<PAGE>
Registration No.____________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
STARBASE CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 33-0567363
----------------------- -------------------
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
18872 MACARTHUR BLVD., SUITE 300
IRVINE, CALIFORNIA 92715
----------------------------------------------------
(Address of principal executive offices) (Zip code)
INDIVIDUAL AGREEMENT ENTERED
INTO WITH FINANCIAL CONSULTANT
STARBASE CORPORATION
INCENTIVE STOCK OPTION, NON-QUALIFIED STOCK OPTION
AND RESTRICTED STOCK PURCHASE PLAN - 1992
-----------------------------------------------------------
(Full title of the plan)
ROBERT LEIMENA, CHIEF FINANCIAL OFFICER
STARBASE CORPORATION
18872 MACARTHUR BLVD., SUITE 300
IRVINE, CALIFORNIA 92715
-------------------------------------------
(Name and address of agent for service)
Telephone number, including area code, of agent for service: 714/442-4400
This registration statement, including all exhibits and attachments, contains 21
pages. The exhibit index may be found on page 8 of the consecutively numbered
pages of the registration statement. This registration statement shall hereafter
become effective in accordance with Rule 462 promulgated under the Securities
Act of 1933, as amended.
1
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share/1/ price fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Available for Grant under Stock Option Plan
- --------------------------------------------------
Common Stock 1,532,327 $6.63 $10,159,328.01 $3,503.24
Par Value $0.01
(including options
to acquire such
Common Stock)
Shares Granted under Outstanding Options under Stock Option Plan
- ----------------------------------------------------------------
Common Stock 1,301,006 $2.77 $ 3,603,786.62 $1,242.69
Par Value $0.01
(including options
to acquire such
Common Stock)
Individual Agreement with Financial Consultant
- ----------------------------------------------
Common Stock 30,000 $2.25 $ 67,500.00 $ 23.28
Par Value $0.01
2,863,333 $13,830,614.63 $4,769.21
</TABLE>
- ------------------------
/1/ Estimated pursuant to Rule 457 solely for purposes of calculating the
registration fee. As to shares subject to the agreement with the financial
consultant, the price is computed on the basis of the exercise price. As to
shares under the Incentive Stock Option, Non-Qualified Stock Option and
Restricted Stock Purchase Plan - 1992 which are subject to outstanding but
unexercised options, the price is computed on the basis of the weighted average
exercise price. As to the remaining shares under the Incentive Stock Option,
Non-Qualified Stock Option and Restricted Stock Purchase Plan - 1992, the price
is based upon the average of the high and low prices of the Common Stock on May
20, 1996, as reported on the National Association of Securities Dealers Bulletin
Board.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference
- ------ ---------------------------------------
StarBase Corporation (the "Company") hereby incorporates by reference
in this registration statement the following documents:
(a) The Company's latest annual report on Form 10-K filed pursuant
to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), containing audited financial statements for the Company's
latest fiscal year as filed with the Commission (Commission File Number
0-25612).
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the registrant
document referred to in (a) above.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed under the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment to this registration statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
- ------ -------------------------
The class of securities to be offered is registered under Section 12
of the Exchange Act.
Item 5. Interests of Named Experts and Counsel
- ------ --------------------------------------
Inapplicable.
3
<PAGE>
Item 6. Indemnification of Directors and Officers
- ------ -----------------------------------------
Delaware law authorizes corporations to eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach or alleged breach of the directors' "duty of care." While the
relevant statute does not change directors' duty of care, it enables
corporations to limit available relief to equitable remedies such as injunction
or rescission. The statute has no effect on directors' duty of loyalty, acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, illegal payment of dividends and approval of any transaction
from which a director derives an improper personal benefit.
The Company has adopted provisions in its Certificate of Incorporation
which eliminate the personal liability of its directors to the Company and its
stockholders for monetary damages for breach or alleged breach of their duty of
care. The By-Laws of the Company provide for indemnification of its directors,
officers, employees and agents to the full extent permitted by the General
Corporation Law of the State of Delaware, the Company's state of incorporation,
including those circumstances in which indemnification would otherwise be
discretionary under Delaware Law. Section 145 of the General Corporation Law of
the State of Delaware provides for indemnification in terms sufficiently broad
to indemnify such individuals, under certain circumstances, for liabilities
(including reimbursement of expenses incurred) arising under the Securities Act.
Item 7. Exemption From Registration Claimed
- ------ -----------------------------------
Inapplicable.
Item 8. Exhibits
- ------ --------
See Exhibit Index.
Item 9. Undertakings
- ------ ------------
(a) Rule 415 Offering
-----------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
4
<PAGE>
(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;
(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 (a)(1)(i) and (a)(l)(ii) do not apply if the
- -----------------
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filing incorporating subsequent Exchange Act documents by reference
-------------------------------------------------------------------
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference 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.
(h) Request for acceleration of effective date or filing of registration
--------------------------------------------------------------------
statement on Form S-8
---------------------
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore,
5
<PAGE>
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.
SIGNATURE
---------
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irvine, State of California, on May 23, 1996.
StarBase Corporation
/s/ Robert Leimena
By:
-------------------------------
Robert Leimena, Chief Financial
Officer
6
<PAGE>
POWER OF ATTORNEY
-----------------
The officers and directors of StarBase Corporation whose signatures
appear below, hereby constitute and appoint William R. Stow, III and Al Davis,
and each of them, their true and lawful attorneys and agents, with full power of
substitution, each with power to act alone, to sign and execute on behalf of the
undersigned any amendment or amendments to this registration statement on Form
S-8.
Each of the undersigned does hereby ratify and confirm all that each
of said attorney and agent, or their or his substitutes, shall do or cause to be
done by virtue hereof. Pursuant to the requirements of the Securities Act of
1933, as amended, this registration statement has been signed by the following
in the capacities indicated on May 23, 1996.
Signature Title
- -------------------------------------------------------------------------------
/s/ William R. Stow, III
- -----------------------------
William R. Stow, III President and Director (Principal
Executive Officer)
/s/ Al Davis
- -----------------------------
Al Davis Chief Operating Officer and Director
/s/ Robert Leimena
- -----------------------------
Robert Leimena Chief Financial Officer (Principal
Financial and Accounting Officer)
/s/ Michael G. Lyons
- -----------------------------
Michael G. Lyons Chairman of the Board of Director
/s/ Roger Ferguson
- -----------------------------
Roger Ferguson Director
/s/ Gary Gratny
- -----------------------------
Gary Gratny Director
/s/ Phillip Pearce
- -----------------------------
Phillip Pearce Director
/s/ Kenneth Sexton
- -----------------------------
Kenneth Sexton Director
/s/ John R. Snedegar
- -----------------------------
John R. Snedegar Director
7
<PAGE>
EXHIBIT INDEX
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<TABLE>
<CAPTION>
Sequentially
Numbered Page
-------------
<S> <C>
4.1 Amended and Restated Certificate of --
Incorporation of the Company, as
amended, is incorporated by reference
to the Company's Registration Statement on
Form 10 (File No. 0-25612) filed with the
Securities and Exchange Commission on
February 23, 1995
4.2 Certificate of Designation of the Company 09
filed with the Office of the Secretary of State
of the State of Delaware in January 1996
4.3 Certificate of Designation of the Company 14
filed with the Office of the Secretary of State
of the State of Delaware in May 1996
4.4 Amended and Restated Bylaws of the --
Company is incorporated by reference to the
Company's Registration Statement on Form
SB-2 (File No. 33-68228) filed with the
Securities and Exchange Commission on
November 2, 1993
5 Opinion re legality 19
23.1 Consent of Counsel (included in Exhibit 5) --
23.2 Consent of Independent Accountants 21
24 Power of Attorney (included in signature --
pages to this registration statement)
</TABLE>
8
<PAGE>
EXHIBIT 4.2
-----------
CERTIFICATE OF DESIGNATION
--------------------------------------
CERTIFICATE OF DESIGNATION
OF
STARBASE CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
----------------------------------------
SERIES B PREFERRED STOCK
StarBase Corporation, a Delaware corporation (the "Corporation"),
hereby certifies that the following resolution has been duly adopted by the
Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation (the "Board") by the
provisions of the Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), there hereby is created, out of the 10,000,000
shares of Preferred Stock, par value $0.01 per share, of the Corporation
authorized in Article 4 of the Certificate of Incorporation (the "Preferred
Stock"), a series of the Preferred Stock of the Corporation consisting of
2,500,000 shares, which series shall have the following powers, designations,
preferences and relative, participating, optional and other rights, and the
following qualifications, limitations and restrictions:
1. Designation and Amount. This series of Preferred Stock shall be
----------------------
designated "Series B Preferred Stock" and the authorized number of shares
constituting such series shall be 2,500,000. The par value of the Series B
Preferred Stock shall be $0.01 per share.
2. Dividend Rights of Series B Preferred Stock. The holders of the
-------------------------------------------
Series B Preferred Stock shall be entitled to receive, out of funds legally
available therefor, cumulative dividends at the rate of $0.12 per share per
annum on each outstanding share of Series B Preferred Stock, payable in
preference and priority to any payment of any dividend on the Common. Such
dividends shall accrue and become payable on the anniversary date of the
original issuance of each share of Series B Preferred Stock on which such
dividend accrues. No dividends or other distributions shall be made with respect
to the Common, until all dividends on the Series B Preferred Stock have been
paid or set apart.
3. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution, or winding up
of the Corporation, either voluntary or involuntary, distributions to the
stockholders of the Corporation shall be made in the following manner:
(i) The holders of Series B Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets or surplus funds of the Corporation to
<PAGE>
the holders of the Common or any other class or series of stock of this
corporation by reason of their ownership of such stock, an amount for each share
of Series B Preferred Stock then held by them, equal to $2.00, appropriately
adjusted for any combinations, consolidations, stock distributions or stock
dividends with respect to such shares plus all accrued and unpaid dividends
thereon (hereinafter such amount shall be referred to as the "Series B
Preference Amount"). If upon occurrence of such event of liquidation,
dissolution or winding up, the assets and property legally available to be
distributed among the holders of the Series B Preferred Stock shall be
insufficient to permit the payment to such holders of the Series B Preference
Amount, then the entire assets and property of the Corporation legally available
for distribution shall be distributed ratably among the holders of the
Preferred.
(ii) After payment has been made to the holders of the
Preferred of the full amounts to which they shall be entitled pursuant to
Section 3(a)(i) above, all remaining assets available for distribution, if any,
shall be distributed, ratably among the holders of the Common based upon the
number of shares of Common then held.
(b) For purposes of this paragraph 3, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the Corporation, in which
consolidation or merger the shareholders of the Corporation receive
distributions in cash or securities of another corporation or corporations as a
result of such consolidation or merger, or a sale of all or substantially all of
the assets of the Corporation, shall be treated as a liquidation, dissolution or
winding up of the Corporation. The valuation of any securities or other property
other than cash received by the Corporation in any transaction covered by this
subparagraph 3(b) shall be computed at the fair value thereof at the time of
receipt as determined in good faith by the Board of Directors.
(c) The holders of Preferred shall have no priority or
preference with respect to distributions made by the Corporation in connection
with the repurchase of shares of Common issued to or held by employees,
directors or consultants upon termination of their employment or services
pursuant to agreements providing for the right of said repurchase between the
Corporation and such persons.
4. Voting Rights. Each share of Series B Preferred Stock issued and
-------------
outstanding shall have the number of votes equal to the number of Common shares
into which such share of Preferred could be converted at the record date for
determination of the stockholders entitled to vote on such matters, or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, such votes to be counted together with all
other shares of stock of the Corporation having general voting power and not
separately as a class. The Preferred and the Common shall vote as a single class
on all matters except as otherwise required by law. The holder of each share of
Preferred shall be entitled to notice of any stockholders' meeting in accordance
with the bylaws of the Corporation.
5. Conversion Rights. The holders of Series B Preferred Stock
-----------------
shall have conversion rights as follows:
(a) Each share of Preferred shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share, at
the office of the Corporation or any transfer agent for the Preferred, into
Common Stock as more fully described below. The number of shares of fully paid
and nonassessable Common Stock into which each share of Series B Preferred Stock
may be converted shall be determined by dividing $2.00 by the Series B
Conversion Price (as hereinafter defined) in effect at the time of conversion.
The Series B Conversion Price shall initially be $2.00 subject to adjustment as
provided in Section 6 below.
<PAGE>
(b) Each share of Preferred shall automatically be converted
into shares of Common utilizing the then effective Conversion Price for each
such share upon the first to occur of the following events: (i) the closing of
an acquisition of the Company by another entity or the sale of all or
substantially all of the assets of the Company; (ii) the closing of a public
and/or private offering of the Company's securities which results in gross
proceeds to the Company of at least US$5,000,000; (iii) if the closing bid price
of the Company's Common Stock as reported on the Vancouver Stock Exchange or
such other exchange or automated quotation system on which the trading price of
the Company's Common Stock is reported on a daily basis averages at least
$US5.00 for a period of 20 consecutive trading days; or (iv) January 18, 1999.
(c) No fractional shares of Common shall be issued upon
conversion of Preferred. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the fair market value of the Common on the Conversion
Date, as determined by the corporation's board of directors. Before any holder
of Preferred shall be entitled to convert the same into full shares of Common,
he shall surrender the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or of any transfer agent for the Preferred, and
shall give written notice to the Corporation at such office that he elects to
convert the same; provided, however, that in the event of an automatic
conversion pursuant to subparagraph 5(b) the outstanding shares of all
Preferred, shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent; provided
further, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common issuable upon such automatic
conversion unless either the certificates evidencing such shares of Preferred
are delivered to the Corporation or its transfer agent as provided above, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates.
(d) The Corporation shall, as soon as practicable after such
delivery, or after such agreement and indemnification, issue and deliver at such
office to such holder of Preferred, a certificate or certificates for the number
of shares of Common to which he shall be entitled as aforesaid and a check
payable to the holder, or order, in the amount of any cash amounts payable as
the result of a conversion into fractional shares of Common, plus any accrued
and unpaid dividends on the converted Preferred, and a certificate for any
shares of Preferred not so converted. 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 Preferred to be converted, or in the case of
automatic conversion on the date of the event causing such automatic conversion,
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.
(e) In the event of any taking by this corporation of a record
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, this corporation shall mail to each
holder of Series B Preferred Stock, at least 20 days prior to the date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.
(f) Upon any conversion of Series B Preferred Stock pursuant to
this Section 5, the shares of Series B Preferred Stock which are converted shall
not be reissued. Upon conversion of all of
<PAGE>
the then outstanding Series B Preferred Stock pursuant to this Section 5 and
upon the taking of any action required by law, all matters set forth in this
Certificate of Designation shall be eliminated from the Certificate of
Incorporation, shares of Series B Preferred Stock shall not be deemed
outstanding for any purpose whatsoever and all such shares shall revert to the
status of authorized and unissued shares of Preferred Stock.
(g) Any notices required by the provisions of this Section 5 to
be given to the holders of shares of Series B Preferred Stock shall be deemed
given if deposited in the United States mail, first class, postage prepaid and
addressed to each holder of record at its address appearing on the books of the
Corporation.
6. Adjustments to Conversion Price.
-------------------------------
(a) In the event the Corporation at any time or from time to
time effects a subdivision or combination of its outstanding Common into a
greater or lesser number of shares without a proportionate and corresponding
subdivision or combination of its outstanding Preferred, then and in each such
event the Conversion Price shall be decreased or increased proportionately.
(b) In the event the Corporation at any time or from time to
time shall make or issue, or fix a record date for the determination of holders
of Common entitled to receive, a dividend or other distribution payable in
additional shares of Common or other securities or rights (hereinafter referred
to as "Common Stock Equivalents") convertible into or entitling the holder
thereof to receive additional shares of Common without payment of any
consideration by such holder for such Common Stock Equivalents or the additional
shares of Common, then and in each such event the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common issuable
in payment of such dividend or distribution or upon conversion or exercise of
such Common Stock Equivalents shall be deemed to be issued and outstanding as of
the time of such issuance or, in the event such a record date shall have been
fixed, as of the close of business on such record date. In each such event, the
Conversion Price shall be proportionately decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date.
(c) In case of any merger (other than a merger in which the
Corporation is not the continuing or surviving entity) or any reclassification
of the Common Stock of the Corporation, each share of the Series B Preferred
Stock shall thereafter be convertible into that number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock issuable upon conversion of a share of Series B Preferred Stock
immediately prior to such merger or reclassification would have been entitled
upon such merger or reclassification. In any such case, appropriate adjustment
(as determined by the Board in good faith) shall be made in the application of
the provisions herein set forth with respect to the rights and interests
thereafter of the holders of Series B Preferred Stock, such that the provisions
set forth herein shall thereafter be applicable, as nearly as reasonably may be,
in relation to any share of stock or other property thereafter issuable upon
conversion.
(d) The Corporation shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of Series B Preferred Stock, the full number
of shares of Common Stock deliverable upon the conversion of all Series B
Preferred Stock from time to time outstanding. The Corporation shall from time
to time (subject to obtaining necessary director and stockholder
authorizations), in accordance with the laws of the State of Delaware, increase
the authorized amount of its Common Stock if at any time the
<PAGE>
authorized number of shares of Common Stock remaining unissued shall not be
sufficient to permit the conversion of all of the shares of Series B Preferred
Stock at the time outstanding.
7. Protective Provisions. So long as at least 50,000 shares of
---------------------
Series B Preferred Stock remain outstanding (as adjusted for stock splits or
recombination, recapitalization and the like), the Company shall not, without
first obtaining the written approval of the holders of a majority of the Series
B Preferred Stock:
(a) create any new class or series of shares or reclassify any
existing class or series of shares into a class or series of shares senior to or
on parity with the Series B Preferred Stock with respect to dividends or other
distributions or liquidation or voting;
(b) amend the Company's Certificate of Incorporation materially
and adversely to the Series B Preferred Stock;
(c) effect any dividend or other distribution on the Company's
Common Stock if any dividends on the Series B Preferred Stock have accrued but
not been paid; or
(d) effect the purchase or redemption of the Company's capital
stock (except pursuant to the Company's exercise of its right to repurchase
shares from employees, officers or consultants of the Company pursuant to
agreements, arrangements or plans approved by the Board of Directors).
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by its President, and attested by its Secretary, this
17th day of January, 1996.
StarBase Corporation
By: /s/ William R. Stow, III
-------------------------------
William R. Stow, III,
President
Attest:
By: /s/ Michael Lyons
-------------------------
Michael Lyons,
Assistant Secretary
<PAGE>
EXHIBIT 4.3
-----------
_______________________________________
CERTIFICATE OF DESIGNATION
OF
STARBASE CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
_______________________________________
SERIES C PREFERRED STOCK
StarBase Corporation, a Delaware corporation (the "Corporation"),
hereby certifies that the following resolution has been duly adopted by the
Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation (the "Board") by the
provisions of the Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), there hereby is created, out of the 10,000,000
shares of Preferred Stock, par value $0.01 per share, of the Corporation
authorized in Article 4 of the Certificate of Incorporation (the "Preferred
Stock"), a series of the Preferred Stock of the Corporation consisting of
300,000 shares, which series shall have the following powers, designations,
preferences and relative, participating, optional and other rights, and the
following qualifications, limitations and restrictions:
1. Designation and Amount. This series of Preferred Stock shall be
----------------------
designated "Series C Preferred Stock" and the authorized number of shares
constituting such series shall be 300,000. The par value of the Series C
Preferred Stock shall be $0.01 per share.
2. No Dividend Rights. The holders of the Series C Preferred Stock
------------------
shall not be entitled to receive any dividends.
3. Ranking. The Series C Preferred Stock shall, with respect to
-------
rights on liquidation, winding up and dissolution, (i) rank senior to any of the
Common Stock and any other class or series of stock of the Corporation which by
its terms shall rank junior to the Series C Preferred Stock, (ii) rank junior to
the Corporation's Series B Preferred Stock and any other class or series of
stock of the Corporation which by its terms shall rank senior to the Series C
Preferred Stock, and (iii) rank on a parity with any other class or series of
stock of the Corporation which by its terms shall rank on a parity with the
Series C Preferred Stock. No approval of the holders of Series C Preferred Stock
shall be required for the authorization or issuance of any shares of any class
or series of stock of the Corporation, whether ranking senior to, junior to or
on a parity with the Series C Preferred Stock.
4. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution, or winding up
of the Corporation, either voluntary or involuntary, distributions to the
stockholders of the Corporation shall be made in the following manner:
<PAGE>
(i) The holders of Series C Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets or surplus funds of the Corporation to the holders of the Common Stock or
any other class or series of stock of the Corporation by reason of their
ownership of the Common Stock or any stock ranking junior to the Series C
Preferred Stock in respect of liquidation rights, but subject to the right of
holders of the Series B Preferred Stock or any other class or series of stock of
the Corporation ranking senior to the Series C Preferred Stock in respect of
liquidation rights to receive a preferential distribution, an amount for each
share of Series C Preferred Stock then held by them, equal to $3.00,
appropriately adjusted for any combinations, consolidations or stock
distributions with respect to such shares (hereinafter such amount shall be
referred to as the "Series C Preference Amount"). If upon occurrence of such
event of liquidation, dissolution or winding up, the assets and property legally
available to be distributed among the holders of the Series C Preferred Stock
and to holders of any stock ranking as to liquidation on a parity with the
Series C Preferred Stock shall be insufficient to permit the payment to such
holders of the Series C Preference Amount, then the entire assets and property
of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Series C Preferred Stock and such parity stock.
(ii) After payment has been made to the holders of the
Series C Preferred Stock of the full amounts to which they shall be entitled
pursuant to Section 4(a)(i) above, all remaining assets available for
distribution, if any, shall be distributed, ratably among the holders of the
Common Stock based upon the number of outstanding shares of Common Stock then
held.
(b) For purposes of this paragraph 4, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the Corporation, in which
consolidation or merger the shareholders of the Corporation receive
distributions in cash or securities of another corporation or corporations as a
result of such consolidation or merger, or a sale of all or substantially all of
the assets of the Corporation, shall be treated as a liquidation, dissolution or
winding up of the Corporation. The valuation of any securities or other property
other than cash received by the Corporation in any transaction covered by this
subparagraph 4(b) shall be computed at the fair value thereof at the time of
receipt as determined in good faith by the Board of Directors.
(c) The holders of Series C Preferred Stock shall have no
priority or preference with respect to distributions made by the Corporation in
connection with the repurchase of shares of Common Stock issued to or held by
employees, directors or consultants upon termination of their employment or
services pursuant to agreements providing for the right of said repurchase
between the Corporation and such persons.
5. Voting Rights. Except as otherwise provided by law, the holders
-------------
of the Series C Preferred Stock shall not be entitled to vote upon any matter
relating to the business or affairs of the Corporation or for any other purpose.
6. Conversion Rights. The holders of Series C Preferred Stock shall
-----------------
have conversion rights as follows:
(a) Each share of Series C Preferred Stock shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share, at the office of American Stock Transfer & Trust Company at 40 Wall
Street, New York, New York 10008, the transfer agent for the Series C Preferred
Stock, into Common Stock as more fully described below. The number of shares of
fully paid and nonassessable Common Stock into which each share of Series C
Preferred Stock may be
<PAGE>
converted shall be determined by dividing $3.00 by the Conversion Price (as
hereinafter defined) in effect at the time of conversion.
(b) Each share of Series C Preferred Stock shall automatically
be converted into shares of Common Stock utilizing the then effective Conversion
Price for each such share upon the first to occur of the following events: (i)
if the closing bid price of the Corporation's Common Stock as reported on any
United States exchange or automated quotation system on which the trading price
of the Corporation's Common Stock is reported on a daily basis is at least US
$6.00 for a period of 20 consecutive trading days, with such period commencing
no earlier than 41 days after the Series C Preferred Stock became issued and
outstanding; or (ii) September 25, 1998.
(c) No fractional shares of Common Stock shall be issued upon
conversion of the Series C Preferred Stock. In lieu of any fractional shares to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the fair market value of the Common Stock
on the Conversion Date, as determined by the Corporation's Board of Directors.
Before any holder of Series C Preferred Stock shall be entitled to convert the
same into full shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series C Preferred Stock, and shall give written notice
to the Corporation at such office that he elects to convert the same; provided,
however, that in the event of an automatic conversion pursuant to subparagraph
6(b) the outstanding shares of all Series C Preferred Stock, shall be converted
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent; provided further, however, that the
Corporation shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon such automatic conversion unless either the
certificates evidencing such shares of Series C Preferred Stock are delivered to
the Corporation or its transfer agent as provided above, or the holder notifies
the Corporation or its transfer agent that such certificates have been lost,
stolen or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates.
(d) The Corporation shall, within 2 business days after such
delivery, or after such agreement and indemnification, issue and deliver at such
office to such holder of Series C Preferred Stock, a certificate or certificates
for the number of shares of Common Stock to which it shall be entitled as
aforesaid and a check payable to the holder, or order, in the amount of any cash
amounts payable as the result of a conversion into fractional shares of Common
Stock, and a certificate for any shares of Series C Preferred Stock not so
converted. 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 C
Preferred Stock to be converted, or in the case of automatic conversion on the
date of the event causing such automatic conversion, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.
(e) In the event of any taking by this Corporation of a record
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
Corporation shall mail to each holder of Series C Preferred Stock, at least 10
days prior to the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such distribution or right,
and the amount and character of such distribution or right.
<PAGE>
(f) Upon any conversion of Series C Preferred Stock pursuant to
this Section 6, the shares of Series C Preferred Stock which are converted shall
not be reissued. Upon conversion of all of the then outstanding Series C
Preferred Stock pursuant to this Section 6 and upon the taking of any action
required by law, all matters set forth in this Certificate of Designation shall
be eliminated from the Certificate of Incorporation, shares of Series C
Preferred Stock shall not be deemed outstanding for any purpose whatsoever and
all such shares shall revert to the status of authorized and unissued shares of
Preferred Stock.
(g) Any notices required by the provisions of this Section 6 to
be given to the holders of shares of Series C Preferred Stock shall be deemed
given if deposited in the United States mail, first class, postage prepaid and
addressed to each holder of record at its address appearing on the books of the
Corporation.
7. Adjustments to Conversion Price.
-------------------------------
(a) In the event the Corporation at any time or from time to
time effects a subdivision or combination of its outstanding Common into a
greater or lesser number of shares without a proportionate and corresponding
subdivision or combination of its outstanding Series C Preferred Stock, then and
in each such event the Conversion Price shall be decreased or increased
proportionately.
(b) In the event the Corporation at any time or from time to
time shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights (hereinafter
referred to as "Common Stock Equivalents") convertible into or entitling the
holder thereof to receive additional shares of Common Stock without payment of
any consideration by such holder for such Common Stock Equivalents or the
additional shares of Common Stock, then and in each such event the maximum
number of shares (as set forth in the instrument relating thereto without regard
to any provisions contained therein for a subsequent adjustment of such number)
of Common Stock issuable in payment of such dividend or distribution or upon
conversion or exercise of such Common Stock Equivalents shall be deemed to be
issued and outstanding as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such record
date. In each such event, the Conversion Price shall be proportionately
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date.
(c) In case of any merger (other than a merger in which the
Corporation is not the continuing or surviving entity) or any reclassification
of the Common Stock of the Corporation, each share of the Series C Preferred
Stock shall thereafter be convertible into that number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock issuable upon conversion of a share of Series C Preferred Stock
immediately prior to such merger or reclassification would have been entitled
upon such merger or reclassification. In any such case, appropriate adjustment
(as determined by the Board of Directors in good faith) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the holders of Series C Preferred Stock, such that the
provisions set forth herein shall thereafter be applicable, as nearly as
reasonably may be, in relation to any share of stock or other property
thereafter issuable upon conversion.
(d) The Corporation shall at all times reserve and keep
available out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of Series C Preferred Stock, the full number
of shares of Common Stock deliverable upon the conversion of all
<PAGE>
Series C Preferred Stock from time to time outstanding. The Corporation shall
from time to time (subject to obtaining necessary director and stockholder
authorizations), in accordance with the laws of the State of Delaware, increase
the authorized amount of its Common Stock if at any time the authorized number
of shares of Common Stock remaining unissued shall not be sufficient to permit
the conversion of all of the shares of Series C Preferred Stock at the time
outstanding.
8. Certain Definitions. The following terms shall have the
-------------------
following meanings:
"Conversion Date" means the date upon which the holder delivers
---------------
the notice of conversion to the Corporation.
"Conversion Price" means the lesser of (a) $3.00 per share, and
----------------
(b) 80% of the average closing bid price of the Common Stock as reported by
Blumberg, L.P. for shares traded in the United States for the five consecutive
trading days preceding the Conversion Date.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by its President, and attested by its Chief Financial
Officer, this 10th day of May, 1996.
StarBase Corporation
By: /s/ William R. Stow, III
-------------------------------
William R. Stow, III
President
Attest:
By: /s/ Robert W. Leimena
-------------------------
Robert W. Leimena
Chief Financial Officer
<PAGE>
[LETTERHEAD OF GRAY CARY WARE FREIDENRICH]
EXHIBIT 5
Our File No.
1191215-900200
May 23, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: STARBASE CORPORATION - REGISTRATION STATEMENT ON FORM S-8 REGISTERING
SHARES ISSUABLE UNDER THE INCENTIVE STOCK OPTION, NON-QUALIFIED STOCK
OPTION AND RESTRICTED STOCK PURCHASE PLAN - 1992 AND THE INDIVIDUAL
AGREEMENT WITH FINANCIAL CONSULTANT
Ladies and Gentlemen:
As legal counsel for StarBase Corporation, a Delaware corporation (the
"Company"), we are rendering this opinion in connection with the registration
under the Securities Act of 1933, as amended, of up to 2,863,333 shares of the
Common Stock, $0.01 par value, of the Company which may be issued under the
StarBase Corporation Incentive Stock Option, Non-Qualified Stock Option and
Restricted Stock Purchase Plan - 1992 (the "Plan") and the individual agreement
entered into with the financial consultant (the "Agreement").
We have examined all instruments, documents and records which we
deemed relevant and necessary for the basis of our opinion hereinafter
expressed. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity to the originals of all documents submitted to us as copies.
We are admitted to practice only in the State of California and we
express no opinion concerning any law other than the law of the State of
California, the corporation laws of the State of Delaware and the federal law of
the United States.
<PAGE>
Securities and Exchange Commission
Page 2
As to matters of Delaware corporation law, we have based our opinion
solely upon our examination of such laws and the rules and regulations of the
authorities administering such laws, all as reported in standard, unofficial
compilations. We have not obtained opinions of counsel licensed to practice in
jurisdictions other than the State of California.
Based on such examination, we are of the opinion that the 2,863,333
shares of Common Stock which may be issued upon under the Plan and the Agreement
are duly authorized shares of the Company's Common Stock, and, when issued
against receipt of the consideration therefor in accordance with the provisions
of the Plan and the Agreement, will be validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
Respectfully submitted,
/s/ Gray Cary Ware & Freidenrich
GRAY CARY WARE & FREIDENRICH
A Professional Corporation
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of StarBase Corporation
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of StarBase Corporation of our report dated May 5, 1995,
except for Notes 1 and 11, as to which the date is July 12, 1995, which appears
on page 19 of the March 31, 1995 Annual Report to Shareholders of StarBase
Corporation, which is incorporated by reference in StarBase Corporation's Annual
Report on Form 10-K for the year ended March 31, 1995. We also consent to the
incorporation by reference of our report on the Financial Statement Schedules,
which appears on page 50 of such Annual Report on Form 10-K.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Cosa Mesa, CA
May 24, 1996
