<PAGE>
As filed with the Securities and Exchange Commission on October 16, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
GENEMEDICINE, INC.
(Exact name of Registrant as specified in its charter)
--------------
Delaware 76-0355802
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
8301 New Trails Drive
The Woodlands, Texas 77381-4248
(281) 364-1150
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
--------------
1993 STOCK OPTION PLAN
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full title of the plans)
--------------
Eric Tomlinson, D.Sc., Ph.D.
President and Chief Executive Officer
GeneMedicine, Inc.
8301 New Trails Drive
The Woodlands, Texas 77381-4248
(281) 364-1150
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies to:
Frederick T. Muto, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
--------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value 2,290,000 $5.5325 $12,669,379.77 $3,839.21
=========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457. The price per share and
aggregate offering price are based upon (a) the actual exercise price
for shares subject to outstanding stock options previously granted
under the Registrant's 1993 Stock Option Plan and 1994 Non-Employee
Directors' Stock Option Plan and (b) the average of the high and low
sales prices of Registrant's Common Stock on October 10, 1997, as
reported on the Nasdaq National Market, for shares issuable under the
Company's 1993 Stock Option Plan and 1994 Non-Employee Directors'
Stock Option Plan. The following chart shows the calculation of the
registration fee.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Aggregate
Type of Shares Number of Shares Offering Price Per Share Offering Price
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Common Stock issuable pursuant to 881,210 $6.084 (a) $5,361,281.64
outstanding options under the
1993 Stock Option Plan
- ---------------------------------------------------------------------------------------------------------
Common Stock issuable under the 1993 1,268,790 $5.1875 (b) $6,581,848.13
Stock Option Plan
- ---------------------------------------------------------------------------------------------------------
Common Stock issuable under the 1994 140,000 $5.1875 (b) $ 726,250.00
Non-Employee Directors' Stock Option
Plan
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Weighted average exercise price.
(b) Average of the high and low sales prices of Registrant's Common Stock on
October 10, 1997, as reported on the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The annual report on Form 10-K for the fiscal year ended December 31, 1996
filed by GeneMedicine, Inc. (the "Registrant") with the Securities and Exchange
Commission (the "Commission"), is hereby incorporated by reference into this
Registration Statement. All other reports filed by the Registrant since
December 31, 1996 pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are also incorporated by reference
into this Registration Statement. A description of the Registrant's Common
Stock, which is contained in the Form 8-A Registration Statement filed by the
Registrant with the Commission on June 14, 1994, including any amendment or
reports filed for the purpose of updating such description, is hereby
incorporated by reference into this Registration Statement. All documents filed
by the Registrant with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement 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 statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation 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 of 1933, as amended (the "Securities Act").
The Registrant's Amended and Restated Certificate of Incorporation and
Bylaws, as amended, 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
1
<PAGE>
102(b)(7) of the General Corporation Law of Delaware (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 or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, for any transaction from which the Director derived an
improper personal benefit and for unlawful payments of dividends or unlawful
stock purchases or redemptions. These provisions also does not affect a
Director's responsibilities under any other law, such as the federal securities
law 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, 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 that 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. The indemnification agreements further provide for
advancing payments of expenses.
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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit No. Description
- ----------- -----------
4.1 Registrant's Amended and Restated Certificate of Incorporation.
4.2 Registrant's Bylaws, as amended.
4.3(1) Specimen Stock Certificate.
5.1 Opinion of Cooley Godward LLP.
99.1(2) 1993 Stock Option Plan, as amended.
99.2(2) 1994 Non-Employee Directors' Stock Option Plan, as amended.
23.1 Consent of Arthur Andersen 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 6.
- ----------------
(1) Filed as an exhibit to the Registration Statement on Form S-1
(No. 33-77126), and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for
the period ended March 31, 1997, and incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes:
(A) 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 of 1933;
(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
3
<PAGE>
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 paragraphs (1)(a)(i) and (1)(a)(ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(B) 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.
(C) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in 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.
3. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 6 hereof, 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 Act and will be governed by the final adjudication of
such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of The Woodlands, State of Texas, on October 16, 1997.
GENEMEDICINE, INC.
By /s/ ERIC TOMLINSON
------------------
Eric Tomlinson, D.Sc., Ph.D.
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eric Tomlinson and Richard A. Waldron,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitutes or substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Eric Tomlinson President, Chief Executive October 16, 1997
- ---------------------------- Officer and Director
Eric Tomlinson, D.Sc., Ph.D. (Principal Executive Officer)
/s/ Richard A. Waldron Vice President and October 16, 1997
- ---------------------------- Chief Financial Officer
Richard A. Waldron (Principal Financial Officer)
/s/ John M. Dodson Director of Finance October 16, 1997
- ---------------------------- & Accounting
John M. Dodson (Principal Accounting Officer)
5
<PAGE>
/s/ Stanley T. Crooke Chairman of the Board October 16, 1997
- ----------------------------
Stanley T. Crooke, M.D., Ph.D.
/s/ Edward L. Cahill Director October 16, 1997
- ----------------------------
Edward L. Cahill
/s/ David F.J. Leathers Director October 16, 1997
- ----------------------------
David F. J. Leathers
/s/ Arthur M. Pappas Director October 16, 1997
- ----------------------------
Arthur M. Pappas
/s/ W. Leigh Thompson Director October 16, 1997
- ----------------------------
W. Leigh Thompson, M.D., Ph.D.
6
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Registrant's Amended and Restated Certificate of Incorporation.
4.2 Registrant's Bylaws, as amended.
4.3(1) Specimen Stock Certificate.
5.1 Opinion of Cooley Godward LLP.
99.1(2) 1993 Stock Option Plan, as amended.
99.2(2) 1994 Non-Employee Directors' Stock Option Plan, as amended.
23.1 Consent of Arthur Andersen 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 6.
- -----------------
(1) Filed as an exhibit to the Registration Statement on Form S-1
(No. 33-77126), and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for
the period ended March 31, 1997, and incorporated herein by reference.
<PAGE>
EXHIBIT 4.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GENEMEDICINE, INC.
GeneMedicine, Inc., a corporation organized under the General Corporation
Law of the State of Delaware (the "Company"), does hereby certify:
That the Company was originally incorporated on January 2, 1992 under the
name "Vector Therapeutics, Inc." pursuant to the General Corporation Law of the
State of Delaware (the "General Corporation Law"); and that the Amended and
Restated Certificate of Incorporation was duly adopted by the Board of Directors
at a meeting of the Board of Directors and by the Company's stockholders at the
Company's annual meeting of stockholders in accordance with Sections 211, 242
and 245 of the General Corporation Law; and
That the Certificate of Incorporation be restated in its entirety to read
as follows:
I.
The name of the Company is GeneMedicine, Inc.
II.
The registered office of the Company in the State of Delaware is located at
Corporation Trust Center, 1013 Centre Road in the City of Wilmington, County of
New Castle. The name and address of its registered agent is The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware.
III.
The nature of the business and purposes to be conducted or promoted by the
Company is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
1
<PAGE>
IV.
The total number of shares of stock which the Company shall have
authority to issue is 60,000,000, of which 20,000,000 shares shall be designated
Preferred Stock, each having a par value of $.001, and of which 40,000,000
shares shall be designated Common Stock, each having a par value of $.001.
The Preferred Stock may be issued from time to time in one or more
series. Except as provided below, the Board of Directors is hereby authorized,
by filing a certificate 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 thereof, including without limitation the dividend rights, dividend
rate, conversion rights, voting rights, rights and terms of redemption
(including sinking fund provisions), redemption price or prices, and the
liquidation preferences of any wholly unissued series of Preferred Stock, and to
establish from time to time the number of shares constituting any such series
and the designation thereof, 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 so decreased, 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.
A. SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. DESIGNATION AND AMOUNT. Six Hundred Thousand (600,000) shares of
Preferred Stock, $.001 par value, are designated "Series A Junior Participating
Preferred Stock" with the designations and the powers, preferences and rights,
and the qualifications, limitations and restrictions specified herein (the
"Junior Preferred Stock"). 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 Junior Preferred Stock 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 the conversion
of any outstanding securities issued by the Company convertible into Junior
Preferred Stock.
2. DIVIDENDS AND DISTRIBUTIONS.
A. Subject to the rights of the holders of any shares of Series B
Preferred Stock or any other series of Preferred Stock (or any similar stock)
ranking prior and superior to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock, par value $.001 per share (the "Common Stock"), of the
Company, 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
Junior Preferred Stock, 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
2
<PAGE>
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 Junior Preferred Stock. 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 Junior Preferred Stock 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
Junior Preferred Stock as provided in paragraph a. of this Section 2 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 Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
C. Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock 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 Junior Preferred Stock 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 Junior Preferred Stock 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 Junior Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Junior Preferred Stock shall
have the following voting rights:
3
<PAGE>
A. Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock 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 Junior
Preferred Stock 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 any other Certificate of
Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Junior Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Company having general voting
rights shall vote together 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 Junior Preferred Stock 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 Common Stock as set forth herein) for taking any corporate
action.
4. CERTAIN RESTRICTIONS.
A. Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock 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 Junior Preferred Stock 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 Junior Preferred Stock;
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 Junior Preferred Stock, except
dividends paid ratably on the Junior Preferred Stock 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 Junior Preferred Stock, 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
4
<PAGE>
Company ranking junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Junior Preferred Stock; or
IV. redeem or purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock ranking on a parity
with the Junior Preferred Stock, 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.
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.
5. REACQUIRED SHARES. Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and
cancelled 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 Restated
Certificate of Incorporation, or in any other Certificate of Designation
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. 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 Junior Preferred Stock unless,
prior thereto, the holders of shares of Junior Preferred Stock 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 Junior Preferred Stock 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 Junior Preferred Stock, except
distributions made ratably on the Junior Preferred Stock 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 Junior Preferred Stock 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
5
<PAGE>
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. CONSOLIDATION, MERGER, ETC. 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 Junior Preferred
Stock 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 Junior
Preferred Stock 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.
8. NO REDEMPTION. The shares of Junior Preferred Stock shall not be
redeemable.
9. RANK. The Junior Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Company's Preferred Stock.
10. AMENDMENT. The Amended and Restated 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 Junior Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Junior Preferred Stock, voting
together as a single class.
B. SERIES B PREFERRED STOCK
1. DESIGNATION AND AMOUNT. Three Million Seven Hundred Fifty Thousand
(3,750,000) shares of Preferred Stock, $.001 pair value, are designated Series B
Preferred Stock (the "Series B Preferred") with the rights, preferences,
privileges and restrictions specified herein.
2. DIVIDEND RIGHTS. The holders of the then-outstanding shares of Series
B Preferred shall be entitled to receive, when, as and if declared by the Board
of Directors, cash dividends at the rate of eight percent (8%) of the "Original
Issue Price" for such series per annum on each outstanding share of Series B
Preferred (as adjusted for any stock dividends, combinations, consolidations,
recapitalizations, stock splits and the like (collectively, a
"Recapitalization") with respect to such shares). The Original Issue Price
shall be four dollars
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($4.00). Any dividend on the Series B Preferred shall be paid prior and in
preference to any declaration or payment of any dividend on the Common Stock of
the Company (the "Common") payable other than in Common or other securities and
rights convertible into or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common. Such dividends shall not be
cumulative, and no right shall accrue to holders of Series B Preferred by reason
of the fact that dividends are not declared in any year, nor shall any
undeclared or unpaid dividend bear or accrue interest.
3. LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution
or winding up of the Company, either voluntary or involuntary, distributions to
the stockholders of the Company shall be made in the following manner:
A. The holders of the Series B Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Company to the holders of Common by reason of their
ownership of such stock, the amount of $4.00 per share on a pari passu basis,
for each share of Series B Preferred, as applicable, then held by them, adjusted
for any Recapitalizations with respect to such shares and, in addition, an
amount equal to all declared but unpaid dividends on such Series B Preferred.
If the assets and funds thus distributed among the holders of the Series B
Preferred shall be insufficient to permit the payment to such holders of the
full aforesaid preferential amount, then the entire assets and funds of the
Company legally available for distribution shall be distributed ratably among
the holders of the Series B Preferred in proportion to the full preferential
amount each such holder would have been entitled to receive if such distribution
had been sufficient to permit the full payment of such preferential amount.
B. After payment has been made to the holders of the Series B
Preferred of the full amounts to which they shall be entitled as provided in
paragraph (a) above, the holders of the Common shall be entitled to receive
ratably on a per share basis all the remaining assets of the Company.
C. For purposes of this Section 3, a merger, consolidation or
reorganization of the Company with or into any other corporation or
corporations, or the merger of any other corporation or corporations into the
Company, in which consolidation, merger or reorganization the stockholders of
the Company receive distributions in cash or securities of another corporation
or corporations as a result of such consolidation, merger or reorganization, or
a sale of all or substantially all of the assets of the Company in a single
transaction or a series of related transactions or other reorganization, shall
be treated as a liquidation, dissolution or winding up of the Company. The
Company shall provide written notice of any such liquidation, dissolution,
winding up, merger, consolidation, reorganization or sale of assets of the
Company as provided in Section 4.g. hereof. Notwithstanding anything else
contained herein to the contrary, each holder of Series B Preferred shall have
the right to convert such holder's shares of Series B Preferred into Common as
provided in Section 4.a.i. hereof prior to the consummation of any such
consolidation, merger, reorganization or sale of assets.
D. Any securities to be delivered to the holders of the Series B
Preferred pursuant to Section 3.c. above shall be valued as follows:
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I. Securities not subject to investment letter or other similar
restrictions on free marketability:
(1) If traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the 30-day period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever are
applicable) over the 30-day period ending three (3) days prior to the closing;
and
II. The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be to make an
appropriate discount from the market value determined as above in subparagraphs
2.d.i.(1) or (2) to reflect the approximate fair market value thereof, as
mutually determined by the Company and the holders of a majority-in-interest of
the Series B Preferred, as applicable, which would be entitled to receive such
securities or the same type of securities.
III. In the event the requirements of Section 3.c. are not
complied with, the Company shall forthwith either:
(1) cause such closing to be postponed until such time as
the requirements of this Section 3 have been complied with, or
(2) cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Series B Preferred shall revert
to and be the same as such rights, preferences and privileges existing
immediately prior to the date of the first notice referred to in subsection 2.c.
hereof.
4. CONVERSION. The holders of the Series B Preferred shall have
conversion rights as follows (the "Conversion Rights"):
A. OPTIONAL AND AUTOMATIC CONVERSION.
I. Each share of Series B Preferred shall be convertible at the
option of the holder thereof, without payment of additional consideration, at
any time after the date of issuance of such share, at the office of the Company
or any transfer agent for the Series B Preferred, as applicable, into such
number of fully paid and nonassessable shares of Common as is determined by
dividing $4.00 by the Series B Conversion Price determined as hereinafter
provided, in effect at the time of conversion. The conversion price for the
Series B Preferred (the "Series B Conversion Price") initially shall be $4.00.
The Series B Conversion Price shall be subject to adjustment, as hereinafter
provided.
II. Each share of Series B Preferred shall be convertible, at
the option of the Company, into such number of fully paid and nonassessable
shares of Common as is determined by dividing $4.00 by the Series B Conversion
Price, in effect of the time of
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conversion, at any time after (A) the closing of a firm commitment underwritten
public offering pursuant to an effective registration statement under the Act,
covering the offer and sale of Common (whether for the account of the Company or
for the account of one or more stockholders of the Company) at an aggregate
offering price of not less than ten million dollars ($10,000,000) and at a
public offering price (prior to underwriters' commissions and expenses) equal to
or exceeding $4.00 per share of Common (as adjusted for any stock dividends,
combinations or splits with respect to such shares), (B) such time as the Common
has traded on a national securities exchange or the Nasdaq National or Small Cap
Market at an average closing price equal to or exceeding $4.00 per share (as
adjusted for any Recapitalizations with respect to such shares) for 30
consecutive trading days, or (C) April 8, 1998.
B. MECHANICS OF CONVERSION. No fractional shares of Common shall be
issued upon conversion of the Series B Preferred. In lieu of any fractional
shares to which the holder would otherwise be entitled, such fractional amount
shall be rounded down to the nearest whole share, after aggregating all shares
to which such holder is entitled.
I. Before any holder of Series B Preferred shall be entitled to
convert the same into shares of Common, it shall surrender its certificate or
certificates therefor, duly endorsed, at the office of the Company or of any
transfer agent for the Series B Preferred Stock and shall give written notice to
the Company at such office that it elects to convert the same (except that no
such written notice of election to convert shall be necessary in the event of
conversion by the Company pursuant to Section 4.a.ii.
II. Before the Company shall be entitled to convert shares of
Series B Preferred into shares of Common as provided in Section 4.a.ii., the
Company shall give written notice to each holder of record of shares of Series B
Preferred at least fifteen (15) days prior to the date of conversion of its
intention to convert all (but not less than all) of the outstanding shares of
Series B Preferred into Common, such notice to be addressed to each holder of
Series B Preferred at the address as it appears on the stock transfer books of
the Company and to specify the date of conversion.
III. The Company shall, as soon as practicable after the date of
receipt of notice pursuant to Section 4.b.i., or within fifteen (15) days of
mailing its notice pursuant to Section 4.b.ii. above, as applicable, issue and
deliver at such office to such holder of Series B Preferred, a certificate or
certificates, registered in such names as are specified by the holder, for the
number of shares of Common to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series B Preferred to
be converted, and the person or persons entitled to receive the shares of Common
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common on such date.
C. ADJUSTMENTS TO CONVERSION PRICE FOR SUBDIVISIONS, DIVIDENDS,
COMBINATIONS OR CONSOLIDATIONS OF COMMON.
I. COMBINATIONS. In the event the outstanding shares of Common
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of
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shares of Common, the Series B Conversion Price in effect immediately prior to
such combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
II. SUBDIVISIONS. In the event the Company shall declare or pay
any dividend on the Common payable in Common or in the event the outstanding
shares of Common shall be subdivided, by reclassification or otherwise than by
payment of a dividend in Common, into a greater number of shares of Common, the
Series B Conversion Price in effect immediately prior to such dividend or
subdivision shall be proportionately decreased:
(1) in the case of any such dividend, immediately after the
close of business on the record date for the determination of holders of any
class of securities entitled to receive such dividend, or
(2) in the case of any such subdivision, at the close of
business on the date immediately prior to the date upon which such corporate
action becomes effective.
If such record date shall have been fixed and such dividend shall not have
been paid on the date fixed therefor, any adjustment previously made to the
Series B Conversion Price with respect to such dividend shall be canceled as of
the close of business on such record date, and thereafter the Series B
Conversion Price shall be adjusted as of the time of actual payment of such
dividend.
III. OTHER DISTRIBUTIONS. In the event the Company at any time
or from time to time makes, or fixes a record date for the determination of
holders of Common entitled to receive any distribution payable in securities or
rights of the Company other than shares of Common and other than as otherwise
adjusted in this Section 4, then and in each such event provision shall be made
so that the holders of Series B Preferred shall receive upon conversion thereof,
in addition to the number of shares of Common receivable thereupon, the amount
of securities or rights of the Company that they would have received had their
Series B Preferred been converted into Common immediately prior to such event
and had they thereafter, during the period from the date of such event to and
including the date of conversion, retained such securities receivable by them as
aforesaid during such period, subject to all other adjustments called for during
such period under this Section 4 with respect to the rights of the holders of
the Series B Preferred.
IV. RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the Common
issuable upon conversion of the Series B Preferred shall be changed into the
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares provided for above), the Series B
Conversion Price then in effect shall, concurrently with the effectiveness of
such reorganization or reclassification, be proportionately adjusted such that
the Series B Preferred shall be convertible into, in lieu of the number of
shares of Common that the holders would otherwise have been entitled to receive,
a number of shares of such other class or classes of stock equivalent to the
number of shares of Common that would have been subject to receipt by the
holders upon conversion of such Series B Preferred immediately before that
change.
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D. NO IMPAIRMENT. Except for transactions approved in accordance
with Section 6 hereof, the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company but will at all times in good
faith assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series B Preferred against
impairment.
The Company shall from time to time in accordance with the laws of the
State of Delaware increase the authorized number of shares of Common if at any
time the number of shares of Common remaining unissued and available for
issuance shall not be sufficient to permit conversion of all of the Series B
Preferred as provided for in this Section 4.
E. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series B Conversion Price pursuant to this
Section 4, the Company shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each holder of Series B
Preferred a certificate setting forth such adjustment or readjustment and
showing 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
setting forth (i) such adjustments and readjustments, (ii) the Series B
Conversion Price, as applicable, at the time in effect and (iii) the number of
shares of Common and the amount, if any, of other property which at the time
would be received upon the conversion of the Series B Preferred.
F. 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, solely for the purpose of effecting the conversion of the
shares of Series B Preferred, such number of its shares of Common as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
Series B Preferred; and if at any time the number of authorized but unissued
shares of Common shall not be sufficient to effect the conversion of all then-
outstanding shares of Series B Preferred, in addition to such other remedies as
shall be available to the holder of such 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 to such number of
shares as shall be sufficient for such purposes.
G. NOTICES OF RECORD DATE. In the event that the Company shall
propose at any time:
I. to declare any dividend or distribution upon its Common
shares outstanding, whether in cash, property, stock or other securities,
whether or not a regular cash dividend and whether or not out of earnings or
earned surplus;
II. to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;
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III. to effect any reclassification or recapitalization of its
Common shares outstanding involving a change in the Common shares; or
IV. to effect a merger or consolidation of the Company with or
into any other corporation, or sell, lease or convey all or substantially all
its property or business, or to liquidate, dissolve or wind up; then, in
connection with each such event, the Company shall send to the holders of the
Series B Preferred;
(1) at least 10 days prior written notice of the date on
which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Common shall be entitled
thereto) or for determining rights to vote in respect of the matters referred to
in (iii) and (iv) above; and
(2) in the case of the matters referred to in (iii) and (iv)
above, at least 10 days prior written notice of the date when the same shall
take place (and specifying, if practicable, or estimating the date on which the
holders of Common shall be entitled to exchange their Common shares for
securities or other property deliverable upon the occurrence of such event).
Each such written notice shall be given personally or by first class mail,
postage prepaid, addressed to the holders of Series B Preferred at the address
for each such holder as shown on the books of the Company, provided, however,
that any holder residing outside of the United States shall receive notice by
telecopy to be followed by notice delivered by mail.
H. ISSUE TAXES. The Company shall pay any and all issue and other
taxes (other than income taxes) that may be payable in respect of any issue or
delivery of shares of Common on conversion of shares of Series B Preferred
pursuant hereto; provided, however, that the Company shall not be obligated to
pay any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.
5. VOTING RIGHTS. Each holder of shares of Series B Preferred shall be
entitled to the number of votes equal to the number of shares of Common into
which such shares of Series B Preferred could be converted on the record date
for the vote or the date of the solicitation of any written consent of
stockholders and shall have voting rights and powers equal to the voting rights
and powers of the Common. The holder of each share of Series B Preferred shall
be entitled to notice of any stockholders' meeting in accordance with the Bylaws
of the Company and shall vote with holders of the Common upon all matters
submitted to a vote of stockholders, except those matters required by law to be
submitted to a class vote. Fractional votes by the holders of Series B
Preferred shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all shares into which shares
of Series B Preferred held by each holder could be converted) shall be rounded
down to the nearest whole number.
6. SERIES B COVENANTS. In addition to any other rights provided by law,
so long as shares of Series B Preferred are outstanding, the Company shall not,
without first obtaining the
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affirmative vote or written consent of the holders of not less than a majority
of the outstanding shares of the Series B Preferred;
A. amend or repeal any provision of, or add any provision to, this
Company's Certificate of Incorporation if such action would adversely alter or
change the preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of, the Series B Preferred;
B. create (by reclassification or otherwise) or issue shares of any
class or series of stock (i) having a preference over the Series B Preferred
with respect to voting, dividends or upon liquidation or (ii) having rights
superior to any of the rights of the Series B Preferred under Section 4 or this
Section 6;
C. increase or decrease the authorized number of shares of Series B
Preferred;
D. do any act or thing which would result in taxation of the holders
of shares of Series B Preferred under Section 305 of the Internal Revenue Code
of 1986, as amended, or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended; or
E. make any amendment to the provisions of this Section 6.
7. STATUS OF CONVERTED STOCK. In the event that any shares of Series B
Preferred shall be converted pursuant to Section 4 hereof, the shares so
converted shall be canceled and shall not be issuable by the Company. The
Certificate of Incorporation of this Company shall be appropriately amended to
effect the corresponding reduction in the Company's authorized capital stock.
8. RESIDUAL RIGHTS. All rights accruing to the outstanding shares of the
Company not expressly provided for to the contrary herein shall be vested in the
Common.
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. BOARD OF DIRECTORS. 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 by the Board of Directors in the manner provided in the Bylaws.
The directors shall be divided into three classes designated as Class I,
Class II and Class III, respectively, each class to consist, as nearly as
possible, of one third of the number of directors then constituting the whole
board. At the first annual meeting of stockholders
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following the 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 the second annual meeting of stockholders
following the 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 third annual meeting of stockholders
following the 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 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.
In case of any increase in the number of directorships, the additional
directorships so created shall be classified as described above and may be
filled in the same manner as a vacancy in the Board of Directors, and a director
elected to such additional directorship shall serve until the next election of
the class to which such additional directorship shall have been assigned.
Notwithstanding the requirement that the three classes shall be as nearly equal
in the number of directorships as possible, no change in the number of
directorships shall operate to prevent a director then in office from continuing
to serve as such until the expiration of his term or his earlier death,
resignation or removal.
On the filing of this Certificate of Incorporation with the Secretary of
State of Delaware, the name of each person who is to serve as a director of the
corporation until the next annual meeting of the stockholders and the class of
directors in which such person is to serve are set forth as follows:
NAME CLASS
Eric Tomlinson, D.Sc., Ph.D. Class I
David F.J. Leathers Class I
Arthur M. Pappas Class II
Edward L. Cahill Class II
W. Leigh Thompson Class III
Stanley T. Crooke, M.D., Ph.D. Class III
B. ELECTION OF THE DIRECTORS. Elections of directors need not be by written
ballot unless the Bylaws of the Company shall so provide. The Board of
Directors is expressly authorized to adopt, amend or repeal the Bylaws of the
Company.
C. REMOVAL OF DIRECTORS. Subject to the rights of the holders of any series
of Preferred Stock, 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 a majority of the voting power of all the then-outstanding shares of
voting stock of the Company 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%) of the voting power of all the
then-outstanding shares of the Voting Stock.
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D. STOCKHOLDER ACTIONS AND MEETINGS. No action shall be taken by the
stockholders of the Company except at an annual or special meeting of
stockholders called in accordance with the Bylaws and no action shall be taken
by written consent.
VI.
A. BUSINESS COMBINATIONS.
1. VOTING. 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 VI:
A. 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
B. 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 10% of the corporation's
assets as set forth on the corporation's most recent audited consolidated
financial statements filed with the Securities and Exchange Commission; or
C. 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 10% of the corporation's assets as set forth on the corporation's
most recent audited consolidated financial statements filed with the Securities
and Exchange Commission; or
D. 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
E. 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 66-2/3 percent of
voting power of all of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the
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election of directors (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. DEFINED TERMS. The term "Business Combination" as used in this
Article shall mean any transaction which is referred to in any one or more of
subparagraphs a. through e. of paragraph 1. of this Section A.
B. EXCEPTIONS. The provisions of Section A of this Article VI 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 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. BOARD APPROVAL. The Business Combination shall have been approved by
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.
2. CONDITIONS. All of the following conditions shall have been met:
A. The consideration to be received by holders of shares of a
particular class (or series) of outstanding capital 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 Capital
Stock. If the Interested Stockholder or any of its Affiliates have paid for
shares of any class (or series) of capital 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 Capital Stock shall be either cash or the
form used to acquire the largest number of shares of such class (or series) of
Capital Stock previously acquired by the Interested Stockholder.
B. 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):
I. (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) 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
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Stockholder became an Interested Stockholder, whichever is higher, plus interest
compounded annually from the first date on which the Interested Stockholder
became an Interested Stockholder (the "Determination Date") through the
Consummation Date at the publicly announced reference rate of interest of Texas
Commerce Bank, National Association (or such other major bank headquartered in
the State of Texas as may be selected by the Continuing Directors) from time to
time in effect in the City of Houston less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any dividends paid in other than
cash, on each share of Common Stock from the Determination Date through the
Consummation Date in an amount up to but not exceeding the amount of interest so
payable per share of Common Stock; and
II. the Fair Market Value per share of Common Stock on the
Announcement Date or the Determination Date, whichever is higher.
C. 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 highest 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.c. 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):
I. (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) 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, plus interest compounded annually
from the Determination Date through the Consummation Date at the publicly
announced reference rate of interest of Texas Commerce Bank, National
Association (or such other major bank headquartered in the State of Texas as may
be selected by the Continuing Directors) from time to time in effect in the City
of Houston less the aggregate amount of any cash dividends paid, and the Fair
Market Value of any dividends paid in other than cash, on each share of such
class (or series) of Voting Stock from the Determination Date through the
Consummation Date in an amount up to but not exceeding the amount of interest so
payable per share of such class (or series) of Voting Stock;
II. 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; and
III. the highest preferential amount per share, if any, to which
the holders of shares of such class (or series) of Voting Stock would be
entitled in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the corporation.
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D. After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (i)
except as approved by a majority of the Continuing 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; (ii) there shall have been (1) 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 (2) 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 (iii) 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; provided, however,
that no approval by Continuing Directors shall satisfy the requirements of this
subparagraph d. unless at the time of such approval there are at least two
Continuing Directors.
E. 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.
F. 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).
G. Such Interested Stockholder shall have supplied the corporation
with such information as shall have been requested pursuant to Section E of this
Article VI within the time period set forth therein.
C. DEFINITIONS. For the purposes of this Article VI:
1. PERSON. A "person" means any individual, limited partnership, general
partnership, corporation or other firm or entity.
2. INTERESTED STOCKHOLDER. "Interested Stockholder" means any person
(other than the corporation or any Subsidiary) who or which:
A. is the Beneficial Owner (as hereinafter defined), directly or
indirectly, of 10% or more of the voting power of the outstanding Voting Stock;
or
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B. 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 ten percent or more of the voting power of the then-
outstanding Voting Stock; or
C. 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
Securities Act of 1933, as amended.
3. BENEFICIAL OWNER. A person shall be a "Beneficial Owner" of, or shall
"Beneficially Own," any Voting Stock:
A. which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in effect on
March 14, 1988; or
B. 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
C. 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
b. 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. OUTSTANDING VOTING STOCK. 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
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which may be issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or otherwise.
5. AFFILIATE. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-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. "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. "Continuing Director" means any member of the
Board of Directors of the corporation who is unaffiliated with the Interested
Stockholder and was a member of the Board 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 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. "Fair Market Value" means: (i) in the case of
stock, the highest closing sale price during the 30-day period 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 during the
30-day period 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 VI; 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 the Article VI.
9. CONSIDERATION. 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 VI 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. "Whole Board" means the total number of directors which
this corporation would have if there were no vacancies.
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11. EXCLUDED PREFERRED STOCK. "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 VI
shall not apply.
D. BOARD DETERMINATIONS. 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 VI, 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 ten percent (10%) of the
corporation's assets as set forth on the corporation's most recent audited
consolidated financial statements filed with the Securities and Exchange
Commission.
E. INFORMATION. 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, as may be reasonably requested of such person, and such
person, and such person shall furnish such information within 10 days after
receipt of such demand.
F. FIDUCIARY DUTY. Nothing contained in this Article VI shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
G. AMENDMENT. Notwithstanding any other provisions of this Amended and
Restated 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 Amended and Restated Certificate of Incorporation or any
Preferred Stock Designation, the affirmative vote of the holders of at least 66-
2/3 percent 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 this Article.
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VII.
A director of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company 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 General Corporation Law of the State of
Delaware or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law hereafter is amended
to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Company, in addition to the
limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this paragraph by the stockholders of the Company
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Company existing at the time of such
repeal or modification.
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IN WITNESS WHEREOF, GeneMedicine, Inc. has caused this Certificate to be
signed and attested by its duly authorized officers this day of May 17, 1996.
GENEMEDICINE, INC.
-------------------------------------
Eric Tomlinson, D.Sc., Ph.D.
President and Chief Executive Officer
ATTEST:
-------------------------------------
Richard A. Waldron
Vice President, Chief Financial Officer
and Secretary
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EXHIBIT 4.2
GENEMEDICINE, INC.
- - - - - - -
BY-LAWS
AMENDED THROUGH MARCH 12, 1996
ARTICLE I
OFFICES
SECTION 1.1 REGISTERED OFFICE. The registered office of the corporation
in the State of Delaware shall be in the City of Wilmington, County of New
Castle, and the name of its registered agent shall be The Corporation Trust
Company.
SECTION 1.2 OTHER OFFICES. The corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1 PLACE OF MEETING. All meetings of stockholders for the
election of directors shall be held at such place, either within or without the
State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting.
SECTION 2.2 ANNUAL MEETING. The annual meeting of stockholders shall be
held on the second Tuesday in May of each year or at such time as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting.
SECTION 2.3 VOTING LIST. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice, or if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
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SECTION 2.4 SPECIAL MEETING. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board or by
the President or by the Board of Directors or by written order of a majority of
the directors. Such request shall state the purposes of the proposed meeting.
The Chairman of the Board or the President or directors so calling any such
meeting shall fix the time and any place, either within or without the State of
Delaware, as the place for holding such meeting.
SECTION 2.5 NOTICE OF MEETING. Written notice of the annual, and each
special meeting of stockholders, stating the time, place and purpose or purposes
thereof, shall be given to each stockholder entitled to vote thereat, not less
than 10 nor more than 60 days before the meeting.
SECTION 2.6 QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at any meeting of stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. Notwithstanding the other provisions of the
Certificate of Incorporation or these by-laws, the holders of a majority of the
shares of capital stock entitled to vote thereat, present in person or
represented by proxy, whether or not a quorum is present, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. If the adjournment
is for more than 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. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
SECTION 2.7 VOTING. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which, by express
provision of the statutes, of the Certificate of Incorporation or of these by-
laws, a different vote is required, in which case such express provision shall
govern and control the decision of such question. Every stockholder having the
right to vote shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such stockholder, beating a date not more
than three years prior to voting, unless such instrument provides for a longer
period, and filed with the Secretary of the corporation before, or at the time
of, the meeting. If such instrument shall designate two or more persons to act
as proxies, unless such instrument shall provide the contrary, a majority of
such persons present at any meeting at which their powers thereunder are to be
exercised shall have and may exercise all the powers of voting or giving
consents thereby conferred, or if only one be present, then such powers may be
exercised by that one; or, if an even number attend and a majority do not agree
on any particular issue, each proxy so attending shall be entitled to exercise
such powers in respect of the same portion of the shares as he is of the proxies
representing such shares.
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SECTION 2.8 ACTION WITHOUT MEETING. No action shall be taken by the
stockholders except at an annual or special meeting of stockholders called in
accordance with these By-laws, and no action shall be taken by the stockholders
by written consent.
SECTION 2.9 VOTING OF STOCK OF CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the by-laws of such corporation may prescribe, or in the
absence of such provision, as the Board of Directors of such corporation may
determine. Shares standing in the name of a deceased person may be voted by the
executor or administrator of such deceased person, either in person or by proxy.
Shares standing in the name of a guardian, conservator or trustee may be voted
by such fiduciary, either in person or by proxy, but no such fiduciary shall be
entitled to vote shares held in such fiduciary capacity without a transfer of
such shares into the name of such fiduciary. Shares standing in the name of a
receiver may be voted by such receiver. A stockholder whose shares are pledged
shall be entitled to vote such shares, unless in the transfer by the pledgor on
the books of the corporation, he has expressly empowered the pledgee to vote
thereon, in which case only the pledgee, or his proxy, may represent the stock
and vote thereon.
SECTION 2.10 TREASURY STOCK. The corporation shall not vote, directly or
indirectly, shares of its own stock owned by it; and such shares shall not be
counted in determining the total number of outstanding shares.
SECTION 2.11 FIXING RECORD DATE. The Board of Directors may fix in
advance a date, which shall not be more than 60 days nor less than 10 days
preceding the date of any meeting of stockholders, nor more than 60 days
preceding the date for payment of any dividend or distribution, or the date for
the allotment of rights, or the date when any change, or conversion or exchange
of capital stock shall go into effect, or a date in connection with obtaining a
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or to receive
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, any such meeting and any adjournment thereof, or to receive payment of such
dividend or distribution, or to receive such allotment of rights, or to exercise
such rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record date
fixed as aforesaid.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 POWERS. The business and affairs of the corporation shall be
managed by its Board of Directors, which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
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SECTION 3.2 NUMBER, ELECTION AND TERM. The authorized number of
directors shall be not less than five (5) nor more than nine (9). The exact
number of directors shall be set within these limits from time to time by the
Board of Directors and shall be set forth in the notice of any meeting of
stockholders held for the purpose of electing directors. Any amendment of the
by-laws changing the maximum or minimum number of directors may be adopted
only by the affirmative vote of a majority of the outstanding shares entitled to
vote. The directors shall be elected at the annual meeting of stockholders,
except as provided in Section 3.3, and each director elected shall hold office
until his successor shall be elected and shall qualify. Directors need not be
residents of Delaware or stockholders of the corporation.
SECTION 3.3 VACANCIES, ADDITIONAL DIRECTORS AND REMOVAL FROM OFFICE.
Unless otherwise provided in the Certificate of Incorporation or these by-laws,
(a) if (i) any vacancy occurs in the Board of Directors caused by death,
resignation, retirement, disqualification or removal from office, or otherwise,
of any director elected by all of the stockholders having the right to vote as a
single class or (ii) any new directorship is created by an increase in the
authorized number of directors which shall be elected by all of the stockholders
having the right to vote as a single class, then a majority of the directors
then in office, even if less than a quorum, or a sole remaining director, may
choose a successor or fill the newly created directorship and any director so
chosen shall hold office until the next annual election and until his successor
shall be duly elected and shall qualify, unless sooner displaced and (b) if (i)
any vacancy occurs in the Board of Directors caused by death, resignation,
retirement, disqualification or removal from office, or otherwise, of any
director elected by the holders of any class or classes of stock or series
thereof entitled to elect such director pursuant to the Certificate of
Incorporation or (ii) any new directorship is created by an increase in the
authorized number of directors which shall be elected by the holders of any
class or classes of stock or series thereof entitled to elect such director
pursuant to the Certificate of Incorporation, then a majority of the directors
elected by such class or classes or series thereof then in office, or a sole
remaining director so elected, may choose a successor or fill the newly created
directorship and any director so chosen shall hold office until the next annual
election and until his successor shall be duly elected and shall qualify, unless
sooner displaced. Unless otherwise provided in the Company's Certificate of
Incorporation, and subject to the rights of the holders of any series of
Preferred Stock, 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 a majority of the voting power of all the then-outstanding shares of
voting stock of the Company 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 voting power of all
the then-outstanding shares of the Voting Stock.
SECTION 3.4 REGULAR MEETING. A regular meeting of the Board of Directors
shall be held each year, without other notice than this bylaw, at the place of,
and immediately prior to or following, the annual meeting of stockholders; and
other regular meetings of the Board of Directors shall be held each year, at
such time and place as the Board of Directors may provide, by resolution, either
within or without the State of Delaware, without other notice than such
resolution.
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SECTION 3.5 SPECIAL MEETING. A special meeting of the Board of Directors
may be called by the Chairman of the Board or by the President and shall be
called by the Secretary on the written request of any two directors. The
Chairman or President so calling, or the directors so requesting, any such
meeting shall fix the time and any place, either within or without the State of
Delaware, as the place for holding such meeting.
SECTION 3.6 NOTICE OF SPECIAL MEETING. Written notice of special
meetings of the Board of Directors shall be given to each director at least 48
hours prior to the time of such meeting. Any director may waive notice of any
meeting. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting, except that notice shall be
given of any proposed amendment to the by-laws if it is to be adopted at any
special meeting or with respect to any other matter where notice is required by
statute.
SECTION 3.7 QUORUM. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute, by the Certificate of
Incorporation or by these by-laws. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 3.8 ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof as provided in Article IV of these by-laws, may be taken without a
meeting, if a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
SECTION 3.9 COMPENSATION. Directors, as such, shall not be entitled to
any stated salary for their services unless voted by the stockholders or the
Board of Directors; but by resolution of the Board of Directors, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board of Directors or any meeting of a committee of
directors. No provision of these by-laws shall be construed to preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
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ARTICLE IV
COMMITTEE OF DIRECTORS
SECTION 4.1 DESIGNATION, POWERS AND NAME. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, including, if they shall so determine, an Executive Committee, each
such committee to consist of two or more of the directors of the corporation.
The committee shall have and may exercise such of the powers of the Board of
Directors in the management of the business and affairs of the corporation as
may be provided in such resolution. The committee may authorize the seal of the
corporation to be affixed to all papers which may require it. 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
such committee. In the absence or disqualification of any member of such
committee or committees, 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. Such committee
or committees shall have such name or names and such limitations of authority as
may be determined from time to time by resolution adopted by the Board of
Directors.
SECTION 4.2 MINUTES. Each committee of directors shall keep regular
minutes of its proceedings and report the same to the Board of Directors when
required.
SECTION 4.3 COMPENSATION. Members of special or standing committees may
be allowed compensation for attending committee meetings, if the Board of
Directors shall so determine.
ARTICLE V
NOTICE
SECTION 5.1 METHODS OF GIVING NOTICE. Whenever under the provisions of
the statutes, the Certificate of Incorporation or these by-laws, notice is
required to be given to any director, member of any committee or stockholder,
such notice shall be in writing and delivered personally or mailed to such
director, member or stockholder; provided that in the case of a director or a
member of any committee such notice may be given orally or by telephone or
telegram. If mailed, notice to a director, member of a committee or stockholder
shall be deemed to be given when deposited in the United States mail first class
in a sealed envelope, with postage thereon prepaid, addressed, in the case of a
stockholder, to the stockholder at the stockholder's address as it appears on
the records of the corporation or, in the case of a director or a member of a
committee, to such person at his business address. If sent by telegraph, notice
to a director or member of a committee shall be deemed to be given when the
telegram, so addressed, is delivered to the telegraph company.
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SECTION 5.2 WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of the statutes, the Certificate of Incorporation or these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VI
OFFICERS
SECTION 6.1 OFFICERS. The officers of the corporation shall consist of
a President and a Secretary. A Chairman of the Board, a Vice Chairman of the
Board, one or more Vice Presidents (any one or more of which may be designated
Executive Vice President or Senior Vice President), and a Treasurer may also be
elected by the Board of Directors. The Board of Directors may appoint such
other officers and agents, including Assistant Vice Presidents, Assistant
Secretaries and Assistant Treasurers, as it shall deem necessary, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined by the Board. Any two or more offices may be held
by the same person. No officer shall execute, acknowledge, verify or
countersign any instrument on behalf of the corporation in more than one
capacity, if such instrument is required by law, by these by-laws or by any act
of the corporation to be executed, acknowledged, verified or countersigned by
two or more officers. The Chairman and Vice Chairman of the Board shall be
elected from among the directors. With the foregoing exceptions, none of the
other officers need be a director, and none of the officers need be a
stockholder of the corporation.
SECTION 6.2 ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors. Each officer
shall hold office until his successor shall have been chosen and shall have
qualified or until his death or the effective date of his resignation or
removal, or until he shall cease to be a director in the case of the Chairman
and the Vice Chairman.
SECTION 6.3 REMOVAL AND RESIGNATION. Any officer or agent elected or
appointed by the Board of Directors may be removed without cause by the
affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall take effect at the date
of the receipt of such notice or at any later time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 6.4 VACANCIES. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
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SECTION 6.5 SALARIES. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors or pursuant to its
direction; and no officer shall be prevented from receiving such salary by
reason of his also being a director.
SECTION 6.6 CHAIRMAN OF THE BOARD. The Chairman of the Board (if one is
elected by the Board) shall preside at all meetings of the Board of Directors or
of the stockholders of the corporation. In the Chairman's absence, such duties
shall be attended to by the Vice Chairman of the Board (if one is elected by the
Board). The Chairman shall formulate and submit to the Board of Directors or
the Executive Committee matters of general policy for the corporation and shall
perform such other duties as usually appertain to the office or as may be
prescribed by the Board of Directors or the Executive Committee.
SECTION 6.7 VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board
(if one is elected by the Board) shall, in the absence of the Chairman of the
Board, perform the duties and exercise the powers of the Chairman of the Board.
The Vice Chairman shall perform such other duties as from time to time may be
prescribed by the Board of Directors or the Executive Committee or assigned by
the Chairman of the Board.
SECTION 6.8 PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman of the Board and the Vice
Chairman of the Board (if elected by the Board), the President shall preside at
all meetings of the Board of Directors and of the stockholders. He may also
preside at any such meeting attended by the Chairman or Vice Chairman of the
Board if he is so designated by the Chairman, or in the Chairman's absence by
the Vice Chairman. He shall have the power to appoint and remove subordinate
officers, agents and employees, except those elected or appointed by the Board
of Directors. The President shall keep the Board of Directors and the Executive
Committee fully informed and shall consult them concerning the business of the
corporation. He may sign with the Secretary or any other officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation and any deeds, bonds, mortgages, contracts, checks,
notes, drafts or other instruments which the Board of Directors has authorized
to be executed, except in cases where the signing and execution thereof has been
expressly delegated by these by-laws or by the Board of Directors to some other
officer or agent of the corporation, or shall be required by law to be otherwise
executed. He shall vote, or give a proxy to any other officer of the
corporation to vote, all shares of stock of any other corporation standing in
the name of the corporation and in general he shall perform all other duties
normally incident to the office of President and such other duties as may be
prescribed by the stockholders, the Board of Directors or the Executive
Committee from time to time.
SECTION 6.9 VICE PRESIDENTS. In the absence of the President, or in the
event of his inability or refusal to act, the Executive Vice President (or in
the event there shall be no Vice President designated Executive Vice President,
any Vice President designated by the Board) shall perform the duties and
exercise the powers of the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the corporation.
The Vice
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Presidents shall perform such other duties as from time to time may be assigned
to them by the President, the Board of Directors or the Executive Committee.
SECTION 6.10 SECRETARY. The Secretary shall (a) keep the minutes of the
meetings of the stockholders, the Board of Directors and committees of
directors; (b) see that all notices are duly given in accordance with the
provisions of these by-laws and as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, and see that the seal of
the corporation or a facsimile thereof is affixed to all certificates for shares
prior to the issue thereof and to all documents, the execution of which on
behalf of the corporation under its seal is duly authorized in accordance with
the provisions of these by-laws; (d) keep or cause to be kept a register of the
post office address of each stockholder which shall be furnished by such
stockholder; (e) sign with the President, or an Executive Vice President or Vice
President, certificates for shares of the corporation, the issue of which shall
have been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the corporation; and (g) in general,
perform all duties normally incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the President, the Board
of Directors or the Executive Committee.
SECTION 6.11 TREASURER. If required by the Board of Directors, the
Treasurer (if one is elected by the Board) shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
Board of Directors shall determine. He shall (a) have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 7.3 of these by-laws; (b) prepare, or cause to be
prepared, for submission at each regular meeting of the Board of Directors, at
each annual meeting of the stockholders, and at such other times as may be
required by the Board of Directors, the President or the Executive Committee, a
statement of financial condition of the corporation in such detail as may be
required; and (c) in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President, the Board of Directors or the Executive Committee.
SECTION 6.12 ASSISTANT SECRETARY OR TREASURER. The Assistant Secretaries
and Assistant Treasurers shall, in general, perform such duties as shall be
assigned to them by the Secretary or the Treasurer, respectively, or by the
President, the Board of Directors or the Executive Committee. The Assistant
Secretaries and Assistant Treasurers shall, in the absence of the Secretary or
Treasurer, respectively, perform all functions and duties which such absent
officers may delegate, but such delegation shall not relieve the absent officer
from the responsibilities and liabilities of his office. The Assistant
Secretaries may sign, with the President or a Vice President, certificates for
shares of the corporation, the issue of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the Board of
Directors shall determine.
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ARTICLE VII
CONTRACTS, CHECKS AND DEPOSITS
SECTION 7.1 CONTRACTS. Subject to the provisions of Section 6.1, the
Board of Directors may authorize any officer, officers, agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.
SECTION 7.2 CHECKS, ETC. All checks, demands, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers or such
agent or agents of the corporation, and in such manner, as shall be determined
by the Board of Directors.
SECTION 7.3 DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 8.1 ISSUANCE. Each stockholder of this corporation shall be
entitled to a certificate or certificates showing the number of shares of stock
registered in his name on the books of the corporation. The certificates shall
be in such form as may be determined by the Board of Directors, shall be issued
in numerical order and shall be entered in the books of the corporation as they
are issued. They shall exhibit the holder's name and number of shares and shall
be signed by the President or a Vice President and by the Secretary or an
Assistant Secretary. If any certificate is countersigned (a) by a transfer
agent other than the corporation or any employee of the corporation, or (b) by a
registrar other than the corporation or any employee of the corporation, any
other signature on the certificate may be a facsimile. If the corporation shall
be authorized to issue more than one class of stock or more than one series of
any class, the 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 rights shall
be set forth in full or summarized on the face or back of the certificate which
the corporation shall issue to represent such class of stock; provided that,
except as otherwise provided by statute, in lieu of the foregoing requirements
there may be set forth on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, a statement
that the corporation will furnish to each stockholder who so requests the
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 rights. All certificates
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and cancelled, except that in the case of a
lost, stolen, destroyed or mutilated certificate a new one
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may be issued therefor upon such terms and with such indemnity, if any, to the
corporation as the Board of Directors may prescribe. Certificates shall not be
issued representing fractional shares of stock.
SECTION 8.2 LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate or certificates alleged to have been lost,
stolen or destroyed, or both.
SECTION 8.3 TRANSFERS. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfers of shares shall be made only on the books
of the corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney and filed with the Secretary of the
corporation or the Transfer Agent.
SECTION 8.4 REGISTERED STOCKHOLDERS. The corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Delaware.
ARTICLE IX
DIVIDENDS
SECTION 9.1 DECLARATION. Dividends upon the capital stock of the
corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property or in
shares of capital stock, subject to the provisions of the Certificate of
Incorporation.
SECTION 9.2 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
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interest of the corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE X
INDEMNIFICATION
SECTION 10.1 THIRD PARTY ACTIONS. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
fight of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 10.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the fight of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
SECTION 10.3 MANDATORY INDEMNIFICATION. To the extent that a director,
officer, employee or agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
Sections 10.1 and 10.2, or in defense of any claim,
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issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
SECTION 10.4 DETERMINATION OF CONDUCT. The determination that a
director, officer, employee or agent has met the applicable standard of conduct
set forth in Sections 10.1 and 10.2 (unless indemnification is ordered by a
court) shall be made (a) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) 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, or (c) by the stockholders.
SECTION 10.5 PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred in
defending a civil or criminal action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this Article X.
SECTION 10.6 INDEMNITY NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by, or granted pursuant to, the other sections
of this Article X shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
the Certificate of Incorporation, any other bylaw, 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 such
office.
SECTION 10.7 DEFINITIONS. For purposes of this Article X:
(A) "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 this Article X
with respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had continued;
(B) "other enterprises" shall include employee benefit plans;
(C) "fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan;
(D) "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
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services by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries; and
(E) 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 plan shall be deemed to have acted in a manner "not opposed to
the best interests of the corporation" as referred to in this Article X.
SECTION 10.8 SURVIVAL OF INDEMNIFICATION. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article X
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 SEAL. The corporate seal shall have inscribed thereon the
name of the corporation, and the words "Corporate Seal, Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
otherwise reproduced.
SECTION 11.2 BOOKS. The books of the corporation may be kept (subject to
any provision contained in the statutes) outside the State of Delaware at the
offices of the corporation at Houston, Texas, or at such other place or places
as may be designated from time to time by the Board of Directors.
ARTICLE XII
AMENDMENT
Except as otherwise provided in these by-laws or in the Company's
Certificate of Incorporation, these by-laws may be altered, amended or repealed
by a majority of the number of directors then constituting the Board of
Directors at any regular meeting of the Board of Directors without prior notice,
or at any special meeting of the Board of Directors if notice of such
alteration, amendment or repeal be contained in the notice of such special
meeting.
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EXHIBIT 5.1
OPINION OF COOLEY GODWARD LLP
October 16, 1997
GeneMedicine, Inc.
8301 New Trails Drive
The Woodlands, TX 77381-4248
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by GeneMedicine, Inc. (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission, covering the registration of up to 2,290,000 shares of the
Company's Common Stock, $.001 par value (the "Shares"), for issuance (i)
pursuant to the Company's 1993 Stock Option Plan and 1994 Non-Employee
Directors' Stock Option Plan (together, the "Plans"), and (ii) upon the exercise
of outstanding options granted under the Company's 1993 Stock Option Plan and
1994 Non-Employee Directors' Stock Option Plan.
In connection with this opinion, we have examined and relied upon the
Registration Statement, the Plans, the Company's Amended and Restated
Certificate of Incorporation and Bylaws, as amended, and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof and
the due execution and delivery of all documents where due execution and delivery
are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Registration
Statement and Plans, will be validly issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
COOLEY GODWARD LLP
/s/ Frederick T. Muto
Frederick T. Muto
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated
February 11, 1997, included in GeneMedicine, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1996, and to all references to our Firm included
in this Registration.
ARTHUR ANDERSEN LLP
The Woodlands, Texas
October 15, 1997
