clinical trial management, manufacturing, sales and
marketing. The Company faces intense competition for such personnel from other
companies, academic institutions, government entities and other organizations.
There is no assurance that the Company will be successful in hiring or retaining
qualified personnel. Managing the integration of new personnel, and Company
growth in general, could pose significant risks to the Company's development and
progress.
The continued employment of the Chief Executive Officer, Randall E. Woods,
and the Executive Vice President, Research and Development, George P. Vlasuk,
Ph.D., is key to the Company's success. Each of these employees has an
employment agreement with the Company, but the agreements provide for "at-will"
employment with no specified term.
John E. Crawford, the Company's former Executive Vice President, Chief
Financial Officer and Corporate Secretary, resigned from the Company effective
April 3, 1998. The Company is in the process of recruiting a business
development executive to perform the business development duties performed by
Mr. Crawford and has hired a person to assume the investor relations duties
performed by Mr. Crawford. Ms. Carolyn M. Felzer, the Company's Senior Director
of Finance, has become the Principal Accounting Officer. Ms. Felzer has worked
at Corvas in various financial capacities under the direction of Mr. Crawford
for approximately seven years, including five years as controller.
There is intense competition for qualified personnel in the areas of the
Company's activities, and there is no assurance that the Company will be able to
continue to attract and retain the necessary personnel. Failure to attract and
retain key personnel could have a material adverse effect on the Company's
business, financial condition, prospects and results of operations.
MANUFACTURING LIMITATIONS
In order for the Company's products to be successful, they must be
manufactured in sufficient commercial quantities, in compliance with regulatory
requirements and at an acceptable cost. The Company has limited experience in
pilot scale manufacturing. For larger scale production, as is required for
Phase I and later phases of clinical testing, the Company must rely on third
parties to manufacture its product candidates. If the Company is unable to
contract for large scale manufacturing capabilities on acceptable terms, or, in
such event, develop its own manufacturing capabilities (which itself would
require additional funds and expertise which may not be available to the
Company), the Company's ability to conduct clinical trials may be adversely
affected, resulting in the delay or preclusion of submission of products for
regulatory approval, which in turn could materially and adversely affect the
Company's business, financial condition, prospects and results of operations.
PATENTS AND PROPRIETARY RIGHTS
The Company's success will depend in part on its ability to obtain patent
protection for its products, both in the U.S. and other countries. The patent
position of biotechnology and pharmaceutical companies is highly uncertain and
involves complex legal and factual questions. There is also uncertainty as to
the breadth of claims that will be allowed in biotechnology patents. The
Company intends to file applications as appropriate for patents covering both
its products and processes. As of the date of this Prospectus, Corvas owns or
holds exclusive rights in 31 U.S. patents and has been notified of eight allowed
patent applications in the U.S. Of the issued patents, 28
12.
<PAGE>
are owned by the Company and three are licensed by the Company. Corvas has
filed or holds licenses to 30 additional patent applications that currently
are pending in the U.S. Patent and Trademark Office (the "USPTO"). Foreign
counterparts of most of the U.S. applications have been filed in many
countries. Some of these applications have issued as patents, and the Company
has been informed that certain other applications have been allowed; the
remaining applications are pending. There is no assurance that patents will
issue from any of the Company's owned or licensed patent applications or as
to the breadth or scope of protection that claims allowed under any issued
patents will provide to protect the Company. In addition, there is no
assurance that any patents issued or licensed to the Company will not be
challenged, invalidated or circumvented, or that the rights granted
thereunder will provide proprietary protection to the Company.
While the Company is aware of issued patents and published applications in
the Company's field, it is uncertain whether these patents and applications will
require the Company to alter products or processes, obtain licenses or cease
certain activities. If the Company is required to obtain such licenses, there
is no assurance the Company will be able to obtain any necessary licenses at a
reasonable cost. Failure by the Company to obtain a license to any technology
that it requires to commercialize its products and obtain FDA approval within an
acceptable period of time, if required to do so, would have a material adverse
effect on the Company's business, financial condition, prospects and results of
operations. Litigation, which could result in substantial costs to the Company,
may also be necessary to enforce any patents issued to the Company or to
determine the scope and validity of others' proprietary rights.
In 1993, the USPTO declared an interference to determine the priority of
invention between a patent for which some rights are licensed to the Company
(the "Licensed Patent") and a patent application for which rights are held by
other parties (the "First Patent Application"). In 1996, the USPTO added a
second patent application to the proceeding (the "Second Patent Application")
and redeclared the interference. Rights to the Second Patent Application are
held by certain other parties, at least some of which also hold rights in the
First Patent Application. The subject matter of the patent and these
applications is recombinant tissue factor. The Company is contesting the other
parties' claims of prior invention; however, there is no assurance that the
Licensed Patent will be upheld. The Company believes that the ultimate
resolution of the above matter will not have a material adverse effect on the
Company's business, financial condition, prospects or results of operation.
In addition to patents, the Company relies on trade secrets and proprietary
know-how, which it seeks to protect, in part, through appropriate
confidentiality and proprietary information and inventions agreements with its
current and prospective collaborative partners, employees, scientific advisors
and consultants. There is no assurance that these agreements will not be
breached, that the Company will have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors.
Certain of the Company's research has been funded in part by the U.S.
Government's Small Business Innovation Research program or by other U.S.
Government funding. As a result of such funding, the U.S. Government may have
certain rights ("Government Rights") in any technology, including inventions,
developed with the funding. These rights include the grant of a non-exclusive,
paid-up, worldwide license to such inventions for any governmental purpose. In
addition, the government has the right to require the Company to grant an
exclusive license to any of these inventions to a third party if the government
determines that (i) adequate steps have not been taken to commercialize such
inventions, (ii) such action is necessary to meet public health or safety needs
or (iii) such action is necessary to meet requirements for public use under
federal regulations. U.S. law requires any licensor of an invention that was
partially funded by federal grants to obtain a covenant from its exclusive
licensee to substantially manufacture products using the invention in the U.S.
In addition, the Company's licenses may also relate to technology developed with
federal funding and, therefore, may also be subject to Government Rights.
ABSENCE OF SALES, MARKETING OR DISTRIBUTION EXPERIENCE
The Company has limited experience in sales, marketing and distribution.
To market and distribute any of its products directly, the Company must develop
a substantial marketing and sales force with technical expertise and supporting
distribution capability. Alternatively, the Company may obtain the assistance
of a pharmaceutical
13.
<PAGE>
company or other entity with a large distribution system and a large direct
sales force. Other than as may be provided for in its collaboration and license
agreements with Schering-Plough and Pfizer, the Company does not have any
existing distribution arrangements with any entity for its products. There is
no assurance that the Company will be able to establish sales, marketing and
distribution capabilities of its own or enter into separate arrangements with
any other entity. See "-- Technological Change and Competition."
UNCERTAINTY RELATED TO PHARMACEUTICAL PRICING AND REIMBURSEMENT
In both domestic and foreign markets, sales of the Company's product
candidates will depend in part upon the availability of reimbursement from
third-party payors, such as government health administration authorities,
managed care providers, private health insurers and other organizations.
Third-party payors are increasingly challenging the price and cost
effectiveness of medical products and services. Significant uncertainty
exists as to the reimbursement status of newly-approved health care products.
In many major markets outside the U.S., pricing approval is required before
sales can commence. There is no assurance as to what price can be obtained
for any of the Company's products that reach the market or that
government-approved prices, once established, will not be reduced in
subsequent years. There is no assurance that the Company's product
candidates, when and if commercialized, will be considered cost effective or
that adequate third-party reimbursement will be available to enable the
Company to maintain price levels sufficient to realize an appropriate return
on its investment in product development. Legislation and regulations
affecting the pricing of pharmaceuticals may change before the Company's
proposed products are approved for marketing. Adoption of such legislation
could further limit reimbursement for medical products. If adequate coverage
and reimbursement levels are not provided by the government and third-party
payors for the Company's product candidates, the market acceptance of such
products would be adversely affected, which would have a material adverse
effect on the Company's business, financial condition, prospects and results
of operations.
RISK OF PRODUCT LIABILITY; UNCERTAINTY OF AVAILABILITY OF INSURANCE
The testing, marketing and sale of human diagnostic and therapeutic
products expose the Company to significant and unpredictable risks of product
liability claims, in the event of allegations that the use of its technology or
products results in adverse effects. Such risks will exist even with respect to
any products that receive regulatory approval for commercial sale. While the
Company has obtained liability insurance for its products in clinical trials,
there is no assurance that it will be sufficient to satisfy any liability that
may arise. There is no assurance that adequate insurance coverage, in either
clinical or commercial products, will be available in the future at an
acceptable cost, if at all, or that a product liability claim would not
materially and adversely affect the Company's business, financial condition,
prospects or results of operations.
ENVIRONMENTAL REGULATIONS
The Company is subject to a variety of governmental regulations relating to
the use, storage, discharge and disposal of toxic or other hazardous substances
and certain radioactive materials used in the Company's operations. The Company
itself uses, stores, discharges and disposes of such hazardous substances in
accordance with applicable regulations, and generally contracts with third
parties for the disposal of such substances. The Company, however, generally
stores its low level radioactive waste at its facility until the materials are
no longer considered radioactive because there are no facilities permitted to
accept such waste in California or neighboring states. Any failure to comply
with current or future regulations could result in civil penalties or criminal
fines being imposed on the Company, or its officers, directors or employees, as
well as suspension of production, alteration of its manufacturing process or
cessation of operations. Such regulations could require the Company to acquire
expensive remediation or abatement equipment or to incur additional expenses to
comply with environmental regulations or to remedy a problem arising in
connection with such substances or materials. Any failure by the Company or its
third party contractors to properly manage the use, storage or disposal of, or
adequately restrict discharge of hazardous or toxic substances or radioactive
waste could subject the Company to significant liabilities which could have a
material adverse effect on the Company's business, financial condition,
prospects or results of operations.
14.
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SHARES ELIGIBLE FOR FUTURE SALE
Future sales of shares by existing security holders could have an
adverse impact on the market price of the Company's Common Stock or otherwise
impair the Company's ability to raise additional capital. As of June 26,
1998, the Company has 14,041,710 shares of Common Stock and 1,250,000 shares
of Convertible Preferred Stock, convertible into 1,250,000 shares of Common
Stock, outstanding. Approximately 4,024,472 shares issuable upon exercise or
conversion of outstanding vested options and warrants will also be eligible
for sale on the Effective Date, subject in some cases to compliance with Rule
144. Of these shares, an aggregate of 17,026,395 shares will be eligible for
immediate sale, subject to, in some cases, the volume restrictions of Rule
144 under the Securities Act. The 1,250,000 shares of Common Stock issuable
upon conversion of Preferred Stock are entitled to certain registration
rights with respect to such shares. The exercise of such rights by such
securities holders could result in a large number of shares being sold in the
public market after the closing of this offering. In addition, in the event
the Company elects to exercise its option to acquire VGI, the Company will
issue additional shares of Common Stock to VGI. Further, if Corvas elects not
to exercise its option, VGI may require Corvas to purchase 19.9% of its
outstanding stock in Corvas stock.
VOLATILITY OF COMMON STOCK PRICE
The market prices for securities of biotechnology companies, including
Corvas, have historically been highly volatile and the market from time to time
has experienced significant price and volume fluctuations that are unrelated to
the operating performance of such companies. Moreover, the Company's relatively
low average daily trading volume increases the likelihood and severity of volume
fluctuations which likely will result in a corresponding increase in the
volatility of Corvas' Common Stock price. Factors such as announcements of
technological innovations or new commercial therapeutic products by the Company
or others, announcements of adverse or favorable preclinical or clinical results
of the Company's or other entities' drug candidates, governmental regulations,
developments in patent or other proprietary rights, developments in the
Company's relationships with its collaborative partners, public concern as to
the safety of drugs developed by the Company or others, general market
conditions and the timing of decisions by existing Corvas stockholders to sell
large positions of the Company's Common Stock may have a significant effect on
the market price of the Company's Common Stock. Fluctuations in financial
performance from period to period also may have a significant impact on the
market price of the Common Stock.
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND CERTAIN CHARTER PROVISIONS;
STOCKHOLDER RIGHTS PLAN
Certain provisions of Delaware law applicable to the Company could delay or
make more difficult a merger, tender offer or proxy contest involving the
Company, including Section 203 of the Delaware General Corporation Law, which
prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years from the date the person
became an interested stockholder unless certain conditions are met. The
Company's Certificate of Incorporation (the "Certificate") provides for
staggered terms for the members of the Board of Directors. In addition, the
Company currently has Preferred Stock issued and outstanding which entitles the
holders thereof to rights not available to holders of Common Stock.
Furthermore, the Board of Directors of the Company may issue additional shares
of Preferred Stock without stockholder approval and on such terms as the Board
of Directors may determine. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. In addition, the Company's
Certificate and Bylaws require advanced stockholder notice to nominate directors
and raise matters at the annual meeting of stockholders and do not provide for
cumulative voting in the election of directors. Further, pursuant to the terms
of its Stockholder Rights Plan, the Company has distributed a dividend of one
right for each outstanding share of Common Stock. These rights could cause
substantial dilution to the ownership percentage of a person or group that
attempts to acquire the Company on terms not approved by the Board of Directors
and may have the effect of deterring hostile takeover attempts. All of the
foregoing could have the effect of delaying, deferring or preventing a change in
control of the Company and could limit the price that certain investors might be
willing to pay in the future for shares of the Company's Common Stock.
15.
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FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements, other than statements of historical facts, included in this
Prospectus which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including, but not
limited to, the development of its potential products and research programs, the
timing of clinical trials, the levels of anticipated research and development
and capital expenditures and the Company's ability to execute its business
strategies, are forward-looking statements. These statements are based on
certain assumptions and analyses made by the Company in light of its experience
and its perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate under the
circumstances. However, whether actual results and developments will conform
with the Company's expectations and predictions is subject to a number of risks
and uncertainties which could cause actual results to differ materially from the
Company's expectations, including the risk factors discussed in this Prospectus
and other factors, many of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Prospectus are
qualified by these cautionary statements and there is no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequences
to, or effects on, the Company or its business, financial condition, prospects
or results of operations. The Company assumes no obligation to update publicly
any such forward-looking statements, whether as a result of new information,
future events or otherwise.
16.
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SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
number of shares of Common Stock owned beneficially by each of them as of
June 1, 1998 and the number of shares which may be offered pursuant to this
Prospectus. This information is based upon information provided by the Selling
Stockholders. Because the Selling Stockholders may offer all, some or none of
their Common Stock, no definitive estimate as to the number of shares thereof
that will be held by the Selling Stockholders after such offering can be
provided.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(1) SHARES OFFERING(1)(2)
--------------------------- BEING --------------------------
Name Number Percent (3) OFFERED Number Percent(3)
- ------------------------------------------------------------ ------------- ----------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
International Biotechnology Trust, plc (4) 2,800,000 19.9% 2,800,000 0 0%
AKKAD (5) 1,600,000 11.4% 800,000 800,000 4.7%
SE Banken Fonder AB (6) 300,000 2.1% 300,000 0 0%
SE Banken Luxembourg S.A. (7) 75,000 * 75,000 0 0%
WPG Institutional Life Sciences Fund, L.P. (8) 120,000 * 120,000 0 0%
WPG Life Sciences Fund, L.P. (9) 80,000 * 80,000 0 0%
Framlington Unit Management-A/C Health Fund (10) 170,000 1.2% 85,000 85,000 *
Framlington Investment Management-A/C Selection Sante (11) 80,000 * 40,000 40,000 *
Clarion Capital Corporation (12) 160,000 1.1% 80,000 80,000 *
Clarion Partners, L.P. (13) 20,000 * 20,000 0 0%
--------- ---------- ---------
TOTAL: 5,405,000 4,400,000 1,005,000
--------- ---------- ---------
--------- ---------- ---------
</TABLE>
- -----------------------
* Less than one percent.
(1) Unless otherwise indicated below, the persons named in the table have sole
voting and investment power with respect to all shares beneficially owned
by them, subject to community property laws where applicable.
(2) Assumes the sale of all shares offered hereby.
(3) Applicable percentage of ownership is based on 14,039,493 shares of Common
Stock issued and outstanding on June 1, 1998, adjusted as required by rules
promulgated by the Commission.
(4) Includes 1,400,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(5) Includes 800,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(6) Includes 300,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(7) Includes 75,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(8) Includes 120,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(9) Includes 80,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(10) The shares beneficially owned by Framlington Unit Management-A/C Health
Fund are registered in the name of MSS Nominees Limited A/C #811627 and
includes 85,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(11) The shares beneficially owned by Framlington Investment Management-A/C
Selection Sante are registered in the name of Sigler & Co. and includes
40,000 shares of Common Stock issuable upon exercise of an outstanding
warrant.
(12) Includes 80,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
(13) Includes 20,000 shares of Common Stock issuable upon exercise of an
outstanding warrant.
17.
<PAGE>
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Stockholders may sell Shares
from time to time in transactions on the Nasdaq National Market, in privately
negotiated transactions or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders may effect such transactions by selling the Shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders or
the purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal, or both (which compensation to a particular broker-
dealer might be in excess of customary commission).
The Selling Stockholders and any broker-dealers who act in connection with
the sale of Shares hereunder may be deemed to be "underwriters" as that term is
defined in the Securities Act, and any commissions received by them and profit
on any resale of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act.
Of the 4,400,000 shares of Common Stock offered hereby, 3,000,000 are
issuable upon exercise of outstanding warrants. Up to all of such warrants
may be exchanged for amended warrants at a reduced purchase price pursuant to
a tender offer by the Company on June 5, 1998, which, if consummated, is
expected to close on or about July 20, 1998.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Cooley Godward LLP, San Diego, California.
Certain members of Cooley Godward LLP beneficially own an aggregate of 9,999
shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of Corvas International, Inc. as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
18.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
19.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the
sale of the Common Stock being registered. All of the amounts shown are
estimates, except for the registration fee, the Nasdaq NMS Listing
Application Fee and the miscellaneous expense.
<TABLE>
<S> <C>
Registration fee.............................. $ 11,328
Nasdaq NMS Listing Application Fee............ 17,500
Blue sky qualification fees and expenses...... 5,000
Legal fees and expenses....................... 101,200
Accounting fees and expenses.................. 10,000
Miscellaneous................................. 46,875
----------
Total.................................... $ 191,903
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Section 145 of the Delaware General Corporation Law (the "Delaware
Law"), the Registrant has broad powers to indemnify its directors and officers
against liabilities they may incur in such capacities, including liabilities
under the Securities Act.
The Registrant's Amended and Restated Certificate of Incorporation and By-
laws include provisions to (i) eliminate the personal liability of its directors
for monetary damages resulting from breaches of their fiduciary duty to the
extent permitted by Section 102(b)(7) of the Delaware Law and (ii) require the
Registrant to indemnify its directors and officers to the fullest extent
permitted by Section 145 of the Delaware Law, including circumstances in which
indemnification is otherwise discretionary. Pursuant to Section 145 of the
Delaware Law, a corporation generally has the power to indemnify its present and
former directors, officers, employees and agents against expenses incurred by
them in connection with any suit to which they are, or are threatened to be
made, a party by reason of their serving in such positions so long as they acted
in good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of the corporation, and with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful. The
Registrant believes that these provisions are necessary to attract and retain
qualified persons as directors and officers. These provisions do not eliminate
the directors' duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware Law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for acts or omissions that the
director believes to be contrary to the best interests of the Registrant or its
stockholders, for any transaction from which the director derived an improper
personal benefit, for acts or omissions involving a reckless disregard for the
director's duty to the Registrant or its stockholders when the director was
aware or should have been aware of a risk of serious injury to the Registrant or
its stockholders, for acts or omission that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
Registrant or its stockholders, for improper transactions between the director
and the Registrant and for improper distributions to stockholders and loans to
directors and officers. The provision also does not affect a director's
responsibilities under any other law, such as federal securities laws or state
or federal environmental laws.
The Registrant has entered into indemnity agreements with each of its
directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened,
II-I
<PAGE>
to which any such person may be made a party by reason of the fact that such
person is or was a director or an executive officer of the Registrant or any of
its affiliated enterprises, provided such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of the Registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. The indemnification
agreements also set forth certain procedures that will apply in the event of a
claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
The Registrant has an insurance policy covering the officers and directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation.
4.2 By-laws.
4.3 Specimen stock certificate. (1)
5.1* Opinion of Cooley Godward LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
- -----------------
* Previously filed
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-44555) as amended, filed December 13, 1991, and incorporated herein
by reference.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to provisions described in Item 15 or otherwise, the
Registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by these clauses is
contained in the periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Exchange Act that are incorporated by reference into the
registration statement; (2) that, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 10(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference into the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant undertakes that: (1) for the purpose of
determining any liability under the Securities Act, the information omitted from
and form of prospectus filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of the registration statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Post-Effective Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Diego, State of California, on June 26, 1998.
CORVAS INTERNATIONAL, INC.
By: /s/ RANDALL E. WOODS
---------------------------
Randall E. Woods
President and Chief Executive Officer
POWER OF ATTORNEY
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Randall E. Woods and Carolyn M. Felzer,
or either of them, his attorney-in-fact, with the full power of substitution for
him in any and all capacities, to sign any amendments to this Report, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact, or his substitute or substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ---------- ------ -----
<S> <C> <C>
/s/ RANDALL E. WOODS President and Chief Executive Officer and June 26, 1998
- ------------------------------- Director (Principal Executive Officer)
Randall E. Woods
/s/ CAROLYN M. FELZER Senior Director of Finance (Principal June 26, 1998
- ------------------------------- Financial and Accounting Officer)
Carolyn M. Felzer
/s/ JOHN H. FRIED, PH.D. Chairman of the Board of Directors June 26, 1998
- -------------------------------
John H. Fried, Ph.D.
/s/ M. BLAKE INGLE, PH.D. Director June 26, 1998
- -------------------------------
M. Blake Ingle, Ph.D.
/s/ R. DOUGLAS NORBY Director June 26, 1998
- -------------------------------
R. Douglas Norby
/s/ MICHAEL SORELL, M.D. Director June 26, 1998
- -------------------------------
Michael Sorell, M.D.
/s/ W. LEIGH THOMPSON, JR., M.D., PH.D. Director June 26, 1998
- -------------------------------
W. Leigh Thompson, Jr., M.D., Ph.D.
/s/ GERARD VAN ACKER Director June 26, 1998
- -------------------------------
Gerard Van Acker
/s/ NICOLE VITULLO Director June 26, 1998
- -------------------------------
Nicole Vitullo
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ---------- -------------------------------------------------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation.
4.2 By-laws.
4.3 Specimen stock certificate. (1)
5.1* Opinion of Cooley Godward LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
- --------------------------
* Previously filed.
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-44555) as amended, filed December 13, 1991, and incorporated herein
by reference.
<PAGE>
CERTIFICATE OF INCORPORATION
OF
CORVAS INTERNATIONAL, INC.
The undersigned, a natural person (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:
I.
The name of this corporation is Corvas International, Inc.
II.
The address of the registered office of the corporation in the State of
Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent,
and the name of the registered agent of the corporation in the State of Delaware
at such address is The Prentice-Hall Corporation System, Inc.
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
the State of Delaware.
IV.
A. This corporation is authorized to issue two classes of stock
designated respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the corporation is authorized to issue is sixty million
(60,000,000) shares, consisting of fifty million (50,000,000) shares of Common
Stock, each having a par value of one-tenth of one cent ($.001), and ten million
(10,000,000) shares of Preferred Stock, each having a par value of one tenth of
one cent ($.001).
B. The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, by filing a certificate (a
"Preferred Stock Designation") pursuant to the Delaware General Corporation Law,
to fix or alter from time to time the designation, powers, preferences and
rights of the shares of each such series and the qualifications, limitations or
restrictions of any wholly unissued series of Preferred Stock, and to establish
from time to time the number of shares constituting any such series or any of
them; and to increase or decrease the number of shares of any series subsequent
to the issuance of shares of that series, but not below the number of shares of
such series then outstanding. In case the number of shares of any series shall
be decreased in accordance with the foregoing sentence, the shares constituting
such decrease shall resume the status that they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
V.
For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
A. (1) The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed (a)
by one or more resolutions adopted by the Board of Directors, or (b) by the
affirmative vote of the holders of at least sixty-six and two-thirds percent (66
2/3%) of the voting power of all of the then-outstanding shares of voting stock
of the corporation entitled to vote at an election of directors (the "Voting
Stock").
1.
<PAGE>
(2) Subject to the rights of the holders of any series of Preferred
Stock to elect additional directors under specified circumstances, the directors
shall be divided into three classes designated as Class I, Class II and Class
III, respectively. Directors shall be assigned to each class in accordance with
a resolution or resolutions adopted by the Board of Directors. At the first
annual meeting of stockholders following the adoption and filing of this
Certificate of Incorporation, the term of office of the Class II directors shall
expire and Class II directors shall be elected for a full term of three years.
At the second annual meeting of stockholders following the adoption and filing
of this Certificate of Incorporation, the term of office of the Class III
directors shall expire and Class III directors shall be elected for a full term
of three years. At the third annual meeting of stockholders following the
adoption and filing of this Certificate of Incorporation, the term of office of
the Class I directors shall expire and Class I directors shall be elected for a
full term of three years. At each succeeding annual meeting of stockholders,
directors shall be elected for a full term of three years to succeed the
directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article, each
director shall serve until his successor is duly elected and qualified or until
his death, resignation or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
(3) Subject to any limitations imposed by law, the Board of Directors
or any individual director may be removed from office at any time (i) with cause
by the affirmative vote of the holders of at least a majority of the voting
power of all of the then-outstanding shares of the Voting Stock; or (ii) without
cause by an affirmative vote of the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the then-outstanding shares of the Voting Stock.
(4) Subject to the rights of the holders of any series of Preferred
Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes, and any newly created
directorships resulting from any increase in the number of directors, shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by the stockholders, except as
otherwise provided by law, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors, and not by the stockholders. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and until such
director's successor shall have been elected and qualified.
B. (1) Subject to paragraph (h) of Section 43 of the By-laws, the
By-laws may be altered or amended or new By-laws adopted by the affirmative vote
of sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the
then-outstanding shares of the Voting Stock. The Board of Directors shall also
have the power to adopt, amend or repeal By-laws.
(2) The directors of the corporation need not be elected by written
ballot unless the By-laws so provide.
(3) No action shall be taken by the stockholders of the corporation
except at an annual or special meeting of stockholders called in accordance with
the By-laws and no action shall be taken by the stockholders by written consent.
(4) Special meetings of the stockholders of the corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board of
Directors for adoption), or (iv) the holders of shares entitled to cast not less
than ten percent (10%) of the votes at the meeting, and shall be held at such
place, on such date and at such time as the Board of Directors shall fix.
(5) Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the corporation shall be given in the manner provided in the
By-laws of the corporation.
VI.
A. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for any breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
A-2
<PAGE>
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 an improper
personal benefit. if the Delaware General Corporation Law is amended after
approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
B. Any repeal or modification of this Article VI shall be prospective and
shall not affect the rights under this Article VI in effect at the time of the
alleged occurrence of any act or omission to act giving rise to liability or
indemnification.
VII.
A. (1) In addition to any affirmative vote required by law, by this
Certificate of Incorporation or by any Preferred Stock Designation, and except
as otherwise expressly provided in Section B of this Article VII:
(i) any merger or consolidation of the corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Stockholder, or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder or any Affiliate of any Interested Stockholder of any
assets of the corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) equal to or greater than 15% of the corporation's
assets as set forth on the corporation's most recent audited consolidated
financial statements; or
(iii) the issuance or transfer by the corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the corporation or any Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value equal to or
greater than 15% of the corporation's assets as set forth on the corporation's
most recent audited consolidated financial statements; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder, or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving any Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the corporation or any Subsidiary which is
Beneficially Owned (as hereinafter defined) by any Interested Stockholder or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class. Such affirmative
vote shall be required notwithstanding any other provisions of this Certificate
of Incorporation or any provision of law or of any agreement with any national
securities exchange or otherwise which might otherwise permit a lesser vote. or
no vote.
(2) The term "Business Combination" as used in this Article VII shall
mean any transaction which is referred to in any one or more of subparagraphs
(i) through (v) of paragraph (1) of this Section A.
B. The provisions of Section A of this Article VII shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required by law, any other
provision of this Certificate of Incorporation and any Preferred Stock
Designation, if, in the case of a Business Combination that does not involve any
cash or other consideration being received by the stockholders of the
corporation, solely in their respective capacities as stockholders of the
corporation, the condition specified in the
A-3
<PAGE>
following paragraph (1) is met, or, in the case of any other Business
Combination, the conditions specified in either of the following paragraph (1)
or paragraph (2) are met:
(1) The Business Combination shall have been approved by:
(i) a majority of the Continuing Directors (as hereinafter
defined); provided however, that this condition shall not be capable of
satisfaction unless there are at least two Continuing Directors; or
(ii) a majority of the shares not held by the Interested
Stockholder.
(2) All of the following conditions shall have been met:
(i) The consideration to be received by holders of shares of a
particular class (or series) of outstanding Voting Stock (including Common Stock
and other than Excluded Preferred Stock (as hereinafter defined)) shall be in
cash or in the same form as the Interested Stockholder or any of its Affiliates
has previously paid for shares of such class (or series) of Voting Stock. If
the Interested Stockholder or any of its Affiliates have paid for shares of any
class (or series) of Voting Stock with varying forms of consideration, the form
of consideration to be received per share by holders of shares of such class (or
series) of Voting Stock shall be either cash or the form used to acquire the
largest number of shares of such class (or series) of Voting Stock previously
acquired by the Interested Stockholder.
(ii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the date (the "Consummation Date") of the consummation of the
Business Combination, of the consideration other than cash to be received per
share by holders of Common Stock in such Business Combination shall be at least
equal to the higher of the following (in each case appropriately adjusted in the
event of any stock dividend, stock split, combination of shares or similar
event):
(a) (if applicable) the highest per share price paid by the
Interested Stockholder or any of its Affiliates for any shares of Common Stock
acquired by them within the two-year period immediately prior to the date of the
first public announcement of the proposal of the Business Combination (the
"Announcement Date") or in any transaction in which the Interested Stockholder
became an Interested Stockholder, whichever is higher, and
(b) the Fair Market Value per share of Common Stock on the
Announcement Date or the first date on which the Interested Stockholder became
an Interested Stockholder (the "Determination Date") (which, if more than two
years prior to the Announcement Date shall be deemed to be the date two years
prior to the Announcement Date), whichever is higher.
(iii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the Consummation Date, of the consideration other than cash to be
received per share by holders of shares of any class (or series), other than
Common Stock or Excluded Preferred Stock, of outstanding Voting Stock shall be
at least equal to the higher of the following (in each case appropriately
adjusted in the event of any stock dividend, stock split, combination of shares
or similar event), it being intended that the requirements of this paragraph
(2)(iii) shall be required to be met with respect to every such class (or
series) of outstanding Voting Stock whether or not the Interested Stockholder or
any of its Affiliates has previously acquired any shares of a particular class
(or series) of Voting Stock):
(a) (if applicable) the highest per share price paid by the
Interested Stockholder or any of its Affiliates for any shares of such class (or
series) of Voting Stock acquired by them within the two-year period immediately
prior to the Announcement Date or in any transaction in which it became an
Interested Stockholder, whichever is higher, and
(b) the Fair Market Value per share of such class (or
series) of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
except as approved by a majority of the Continuing
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Directors, there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative) on any
outstanding Preferred Stock; (b) there shall have been (I) no reduction in the
annual rate of dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as approved by a majority
of the Continuing Directors, and (II) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by a majority of
the Continuing Directors; and (c) neither such Interested Stockholder nor any of
its Affiliates shall have become the beneficial owner of any additional shares
of Voting Stock except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder and any of its Affiliates shall not
have received the benefit, directly or indirectly (except proportionately,
solely in such Interested Stockholder's or Affiliate's capacity as a stockholder
of the corporation), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages provided by the
corporation, whether in anticipation of or in connection with such Business
Combination or otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules or regulations) shall be
mailed to all stockholders of the corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
(vii) Such Interested Stockholder shall have supplied the
corporation with such information as shall have been requested pursuant to
Section E of this Article VII within the time period set forth therein.
C. For the purposes of this Article VH:
(1) A "person" means any individual, limited partnership, general
partnership, corporation or other firm or entity.
(2) "Interested Stockholder" means any person (other than the
corporation or any Subsidiary) who or which:
(i) is the Beneficial Owner (as hereinafter defined), directly
or indirectly, of fifteen percent (15%) or more of the voting power of all of
the then-outstanding shares of the Voting Stock; or
(ii) if an Affiliate of the corporation and at any time within
the two-year period immediately prior to the date in question was the Beneficial
Owner, directly or indirectly, of fifteen percent (15%) or more of the voting
power of all of the then-outstanding shares of the Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by an Interested Stockholder,
if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within the
meaning of the 1933 Act.
(3) A person shall be a "Beneficial Owner" of, or shall "Beneficially
Own," any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly within the
meaning of Rule l3d-3 under the Securities Exchange Act of 1934, as in effect on
the adoption date of this Certificate of Incorporation; or
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(ii) which such person or any of its Affiliates or Associates has
(a) the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding (but shall not be deemed to be the
Beneficial Owner of any shares of Voting Stock solely by reason of a revocable
proxy granted for a particular meeting of stockholders, pursuant to a public
solicitation of proxies for such meeting, and with respect to which shares
neither such person nor any such Affiliate or Associate is otherwise deemed the
Beneficial Owner); or
(iii) which is beneficially owned, directly or indirectly, within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in
effect on the adoption date of this Certificate of Incorporation, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting (other than solely by reason of a revocable proxy as described in
subparagraph (ii) of this paragraph (3) or disposing of any shares of Voting
Stock;
provided, however, that in case of any employee stock ownership or similar plan
of the corporation or of any Subsidiary in which the beneficiaries thereof
possess the right to vote any shares of Voting Stock held by such plan, no such
plan nor any trustee with respect thereto (nor any Affiliate of such trustee),
solely by reason of such capacity of such trustee, shall be deemed, for any
purposes hereof, to beneficially own any shares of Voting Stock held under any
such plan.
(4) For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph (2) of this Section C, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned through
application of paragraph (3) of this Section C but shall not include any other
unissued shares of Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on the adoption date of this
Certificate of Incorporation.
(6) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in paragraph (2) of this Section C, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
security is owned directly or indirectly, by the corporation.
(7) "Continuing Director" means any member of the Board of Directors
of the corporation who is a director originally elected or appointed upon
incorporation of the corporation or who is not an Interested Stockholder or
affiliated with the Interested Stockholder and was a member of the Board of
Directors prior to the time that the Interested Stockholder became an Interested
Stockholder and any director who is thereafter chosen to fill any vacancy on the
Board of Directors or who is elected and who, in either event, is not an
Interested Stockholder or unaffiliated with the Interested Stockholder and in
connection with his or her initial assumption of office is recommended for an
appointment or election by a majority of Continuing Directors then on the Board.
(8) "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price on the last trading day immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing sale price
quotation with respect to a share of such stock on the last trading day
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by the Board in accordance with Section D of
this Article VII; and (ii) in the case of property other than cash or stock, the
fair market value of such property on the date in question as determined by the
Board in accordance with Section D of this Article VII.
(9) In the event of any Business Combination in which the corporation
survives, the phrase "consideration other than cash to be received" as used in
paragraphs (2)(ii) and (2)(iii) of Section B of this Article
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VII shall include the shares of Common Stock and/or the shares of any other
class (or series) of outstanding Voting Stock retained by the holders of such
shares.
(10) "Whole Board" means the total number of directors which this
corporation would have if there were no vacancies.
(11) "Excluded Preferred Stock" means any series of Preferred Stock
with respect to which the Preferred Stock Designation creating such series
expressly provides that the provisions of this Article VII shall not apply.
D. A majority of the Whole Board but only if a majority of the Whole
Board shall then consist of Continuing Directors or, if a majority of the Whole
Board shall not then consist of Continuing Directors, a majority of the then
Continuing Directors, shall have the power and duty to determine, on the basis
of information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article, including, without limitation, (i)
whether a person is an Interested Stockholder, (ii) the number of shares of
Voting Stock beneficially owned by any person (iii) whether a person is an
Affiliate or Associate of another, (iv) whether the applicable conditions set
forth in paragraph (2) of Section B have been met with respect to any Business
Combination, (v) the Fair Market Value of stock or other property in accordance
with paragraph (8) of Section C of this Article VII, and (vi) whether the assets
which are the subject of any Business Combination referred to in paragraph
(1)(ii) of Section A have or the consideration to be received for the issuance
or transfer of securities by the corporation or any Subsidiary in any Business
Combination referred to in paragraph (1)(iii) of Section A has, an aggregate
Fair Market Value equal to or greater than 15% of the corporation's assets as
set forth on the corporation's most recent audited consolidated financial
statements.
E. A majority of the Whole Board shall have the right to demand, but only
if a majority of the Whole Board shall then consist of Continuing Directors, or,
if a majority of the Whole Board shall not then consist of Continuing Directors,
a majority of the then Continuing Directors shall have the right to demand, that
any person who it is reasonably believed is an Interested Stockholder (or holds
of record shares of Voting Stock Beneficially Owned by any Interested
Stockholder) supply this corporation with complete information as to (i) the
record owner(s) of all shares Beneficially Owned by such person who it is
reasonably believed is an Interested Stockholder, (ii) the number of, and class
or series of, shares Beneficially Owned by such person who it is reasonably
believed is an Interested Stockholder and held of record by each such record
owner and the number(s) of the stock certificate(s) evidencing such shares, and
(iii) any other factual matter relating to the applicability of effect of this
Article VII, as may be reasonably requested of such person, and such person
shall furnish such information within 10 days after receipt of such demand.
F. Nothing contained in this Article VII shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
VIII.
A. 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, except as provided in paragraph B. of this
Article VIII, and all rights conferred upon the stockholders herein are granted
subject to this reservation.
B. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal Article V, VI,
VII or VIII.
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IX.
The name and the mailing address of the Sole Incorporator is as follows:
NAME MAILING ADDRESS
L. Kay Chandler Cooley Godward Castro
Huddleson & Tatum
4365 Executive Drive, Suite 1200
San Diego, CA 92121
IN WITNESS WHEREOF, this Certificate has been subscribed this 7th day of
May, 1993 by the undersigned who affirms that the statements made herein are
true and correct.
/s/ L. KAY CHANDLER
---------------------------------
L. Kay Chandler
Sole Incorporator
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CERTIFICATE OF DESIGNATIONS
OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CORVAS INTERNATIONAL, INC.
--------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------
The undersigned duly authorized officer of Corvas International, Inc., a
company organized and existing under the General Corporation Law of the State of
Delaware (the "Company"), in accordance with the provisions of Section 103
thereof, and pursuant to Section 151 thereof, DOES HEREBY CERTIFY:
That the Certificate of Incorporation of the Company (the "Certificate of
Incorporation") authorizes the creation of up to 10,000,000 shares of the
Company's preferred stock, par value $.001 per share (such preferred stock,
together with all other preferred stock of the Company the creation of which is
in the future authorized by the Certificate of Incorporation, referred to herein
as the "Preferred Stock"); and
That pursuant to the authority conferred upon the Board of Directors (the
"Board") by the Certificate of Incorporation of the Company, the Board on
December 1, 1994, approved the creation, issuance and the voting powers of
shares of Preferred Stock to be issued in one series and adopted the following
resolution creating a series of 1,000,000 shares of Preferred Stock designated
as set forth below:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board by provisions of the Certificate of Incorporation of the Company and
the General Corporation Law of the State of Delaware, the issuance of a series
of Preferred Stock, which shall consist of 1,000,000 shares of the 10,000,000
shares of Preferred Stock which the Company now has authority to issue, be, and
the same hereby is, authorized, and the Board hereby fixes the powers,
designations, preferences and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock)
authorized by this resolution as follows:
SECTION 1. DESIGNATION AND AMOUNT. The designation of such series of
Preferred Stock authorized by this resolution shall be Series A Convertible
Preferred Stock (the "Series A Preferred"). The Series A Preferred is issuable
solely in whole shares that shall entitle the holder thereof to exercise the
voting rights, to participate in the distributions and to have the benefit of
all other rights of holders of Series A Preferred, as set forth herein and in
the Certificate of Incorporation.
SECTION 2. DIVIDENDS. The holders of the Series A Preferred shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
funds legally available therefor, dividends at the rate of Forty Cents ($0.40)
per share of Series A Preferred per annum (as adjusted for any combinations,
consolidations, stock distributions, stock dividends or other recapitalizations
with respect to such shares) before any dividend is declared or paid on shares
of Common Stock. The right to such dividends on the Series A Preferred shall be
cumulative and shall accrue annually on the Series A Preferred from the date of
issuance, whether or not earned or declared. No interest shall be earned or
accrued on any unpaid cumulative dividends. No dividends (other than those
payable solely in Common Stock of the Company) shall be declared or paid on any
Common Stock of the Company until any accrued by unpaid dividends on the Series
A Preferred shall have been declared and paid or set apart.
SECTION 3. PREFERENCE ON LIQUIDATION.
(a) SERIES A PREFERRED. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of Series A
Preferred then outstanding shall be entitled to be paid, pro rata,
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out of the assets of the Company available for distribution to its stockholders,
whether from capital, surplus or earnings, before any payment shall be made in
respect of any other class or series of stock ranking junior to the Series A
Preferred, an amount equal to Five Dollars ($5.00) per share (the "Series A
Original Issue Price")(as adjusted for any combinations, consolidations, stock
distributions, stock dividends or other recapitalizations with respect to such
shares) plus any declared but unpaid dividends on such shares. If upon
liquidation, dissolution or winding up of the Company the assets of the Company
available for distribution to its stockholders shall be insufficient to pay the
holders of the Series A Preferred the full amounts to which they shall be
entitled as set forth above, then the entire assets of the Company legally
available for distribution shall be distributed pro rata among the holders of
the Series A Preferred in proportion to the preferential amount each such holder
would otherwise be entitled to receive. After setting apart or paying in full
the preferential amounts due the holders of the Series A Preferred, the holders
of the Series A Preferred will not be entitled to any further participation in
any distribution of the assets of the Company, and the entire remaining assets
of the Company legally available for distribution, if any, shall be distributed
among the holders of Common Stock in proportion to the shares of Common Stock
then held by them.
(b) MERGERS, CONSOLIDATIONS NOT DEEMED LIQUIDATIONS. The merger or
consolidation of the Company into or with another company in which the Company
is not the surviving entity or in which the stockholders of this Company
immediately prior to such event shall own less than a majority of the voting
securities of the surviving company, or the sale, transfer, or lease (but not
including a transfer or lease by pledge or mortgage to a bona fide lender) of
all or substantially all of the assets of the Company, shall not be deemed a
liquidation, dissolution or winding up of the Company as those terms are used in
this Section 3.
SECTION 4. CONVERSION PRIVILEGES.
(a) RIGHTS OF CONVERSION. Subject to the other provisions of this
Certificate of Designations, each share of Series A Preferred shall be
convertible, without payment of any additional consideration by the holder
thereof and at the option of such holder, at any time and from time to time
after the date of issuance of such share, at the office of the Company or any
transfer agent for such stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing the Series A Original Issue
Price by the Series A Conversion Price (as defined below) in effect at the time
of conversion. The price at which shares of Common Stock shall be deliverable
upon conversion of Series A Preferred (the "Series A Conversion Price") shall
initially equal the Series A Original Issue Price per share, subject to
adjustment as set forth below.
(b) AUTOMATIC CONVERSION. Each share of Series A Preferred shall
automatically, and without action on the part of the holder thereof, be
converted into shares of Common Stock at the Series A Conversion Price then in
effect upon the 10th consecutive trading day for which the average of the high
and low sales prices per share of Common Stock as reported on the Nasdaq
National Market (or any national securities exchange on which the Common Stock
of the Company is then traded) is equal to or greater than One Hundred Fifty
percent (150%) of the Series A Original Issue Price (the "Automatic Conversion
Date").
(c) MECHANICS OF CONVERSION. Before any holder of Series A Preferred
shall be entitled to convert the same into shares of Common Stock pursuant to
Section 4(a) hereof, and before the Company shall be obligated to issue
certificates for shares of Common Stock upon the automatic conversion of the
Series A Preferred pursuant to Section 4(b) hereof, such holder shall surrender
the certificate or certificates thereof, duly endorsed, at the office of the
Company or of any transfer agent for such stock, and shall give written notice
to the Company at such office that such holder elects to convert the same and
shall state therein the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued (except that
no such written notice of intent to convert shall be necessary in the event of
an automatic conversion pursuant to Section 4(b) hereof). The Company shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Series A Preferred or its nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be entitled
as aforesaid, together with cash in lieu of any fractional shares. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of surrender of the shares of Series A Preferred to be
converted, except that in the case of an automatic conversion pursuant to
Section 4(b) hereof, such conversion shall be deemed to have been made
immediately prior to the close of business on the Automatic Conversion Date.
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 on such date.
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(d) ADJUSTMENTS FOR COMBINATIONS OR SUBDIVISIONS OF COMMON STOCK. In the
event the Company at any time or from time to time after the original issue date
of the Series A Preferred shall declare or pay any dividend on the Common Stock
payable in Common Stock or in any right to acquire Common Stock, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise), or in
the event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, then the Series A Conversion Price in effect immediately prior
to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate.
(e) ADJUSTMENTS FOR OTHER DISTRIBUTIONS. In the event the Company shall
at any time or from time to time make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Company (other than Common
Stock) or in securities of any of its subsidiaries, then in each such event
provision shall be made so that the holders of Series A Preferred shall receive,
upon the conversion thereof, the securities of the Company which they would have
received had their stock been converted into Common Stock on the date of such
event.
(f) ADJUSTMENTS FOR REORGANIZATION OR RECLASSIFICATION. In case of any
capital reorganization or any reclassification of the capital stock of the
Company (other than a combination or subdivision of shares, dividend,
distribution or other transaction provided for in Section 2 or Section 4(d) or
(e) above), each share of Series A Preferred shall thereafter be convertible
into the same kind and amounts of securities or property (including cash), or
both, to which a holder of the number of shares of Common Stock deliverable upon
conversion of such share of Series A Preferred would have been entitled upon the
record date of (or date of, if no record date is fixed) such reorganization or
reclassification, and, in any case, appropriate adjustment (as determined by the
Board of Directors) shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the holders of
such Series A Preferred, to the end that the provisions set forth herein shall
thereafter be applicable, as nearly as equivalent as is practicable, in relation
to any securities or property (including cash) thereafter deliverable upon the
conversion of the shares of such Series A Preferred.
(g) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the number of shares of Common Stock issuable upon
conversion of a share of Series A Preferred pursuant to this Section 4, the
Company 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 Preferred a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of any holder of
Series A Preferred, furnish or cause to be furnished to such holder a like
certificate prepared by the Company setting forth (i) such adjustments and
readjustments, (ii) the Series A Conversion Price at the time in effect, and
(iii) 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 the Series A
Preferred.
(h) NOTICES OF RECORD DATE. In the event of any taking by the Company 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 security or right convertible
into or entitling the holder thereof to receive additional shares of Common
Stock, or 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 Company shall mail to each holder of Series A Preferred at
least 10 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, security or right, and the amount and character of such dividend,
distribution, security or right.
(i) ISSUE TAXES. The holders of Series A Preferred shall pay any and all
issue, transfer and other taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of shares of Series A Preferred
pursuant hereto.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company 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 Preferred, 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 the Series A Preferred; and if at any time the
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number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred, the Company 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 purpose,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to the Certificate of
Incorporation.
(k) FRACTIONAL SHARES. No fractional share shall be issued upon the
conversion of any share or shares of Series A Preferred. All shares of Common
Stock (including fractions thereof) issuable upon conversion of more than one
share of Series A Preferred by a holder thereof shall be aggregated for purposes
of determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of a fraction of a share of Common Stock, the
Company shall, in lieu of issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the fair market value of such
fraction on the date of conversion (as determined in good faith by the Board).
(l) NOTICES. Any notice required by the provisions of this Section 4 to
be given to the holders of shares of Series A Preferred shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at its address appearing on the books of the Company.
SECTION 5. VOTING RIGHTS. Except as provided in this Section 5 or as
otherwise from time to time required by law, the Series A Preferred shall vote
together with the Common Stock as a single class. The holder of each share of
Series A Preferred shall be entitled to that number of votes equal to the number
of shares of Common Stock into which such share could then be converted and
shall be entitled to notice of all stockholders' meetings in accordance with the
By-laws of the Company. So long as any shares of Series A Preferred remain
outstanding, the consent of the holders of a majority of the shares of Series A
Preferred outstanding at the time, voting separately as a class, given in person
or by proxy, either in writing or at any special or annual meeting called for
the purpose, shall be necessary to permit, effect or validate any capital
reorganization or reclassification of the capital stock of the Company or any
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation or of these resolutions which, in any such event, would alter or
change the powers, preferences, or special rights of the shares of the Series A
Preferred so as to affect them adversely; provided, however, that any increase
in the amount of authorized Preferred Stock or the creation and issuance of
other series of Preferred Stock, shall not be deemed to adversely affect such
powers, preferences or special rights. The foregoing voting provisions shall
not apply if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding shares of
Series A Preferred shall have been converted into Common Stock.
IN WITNESS WHEREOF, Corvas International, Inc. has caused this Certificate
to be signed by its President and Chief Executive Officer, and attested by its
Secretary, this 12th day of December, 1994.
CORVAS INTERNATIONAL, INC.
By: /s/ DAVID S. KABAKOFF, Ph. D.
------------------------------
David S. Kabakoff, Ph.D.,
President and Chief Executive Officer
Attest:
/s/ JOHN E. CRAWFORD
- --------------------
John E. Crawford,
Secretary
A-12
<PAGE>
CERTIFICATE OF DESIGNATION
OF THE
SERIES B CONVERTIBLE PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CORVAS INTERNATIONAL, INC.
--------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------
Corvas International, Inc., a company organized and existing under the
General Corporation Law of the State of Delaware (the "Company"), in accordance
with the provisions of Section 103 thereof, and pursuant to Section 151 thereof,
DOES HEREBY CERTIFY:
That the Certificate of Incorporation of the Company (the "Certificate of
Incorporation") authorizes the creation of up to 10,000,000 shares of the
Company's preferred stock, par value $.001 per share (such preferred stock,
together with all other preferred stock of the Company the creation of which is
in the future authorized by the Certificate of Incorporation, referred to herein
as the "Preferred Stock"); and
That pursuant to the authority conferred upon the Board of Directors (the
"Board") by the Certificate of Incorporation of the Company, the Board on
December 20, 1996, approved the creation, issuance and the voting powers of
shares of Preferred Stock to be issued in one series and adopted the following
resolution creating a series of 250,000 shares of Preferred Stock designated as
set forth below:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board by provisions of the Certificate of Incorporation of the Company and
the General Corporation Law of the State of Delaware, the issuance of a series
of Preferred Stock, which shall consist of 250,000 shares of the 10,000,000
shares of Preferred Stock which the Company now has authority to issue, be, and
the same hereby is, authorized, and the Board hereby fixes the powers,
designations, preferences and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock)
authorized by this resolution as follows:
SECTION 1. DESIGNATION OF SERIES B PREFERRED STOCK. The designation of such
series of Preferred Stock authorized by this resolution shall be Series B
Convertible Preferred Stock (the "Series B Preferred"). The Series B Preferred
is issuable solely in whole shares that shall entitle the holder thereof to
exercise the voting rights, to participate in the distributions and to have the
benefit of all other rights of holders of Series B Preferred, as set forth
herein and in the Certificate of Incorporation.
SECTION 2. DIVIDEND RIGHTS OF SERIES B PREFERRED. Subject to the rights of
the holders of any shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series B Preferred Stock with respect
to dividends, the holders of the Series B Preferred shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends at the rate of Sixty-Four Cents ($0.64)
per share of Series B Preferred per annum (as adjusted for any combinations,
consolidations, stock distributions, stock dividends or other recapitalizations
with respect to such shares) before any dividend is declared or paid on shares
of Common Stock. The right to such dividends on the Series B Preferred shall be
cumulative and shall accrue annually on the Series B Preferred from the date of
issuance, whether or not earned or declared. No interest shall be earned or
accrued on any unpaid cumulative dividends. No dividends (other than those
payable solely in Common Stock of the Company) shall be declared or paid on any
Common Stock of the Company until any accrued by unpaid dividends on the Series
B Preferred shall have been declared and paid or set apart.
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<PAGE>
SECTION 3. LIQUIDATION PREFERENCE.
(a) SERIES B PREFERRED. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of Series B
Preferred then outstanding shall be entitled to be paid, pro rata, out of the
assets of the Company available for distribution to its stockholders, whether
from capital, surplus or earnings, before any payment shall be made in respect
of any other class or series of stock ranking junior to the Series B Preferred,
an amount equal to Eight Dollars ($8.00) per share (the "Series B Original Issue
Price") (as adjusted for any combinations, consolidations, stock distributions,
stock dividends or other recapitalizations with respect to such shares) plus any
declared but unpaid dividends on such shares. If upon liquidation, dissolution
or winding up of the Company the assets of the Company available for
distribution to its stockholders shall be insufficient to pay the holders of the
Series B Preferred the full amounts to which they shall be entitled as set forth
above, then the entire assets of the Company legally available for distribution
shall be distributed pro rata among the holders of the Series B Preferred in
proportion to the preferential amount each such holder would otherwise be
entitled to receive. After setting apart or paying in full the preferential
amounts due the holders of the Series B Preferred, the holders of the Series B
Preferred will not be entitled to any further participation in any distribution
of the assets of the Company, and the entire remaining assets of the Company
legally available for distribution, if any, shall be distributed among the
holders of Common Stock in proportion to the shares of Common Stock then held by
them.
(b) MERGERS, CONSOLIDATIONS NOT DEEMED LIQUIDATIONS. The merger or
consolidation of the Company into or with another company in which the Company
is not the surviving entity or in which the stockholders of this Company
immediately prior to such event shall own less than a majority of the voting
securities of the surviving company, or the sale, transfer, or lease (but not
including a transfer or lease by pledge or mortgage to a bona fide lender) of
all or substantially all of the assets of the Company, shall not be deemed a
liquidation, dissolution or winding up of the Company as those terms are used in
this Section 3.
SECTION 4. CONVERSION PRIVILEGES.
(a) RIGHTS OF CONVERSION. Subject to the other provisions of this
Certificate of Designations, each share of Series B Preferred shall be
convertible, without payment of any additional consideration by the holder
thereof and at the option of such holder, at any time and from time to time
after the date of issuance of such share, at the office of the Company or any
transfer agent for such stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing the Series B Original Issue
Price by the Series B Conversion Price (as defined below) in effect at the time
of conversion. The price at which shares of Common Stock shall be deliverable
upon conversion of Series B Preferred (the "Series B Conversion Price") shall
initially equal the Series B Original Issue Price per share, subject to
adjustment as set forth below.
(b) AUTOMATIC CONVERSION. Each share of Series B Preferred shall
automatically, and without action on the part of the holder thereof, be
converted into shares of Common Stock at the Series B Conversion Price then in
effect upon the 10th consecutive trading day for which the average of the high
and low sales prices per share of Common Stock as reported on the Nasdaq
National Market (or any national securities exchange on which the Common Stock
of the Company is then traded) is equal to or greater than One Hundred Fifty
percent (150%) of the Series B Original Issue Price (the "Automatic Conversion
Date").
(c) MECHANICS OF CONVERSION. Before any holder of Series B Preferred
shall be entitled to convert the same into shares of Common Stock pursuant to
Section 4(a) hereof, and before the Company shall be obligated to issue
certificates for shares of Common Stock upon the automatic conversion of the
Series B Preferred pursuant to Section 4(b) hereof, such holder shall surrender
the certificate or certificates thereof, duly endorsed, at the office of the
Company or of any transfer agent for such stock, and shall give written notice
to the Company at such office that such holder elects to convert the same and
shall state therein the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued (except that
no such written notice of intent to convert shall be necessary in the event of
an automatic conversion pursuant to Section 4(b) hereof). The Company shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Series B Preferred or its nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be entitled
as aforesaid, together with cash in lieu of any fractional shares. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of surrender of the shares of Series B Preferred to be
converted, except that in the case of an automatic conversion pursuant to
Section 4(b) hereof, such conversion shall be deemed to have been made
immediately prior to the close of business on the Automatic Conversion Date.
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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 on such date.
(d) ADJUSTMENTS FOR COMBINATIONS OR SUBDIVISIONS OF COMMON STOCK. In the
event the Company at any time or from time to time after the original issue date
of the Series B Preferred shall declare or pay any dividend on the Common Stock
payable in Common Stock or in any right to acquire Common Stock, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise), or in
the event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, then the Series B Conversion Price in effect immediately prior
to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate.
(e) ADJUSTMENTS FOR OTHER DISTRIBUTIONS. In the event the Company shall
at any time or from time to time make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Company (other than Common
Stock) or in securities of any of its subsidiaries, then in each such event
provision shall be made so that the holders of Series B Preferred shall receive,
upon the conversion thereof, the securities of the Company which they would have
received had their stock been converted into Common Stock on the date of such
event.
(f) ADJUSTMENTS FOR REORGANIZATION OR RECLASSIFICATION. In case of any
capital reorganization or any reclassification of the capital stock of the
Company (other than a combination or subdivision of shares, dividend,
distribution or other transaction provided for in Section 2 or Section 4(d) or
(e) above), each share of Series B Preferred shall thereafter be convertible
into the same kind and amounts of securities or property (including cash), or
both, to which a holder of the number of shares of Common Stock deliverable upon
conversion of such share of Series B Preferred would have been entitled upon the
record date of (or date of, if no record date is fixed) such reorganization or
reclassification, and, in any case, appropriate adjustment (as determined by the
Board of Directors) shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the holders of
such Series B Preferred, to the end that the provisions set forth herein shall
thereafter be applicable, as nearly as equivalent as is practicable, in relation
to any securities or property (including cash) thereafter deliverable upon the
conversion of the shares of such Series B Preferred.
(g) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the number of shares of Common Stock issuable upon
conversion of a share of Series B Preferred pursuant to this Section 4, the
Company 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 B Preferred a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of any holder of
Series B Preferred, furnish or cause to be furnished to such holder a like
certificate prepared by the Company setting forth (i) such adjustments and
readjustments, (ii) the Series B Conversion Price at the time in effect, and
(iii) 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 the Series B
Preferred.
(h) NOTICES OF RECORD DATE. In the event of any taking by the Company 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 security or right convertible
into or entitling the holder thereof to receive additional shares of Common
Stock, or 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 Company shall mail to each holder of Series B Preferred at
least 10 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, security or right, and the amount and character of such dividend,
distribution, security or right.
(i) ISSUE TAXES. The holders of Series B Preferred shall pay any and all
issue, transfer and other taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of shares of Series B Preferred
pursuant hereto.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company 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 B Preferred, such number of its shares of Common Stock as
shall from time to
A-15
<PAGE>
time be sufficient to effect the conversion of all outstanding shares of the
Series B Preferred; 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 the Series B Preferred, the Company 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 purpose, including, without limitation, engaging in
best efforts to obtain the requisite stockholder approval of any necessary
amendment to the Certificate of Incorporation.
(k) FRACTIONAL SHARES. No fractional share shall be issued upon the
conversion of any share or shares of Series B Preferred. All shares of Common
Stock (including fractions thereof) issuable upon conversion of more than one
share of Series B Preferred by a holder thereof shall be aggregated for purposes
of determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of a fraction of a share of Common Stock, the
Company shall, in lieu of issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the fair market value of such
fraction on the date of conversion (as determined in good faith by the Board).
(l) NOTICES. Any notice required by the provisions of this Section 4 to
be given to the holders of shares of Series B Preferred shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at its address appearing on the books of the Company.
SECTION 5. VOTING RIGHTS. Except as provided in this Section 4 or as
otherwise from time to time required by law, the Series B Preferred shall vote
together with the Common Stock as a single class. The holder of each share of
Series B Preferred shall be entitled to that number of votes equal to the number
of shares of Common Stock into which such share could then be converted and
shall be entitled to notice of all stockholders' meetings in accordance with the
Bylaws of the Company. So long as any shares of Series B Preferred remain
outstanding, the consent of the holders of a majority of the shares of Series B
Preferred outstanding at the time, voting separately as a class, given in person
or by proxy, either in writing or at any special or annual meeting called for
the purpose, shall be necessary to permit, effect or validate any capital
reorganization or reclassification of the capital stock of the Company or any
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation or of these resolutions which, in any such event, would alter or
change the powers, preferences, or special rights of the shares of the Series B
Preferred so as to affect them adversely; provided, however, that any increase
in the amount of authorized Preferred Stock or the creation and issuance of
other series of Preferred Stock, shall not be deemed to adversely affect such
powers, preferences or special rights. The foregoing voting provisions shall
not apply if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding shares of
Series B Preferred shall have been converted into Common Stock.
IN WITNESS WHEREOF, Corvas International, Inc. has caused this Certificate
to be signed by its President and Chief Executive Officer, and attested by its
Secretary, this 20th day of December, 1996.
CORVAS INTERNATIONAL, INC.
By: /s/ RANDALL E. WOODS
------------------------------
Randall E. Woods,
President and Chief Executive Officer
Attest:
/s/ JOHN E. CRAWFORD
- ----------------------
John E. Crawford,
Secretary
A-16
<PAGE>
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
CORVAS INTERNATIONAL, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
CORVAS INTERNATIONAL, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on September 18, 1997:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Company in accordance with the
provisions of its Certificate of Incorporation, the Board of Directors
hereby creates a series of Preferred Stock, par value $.001 per share,
of the Company and hereby states the designation and number of shares,
and fixes the relative designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions thereof
(in addition to the provisions set forth in the Certificate of
Incorporation of the Company, which are applicable to the Preferred
Stock of all classes and series), as follows:
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<PAGE>
Series C Junior Participating Preferred Stock:
SECTION 1. Designation and Amount. Five Hundred Thousand (500,000) shares
of Preferred Stock, $.001 par value, are designated "Series C Junior
Participating Preferred Stock" with the designations and the powers, preferences
and rights, and the qualifications, limitations and restrictions specified
herein (the "Series C Preferred"). Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series C Preferred to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
conversion of Series A Convertible Preferred Stock, par value $.001 per share
(the "Series A Preferred"), and Series B Convertible Preferred Stock, par value
$.001 per share (the "Series B Preferred"), or upon the conversion of any
outstanding securities issued by the Company convertible into Series C
Preferred.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the payment in full of all accrued dividends to the holders
of Series A Preferred and Series B Preferred and subject to the rights of such
holders and of the holders of any shares of any other series of Preferred Stock
(or any similar stock) ranking prior and superior to the Series C Preferred with
respect to dividends, the holders of shares of Series C Preferred, in preference
to the holders of Common Stock, par value $.001 per share (the "Common Stock"),
of the Company (preferential to the Common Stock, not the Series A Preferred or
the Series B Preferred), and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of April, July, October and January in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series C Preferred, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $l.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series C Preferred. In the event the Company
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series C Preferred were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series C
Preferred as provided in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series C Preferred
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Preferred from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series C Preferred entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series C Preferred in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series C Preferred entitled to receive payment of a
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<PAGE>
dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series C Preferred shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series C Preferred shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Company. In the event
the Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series C Preferred were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in the Certificate of Designation
creating the Series A Preferred, the Certificate of Designation creating the
Series B Preferred or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock, or by law, the Series C Preferred shall
be voted equally with the shares of the Series A Preferred, the Series B
Preferred and the Common Stock and any other capital stock of the Company having
general voting rights as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series C Preferred shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of the Series A Preferred, the Series B Preferred and the Common Stock
as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series C Preferred as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series C Preferred outstanding shall have been
paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Preferred, except dividends paid
ratably on the Series C Preferred and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred, provided that the Company
may at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the Series C
Preferred; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series C Preferred, or any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
C Preferred, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
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<PAGE>
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series C Preferred purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, the Certificate of Designation creating the Series A Preferred,
the Certificate of Designation creating the Series B Preferred or in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Subject to the payment
in full of the liquidation preferences of any outstanding Series A Preferred and
Series B Preferred and the rights of the holders of Series A Preferred and
Series B Preferred or of any shares of any series of Preferred Stock (or any
similar stock) ranking prior and superior to the Series C Preferred with respect
to the distribution of assets, upon any liquidation, dissolution or winding up
of the Company, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred unless, prior thereto, the holders of
shares of Series C Preferred shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series C Preferred shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred, except distributions made ratably on the Series C Preferred
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series C
Preferred were entitled immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. Subject to the rights of the holders
of Series A Preferred and Series B Preferred, in case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series C Preferred shall at the same time be similarly exchanged or changed into
an amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series C Preferred shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 8. NO REDEMPTION. The shares of Series C Preferred shall not be
redeemable.
SECTION 9. RANK. The Series C Preferred shall rank, with respect to the
payment of dividends and the distribution of assets, junior to the Series A
Preferred, the Series B Preferred and all series of any other class of the
Company's Preferred Stock.
SECTION 10. AMENDMENT. The Certificate of Incorporation of the Company shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series C Preferred so
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as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series C Preferred, voting
together as a single class.
IN WITNESS WHEREOF, the undersigned have executed this certificate as of
September 18, 1997.
CORVAS INTERNATIONAL, INC.
/s/ RANDALL E. WOODS
---------------------------------------
Randall E. Woods
President and Chief Executive Officer
/s/ JOHN E. CRAWFORD
----------------------------------------
John E. Crawford
Secretary
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EXHIBIT B
BYLAWS
OF
CORVAS INTERNATIONAL, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the corporation in
the State of Delaware shall be in the City of Dover, County of Kent.
SECTION 2. OTHER OFFICES. The corporation shall also have and maintain an
office or principal place of business at such place as may be fixed by the Board
of Directors, and may also have offices at such other places, both within and
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
SECTION 3. CORPORATE SEAL. The corporate seal shall consist of a die
bearing the name of the corporation and the inscription, "Corporate
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
SECTION 4. PLACE OF MEETINGS. Meetings of the stockholders of the
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the office of the corporation required to be
maintained pursuant to Section 2 hereof.
SECTION 5. ANNUAL MEETING.
(a) The annual meeting of the stockholders of the corporation, for
the purpose of election of directors and for such other business as may lawfully
come before it, shall be held on such date and at such time as may be designated
from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be: (A) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (B) otherwise properly brought before the
meeting by or at the direction of the Board of Directors, or (C) otherwise
properly brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the corporation.
To be timely, a stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the corporation not later than the close
of business on the one hundred twentieth (120th) day prior to the first
anniversary of the date specified in the corporation's proxy statement released
to stockholders in connection with the preceding year's annual meeting;
provided, however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by more than
thirty (30) days from the date contemplated at the time of the previous year's
proxy statement, notice by the stockholder to be timely must be so received not
earlier than the close of business on the ninetieth (90th) day prior to such
annual meeting and not later than the close of business on the sixtieth (60th)
day prior to such annual meeting. A stockholder's
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notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is required to
be provided by the stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity as a
proponent to a stockholder proposal. Notwithstanding the foregoing, in order to
include information with respect to a stockholder proposal in the proxy
statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this paragraph (b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the meeting shall not
be transacted.
(c) Only persons who are nominated in accordance with the procedures
set forth in this paragraph (c) shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors of the corporation
may be made at a meeting of stockholders by or at the direction of the Board of
Directors or by any stockholder of the corporation entitled to vote in the
election of directors at the meeting who complies with the notice procedures set
forth in this paragraph (c). Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the corporation in accordance with the provisions
of paragraph (b) of this Section 5. Such stockholder's notice shall set forth
(i) as to each person, if any, whom the stockholder proposes to nominate for
election or re-election as a director: (A) the name, age, business address and
residence address of such person, (B) the principal occupation or employment of
such person, (C) the class and number of shares of the corporation which are
beneficially owned by such person, (D) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nominations are to
be made by the stockholder, and (E) any other information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's written consent
to being named in the proxy statement, if any, as a nominee and to serving as a
director if elected); and (ii) as to such stockholder giving notice, the
information required to be provided pursuant to paragraph (b) of this Section 5.
At the request of the Board of Directors, any person nominated by a stockholder
for election as a director shall furnish to the Secretary of the corporation
that information required to be set forth in the stockholder's notice of
nomination which pertains to the nominee. No person shall be eligible for
election as a director of the corporation unless nominated in accordance with
the procedures set forth in this paragraph (c). The chairman of the meeting
shall, if the facts warrant, determine and declare at the meeting that a
nomination was not made in accordance with the procedures prescribed by these
Bylaws, and if he should so determine, he shall so declare at the meeting, and
the defective nomination shall be disregarded.
SECTION 6. SPECIAL MEETINGS.
(a) Special meetings of the stockholders of the corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board of
Directors for adoption) or (iv) by the holders of shares entitled to cast not
less than ten percent (10%) of the votes at the meeting, and shall be held at
such place, on such date, and at such time as the Board of Directors, shall fix.
(b) If a special meeting is called by any person or persons other
than the Board of Directors, the request shall be in writing, specifying the
general nature of the business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other facsimile
transmission to the Chairman of the Board of Directors, the Chief Executive
Officer, or the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The Board of
Directors shall determine the time and place of such special meeting, which
shall be held not less than thirty-five (35) nor more than one hundred twenty
(120) days after the date of the receipt of the request. Upon determination of
the time and place of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
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accordance with the provisions of Section 7 of these Bylaws. If the notice is
not given within sixty (60) days after the receipt of the request, the person or
persons requesting the meeting may set the time and place of the meeting and
give the notice. Nothing contained in this paragraph (b) shall be construed as
limiting, fixing, or affecting the time when a meeting of stockholders called by
action of the Board of Directors may be held.
SECTION 7. NOTICE OF MEETINGS. Except as otherwise provided by law or
the Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting, such
notice to specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of stockholders
may be waived in writing, signed by the person entitled to notice thereof,
either before or after such meeting, and will be waived by any stockholder by
his attendance thereat in person or by proxy, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of such meeting shall be
bound by the proceedings of any such meeting in all respects as if due notice
thereof had been given.
SECTION 8. QUORUM. At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. In the absence of a
quorum, any meeting of stockholders may be adjourned, from time to time, either
by the chairman of the meeting or by vote of the holders of a majority of the
shares represented thereat, but no other business shall be transacted at such
meeting. The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. Except as otherwise provided by law, the Certificate of Incorporation
or these Bylaws, all action taken by the holders of a majority of the vote cast,
excluding abstentions, at any meeting at which a quorum is present shall be
valid and binding upon the corporation; provided, however, that directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. Where a separate vote by a class or classes or series is required,
except where otherwise provided by the statute or by the Certificate of
Incorporation or these Bylaws, a majority of the outstanding shares of such
class or classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote on that
matter and, except where otherwise provided by the statute or by the Certificate
of Incorporation or these Bylaws, the affirmative vote of the majority
(plurality, in the case of the election of directors) of the votes cast,
including abstentions, by the holders of shares of such class or classes or
series shall be the act of such class or classes or series.
SECTION 9. ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting
of stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares
casting votes, excluding abstentions. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting, the corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is for more
than thirty (30) days or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 10. VOTING RIGHTS. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote or execute consents shall have the right to do so either
in person or by an agent or agents authorized by a proxy granted in accordance
with Delaware law. An agent so appointed need not be a stockholder. No proxy
shall be voted after three (3) years from its date of creation unless the proxy
provides for a longer period.
SECTION 11. JOINT OWNERS OF STOCK. If shares or other securities having
voting power stand of record in the names of two (2) or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety, or otherwise, or if two (2) or more persons have the same
fiduciary relationship respecting the same shares, unless the Secretary is given
written notice to the contrary and is furnished with a copy of the instrument or
order appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect: (a) if only
one (1) votes, his act binds all; (b) if more than one (1)
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votes, the act of the majority so voting binds all; (c) if more than one (1)
votes, but the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the Delaware
Court of Chancery for relief as provided in the General Corporation Law of
Delaware, Section 217(b). If the instrument filed with the Secretary shows that
any such tenancy is held in unequal interests, a majority or even-split for the
purpose of subsection (c) shall be a majority or even-split in interest.
SECTION 12. LIST OF STOCKHOLDERS. The Secretary shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order, showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time thereof
and may be inspected by any stockholder who is present.
SECTION 13. ACTION WITHOUT MEETING. No action shall be taken by the
stockholders except an annual or special meeting of the stockholders called in
accordance with these Bylaws, and no action shall be taken by the stockholders
by written consent.
SECTION 14. ORGANIZATION.
(a) At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the President,
or, if the President is absent, the most senior Vice President present, or in
the absence of any such officer, a chairman of the meeting chosen by a majority
in interest of the stockholders entitled to vote, present in person or by proxy,
shall act as chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as secretary of the
meeting.
(b) The Board of Directors of the corporation shall be entitled to
make such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
SECTION 15. NUMBER AND TERM OF OFFICE. The authorized number of
directors of the corporation shall be fixed in accordance with the Certificate
of Incorporation. Directors need not be stockholders unless so required by the
Certificate of Incorporation. If for any cause, the directors shall not have
been elected at an annual meeting, they may be elected as soon thereafter as
convenient at a special meeting of the stockholders called for that purpose in
the manner provided in these Bylaws.
SECTION 16. POWERS. The powers of the corporation shall be exercised,
its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of
Incorporation.
SECTION 17. CLASSES OF DIRECTORS. Subject to the rights of the holders
of any series of Preferred Stock to elect additional directors under specified
circumstances, the directors shall be divided into three classes designated as
Class I, Class II and Class III, respectively. Directors shall be assigned to
each class in accordance with a
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resolution or resolutions adopted by the Board of Directors. At the first
annual meeting of stockholders following the adoption and filing of the
Certificate of Incorporation, the term of office of the term of office of the
Class II directors shall expire, and Class II directors shall be elected for a
full term of three years. At the second annual meeting of stockholders
following the adoption and filing of the Certificate of Incorporation, the term
of office of the Class III directors shall expire, and Class III directors shall
be elected for a full term of three years. At the third annual meeting of
stockholders following the adoption and filing of the Certificate of
Incorporation, Class I directors shall expire, and Class I directors shall be
elected for a full term of three years. At each succeeding annual meeting of
stockholders, directors shall be elected for a full term of three years to
succeed the directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article, each director shall
serve until his successor is duly elected and qualified or until his death,
resignation or removal. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director.
SECTION 18. VACANCIES. Unless otherwise provided in the Certificate of
Incorporation, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by stockholders, be filled only
by the affirmative vote of a majority of the directors then in office, 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 director for which the vacancy was created or occurred and
until such director's successor shall have been elected and qualified. A
vacancy in the Board of Directors shall be deemed to exist under this Bylaw in
the case of the death, removal or resignation of any director.
SECTION 19. RESIGNATION. Any director may resign at any time by
delivering his written resignation to the Secretary, such resignation to specify
whether it will be effective at a particular time, upon receipt by the Secretary
or at the pleasure of the Board of Directors. If no such specification is made,
it shall be deemed effective at the pleasure of the Board of Directors. When
one or more directors shall resign from the Board of Directors, effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each Director so chosen shall hold office for the unexpired
portion of the term of the Director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
SECTION 20. REMOVAL. Subject to any limitations imposed by law or the
Certificate of Incorporation, the Board of Directors or any individual director
may be removed from office (i) with cause by the affirmative vote of the
holders of a majority of the voting power of all the then-outstanding shares of
voting stock of the corporation entitled to vote at an election of directors
(the "Voting Stock") or (ii) without cause by the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66 2/3%) of the
then-outstanding shares of the Voting Stock.
SECTION 21. MEETINGS.
(a) ANNUAL MEETINGS. The annual meeting of the Board of Directors
shall be held immediately before or after the annual meeting of stockholders and
at the place where such meeting is held. No notice of an annual meeting of the
Board of Directors shall be necessary and such meeting shall be held for the
purpose of electing officers and transacting such other business as may lawfully
come before it.
(b) REGULAR MEETINGS. Except as hereinafter otherwise provided,
regular meetings of the Board of Directors shall be held in the office of the
corporation required to be maintained pursuant to Section 2 hereof. Unless
otherwise restricted by the Certificate of Incorporation, regular meetings of
the Board of Directors may also be held at any place within or without the State
of Delaware which has been designated by resolution of the Board of Directors or
the written consent of all directors.
(c) SPECIAL MEETINGS. Unless otherwise restricted by the Certificate
of Incorporation, special meetings of the Board of Directors may be held at any
time and place within or without the State of Delaware whenever called by the
Chairman of the Board, the President or any two of the directors
(d) TELEPHONE MEETINGS. Any member of the Board of Directors, or of
any committee thereof, may participate in a meeting by means of conference
telephone or similar communications equipment by
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means of which all persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
(e) NOTICE OF MEETINGS. Notice of the time and place of all special
meetings of the Board of Directors shall be orally or in writing, by telephone,
facsimile, telegraph or telex, during normal business hours, at least
twenty-four (24) hours before the date and time of the meeting, or sent in
writing to each director by first class mail, charges prepaid, at least three
(3) days before the date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived by any
director by attendance thereat, except when the director attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
(f) WAIVER OF NOTICE. The transaction of all business at any meeting
of the Board of Directors, or any committee thereof, however called or noticed,
or wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present and if, either before or after
the meeting, each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records or made a
part of the minutes of the meeting.
SECTION 22. QUORUM AND VOTING.
(a) Unless the Certificate of Incorporation requires a greater number
and except with respect to indemnification questions arising under Section 43
hereof, for which a quorum shall be one-third of the exact number of directors
fixed from time to time in accordance with the Certificate of Incorporation, a
quorum of the Board of Directors shall consist of a majority of the exact number
of directors fixed from time to time by the Board of Directors in accordance
with the Certificate of Incorporation; provided, however, at any meeting whether
a quorum be present or otherwise, a majority of the directors present may
adjourn from time to time until the time fixed for the next regular meeting of
the Board of Directors, without notice other than by announcement at the
meeting.
(b) At each meeting of the Board of Directors at which a quorum is
present, all questions and business shall be deter-mined by the affirmative vote
of a majority of the directors present, unless a different vote be required by
law, the Certificate of Incorporation or these Bylaws.
SECTION 23. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
SECTION 24. FEES AND COMPENSATION. Directors shall be entitled to such
compensation for their services as may be approved by the Board of Directors,
including, if so approved, by resolution of the Board of Directors, a fixed sum
and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board
of Directors. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
SECTION 25. COMMITTEES.
(a) EXECUTIVE COMMITTEE. The Board of Directors may by resolution
passed by a majority of the whole Board of Directors appoint an Executive
Committee to consist of one (1) or more members of the Board of Directors. The
Executive Committee, to the extent permitted by law and provided in the
resolution of the Board of Directors shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, including without limitation the power or authority
to declare a dividend, to authorize the issuance of stock and adopt a
certificate of ownership and merger, and may authorize the seal of the
corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors fix the designations and any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation or fix the
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number of shares of any series of stock or authorize the increase or decrease of
the shares of any series), adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
or amending the bylaws of the corporation.
(b) OTHER COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, from time to time appoint
such other committees as may be permitted by law. Such other committees
appointed by the Board of Directors shall consist of one (1) or more members of
the Board of Directors and shall have such powers and perform such duties as may
be prescribed by the resolution or resolutions creating such committees, but in
no event shall such committee have the powers denied to the Executive Committee
in these Bylaws.
(c) TERM. Each member of a committee of the Board of Directors shall
serve a term on the committee coexistent with such member's term on the Board of
Directors. The Board of Directors, subject to the provisions of subsections (a)
or (b) of this Bylaw may at any time increase or decrease the number of members
of a committee or terminate the existence of a committee. The membership of a
committee member shall terminate on the date of his death or voluntary
resignation from the committee or from the Board of Directors. The Board of
Directors may at any time for any reason remove any individual committee member
and the Board of Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the committee. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee, and, in addition, in the absence or disqualification of any
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(d) MEETINGS. Unless the Board of Directors shall otherwise provide,
regular meetings of the Executive Committee or any other committee appointed
pursuant to this Section 25 shall be held at such times and places as are
determined by the Board of Directors, or by any such committee, and when notice
thereof has been given to each member of such committee, no further notice of
such regular meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from time to time
by such committee, and may be called by any director who is a member of such
committee, upon written notice to the members of such committee of the time and
place of such special meeting given in the manner provided for the giving of
written notice to members of the Board of Directors of the time and place of
special meetings of the Board of Directors. Notice of any special meeting of
any committee may be waived in writing at any time before or after the meeting
and will be waived by any director by attendance thereat, except when the
director attends such special meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. A majority of the authorized number
of members of any such committee shall constitute a quorum for the transaction
of business, and the act of a majority of those present at any meeting at which
a quorum is present shall be the act of such committee.
SECTION 26. ORGANIZATION. At every meeting of the directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or, if the President absent, the most senior Vice
President, or, in the absence of any such officer, a chairman of the meeting
chosen by a majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed to do so by
the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
SECTION 27. OFFICERS DESIGNATED. The officers of the corporation shall
include, if and when designated by the Board of Directors, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, one or more Vice
Presidents, the Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual organizational meeting of
the Board of Directors. The order of seniority of the Vice Presidents shall be
in the order of their nomination, unless otherwise determined by the Board of
Directors. The Board of Directors may also appoint one or more Assistant
Secretaries, Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary. The Board of
Directors may assign such additional titles to one or more of the officers as it
shall deem appropriate. Any one
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person may hold any number of offices of the corporation at any one time unless
specifically prohibited therefrom by law. The salaries and other compensation
of the officers of the corporation shall be fixed by or in the manner designated
by the Board of Directors.
SECTION 28. TENURE AND DUTIES OF OFFICERS.
(a) GENERAL. All officers shall hold office at the pleasure of the
Board of Directors and until their successors shall have been duly elected and
qualified, unless sooner removed. Any officer elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Board of Directors.
(b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of
the Board of Directors, when present, shall preside at all meetings of the
stockholders and the Board of Directors. The Chairman of the Board of Directors
shall perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. If there is no President, then the Chairman
of the Board of Directors shall also serve as the Chief Executive Officer of the
corporation and shall have the powers and duties prescribed in paragraph (c) of
this Section 28.
(c) DUTIES OF PRESIDENT. The President shall preside at all meetings
of the stockholders and at all meetings of the Board of Directors, unless the
Chairman of the Board of Directors has been appointed and is present. Unless
some other officer gas been elected Chief Executive Officer of the corporation,
the President shall be the Chief Executive Officer of the corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation. The
President shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
(d) DUTIES OF VICE PRESIDENTS. The Vice Presidents, in the order of
their seniority, may assume and perform the duties of the President in the
absence or disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly incident to
their office and shall also perform such other duties and have such other powers
as the Board of Directors or the President shall designate from time to time.
(e) DUTIES OF SECRETARY. The Secretary shall attend all meetings of
the stockholders and of the Board of Directors and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary shall
give notice in conformity with these Bylaws of all meetings of the stockholders
and of all meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties given him in
these Bylaws and other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time.
(f) DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial Officer
shall keep or cause to be kept the books of account of the corporation in a
thorough and proper manner and shall render statements of the financial affairs
of the corporation in such form and as often as required by the Board of
Directors or the President. The Chief Financial Officer, subject to the order
of the Board of Directors, shall have the custody of all funds and securities of
the corporation. The Chief Financial Officer shall perform other duties
commonly incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors or the President shall
designate from time to time. The President may direct the Treasurer or any
Assistant Treasurer, or the Controller or any Assistant Controller to assume and
perform the duties of the Chief Financial Officer in the absence or disability
of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and
each Controller and Assistant Controller shall perform other duties commonly
incident to his office and shall also perform such other duties and have such
other powers as the Board of Directors or the Chief Executive Officer shall
designate from time to time.
SECTION 29. DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.
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SECTION 30. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective. Any resignation shall
be without prejudice to the rights, if any, of the corporation under any
contract with the resigning officer.
SECTION 31. REMOVAL. Any officer may be removed from office at any
time, either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
SECTION 32. EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors, or the President or any Vice President, and by the
Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. All
other instruments and documents requiring the corporate signature, but not
requiring the corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on funds
to the credit of the corporation or in special accounts of the corporation
shall be signed by such person or persons as the Board of Directors shall
authorize so to do.
Unless authorized or ratified by the Board of Directors or within the
agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
SECTION 33. VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
SECTION 34. FORM AND EXECUTION OF CERTIFICATES. Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Any or all of the signatures on the certificate may be
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in
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summary, all of the powers, designations, preferences, and rights, and the
limitations or restrictions of the shares authorized to be issued or shall,
except as otherwise required by law, set forth on the face or back a statement
that the corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional, or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights. Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to this section or otherwise required by law or with
respect to this section a statement that the corporation will furnish without
charge to each stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights. Except as otherwise expressly provided by law,
the rights and obligations of the holders of certificates representing stock of
the same class and series shall be identical.
SECTION 35. LOST CERTIFICATES. A new certificate or certificates shall
be issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a condition
precedent to the issuance of a new certificate or certificates, the owner of
such lost, stolen, or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require or to
give the corporation a surety bond in such form and amount as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen, or destroyed.
SECTION 36. TRANSFERS.
(a) Transfers of record of shares of stock of the corporation shall
be made only upon its books by the holders thereof, in person or by attorney
duly authorized, and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware.
SECTION 37. FIXING RECORD DATES.
(a) In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which record date
shall not be more than sixty (60) nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
SECTION 38. REGISTERED STOCKHOLDERS. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any
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other person whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
SECTION 39. EXECUTION OF OTHER SECURITIES. All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 34), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature, or where permissible facsimile signature, of a trustee under an
indenture pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and attesting the
corporate seal on such bond, debenture or other corporate security may be the
imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may be authorized
by the Board of Directors, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or attested
shall have been delivered, such bond, debenture or other corporate security
nevertheless may be adopted by the corporation and issued and delivered as
though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
SECTION 40. DECLARATION OF DIVIDENDS. Dividends upon the capital stock
of the corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to law
at any regular or special meeting. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the Certificate
of Incorporation.
SECTION 41. DIVIDEND RESERVE. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
SECTION 42. FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
SECTION 43. INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER
OFFICERS, EMPLOYEES AND OTHER AGENTS.
(a) DIRECTORS AND EXECUTIVE OFFICERS. The corporation shall
indemnify its directors and executive officers for the purposes of this Article
XI, as defined in Rule 3b-7 promulgated under the 1934 Act to the
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fullest extent not prohibited by the Delaware General Corporation Law; provided,
however, that the corporation may limit the extent of such indemnification by
individual contracts with its directors and executive officers; and, provided,
further, that the corporation shall not be required to indemnify any director or
executive officer in connection with any proceeding (or part thereof) initiated
by such person unless (i) such indemnification is expressly required to be made
by law, (ii) the proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the corporation, in its
sole discretion, pursuant to the powers vested in the corporation under the
Delaware General Corporation Law or (iv) such indemnification is required to be
made under subsection (d).
(b) OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The corporation
shall have power to indemnify its other officers, employees and other agents as
set forth in the Delaware General Corporation Law.
(c) EXPENSES. The corporation shall advance to any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or executive
officer, of the corporation, or is or was serving at the request of the
corporation as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the final
disposition of the proceeding, promptly following request therefor, all expenses
incurred by any director or executive officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this Bylaw, no advance shall be made by the corporation to an
executive officer of the corporation in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, except by reason of the fact
that such executive officer is or was a director of the corporation or is or was
serving at the request of the corporation as a director or executive officer of
another corporation, partnership, joint venture, trust or other enterprise in
which event this paragraph shall not apply, if a determination is reasonably and
promptly made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (ii) if such
quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, that
the facts known to the decision-making party at the time such determination is
made demonstrate clearly and convincingly that such person acted in bad faith or
in a manner that such person did not believe to be in or not opposed to the best
interests of the corporation.
(d) ENFORCEMENT. Without the necessity of entering into an express
contract, all rights to indemnification and advances to directors and executive
officers under this Bylaw shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between the
corporation and the director or executive officer. Any right to indemnification
or advances granted by this Bylaw to a director or executive officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make it permissible under the
Delaware General Corporation Law for the corporation to indemnify the claimant
for the amount claimed. In connection with any claim by an executive officer of
the corporation (except in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
executive officer is or was a director of the corporation, partnership, joint
venture, trust or other enterprise) for advances, the corporation shall be
entitled to raise a defense as to any such action clear and convincing evidence
that such person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the corporation.
Neither the failure of the corporation (including its Board of Directors,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the corporation (including its Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that claimant has not met the applicable standard of conduct. In any suit
brought by a director or executive officer to enforce a right to indemnification
or to an advancement of expenses hereunder, the burden of proving that the
director or executive officer is not entitled to be indemnified, or to such
advancement of expenses, under t his Article XI or otherwise shall be on the
corporation.
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(e) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this Bylaw shall not be exclusive of any other right which such person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law.
(f) SURVIVAL OF RIGHTS. The rights conferred on any person by this
Bylaw shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(g) INSURANCE. To the fullest extent permitted by the Delaware
General Corporation Law, the corporation, upon approval by the Board of
Directors, may purchase insurance on behalf of any person required or permitted
to be indemnified pursuant to this Bylaw.
(h) AMENDMENTS. Any repeal or modification of this Bylaw shall only
be prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(i) SAVING CLAUSE. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and executive officer to
the full extent not prohibited by any applicable portion of this Bylaw that
shall not have been invalidated, or by any other applicable law.
(j) CERTAIN DEFINITIONS. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(iii) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Bylaw with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(iv) References to a "director," "executive officer," "officer,"
"employee," or "agent" of the corporation shall include, without limitation,
situations where such person is serving at the request of the corporation as a
director, executive officer, officer, employee, trustee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
(v) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit
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plan shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
SECTION 44. NOTICES.
(a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of
these Bylaws, notice is required to be given to any stockholder, it shall be
given in writing, timely and duly deposited in the United States mail,
postage prepaid, and addressed to his last known post office address as shown
by the stock record of the corporation or its transfer agent.
(b) NOTICE TO DIRECTORS. Any notice required to be given to any
director may be given by the method stated in subsection (a), or by facsimile,
telex or telegram, except that such notice other than one which is delivered
personally shall be sent to such address as such director shall have filed in
writing with the Secretary, or, in the absence of such filing, to the last known
post office address of such director.
(c) AFFIDAVIT OF MAILING. An affidavit of mailing, executed by a
duly authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
director or directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall in the absence of fraud, be prima
facie evidence of the facts therein contained.
(d) TIME NOTICES DEEMED GIVEN. All notices given by mail, as above
provided, shall be deemed to have been given as at the time of mailing, and all
notices given by facsimile, telex or telegram shall be deemed to have been given
as of the sending time recorded at time of transmission.
(e) METHODS OF NOTICE. It shall not be necessary that the same
method of giving notice be employed in respect of all directors, but one
permissible method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or others.
(f) FAILURE TO RECEIVE NOTICE. The period or limitation of time
within which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any director may
exercise any power or right, or enjoy any privilege, pursuant to any notice sent
him in the manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such director to receive such
notice.
(g) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL. Whenever
notice is required to be given, under any provision of law or of the Certificate
of Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such person with
whom communication is unlawful shall have the same force and effect as if such
notice had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate shall state,
if such is the fact and if notice is required, that notice was given to all
persons entitled to receive notice except such persons with whom communication
is unlawful.
(h) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever notice
is required to be given, under any provision of law or the Certificate of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings or of
the taking of action by written consent without a meeting to such person
during the period between such two consecutive annual meetings, or (ii) all,
and at least two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been mailed
addressed to such person at his address as shown on the records of the
corporation and have been returned undeliverable, the giving of such notice
to such person shall not be required. Any action or meeting which shall be
taken or held without notice to such person shall have the same force and
effect as if such notice had been duly given. If any such person shall
deliver to the corporation a written notice
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setting forth his then current address, the requirement that notice be given to
such person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate need not
state that notice was not given to persons to whom notice was not required to be
given pursuant to this paragraph.
ARTICLE XIII
AMENDMENTS
SECTION 45. AMENDMENTS. Subject to paragraph (h) of Section 43 of these
Bylaws, the Bylaws may be altered or amended or Bylaws adopted by the
affirmative vote of, sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the Voting Stock. The Board of
Directors shall also have the power, if such power is conferred upon the Board
of Directors by the Certificate of Incorporation, to adopt, amend or repeal
Bylaws.
ARTICLE XIV
LOANS TO OFFICERS
SECTION 46. LOANS TO OFFICERS. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiaries, including any officer or employee who
is a director of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may reasonably be
expected to benefit the corporation. The loan, guarantee or other assistance
may be with or without interest and may be unsecured, or secured in such manner
as the Board of Directors shall approve, including, without limitation, a pledge
of shares of stock of the corporation. Nothing in these Bylaws shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute.
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use of our report incorporated herein by reference in
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (No.
333-1762) and to the reference to our firm under the heading "Experts" in the
Prospectus and to the reference to our firm under the heading "Selected
Financial Data," which is incorporated herein by reference from the 1997 Annual
Report on Form 10-K of Corvas International, Inc.
KPMG PEAT MARWICK LLP
San Diego, California
June 26, 1998
