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EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
TESSERA, INC. (formerly known as IST ASSOCIATES INC.)
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(Originally incorporated on May 10, 1990)
Adopted in accordance with Sections 242 and 245
of the General Corporation Law of Delaware
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Steve G. Vogel certifies that:
1. He is the Chief Financial Officer and Secretary of TESSERA, INC., a
Delaware corporation.
2. The Restated Certificate of Incorporation of this corporation is
restated in its entirety to read as follows:
FIRST: The name of this corporation is TESSERA, INC. (hereinafter called
the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle, and the name of its registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation is authorized to issue is 87,260,237 and shall be divided into
classes of stock as follows: (i) 4,000,000 shares of Series A 10% Cumulative
Convertible Preferred Stock, par value $0.001 per share (the "Series A Preferred
Stock"); (ii) 8,000,000 shares of Series B 10% Cumulative Convertible Preferred
Stock, par value $0.001 per share (the "Series B Preferred Stock"); (iii)
10,000,000 shares of Series C 10% Cumulative Convertible Preferred Stock, par
value $0.001 per share (the "Series C Preferred Stock"); (iv) 5,593,572 shares
of Series D 10% Cumulative Convertible Preferred Stock, par value $0.001 per
share (the "Series D Preferred Stock"); (v) 4,000,000 shares of Series E 10%
Cumulative Convertible Preferred Stock, par value $0.001 per share (the "Series
E Preferred Stock"); and (vi) 666,666 shares of Series E-1 10% Cumulative
Convertible Preferred Stock, par value $0.001 per share (the "Series E-1
Preferred Stock"), (vii) 3,333,333 shares of one or more additional series of
preferred stock, par value $0.001 per share (the "Serial Preferred Stock") to be
designated as hereinafter provided; and (viii) 51,666,666 shares of Common
Stock, par value $0.001 per share (the "Common Stock"). The Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock and the Series E-1 Preferred Stock
are sometimes referred to hereinafter collectively as the "Preferred Stock." In
the event that one or more series of Serial Preferred Stock is designated to
rank on a
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parity in all respects with the Series A, Series B, Series C, Series D, Series E
and Series E-1 Preferred Stock, then thereafter all references herein to
"Preferred Stock" shall be deemed to include each such series of Serial
Preferred Stock.
Immediately upon the filing of this restated Certificate of
Incorporation, a reverse 2-for-3 stock split shall be effected such that each
three outstanding shares of Common Stock and Preferred Stock of the Corporation
shall be converted and combined into two such shares of Common Stock or
Preferred Stock, respectively, of the Corporation.
The designations and powers, preferences and rights, and the
qualifications, limitations or restrictions of the shares of each class are as
follows:
A. Preferred Stock.
1. Relative Seniority. Except as set forth in Section 4(a) below, the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock and Series E-1
Preferred Stock shall rank on a parity with each other and with any series of
Serial Preferred Stock which is designated to rank on a parity with the Series
A, Series B, Series C, Series D, Series E and Series E-1 Preferred Stock, and
senior to the Common Stock and any series of Serial Preferred Stock which is
designated to rank junior to the Series A, Series B, Series C, Series D, Series
E, and Series E-1 Preferred Stock ("Junior Stock") as to dividends and
distributions upon liquidation, dissolution, or winding up of the Corporation.
2. Voting.
(a) General. Except as may be otherwise provided in these terms of
the Preferred Stock or by law, the holders of the Series A, Series B, Series C,
Series D, Series E and Series E-1 Preferred Stock shall vote together with all
other classes and series of stock of the Corporation as a single class on all
actions to be taken by the stockholders of the Corporation. Each share of the
Series A, Series B, Series C, Series D, Series E and Series E-1 Preferred Stock
shall entitle the holder thereof to such number of votes per share on each such
action as shall equal the number of shares of Common Stock (including fractions
of a share) into which each share of Series A, Series B, Series C, Series D,
Series E or Series E-1 Preferred Stock is then convertible.
(b) Board Size. The Corporation shall not, without the written
consent or affirmative vote of the holders of at least 66-2/3% of the then
outstanding shares of Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a single class, change
the number of directors constituting the Board of Directors to a number less
than five or more than nine.
(c) Cumulative Voting. In accordance with Section 214 of the
Delaware General Corporation Law, at all elections of directors of the
Corporation each holder of Series A, Series B, Series C, Series D, Series E and
Series E-1 Preferred Stock and each holder of Common Stock shall be entitled to
as many votes as shall equal the number of votes which such holder would be
entitled to cast for the election of directors with respect to the total number
of shares of the Series A, Series B, Series C, Series D, Series E and Series E-1
Preferred Stock and Common Stock held by
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such holder multiplied by the number of directors to be elected, and any such
holder may cast all of such votes for a single director or may distribute such
votes among the number of directors to be voted for, or for any two or more of
such directors, all as such holder may see fit.
3. Dividends. The holders of the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, the
Series E Preferred Stock and the Series E-1 Preferred Stock shall be entitled to
receive, out of funds legally available therefor and when declared by the
Corporation's Board of Directors, dividends which shall begin to accrue on
December 28, 1999 at the rate per annum of 10% of the original purchase price of
such stock compounded on a yearly basis based upon 365 days in each year on the
fiscal year of the Corporation (collectively, the "Dividends"). For example,
accrued dividends as of January 14, 2003 for one share of Series E Preferred
Stock purchased on January 14, 2000 would total approximately $2.4514, which is
calculated as follows: (a) (($7.5000 * 0.10) / 365) * 351), or $0.7212 for
January 14, 2000 through December 31, 2000; (b) (($7.5000 + $0.7212) * 0.10), or
$0.8221 for January 1, 2001 through December 31, 2001; (c) ($7.5000 + $0.7212 +
$0.8221) * 0.10, or $0.9043 for January 1, 2002 through December 31, 2002; and
(d) ((($7.5000 + $0.7212 + $0.8221 + $0.9043) * 0.10) / 365) * 14, or $0.0038
for January 1, 2003 through January 14, 2003. It is agreed that the original
purchase price of the Series A Preferred Stock is $0.7500 per share, the
original purchase price of the Series B Preferred Stock is $1.1250 per share,
the original purchase price of the Series C Preferred Stock is $3.7500 per
share, the original purchase price of the Series D Preferred Stock is $7.5000
per share, the original purchase price of the Series E Preferred Stock is
$7.5000 per share and the original purchase price per share of the Series E-1
Preferred Stock is $9.0000 per share. When declared, the Dividends shall be
payable to holders of record of the Preferred Stock at the close of business on
such date as shall be fixed by the Board of Directors at the time of the
declaration of any dividend, which record date shall be not less than 10 nor
more than 30 days preceding such date of declaration. If sufficient funds are
not available to pay the full per share dividend to all holders of Preferred
Stock on any dividend payment date, then the funds available for the payment of
dividends shall be distributed to the holders of the Preferred Stock entitled to
receive such dividend pro rata on the basis, with respect to each such holder,
of the aggregate original purchase price of the number of shares of Preferred
Stock owned by such holder. Unless full dividends on the Preferred Stock have
been paid (or declared and a sum sufficient for the payment thereof set apart
for such payment), no dividends shall be declared or paid or set aside for
payment or other distribution made upon the Junior Stock, nor shall any Junior
Stock be redeemed, purchased or otherwise acquired for any consideration (or any
payment made to or available for a sinking fund for the redemption of such
stock) by the Corporation, other than: (i) pursuant to a Right of First Refusal
(as hereinafter defined); or (ii) pursuant to the purchase of shares of Common
Stock from former employees of the Corporation who acquired such shares directly
from the Corporation so long as each such purchase is made pursuant to
contractual rights held by the Corporation relating to the termination of
employment of such former employees.
4. Liquidation. Upon any liquidation dissolution or winding up of the
Corporation, whether voluntary or involuntary,
(a) Series E and Series E-1 Preferred Stock. The holders of the
Series E and Series E-1 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 legally available for distribution to the holders
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of the Series A Preferred Stock, the holders of the Series B Preferred Stock,
the holders of the Series C Preferred Stock, the holders of the Series D
Preferred Stock, or the holders of the Common Stock by reason of their ownership
of shares of the capital stock of the Corporation, a liquidation preference
equal to $7.5000 per share for each share of Series E Preferred Stock and
$9.0000 per share for each share of Series E-1 Preferred Stock then held by them
(as adjusted for stock splits and the like occurring after the effective date of
the filing of this restated Certificate of Incorporation), plus accrued
dividends, if any, unpaid thereon, computed to the date payment thereof is made
available (the "Series E and Series E-1 Liquidation Preference"). If upon the
occurrence of such event the assets or surplus funds of the Corporation legally
available for distribution among the holders of the Series E Preferred Stock and
the Series E-1 Preferred Stock are insufficient to permit the payment to such
holders of the full Series E and Series E-1 Liquidation Preference, then all
such assets and surplus funds shall be distributed ratably among the holders of
the Series E Preferred Stock and Series E-1 Preferred Stock in proportion to the
full preferential amount each such holder is entitled to receive.
(b) Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock. Following payment in full of the
Series E and Series E-1 Liquidation Preference in accordance with Subsection
4(a) above, the holders of the Series A Preferred Stock, the holders of the
Series B Preferred Stock, the holders of the Series C Preferred Stock and the
holders of the Series D Preferred Stock shall be entitled, before any
distribution or payment is made with respect to any Junior Stock, to be paid an
amount equal to:
(A) With respect to holders of shares of Series A Preferred
Stock, $0.7500 per share of Series A Preferred Stock
plus accrued dividends, if any, unpaid thereon, computed
to the date payment thereof is made available.
(B) With respect to holders of shares of Series B Preferred
Stock, $1.1250 per share of Series B Preferred Stock
plus accrued dividends, if any, unpaid thereon, computed
to the date payment thereof is made available.
(C) With respect to holders of shares of Series C Preferred
Stock, $3.7500 per share of Series C Preferred Stock
plus accrued dividends, if any, unpaid thereon, computed
to the date payment thereof is made available.
(D) With respect to holders of shares of Series D Preferred
Stock, $7.5000 per share of Series D Preferred Stock
plus accrued dividends, if any, unpaid thereon, computed
to the date payment thereof is made available.
If upon such liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the assets to be distributed among the holders
of Preferred Stock shall be insufficient to permit payment in full to the
holders of Series A, Series B, Series C and Series D Preferred Stock of the
amounts set forth in (A), (B), (C) and (D) of this Subsection 4(b), then the
entire remaining
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assets, or proceeds thereof, of the Corporation shall be distributed ratably
among the holders of Series A, Series B, Series C and Series D Preferred Stock
in proportion to the full preferential amount each such holder is entitled to
receive.
(c) Notice. Written notice of such liquidation, dissolution or
winding up, stating a payment date and the place where said payments shall be
made, shall be given by mail, postage prepaid, or by facsimile transmission to
non-U.S. residents, not less than 20 days prior to the payment date stated
therein, to the holders of record of Preferred Stock, such notice to be
addressed to each such holder at its address as shown on the records of the
Corporation.
(d) Consolidation, Merger and the Like. For purposes of this
Subsection 4, 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. In addition, a merger or consolidation of the Corporation with or
into any other entity or entities shall be treated as a liquidation, dissolution
or winding up of the Corporation for purposes of this Subsection 4 unless
following such transaction the stockholders of the Corporation immediately
before such transaction directly or indirectly own, in the aggregate, more than
50% of the total voting power of (i) the surviving entity or entities, or (ii)
the acquiring entity or entities.
5. Restrictions. At any time when shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock or Series E-1 Preferred Stock are outstanding, except
where the vote or written consent of the holders of a greater number of shares
of the Corporation is required by law, without the approval of the holders of at
least 66-2/3% of the then outstanding shares of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series E-1 Preferred Stock, given in writing or by
vote at a meeting, consenting or voting (as the case may be) together as a
single class, the Corporation will not:
(a) consent to any liquidation, dissolution or winding up of the
Corporation or consolidate or merge into or with any other entity or entities or
sell or transfer all or substantially all its assets, whether in one transaction
or in a series of transactions, or agree to do any of the foregoing; or
(b) amend, alter, restate or repeal its Restated Certificate of
Incorporation, or by-laws, or reduce the stated capital of the Corporation; or
(c) purchase or set aside any sums for the purchase of, or declare
or pay any dividend or make any distribution on or set aside any sum for the
payment of dividends on, any shares of stock other than the Preferred Stock,
except for (i) the purchase of shares of Common Stock from former employees of
the Corporation who acquired such shares directly from the Corporation so long
as each such purchase is made pursuant to contractual rights held by the
Corporation relating to the termination of employment of such former employees;
and (ii) purchases pursuant to and right of first offer or refusal provisions
approved by the Board of Directors of the Corporation (a "Right of First
Refusal"); or
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(d) create or authorize the creation of any additional class or
series of shares of stock (except Serial Preferred Stock) senior to the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock or the Series E-1
Preferred Stock, as the case may be, as to dividends and the distribution of
assets on the liquidation, dissolution or winding up of the Corporation, whether
any such action, amendment, purchase, redemption, creation, authorization or
increase shall be by means of amendment to the Restated Certificate of
Incorporation or by merger, consolidation or otherwise; or
(e) increase the authorized amount of the Series A Preferred Stock,
the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock, the Series E-1 Preferred Stock,
or Serial Preferred Stock, as the case may be; or
(f) increase the authorized amount of any additional class or series
of shares of stock unless the same ranks junior to the Series A Preferred Stock,
the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock, the Series E-1 Preferred Stock or
Serial Preferred Stock, as to dividends and the distribution of assets on the
liquidation, dissolution or winding up of the Corporation, whether any such
action, amendment, purchase, redemption, creation, authorization or increase
shall be by means of amendment to the Restated Certificate of Incorporation or
by merger, consolidation or otherwise; or
(g) create or authorize any obligation or security convertible into
shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, the Series E-1
Preferred Stock or Serial Preferred Stock, as the case may be, or into shares of
any other class or series of stock, whether any such action, amendment,
purchase, redemption, creation, authorization or increase shall be by means of
amendment to the Certificate of Incorporation or by merger, consolidation or
otherwise.
6. Conversion of Series A, Series B, Series C, Series D, Series E and
Series E-1 Preferred Stock. The holders of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series E-1 Preferred Stock shall have the following
conversion rights (the "Conversion Rights"):
(a) Right to Convert. Subject to the terms and conditions of this
Subsection 6, the holder of any share or shares of Series A, Series B, Series C,
Series D, Series E or Series E-1 Preferred Stock shall have the right, at its
option at any time, to convert any or all such shares of Series A, Series B,
Series C, Series D, Series E or Series E-1 Preferred Stock (except that upon any
liquidation of the Corporation the right of conversion shall terminate at the
close of business on the business day fixed for payment of the amount
distributable on the Series A, Series B, Series C, Series D, Series E or Series
E-1 Preferred Stock unless the Corporation shall default in distributing any
such amounts), in whole or in part, into such number of fully paid and
nonassessable shares of Common Stock as is obtained by:
(A) multiplying the number of shares of Series A, Series B,
Series C, Series D, Series E or Series E-1 Preferred
Stock to be converted by (t) in the case of Series A
Preferred Stock, $0.75000; (u) in the case of Series B
Preferred Stock originally sold prior to August 1, 1993,
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$1.1250; (v) in the case of Series B Preferred Stock
originally sold on or after August 1, 1993, $1.1250; (w)
in the case of Series C Preferred Stock, $3.7500; (x) in
the case of Series D Preferred Stock, $7.5000; (y) in
the case of Series E Preferred Stock, $7.5000; and (z)
in the case of Series E-1 Preferred Stock, $9.0000;
(B) dividing the result by the conversion price (which shall
be subject to adjustment as hereinafter provided) of (t)
in the case of Series A Preferred Stock, $0.7500; (u) in
the case of Series B Preferred Stock originally sold
prior to August 1, 1993, the product of $1.1250
multiplied by 5,076,191 divided by 5,768,399; (v) in the
case of Series B Preferred Stock originally sold on or
after August 1, 1993, $1.1250; (w) in the case of Series
C Preferred Stock, $3.7500; (x) in the case of Series D
Preferred Stock, $7.5000; (y) in the case of Series E
Preferred Stock, $7.5000; and (z) in the case of Series
E-1 Preferred Stock, $9.0000; or, in case an adjustment
of such price has taken place pursuant to the further
provisions of this Subsection 6, then dividing by the
conversion price as last adjusted and in effect at the
date any share or shares of Series A, Series B, Series
C, Series D, Series E or Series E-1 Preferred Stock are
surrendered for conversion (such price, or such price as
last adjusted, being referred to hereinafter as the
"Conversion Price").
Such rights of conversion shall be exercised by the holder thereof by
giving written notice that the holder elects to convert a stated number of
shares of Series A, Series B, Series C, Series D, Series E or Series E-1
Preferred Stock into Common Stock and by surrender of a certificate or
certificates for the shares so to be converted to the Corporation at its
principal office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the Series A,
Series B, Series C, Series D, Series E and Series E-1 Preferred Stock) at any
time during its usual business hours on the date set forth in such notice,
together with a statement of the name or names (with address) in which the
certificate or certificates for shares of Common Stock shall be issued.
(b) Issuance of Certificates: Time Conversion Effected. Promptly
after the receipt of the written notice referred to in Subsection 6(a) and
surrender of the certificate or certificates representing the share or shares of
Series A, Series B, Series C, Series D, Series E or Series E-1 Preferred Stock
to be converted, the Corporation shall issue and deliver, or cause to be issued
and delivered, to the holder, registered in such holders name, a certificate or
certificates for the number of whole shares of Common Stock issuable upon the
conversion of such share or shares of Series A, Series B, Series C, Series D,
Series E or Series E-1 Preferred Stock. To the extent permitted by law, such
conversion shall be deemed to have been effected and the Conversion Price shall
be determined as of the close of business on the date on which such written
notice shall have been received by the Corporation and the certificate or
certificates representing such share or shares shall have been surrendered as
aforesaid, and at such time the rights of the holder of such share or shares of
Series A, Series B, Series C, Series D, Series E or Series E-1 Preferred Stock
shall cease, and the person or persons in whose name or names any certificate or
certificates representing shares
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of Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby. All
shares of Common Stock delivered upon conversion of any shares of Series A,
Series B, Series C, Series D, Series E or Series E-1 Preferred Stock will, upon
delivery, be duly and validly issued and fully paid and non-assessable, free and
clear of all liens and charges and not subject to any preemptive rights.
(c) Fractional Shares: Dividends: Partial Conversion. No fractional
shares shall be issued upon conversion of Series A, Series B, Series C, Series
D, Series E or Series E-1 Preferred Stock into Common Stock and the number of
shares shall be rounded down to the nearest whole share. In addition, no payment
or adjustment shall be made upon any conversion on account of any cash dividends
on the Common Stock issued upon such conversion. At the time of any conversion
other than a mandatory conversion pursuant to subsection (r) hereof, the
Corporation shall pay in cash an amount equal to all dividends, if any, accrued
and unpaid, on the shares of Series A, Series B, Series C, Series D, Series E
and Series E-1 Preferred Stock surrendered for conversion. Any such accrued and
unpaid dividends shall be paid through the date upon which such conversion is
deemed to take place, with such date to be determined as provided in Subsection
6(b). In the event of an automatic conversion pursuant to subsection (r) hereof,
no payment or adjustment shall be made on account of any cash dividends, if any,
accrued and unpaid, on the shares of Series A, Series B, Series C, Series D,
Series E or Series E-1 Preferred Stock surrendered for conversion. In case the
number of shares of Series A, Series B, Series C, Series D, Series E or Series
E-1 Preferred Stock represented by the certificate or certificates surrendered
pursuant to Subsection 6(a) exceeds the number of shares converted, the
Corporation shall, upon such conversion, execute and deliver to the holder, at
the expense of the Corporation, a new certificate or certificates for the number
of shares of Series A, Series B, Series C, Series D, Series E or Series E-1
Preferred Stock represented by the certificate or certificates surrendered which
are not to be converted.
(d) Adjustments to Conversion Price For Diluting Issues.
(i)Special Definitions. For purposes of this Subsection 6(d), the
following definitions shall apply:
(A) "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities, excluding options granted to employees, consultants or directors of
the Corporation pursuant to a plan or agreement adopted by the Board of
Directors of the Corporation.
(B) "Issue Date" shall mean the effective date of the filing
of this Restated Certificate of Incorporation.
(C) "Convertible Securities" shall mean any stock or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.
(D) "Additional Shares of Common Stock" shall mean all shares
of Common Stock issued (or, pursuant to Subsection 6(d)(iii) below, deemed to be
issued) by the Corporation after the Issue Date, other than shares of Common
Stock issued or issuable:
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(I) upon conversion of shares of Series A Preferred
Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock, Series E-1 Preferred
Stock or any series of Serial Preferred Stock;
(II) as a dividend or distribution on Series A
Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock, Series E-1
Preferred Stock or any series of Serial
Preferred Stock;
(III) by reason of a dividend, stock split, split-up
or other distribution of shares of Common Stock
excluded from the definition of Additional
Shares of Common Stock by the foregoing clauses
(I) and (II) or this clause (III);
(IV) to employees, consultants or directors of the
Corporation pursuant to a plan adopted or
agreement approved by the Board of Directors of
the Corporation;
(V) in respect of warrants, options or other rights
outstanding on the date hereof; or
(VI) in connection with any merger, acquisition,
consolidation or purchase of all or
substantially all of the shares or assets of
another entity.
(ii) No Adjustment of Conversion Price. No adjustment in the
number of shares of Common Stock into which the Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series E-1 Preferred Stock is convertible shall be made
pursuant to Subsection 6(d)(iv) hereof by adjustment in the applicable
Conversion Price thereof unless the consideration per share (determined pursuant
to Subsection 6(d)(v) hereof) for an Additional Share of Common Stock issued or
deemed to be issued by the Corporation is less than the applicable Conversion
Price in effect with respect to the Series A, Series B, Series C, Series D,
Series E or Series E-1 Preferred Stock on the date of, and immediately prior to,
the issuance of such Additional Shares (such that no adjustment in the
Conversion Price applicable to the Series A, for example, shall be made in the
event that the consideration per share for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is not less than the Conversion
Price then in effect with respect to the Series A); provided, however, that no
such adjustment shall be made if prior to such issuance, the Corporation
receives written notice from the holders of at least 66-2/3% of the then
outstanding shares of each series of preferred stock which would be affected by
such adjustment, with each series voting separately as a class, agreeing that no
adjustment shall be made with respect to such series under the provisions of
this Subsection 6 as the result of the issuance of Additional Shares of Common
Stock.
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(iii) Issue of Securities Deemed Issue of Additional Shares of
Common Stock. For purposes of this Subsection 6(d), if the Corporation at any
time or from time to time after the Issue Date shall issue any Options or
Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of Common Stock (as
set forth in the instrument relating thereto without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that Additional Shares of Common Stock
shall not be deemed to have been issued unless the consideration per share
(determined pursuant to Subsection 6(d)(v) hereof) of such Additional Shares of
Common Stock would be less than the applicable Conversion Price in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, and provided further that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) No further adjustment in the Conversion Price shall be
made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) If such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Corporation, or decrease or increase in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Conversion Price computed upon the original issue thereof
(or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) No readjustment pursuant to clause (B) above shall have
the effect of increasing the Conversion Price to an amount which exceeds the
lower of (i) the Conversion Price on the original adjustment date, or (ii) the
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date;
(D) Notwithstanding clause (B) above, upon the expiration or
termination of any unexercised Option, the Conversion Price shall be readjusted
to remove from such prior adjustment the effect of such Additional Shares of
Common Stock deemed issuable as the result of the original issue of such Option;
and
(E) In the event of any increase in the number of shares of
Common Stock issuable upon the exercise, conversion or exchange of any Option or
Convertible Security, including, but not limited to, an increase resulting from
the antidilution provisions thereof, the Conversion Price then in effect shall
forthwith be readjusted to such Conversion Price as would have obtained had the
adjustment (if any) which was made upon the issuance of such Option or
Convertible Security not exercised or converted prior to such increase been made
upon the basis of
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such increased number of shares, but no further adjustment shall be made for the
actual issuance of Common Stock upon the exercise or conversion of any such
Option or Convertible Security.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
Shares of Common Stock. In the event that the Corporation shall at any time
after the Issue Date issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Subsection
6(d)(iii) hereof but excluding shares issued as a dividend or distribution as
provided in Subsection 6(f) hereof or upon a stock split or combination as
provided in Subsection 6(e) hereof)), without consideration or for a
consideration per share less than the applicable Conversion Price in effect on
the date of and immediately prior to such issue, then and in such event, such
Conversion Price shall be reduced, concurrently with such issue to a price
(calculated to the nearest cent) determined by multiplying such Conversion Price
by a fraction, (A) the numerator of which shall be (1) the number of shares of
Common Stock outstanding immediately prior to such issue plus (2) the number of
shares of Common Stock which the aggregate consideration received by the
Corporation for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price, and (B) the denominator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
issue plus the number of such Additional Shares of Common Stock so issued;
provided, that immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Subsection 6(d)(iii) hereof and the Conversion Price
has been appropriately reduced pursuant to this Subsection 6(d)(iv), then such
Additional Shares of Common Stock shall be deemed to be outstanding for all
subsequent applications of this Subsection 6(d)(iv).
Notwithstanding the foregoing, the applicable Conversion Price shall not
be so reduced at such time if the amount of such reduction would be an amount
less than $.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.01 or more.
(v) Determination of Consideration. For purposes of this
Subsection 6(d), the consideration received by the Corporation for the issuance
of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(I) insofar as it consists of cash, be computed at
the aggregate of cash received and to be
received by the Corporation with respect
thereto, excluding amounts paid or payable for
accrued interest or accrued dividends;
(II) insofar as it consists of property other than
cash, be computed at the fair market value
thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
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(III) in the event Additional Shares of Common Stock
are issued together with other shares of
securities or other assets of the Corporation
for consideration which covers both, be the
proportion of such consideration so received,
computed as provided in clauses (I) and (II)
above, as determined in good faith by the Board
of Directors.
(B) Options and Convertible Securities. The consideration per
share received by the Corporation for Additional Shares of Common Stock deemed
to have been issued pursuant to Subsection 6(d)(iii) hereof, relating to Options
and Convertible Securities, shall be determined by dividing:
(x) the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, subject to Subsection
6(d)(iii)(E) hereof.
(e) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the Issue Date effect a subdivision
of the outstanding Common Stock, the Conversion Price then in effect immediately
before the subdivision shall be proportionately decreased. If the Corporation
shall at any time or from time to time after the Issue Date combine the
outstanding shares of Common Stock, the Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this paragraph shall become effective at the close of business
on the date the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time, or from time to time, after the Issue Date 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, then and in each such event the Conversion
Price then in effect shall be 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, by multiplying the Conversion Price then in effect by a
fraction:
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<PAGE> 13
(i) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution,
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(g) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Issue Date 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 securities of
the Corporation other than shares of Common Stock then and in each such event
provision shall be made so that the holders of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series E-1 Preferred Stock shall receive upon conversion
thereof in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities of the Corporation that they would have
received had their Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series
E-1 Preferred Stock been converted into Common Stock on the date of such event
and had they thereafter, during the period from the date of such event to and
including the actual conversion date, retained such securities receivable by
them as aforesaid during such period giving application to all adjustments
called for during such period, under this paragraph with respect to the rights
of the holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series
E-1 Preferred Stock.
(h) Adjustment for Reclassification, Exchange, or Substitution. If
the Common Stock issuable upon the conversion of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock or Series E-1 Preferred Stock shall be changed into the
same or a different number of shares of any class or classes of stock, whether
by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets provided for below),
then holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series
E-1 Preferred Stock shall have the right thereafter to convert such shares into
the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock into which such shares of Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Series E-1 Preferred Stock
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<PAGE> 14
were convertible immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
(i) Adjustment for Merger or Reorganization, etc. In case of any
consolidation or merger of the Corporation with or into another corporation or
the sale of all or substantially all of the assets of the Corporation to another
corporation (other than a consolidation, merger or sale which is treated as a
liquidation pursuant to Subsection 4(c) hereof), each share of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series E-1 Preferred Stock shall
thereafter be convertible into the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of Common Stock
of the Corporation deliverable upon conversion of such Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock or Series E-1 Preferred Stock would have been entitled
upon such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors) shall be made
in the application of the provisions set forth in this Subsection 6 with respect
to the rights and interests thereafter of the holders of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock and Series E-1 Preferred Stock, to the end that
the provisions set forth in this Subsection 6 (including provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the conversion of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock or the Series E-1
Preferred Stock.
(j) No Impairment. The Corporation 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 Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Subsection 6 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 A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stock, the Series E Preferred Stock and the Series
E-1 Preferred Stock against impairment.
(k) Notice of Adjustment. Upon any adjustment of the Conversion
Price, then and in each such case the Corporation shall give written notice
thereof, by first class mail, postage prepaid, or by facsimile transmission to
non-U.S. residents, addressed to each holder of shares of Preferred Stock at the
address of such holder as shown on the books of the Corporation, which notice
shall state the Conversion Price resulting from such adjustment, setting forth
in reasonable detail the method upon which such calculation is based.
(l) Other Notices. In case at any time:
(i)the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
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<PAGE> 15
(ii) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any
class or other rights;
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation or a
consolidation or merger of the Corporation with or into another entity
or entities (except in the event of any such transaction effected for
the sole purpose of changing the jurisdiction of incorporation of the
Corporation);
(iv) there shall be a sale of all or substantially all of the
assets of the Corporation to another entity or entities; or
(v)there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
addressed to each holder of any shares of Preferred Stock at the address of such
holder as shown on the books of the Corporation, (a) at least 30 days prior
written notice of the date on which the books of the Corporation shall close or
a record shall be taken for such dividend, distribution or subscription rights
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and (b) in the case of any such reorganization, reclassification,
reconsolidation, merger, sale, dissolution, liquidation or winding up, at least
30 days prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (a) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
(m) Stock to be Reserved. The Corporation will, at all times,
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon the conversion of Preferred Stock as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Preferred Stock. The Corporation
covenants that all shares of Common Stock which shall be so issued shall be duly
and validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Corporation covenants that it will from time to
time take all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the Conversion
Price in effect at the time. The Corporation will take all such action as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange upon which the Common Stock may be listed. The
Corporation will not take any action which results in any adjustment of the
Conversion Price if the total number of shares of Common Stock issued and
issuable after such action upon Conversion of the Preferred Stock would exceed
the total number of shares of Common Stock then authorized by the Certificate of
Incorporation.
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<PAGE> 16
(n) No Reissuance of Preferred Stock. Shares of Preferred Stock
which are converted into shares of Common Stock as provided herein shall not be
reissued.
(o) Issue Tax. The issuance of certificates representing shares of
Common Stock upon conversion of Preferred Stock shall be made without charge to
the holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the holder of the Preferred Stock which is being
converted.
(p) Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Preferred Stock or of any shares of
Common Stock issued or issuable upon the conversion of any shares of Preferred
Stock in any manner which interferes with the timely conversion of such
Preferred Stock, except as may otherwise be required to comply with applicable
corporate or securities laws.
(q) Definition of Common Stock. As used in this Subsection 6, the
term "Common Stock" shall mean and include the Corporation's authorized Common
Stock, par value $.01 per share, as constituted on the date of filing of these
terms of the Preferred Stock, and shall also include any capital stock of any
class of the Corporation thereafter authorized which shall neither be limited to
a fixed sum or percentage of par value in respect of the rights of the holders
thereof to participate in dividends nor entitled to a preference in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; provided, that the shares of
Common Stock receivable upon conversion of shares of Preferred Stock shall
include only shares designated as Common Stock of the Corporation on the date of
filing of this instrument, or in case of any reorganization or reclassification
of the outstanding shares thereof, the stock, securities or assets provided for
in Subsection 6(h).
(r) Mandatory Conversion. If at any time the Corporation shall
effect a public offering of shares of Common Stock at a price per share of not
less than $9.00 (as adjusted for stock splits, reverse stock splits and the like
occurring after the effective date of the filing of this restated Certificate of
Incorporation) in which the aggregate price paid for such shares by the public
shall result in net proceeds to the Corporation of at least $10,000,000 (the
"Initial Public Offering"), then effective immediately prior to the closing of
the sale of such shares by the Corporation pursuant to such public offering, all
outstanding shares of Preferred Stock shall automatically convert into the
number of shares of Common Stock into which such shares are convertible at the
then effective Conversion Price.
7. Amendments. No provision of these terms of the Preferred Stock may be
amended, modified or waived without the written consent or affirmative vote of
the holders of at least 66-2/3% of the then outstanding shares of Preferred
Stock, provided, however, that if, pursuant to such amendment, modification or
waiver, any series of Preferred Stock would be adversely affected in a manner
different from any other series of Preferred Stock, then no such provision may
be amended, modified or waived without the written consent or affirmative vote
of the holders of at least 66-2/3% of the then outstanding shares of the series
that would be adversely affected in a manner different from any other series of
Preferred Stock.
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8. Liquidation Payments and Dividends Adjustments. In case the
Corporation shall at any time subdivide (by any stock split, stock dividend or
otherwise) or combine its outstanding shares of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series E-1 Preferred Stock after the effective date of the
filing of this restated Certificate of Incorporation, the amount to be paid to
each share of such class in the event of any liquidation, dissolution or winding
up of the Corporation as set forth in Subsection 4 and the amount of Accruing
Dividends, if any, for each share of such class as set forth in Subsection 3
shall be proportionately adjusted.
9. Preemptive Rights. Prior to the consummation by the Corporation of
the Initial Public Offering, the Corporation will not issue or sell (other than
(i) pursuant to stock option plans for the benefit of its employees, consultants
and directors, (ii) warrants to purchase shares of Common Stock and Preferred
Stock issued in one or more transactions contemplated by the Stock Purchase
Agreement, (iii) warrants to purchase shares of Common Stock issued in
connection with that certain Security and Senior Note and Warrant Purchase
Agreement dated June 15, 1990 by and among the Corporation, APA Excelsior III,
L.P. and APA Excelsior III/Offshore, L.P., (iv) shares of Common Stock issuable
upon conversion of any shares of the Preferred Stock, (v) in connection with the
merger, acquisition, consolidation or purchase of all or substantially all of
the stock or assets of another entity, (vi) in connection with a transaction
approved by a majority of the Board of Directors of the Corporation in
connection with which Thomas H. DiStefano (the "Founder") and the holders of
66-2/3% in interest of the Preferred Stock shall have agreed in writing to waive
their preemptive rights, or (vii) in connection with the Initial Public
Offering), any shares of Common Stock of the Corporation, or options, warrants
or other rights to purchase or subscribe for such shares, or securities
convertible into or exchangeable for such shares (collectively, the
"Securities"), unless prior to the issuance or sale of such Securities each
holder of record of Preferred Stock (each, an "Investor"), including transferees
or assignees of the Investors (each, a "Transferee"), shall have been given the
opportunity to purchase (on the same terms as such Securities are proposed to be
sold) the same proportion of such Securities being issued or offered for sale by
the Corporation as (x) the number of shares of Common Stock owned by such
Investor or Transferee plus the number of shares of Common Stock issued or
issuable upon conversion of all Preferred Stock owned by such Investor or
Transferee, on the day preceding the date of the notice required to be given to
such Investor and Transferee hereunder, bears to (y) all of the Corporation's
issued and outstanding Common Stock on that day, including, for this purpose,
the number of shares of Common Stock then issuable upon conversion of all shares
of Preferred Stock then outstanding. Prior to the issuance or sale by the
Corporation of any Securities, the Corporation will give written notice thereof
(the "Notice") to each holder of record of Preferred Stock, including each
Transferee. The Notice shall specify the number of shares or amount of such
Securities proposed to be issued, the price and other terms of their proposed
issuance, the amount of such Securities which such Investor or Transferee may
elect to purchase, and the fact that such Securities may be purchased by such
Investor or Transferee during a period of time that is equal to at least 30 days
following the giving of the Notice. Each Investor and Transferee desiring to
purchase Securities shall notify the Corporation within the specified period
(which shall be a minimum of 30 days following the giving of the Notice) of the
amount of Securities it wishes to purchase, as well as any additional Securities
it would be willing to purchase in the event that all of the Securities subject
to preemptive rights hereunder are not subscribed for by the other Investors and
Transferees. Each Investor and Transferee shall have the right to purchase its
pro rata share of any Securities which are subject to preemptive rights but not
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<PAGE> 18
subscribed for by any Investor or Transferee which was entitled to purchase such
Securities. Any such Securities which no Investor or Transferee elects to
purchase in accordance with the provisions of this subsection, may, within a
period of 3 months after the expiration of the time for making such election, be
sold by the Corporation to any other person or persons at not less than the
price and upon other terms and conditions not less favorable to the Corporation
than those set forth in the Notice. In the event that an Investor, a Transferee
or the Corporation fails to perform its obligations hereunder, the injured party
shall have the right, in addition to any other rights such party may have, at
law, in equity or otherwise, to specific performance of any and all of such
other party's obligations under this subsection.
10. Special Voting Rights of the Series E Preferred Stock. At any time
when at least 333,333 shares of Series E Preferred Stock are outstanding (as
adjusted for stock splits and the like occurring after the effective date of the
filing of this restated Certificate of Incorporation), without the approval of
the holders of at least a majority of the then outstanding shares of the Series
E Preferred Stock given in writing or by vote at a meeting, consenting or voting
together as a single class, the Corporation will not:
(a) create (by reclassification or otherwise) any new class or
series of capital stock (including without limitation, any Serial Preferred
Stock) or any other securities convertible into equity securities of the
Corporation having rights, preferences or privileges senior to or on a parity
with the Series E Preferred Stock; or
(b) change the rights, preferences, privileges or restrictions of
the Series E Preferred Stock in a way that adversely affects the Series E
Preferred Stock in a different manner than the other series of Preferred Stock
(including without limitation, by diminishing the seniority of the Series E
Preferred Stock relative to the other series of Preferred Stock).
11. Special Voting Rights of the Series E-1 Preferred Stock. At any time
when at least 333,333 shares of Series E-1 Preferred Stock are outstanding (as
adjusted for stock splits and the like occurring after the effective date of the
filing of this restated Certificate of Incorporation), without the approval of
the holders of at least a majority of the then outstanding shares of the Series
E-1 Preferred Stock given in writing or by vote at a meeting, consenting or
voting together as a single class, the Corporation will not:
(a) create (by reclassification or otherwise) any new class or
series of capital stock (including without limitation, any Serial Preferred
Stock) or any other securities convertible into equity securities of the
Corporation having rights, preferences or privileges senior to or on a parity
with the Series E-1 Preferred Stock; or
(b) change the rights, preferences, privileges or restrictions of
the Series E-1 Preferred Stock in a way that adversely affects the Series E-1
Preferred Stock in a different manner than the other series of Preferred Stock
(including without limitation, by diminishing the seniority of the Series E-1
Preferred Stock relative to the other series of Preferred Stock).
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B. Serial Preferred Stock.
The Board of Directors is authorized at any time, and from time to time,
to provide for the issuance of shares of Serial Preferred Stock in one or more
series of any number of shares by filing a certificate of designation of
preferences with the state, provided that the aggregate number of shares issued
and not canceled of any and all such series shall not exceed the total number of
shares of Serial Preferred Stock hereinabove authorized, and with distinctive
serial designations, all as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issue of such shares of Serial
Preferred Stock from time to time adopted by the Board of Directors, subject to
the provisions hereof. Each series of shares of Serial Preferred Stock (a) may
have such voting powers, full or limited, or may be without voting powers; (b)
may be subject to redemption at such time or times and at such prices; (c) may
be entitled to receive dividends (which may be cumulative or non-cumulative) at
such rate or rates, on such conditions and at such times, and payable in
preference to, or in such relation to, the dividends payable on any other class
or classes or series of stock; (d) may have such rights upon the dissolution of,
or upon any distribution of the assets of the Corporation; (e) may be made
convertible into or exchangeable for, shares of any other class or classes or of
any other series of the same or any other class or classes of shares of the
Corporation at such price or prices or at such rates of exchange and with such
adjustments; (f) may be entitled to the benefit of a sinking fund to be applied
to the purchase or redemption of shares of such series in such amount or
amounts; and (g) may have such other relative, participating, optional or other
special rights, qualifications, limitations or restrictions thereof, all as
shall be stated in said resolution or resolutions providing for the issue of
such shares of Serial Preferred Stock. Shares of Serial Preferred Stock of any
series which have been redeemed (whether through the operation of a sinking fund
or otherwise) or which, if convertible or exchangeable, have been converted into
or exchanged for shares of any other class or classes shall be retired and shall
have the status of authorized and unissued shares of Serial Preferred Stock and
may be reissued as a part of the series of which they were originally a part or
may be reissued as part of a new series of shares of Serial Preferred Stock to
be created by resolution or resolutions of the Board of Directors or as part of
any other series of shares of Serial Preferred Stock, all subject to the
conditions or restrictions on issuance set forth in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of any
series of shares of Serial Preferred Stock.
C. Common Stock.
1. Relative Seniority. The Common Stock shall rank junior to the
Preferred Stock and Serial Preferred Stock in respect of the rights to receive
dividends and participate in distributions in the event of any liquidation,
dissolution or winding up of the Corporation.
2. Dividends. Subject to the rights of holders of Preferred Stock and
Serial Preferred Stock, the holders of the Common Stock shall be entitled to
receive dividends when and as declared by the Board of Directors out of any
funds legally available for the payment thereof. Dividends shall be payable to
holders of record of the Common Stock at the close of business on such date as
shall be fixed by the Board of Directors at the time of the declaration of the
dividend, which record date shall not be less than 10 nor more than 30 days
preceding such date of declaration.
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3. Voting Rights. Subject to the provisions of applicable law and
Subsections 2 and 5 of Section A of this Article FOURTH, the Common Stock shall
vote together with all other classes and series of stock of the Corporation as a
single class on all actions to be taken by the stockholders of the Corporation.
Each holder of Common Stock shall be entitled to one vote for each share of
Common Stock held.
4. Liquidation Rights. Upon the dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, after payment shall have
been made to holders of Preferred Stock of the full amount for which they shall
be entitled pursuant to the provisions of Subsection 4 of Section A of this
Article FOURTH, and subject to the rights of holders of Serial Preferred Stock,
the holders of Common Stock shall be entitled to share, ratably according to the
number of shares of Common Stock held by them, in all remaining assets of the
Corporation available for distribution to its stockholders.
FIFTH:
A. To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or as may hereafter be amended, a director of the Corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director.
B. The Corporation may indemnify to the fullest extent permitted by law any
person made or threatened to be made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that he,
his testator or intestate is or was a director, officer or employee of the
Corporation or any predecessor of the Corporation or serves or served at any
other enterprise as a director, officer or employee at the request of the
Corporation or any predecessor to the Corporation.
C. Neither any amendment nor repeal of this Article FIFTH, nor the adoption of
any provision of the Corporation's Certificate of Incorporation inconsistent
with this Article FIFTH, shall eliminate or reduce the effect of this Article
FIFTH, in respect of any matter occurring, or any action or proceeding accruing
or arising or that, but for this Article FIFTH, would accrue or arise, prior to
such amendment, repeal, or adoption of an inconsistent provision.
SIXTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a
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consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
1. This Restatement of the Certificate of Incorporation
(the "Restatement") has been duly approved by this
corporation's Board of Directors in accordance with
Sections 242 and 245 of the Delaware General corporation
Law (the "DGCL").
2. This Restatement has been duly approved by the
stockholders in accordance with Sections 242 and 245 of
the DGCL.
I hereby further declare and certify under penalty of perjury under the
laws of the State of Delaware that the facts set forth in the foregoing
certificate are true and correct of my own knowledge and that this Restatement
is my act and deed.
Executed at San Jose, California, this 1st day of September, 2000.
---------------------------------------
Steve G. Vogel, Chief Financial Officer
and Secretary
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