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EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MASIMO CORPORATION,
a Delaware corporation
The undersigned, Joe E. Kiani and Bradley R. Langdale hereby certify
that:
1. They are the duly elected and acting President and Secretary,
respectively, of MASIMO CORPORATION, a Delaware corporation (the "Corporation").
2. The Corporation's original Certificate of Incorporation was filed
with the Delaware Secretary of State on May 7, 1996.
3. The Corporation's Amended and Restated Certificate of Incorporation
was filed with the Delaware Secretary of State on August 20, 1996.
4. The Corporation's Amended and Restated Certificate of Incorporation
was filed with the Delaware Secretary of State on December 2, 1997.
5. The Corporation's Amended and Restated Certificate of Incorporation
was filed with the Delaware Secretary of State on January 30, 1998.
6. The Corporation's Amended and Restated Certificate of Incorporation
was filed with the Delaware Secretary of State on May 1, 1998.
7. The Corporation's Amended and Restated Certificate of Incorporation
was filed with the Delaware Secretary of State on December 23, 1998.
8. The Certificate of Incorporation of the Corporation is amended
and restated hereby to read in full as follows:
ARTICLE I -- NAME
The name of the Corporation is Masimo Corporation.
ARTICLE II -- REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The name of the
Corporation's registered agent at that address is Corporation Service Company,
County of New Castle.
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ARTICLE III -- PURPOSE
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, as amended from time to time.
ARTICLE IV -- AUTHORIZED CAPITAL
The Corporation is authorized to issue two classes of shares to be
designated respectively "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock authorized is 10,000,000, $.001 par value. The
total number of shares of Common Stock authorized is 21,000,000, $.001 par
value.
The shares of Preferred Stock authorized by this Certificate of
Incorporation may be issued from time to time in one or more series. The Board
of Directors is authorized to determine or alter any or all of the rights,
preferences, privileges and restrictions to or imposed upon any wholly
unissued series of the shares of Preferred Stock, and to fix or alter the
number of shares comprising any such series and the designation thereof, or any
of them, to increase or decrease (but not below the number of shares of any
such series then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series, and to provide for rights and
terms of redemption or conversion of the shares of any such series. The first
series of Preferred Stock shall be comprised of 966,363 shares and shall be
designated as "Series A Preferred Stock." The second series of Preferred Stock
shall be comprised of 1,125,000 shares and shall be designated as "Series B
Preferred Stock." The third series of Preferred Stock shall be comprised of
1,848,238 shares and shall be designated as "Series C Preferred Stock." The
fourth series of Preferred Stock shall be comprised of 1,500,000 shares and
shall be designated as "Series D Preferred Stock." The fifth series of
Preferred Stock shall be comprised of 2,054,516 shares and shall be designated
as "Series E Preferred Stock." The sixth series of Preferred Stock shall be
comprised of 2,000,000 shares and shall be designated as "Series F Preferred
Stock."
A. SERIES A PREFERRED STOCK, SERIES B PREFERRED STOCK, SERIES C
PREFERRED STOCK, SERIES D PREFERRED STOCK, SERIES E PREFERRED STOCK, SERIES F
PREFERRED STOCK AND COMMON STOCK. The relative rights, preferences,
restrictions, and other matters relating to the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock, Series F Preferred Stock and the Common Stock or the
holders thereof are as follows:
1. DIVIDENDS RIGHTS OF PREFERRED.
The holders of Series F Preferred Stock, Series E Preferred
Stock, Series D Preferred Stock and Series C Preferred Stock shall be entitled
to receive in any fiscal year, when, as and if, declared by the Board of
Directors, out of any assets at the time legally available therefor, dividends
in cash at the rate per annum of $0.99 per share of Series F Preferred Stock,
$0.81 per share of Series E Preferred Stock, $0.63 per share of Series D
Preferred Stock, $0.2934 per share of Series C Preferred Stock from the date of
issuance through September 18, 1998 and thereafter at $0.4635 per share of
Series C Preferred Stock, payable on a pari passu basis and in preference and
priority to any payment of any cash dividend on Series B Preferred Stock,
Series A Preferred Stock or Common Stock. The right to such cash dividends on
the Series F Preferred Stock, Series E Preferred Stock, Series D Preferred
Stock and Series C Preferred Stock shall be cumulative. No dividends may be
paid on the Series B Preferred Stock, the Series A Preferred Stock or the
Common Stock until accumulated dividends have been paid, or declared and set
apart for payment as to each outstanding share of Series F Preferred Stock,
Series E Preferred Stock, Series D Preferred Stock and Series C Preferred
Stock. The holders of Series B Preferred Stock shall be entitled to receive in
any fiscal year, when, as and if, declared by the Board of
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Directors, out of any assets at the time legally available therefor, dividends
in cash at the rate per annum of $0.144 per share of Series B Preferred Stock
payable in preference and priority to any payment of any cash dividend on Series
A Preferred Stock or Common Stock, which dividend rate shall increase to $0.156
per shares on and after December 21, 1993. The right to such cash dividends on
the Series B Preferred Stock shall be cumulative from November 21, 1992. No
dividends may be paid on the Series A Preferred Stock or the Common Stock until
accumulated dividends have been paid, or declared and set apart for payment as
to each outstanding share of Series B Preferred Stock. The holders of the Series
A Preferred Stock shall be entitled to receive in any fiscal year, when, as and
if, declared by the Board of Directors, out of any assets at the time legally
available therefor, dividends in cash at the rate per annum of $.09 per share of
Series A Preferred Stock payable in preference and priority to any payment of
any cash dividend on Common Stock. The right to such cash dividends on the
Series A Preferred Stock shall not be cumulative, and no right shall accrue to
holders of Series A Preferred Stock by reason of the fact that dividends on such
shares are not declared in any prior year. No cash dividends shall be paid on
any Common Stock unless all accumulated dividends on the Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock and Series F Preferred Stock have been paid and thereafter an equal
dividend is paid with respect to all outstanding shares of Preferred Stock in an
amount for each such share of Preferred Stock equal to the aggregate amount of
such dividends for all Common Stock into which each such share of Preferred
Stock could then be converted.
2. PREFERENCE ON LIQUIDATION.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, distributions to the shareholders of the Corporation shall be
made in the following manner:
(i) The holders of Series F 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 Series E Preferred
Stock, Series D Preferred Stock, Series C Preferred Stock, Series B Preferred
Stock, Series A Preferred Stock or Common Stock, by reason of their ownership of
such stock, an amount equal to (A) $11.00 for each share of Series F Preferred
Stock then held by them (the "Series F Liquidation Value"), as adjusted for any
stock split, combination, consolidation, or stock distributions or stock
dividends with respect to such shares, plus (B) an amount equal to unpaid,
accumulated cumulative dividends. If the assets and funds thus distributed among
the holders of the Series F Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amount, then the
entire assets and funds of the Corporation legally available for distribution
shall be distributed among the holders of Series F Preferred Stock in proportion
to the shares of Series F Preferred Stock then held by them.
(ii) The holders of Series E Preferred Stock, Series D
Preferred Stock and 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 Series B Preferred Stock, Series A Preferred
Stock or Common Stock, by reason of their ownership of such stock, an amount
equal to (A) $9.00 for each share of Series E Preferred Stock then held by them
(the "Series E Liquidation Value"), $7.00 for each share of Series D Preferred
Stock then held by them (the "Series D Liquidation Value") and $5.15 each share
of Series C Preferred Stock then held by them (the "Series C Liquidation
Value"), as applicable, each as adjusted for any stock split, combination,
consolidation, or stock distributions or stock dividends with respect to such
shares, plus (B) an amount equal to unpaid, accumulated cumulative dividends. If
the assets and funds thus distributed among the holders of the Series E
Preferred Stock, Series D Preferred Stock and Series C Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed among the holders of Series E
Preferred Stock,
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Series D Preferred Stock and Series C Preferred Stock on a pari passu basis in
proportion to the liquidation preference of the shares of Series E Preferred
Stock, Series D Preferred Stock and Series C Preferred Stock then held by them.
(iii) 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 the holders of Series A Preferred Stock or
Common Stock, by reason of their ownership of such stock, an amount (the
"Series B Liquidation Value") equal to (A) $1.73 for each share of Series B
Preferred Stock then held by them, adjusted for any stock split, combination,
consolidation, or stock distributions or stock dividends with respect to such
shares, plus (B) an amount equal to unpaid, accumulated cumulative dividends.
If the assets and funds thus distributed among the holders of the Series B
Preferred Stock shall be insufficient to permit the payment to such holders of
the full aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of Series B Preferred Stock in proportion to the shares of Series B
Preferred Stock then held by them.
(iv) The holders of the Series A 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,
by reason of their ownership of such stock, an amount (the "Series A
Liquidation Value") equal to (A) $1.10 for each share of Series A Preferred
Stock then held by them, adjusted for any stock split, combination,
consolidation, or stock distributions or stock dividends with respect to such
shares, plus (B) an amount equal to 9% per annum cumulative, commencing on the
date on which the first shares of Series A Preferred Stock were issued. If the
assets and funds thus distributed among the holders of the Series A Preferred
Stock shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of Series A Preferred Stock in proportion to the shares of Series A
Preferred Stock then held by them.
(v) After payment has been made to 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 F Preferred Stock of the
full amount of the liquidation preference to which they shall be entitled under
subsections (a)(i), (a)(ii), (a)(iii) and (a)(iv) above, the holders of Common
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series F Preferred Stock, based
on the shares of Common Stock into which the Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock, respectively, may be converted into, shall be
entitled to receive the remaining assets of the Corporation on a pro rata basis
based on the number of shares of Common Stock (plus Common Stock issuable upon
conversion of the Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series F Preferred Stock) then
held by them. The right of holders of Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock to participate in distributions under this paragraph
is limited by Section A.2(b) of Article IV below.
(b) A consolidation or merger of this Corporation with or into any other
corporation or corporations, or the sale, transfer or other disposition of all
or substantially all of the assets of this Corporation in which more than 50%
of the voting power of the Corporation (a "Sale Transaction") is disposed of
shall be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 2. Notwithstanding the above, the liquidation
preference right of Series B Preferred Stock to share ratably with Common Stock
pursuant to Section A.2(a)(v) of Article IV above as a result of a Sale
Transaction shall not apply to a Sale Transaction for a total value in excess of
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$20,000,000, in which case any distribution made pursuant to Section A.2(a)(v)
of Article IV above shall be made to the holders of Common Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F
Preferred Stock only. Notwithstanding the above, the liquidation preference
right of Series C Preferred Stock to share ratably with Common Stock pursuant to
Section A.2(a)(v) of Article IV above as a result of a Sale Transaction shall
not apply to a Sale Transaction for a total value in excess of $40,000,000, in
which case any distribution made pursuant to Section A.2(a)(v) of Article IV
above shall be made to the holders of Common Stock, Series D Preferred Stock,
Series E Preferred Stock and Series F Preferred Stock only. Notwithstanding the
above, the liquidation preference right of Series D Preferred to share ratably
with Common Stock pursuant to Section A.2(a)(v) of Article IV above as a result
of a Sale Transaction shall not apply to a Sale Transaction for a total value in
excess of $75,000,000, in which case any distribution made pursuant to Section
A.2(a)(v) of Article IV above shall be made to the holders of Common Stock,
Series E Preferred Stock and Series F Preferred Stock only. Notwithstanding the
above, the liquidation preference right of Series E Preferred to share ratably
with Common Stock pursuant to Section A.2(a)(v) of Article IV above as a result
of a Sale Transaction shall not apply to a Sale Transaction for a total value in
excess of $100,000,000, in which case any distribution made pursuant to Section
A.2(a)(v) of Article IV above shall be made to the holders of Common Stock and
the Series F Preferred Stock only. Notwithstanding the above, the liquidation
preference right of Series F Preferred to share ratably with Common Stock
pursuant to Section A.2(a)(v) of Article IV above as a result of a Sale
Transaction shall not apply to a Sale Transaction for a total value in excess of
$150,000,000, in which case any distribution made pursuant to Section A.2(a)(v)
of Article IV above shall be made to the holders of Common Stock only.
(c) In the event the Corporation shall propose to take any action
of the type described in this Section 2, the Corporation shall, within ten (10)
days after the date of the Board of Directors approves such action or twenty
(20) days prior to any stockholders' meeting called to approve such action,
whichever is earlier, give each holder of shares of the Preferred Stock written
notice to the proposed action. Such written notice shall describe the material
terms and conditions of such proposed action, including a description of the
stock, cash and property to be received by the holder of shares of the Preferred
Stock upon consummation of the proposed action and the proposed date of delivery
thereof. If any material change in the facts set forth in the notice shall
occur, the Corporation shall promptly give written notice to each holder of
shares of the Preferred Stock of such material change.
(d) The Corporation shall not consummate any proposed action of
the type described in this Section 2 before the expiration of thirty (30) days
after the mailing of the initial written notice or ten (10) days after the
mailing of any subsequent written notice, whichever is later; provided,
however, that any such 30-day or 10-day period may be shortened upon the written
consent of the holders of a majority of the outstanding shares of each of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock
each such series voting as a separate class.
(e) If the Corporation shall propose to take any action of the
type described in this Section 2 which will involve the distribution of assets
other than cash, the Corporation shall upon the written request of holders of
2/3 of the outstanding shares 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 F Preferred Stock, each such series
voting as a separate class, promptly engage independent competent appraisers to
determine the value of the assets to be distributed to the holders of shares of
the Preferred Stock and the Common Stock. The Corporation shall, upon receipt of
such appraiser's valuation, give prompt written notice of the appraiser's
valuation to each holder of shares of the Preferred Stock.
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3. VOTING
(a) VOTING FOR DIRECTORS.
(i) The holders of the shares of Series A Preferred Stock
and Series B Preferred Stock, voting separately as one class, shall be entitled
to elect one director.
(ii) The holders of the shares of the Series C Preferred
Stock, voting separately as one class, shall be entitled to elect one director.
(iii) The holders of the shares of Common Stock, voting
separately as one class, shall be entitled to elect two directors.
(iv) Any directors other than those elected pursuant to
this section 3(a)(i)-(iii)(the "Additional Directors") shall be elected by the
votes of the holders of Preferred Stock and Common Stock, voting as a single
class.
(v) Any vacancy occurring on the Board because of the
death, resignation or removal of a director elected by the holders of the Series
A and Series B Preferred Stock, Series C Preferred Stock or Common Stock,
respectively, voting as separate classes pursuant to subparagraphs (i), (ii) or
(iii) above, shall be filled by the vote or written consent of the holders of a
majority of the class of stock which had the right to elect such director under
subparagraphs (i), (ii) or (iii) above, or in the absence of action by such
holders, by action of the remaining director, if any, elected by such holders,
respectively.
(vi) A director may be removed from the Board with or
without cause by a vote or consent of the holders of the outstanding class with
voting power entitled to elect him or her in accordance with the Delaware
General Corporations Law.
(b) ALL OTHER MATTERS. On all matters, except as otherwise
required by law or as set forth herein, all of the shares of 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 F Preferred Stock
shall be voted with the shares of the Corporation's Common Stock as one class at
any annual or special meeting of shareholders of the Corporation, or may act by
written consent in the same manner as the Corporation's Common Stock, upon the
following basis: each holder of shares 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 F Preferred Stock shall be
entitled to such number of votes for 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 F Preferred Stock held by such holder on
the record date fixed for such meeting or on the effective date of such written
consent, as shall be equal to the whole number of shares of the Corporation's
Common Stock into which all of his or her share 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 F Preferred Stock
are convertible immediately after the close of business on the record date fixed
for such meeting or the effective date of such written consent.
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4. CONVERSION RIGHTS. The holders of Preferred Stock shall have
conversion rights as follows:
(a) Each share of Preferred Stock shall be convertible, at the
option of the holder thereof, at any time and from time to time into the number
of fully paid and nonassessable shares of Common Stock of the Corporation as is
determined by dividing $1.10 in the case of Series A Preferred Stock, $1.73 in
the case of Series B Preferred Stock, $5.15 in the case of Series C Preferred
Stock, $7.00 in the case of Series D Preferred Stock, $9.00 in the case of the
Series E Preferred Stock and $11.00 in the case of the Series F Preferred Stock
by the applicable Conversion Price in effect at the time of the conversion. The
Conversion Price at which shares of Common Stock shall be deliverable upon
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 and the Series F Preferred Stock shall initially be $1.10, $1.73, $5.15,
$7.00, $9.00 and $11.00 respectively, subject to adjustment as provided herein.
(b) Each share of Series F Preferred Stock shall be converted
into Common Stock automatically at the closing of the sale of the
Corporation's securities pursuant to a firm commitment underwritten public
offering from which the Corporation receives net proceeds of not less than
$10,000,000 at a purchase price of not less than $14.00 per share (as adjusted
for stock splits, stock dividends, reorganizations and the like). Each share of
Series E Preferred Stock shall be converted into Common Stock automatically at
the closing of the sale of the Corporation's securities pursuant to a firm
commitment underwritten public offering from which the Corporation receives net
proceeds of not less than $10,000,000 at a purchase price of not less than
$11.00 per share (as adjusted for stock splits, stock dividends,
reorganizations and the like). Each share of Series D Preferred Stock shall be
converted into Common Stock automatically at the closing of the sale of the
Corporation's securities pursuant to a firm commitment underwritten public
offering from which the Corporation receives net proceeds of not less than
$10,000,000 at a purchase price of not less than $10.00 per share (as adjusted
for stock splits, stock dividends, reorganizations and the like). Each share of
Series C Preferred Stock shall be converted into Common Stock automatically at
the closing of the sale of the Corporation's securities pursuant to a firm
commitment underwritten public offering from which the Corporation receives net
proceeds of not less than $10,000,000 at a purchase price of not less than $9.00
per share (as adjusted for stock splits, stock dividends, reorganizations and
the like). Each share of Series B Preferred Stock shall be converted into Common
Stock automatically at the closing of the sale of the Corporation's securities
pursuant to a firm commitment underwritten public offering from which the
Corporation receives net proceeds of not less than $10,000,000 at a purchase
price of not less than $9.00 per share (as adjusted for stock splits, stock
dividends, reorganizations and the like). Each share of Series A Preferred Stock
shall be converted into Common Stock automatically in the manner provided herein
upon the earlier to occur of (i) the written election by holders of two thirds
of the outstanding shares of Series A Preferred Stock to convert such shares of
Series A Preferred Stock; or (ii) the actual conversion of 2/3 of the maximum
number of shares of Series A Preferred Stock previously outstanding at any time;
or (iii) the closing of the sale of the Corporation's securities pursuant to a
firm commitment underwritten public offering from which the Corporation receives
gross proceeds of not less than $10,000,000 at a purchase price of not less than
$9.00 per share (as adjusted for stock splits, stock dividends, reorganizations
and the like).
(c) In the case of conversion pursuant to Section 4(a) hereof,
before any holder of Preferred Stock shall be entitled to convert the same into
Common Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed in blank or accompanied by proper instruments of
transfer, at the principal office of the Corporation or of any transfer agent
for the Preferred Stock, and shall give written notice to the Corporation at
such office that such holder elects to convert the same and shall state in
writing therein the name or names in which such holder wishes the
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certificate or certificates for Common Stock to be issued. As soon as
practicable thereafter, the Corporation shall issue and deliver at such office
to such holder certificates for the number of whole shares of Common Stock to
which such holder shall be entitled. No fractional shares of Common Stock shall
be issued by the Corporation and all such fractional shares shall be
disregarded. In lieu thereof, the Corporation shall pay in cash the fair market
value of such fractional share as determined by the Board of Directors of the
Corporation. Such conversion shall be deemed to have been made as of the date of
such surrender of the Preferred Stock to be converted, and the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such Common Stock on
said date.
(d) In case the Corporation shall at any time (i) subdivide the
outstanding Common Stock, or (ii) issue a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock issuable upon conversion of
the Preferred Stock immediately prior to such subdivision or the issuance of
such stock dividend shall be proportionately increased by the same ratio as the
subdivision or dividend (with appropriate adjustments in the Conversion Price
of each series of Preferred Stock). In case the Corporation shall at any time
combine its outstanding Common Stock, the number of shares of Common Stock
issuable upon conversion of each series of Preferred Stock immediately prior to
such combination shall be proportionately decreased by the same ratio as the
combination (with appropriate adjustments in the Conversion Price of the
Preferred Stock). All such adjustments described herein shall be effective at
the close of business on the date of such subdivision, stock dividend or
combination, as the case may be.
(e) In case of any capital reorganization (other than in connection
with a merger or other reorganization in which the Corporation is not the
continuing or surviving entity) or any reclassification of the Common Stock of
the Corporation, the 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 of the Corporation deliverable upon
conversion of the shares of Preferred Stock immediately prior to such
reorganization or recapitalization would have been entitled upon such
reorganization or reclassification. In any such case, appropriate adjustment
(as determined by the Board of Director) shall be made in the application of
the provisions herein set forth with respect to the rights and interests
thereafter of the holders of Preferred Stock, such that the provisions set
forth herein shall thereafter be applicable, as nearly as reasonable may be, in
relation to any shares of stock or other property thereafter deliverable upon
the conversion.
(f) In case:
(i) the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
(ii) the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to subscribe for or purchase any
shares of stock of any class or to receive any other rights; or
(iii) the Corporation shall effect a capital reorganization of
the Corporation, reclassification of the capital stock of the Corporation
(other than a subdivision or combination of its outstanding Common Stock),
consolidation or merger of the Corporation (other than a merger or
reorganization in which the Corporation is not the continuing or surviving
entity);
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then, and in any such case, the Corporation shall cause to be mailed to the
holders of its outstanding Preferred Stock, at least twenty (20) days prior to
the date hereinafter specified, a notice stating the date on which a record is
to be taken for the purpose of such dividend, distribution or rights, or such
action is to be taken in connection with such reorganization, reclassification,
merger or consolidation.
(g) 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 the Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Preferred Stock
from time to time outstanding. The Corporation shall from time to time (subject
to obtaining necessary director and shareholder action), 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 Preferred Stock at the time outstanding.
(h) Upon the issuance by the Corporation (other than issuances
described in subsections (d) and (e) of this Section 4) of Common Stock, or any
right or option to purchase Common Stock, or any obligation or any shares of
stock convertible into or exchangeable for Common Stock for a consideration per
share less than the Conversion Price of each series of Preferred Stock in effect
immediately prior to the time of such issue or sale other than the issuance of
shares of Common Stock upon conversion of any Preferred Stock, then forthwith
upon such issue or sale, the Conversion Price of the Preferred Stock will be
adjusted as follows:
(i) with respect to the Series F Preferred Stock, (A) if
the consideration per share in such subsequent issuance is greater than or equal
to $9.00 per share, then the Conversion Price for the Series F Preferred Stock
in effect immediately prior to the time of such subsequent issuance shall
forthwith be adjusted to a price equal to the consideration per share in such
subsequent issuance, or (B) if the consideration per share for such issuance is
less than $9.00 per share then the Conversion Price for the Series F Preferred
Stock in effect immediately prior to the time of such subsequent issuance shall
forthwith be adjusted to $9.00 and then further adjusted on a weighted average
basis as provided for in subsection (h)(ii) of this Section 4, and
(ii) with respect to each series of Preferred Stock, to a
price (calculated to the nearest cent) by dividing an amount equal to the (A)
sum of (1) the number of shares of Common Stock outstanding immediately prior to
such issue or sale multiplied by the then existing Conversion Price of the
Preferred Stock, (2) the number of shares of Common Stock issuable upon
conversion of any shares of stock of the Corporation outstanding immediately
prior to such issue or sale multiplied by the then existing Conversion Price of
the Preferred Stock, and (3) an amount equal to the aggregate consideration
received by the Corporation upon such issue or sale, by (B) the sum of the
number of shares of Common Stock outstanding immediately after such issue or
sale and the maximum number of shares of Common Stock (without taking into
account any adjustment in such number resulting from such issue or sale)
issuable upon conversion of any shares of stock of the Corporation outstanding
immediately after such issue or sale.
For purposes of this subsection (h) the following provisions shall be
applicable:
(1) In the case of an issuance or sale for cash of
shares of Common Stock, the consideration received by the Corporation therefor
shall be deemed to be the amount of cash received, before deducting therefrom
any commissions or expenses paid or incurred by the Corporation.
<PAGE> 10
(2) In case of the issuance (otherwise than upon conversion
or exchange of obligations or shares of stock of the Corporation) of additional
shares of Common Stock for a consideration other than cash or a consideration
partly other than cash, the amount of the consideration other than cash
received by the Corporation for such shares shall be deemed to be the value of
such consideration as reasonably determined by the Board of Directors.
(3) In case of the issuance by the Corporation in any manner
of any rights to subscribe for or to purchase shares of Common Stock, at a
consideration per share (as computed below) less than the Conversion Price in
effect immediately prior to the date of the offering of such rights or the
granting of such options, as the case may be, the maximum number of shares of
Common Stock to which the holders of such rights or options shall be entitled
to subscribe for or purchase pursuant to such rights or options shall be deemed
to be issued or sold as of the date of the offering of such rights or the
granting of such options, as the case may be, and the minimum aggregate
consideration named in such rights or options for the shares of Common Stock
covered thereby, plus the consideration, if any, received by the Corporation
for such rights or options, shall be deemed to be the consideration actually
received by the Corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares.
(4) In case of the issuance or issuances by the Corporation in
any manner of any obligation or of any shares of stock of the Corporation that
shall be convertible into or exchangeable for Common Stock, at a consideration
per share (as computed below) less than the applicable Conversion Price in
effect immediately prior to the date such obligation or shares are issued, the
maximum number of shares of Common Stock issuable upon the conversion or
exchange of such obligations or shares shall be deemed issued as of the date
such obligations or shares are issued, and the amount of the consideration
received by the Corporation for such additional shares of Common Stock shall be
deemed to be the total of (X) the amount of consideration received by the
Corporation upon the issuance of such obligations or shares, as the case may
be, plus (Y) the minimum aggregate consideration, if any, other than such
obligations or shares, receivable by the Corporation upon such conversion or
exchange, except in adjustment of dividends.
(5) The amount of the consideration received by the
Corporation upon the issuance of any rights or options referred to in
subsection (3) above or upon the issuance of any obligations or shares which
are convertible or exchangeable as described in subsection (4) above, and the
amount of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (h)(i) and (ii) above with respect to the consideration received
by the Corporation in case of the issuance of additional shares of Common
Stock. On the expiration of any rights or options referred to in subsection
(3), or the termination of any right of conversion or exchange referred to in
subsection (4), the Conversion Price then in effect shall forthwith be
readjusted to such Conversion Price as would have obtained had the adjustments
made upon the issuance of such option, right or convertible or exchangeable
securities been made upon the basis of the delivery of only the number of
shares of Common Stock actually delivered upon the exercise of such rights or
options or upon the conversion or exchange of such securities.
(6) Anything herein in the contrary notwithstanding, the
Corporation shall not be required to make any adjustment of the Conversion
Price in the case (i) the sale or issuance by the Corporation of shares of
Common Stock or rights or options to purchase shares of Common Stock (as
adjusted for stock splits, stock dividends, reorganizations and the like), to
officers, directors, employees and consultants of the Corporation in connection
with the performance of services to the extent such sale or issuance is
approved by the Corporation's Board of Directors, (ii) the
<PAGE> 11
conversion of shares of Preferred Stock, (iii) the sale or issuance by the
Corporation of shares of Common Stock or rights or options to purchase shares of
Common Stock in connection with an equipment lease financing, (iv) with respect
to the Series A Preferred Stock, solely as a result of an adjustment of the
Conversion Price of the Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock and/or Series F Preferred
Stock, and with respect to the Series B Preferred Stock, solely as a result of
an adjustment of the Conversion Price of the Series A Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and/or
Series F Preferred Stock, and with respect to the Series C Preferred Stock,
solely as a result of an adjustment of the Conversion Price of the Series A
Preferred Stock, Series B Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and/or the Series F Preferred Stock, and with respect to the
Series D Preferred Stock solely as a result of an adjustment of the Conversion
Price of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series E Preferred Stock and/or the Series F Preferred Stock
and with respect to the Series E Preferred Stock solely as a result of an
adjustment of the Conversion Price of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and/or
Series F Preferred Stock, or (v) with respect 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 and/or the Series F Preferred
Stock, in a financing in which the holders of such Preferred Stock, each series
of Preferred Stock treated separately as a group, do not buy their pro rata
share of the securities being sold by the Corporation pursuant to the
Certificate of Incorporation, the provisions of the Series B Preferred Stock
Purchase Agreement dated as of December 10, 1993, Series C Preferred Stock
Purchase Agreement dated as of September 18, 1998, Series D Preferred Stock
Purchase Agreement dated as of August 20, 1996 or Series E Preferred Stock
Purchase Agreement dated as of December 3, 1997, First Amended and Restated
Series E Preferred Stock Purchase Agreement dated as of December 19, 1997,
Second Amended and Restated Series E Preferred Stock Purchase Agreement dated as
of January 26, 1998, Third Amended and Restated Series E Preferred Stock
Purchase Agreement dated as of January 30, 1998, and Colin Corporation Series E
Preferred Stock Purchase Agreement dated as of April 30, 1998. For purposes of
this Section A.4.(h)(6), "pro rata share" shall be equal to the ratio of 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 and Series F Preferred Stock, respectively, have been or are
convertible and which are held by such holders immediately preceding the
issuance of Securities to the total number of shares of Common Stock and
Preferred Stock (on a converted basis) then outstanding.
Notwithstanding the foregoing, in the event that the
Corporation shall not be required to make any adjustment of the Conversion
Price with respect to a series of Preferred Stock on account of the occurrence
of the event described in Section A.4(h)(6)(v), any holders of Preferred Stock
of such series who shall have purchased their pro rata shares of the securities
being sold in connection with such financing shall be entitled to receive newly
issued shares of Common Stock from the Corporation. The number of shares of
Common Stock to be issued to each such holder of Preferred Stock shall be
computed by dividing: (i) an amount equal to the Conversion Price in effect
with respect to such series of Preferred Stock immediately prior to the closing
of the financing minus an amount equal to the Conversion Price which would have
been in effect with respect to such series had such series been entitled to an
adjustment pursuant to Section A.4(h)(6)(v), by (ii) an amount equal to the
Conversion Price which would have been in effect with respect to such series
had such series been entitled to an adjustment pursuant to Section
A.4(h)(6)(v), and multiplying the quotient of (i) and (ii) by the number of
shares of such series of Preferred Stock owned by such holder prior to the
closing of the financing. The Corporation shall not be required to make any
adjustment to the Conversion Price in the case of Common Stock issued pursuant
to this paragraph.
<PAGE> 12
(i) Upon any conversion of Preferred Stock pursuant to this
Section 4, the shares of Preferred Stock which are converted shall not be
reissued. Upon conversion of all of the then outstanding Preferred Stock,
Sections 1 through 6 of this Article IV shall be void and shares of Preferred
Stock shall not be deemed outstanding for any purpose whatsoever.
(j) Upon the occurrence of each adjustment or readjustment of
the Conversion Price for any Preferred Stock pursuant to this Section 4, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the reasonable written
request at any time of any holder of Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, and (ii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of the Preferred Stock.
(k) In the event the Corporation at any time or from time to
time makes, or fixes a record date for the termination of holders of Common
Stock entitled to receive any distribution payable in securities or other
property of the Corporation other than Common Stock and other than as otherwise
adjusted in this Section 4, then and in each such event provision shall be made
so that the holders of Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities and other property of the Corporation which they would have
received had their shares of Preferred Stock been converted into shares of
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 date of conversion,
retained such securities and other property receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Section 4 with respect to the rights of the holders of
Preferred Stock.
(l) Any notices required by the provisions of this Section 4 to
be given to the holders of shares of 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.
5. MANDATORY REDEMPTION
On December 10, 2003, the Corporation shall redeem one-third
(1/3) of the shares of Series B Preferred Stock then outstanding, one-third
(1/3) of the shares of Series C Preferred Stock then outstanding, one-third
(1/3) of the shares of Series D Preferred Stock then outstanding, one-third
(1/3) of the shares of Series E Preferred Stock and one-third (1/3) of the
Series F Preferred Stock and on each of December 10, 2004 and December 10, 2005,
the Company will redeem one-third (1/3) of the number of shares of Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series F Preferred Stock, respectively, which were
outstanding on December 10, 2003 at a redemption price for the shares of Series
B Preferred Stock of $1.73 per share, plus any accrued and unpaid dividends, a
redemption price for the shares of Series C Preferred Stock of $5.15 per share,
plus any accrued and unpaid dividends, a redemption price for the shares of
Series D Preferred Stock of $7.00 per share, plus any accrued and unpaid
dividends, a redemption price for the shares of Series E Preferred Stock of
$9.00 per share, plus any accrued and unpaid dividends, and a redemption price
for the shares of Series F Preferred Stock of $11.00 per share, plus any accrued
and unpaid dividends. The shares of Series F Preferred Stock shall be redeemed
in preference and priority to any redemption of the Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock.
If there shall be insufficient funds legally available for such redemption of
the
<PAGE> 13
Series F Preferred Stock, then all funds legally available therefor shall be
used to redeem shares of Series F Preferred Stock on a pro-rata basis among the
then outstanding shares of Series F Preferred Stock. If after redemption of the
Series F Preferred Stock, there shall be insufficient funds legally available to
redeem the Series B, Series C, Series D and Series E Preferred Stock, then all
funds legally available therefor shall be used to redeem shares of Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock on a pari passu basis in proportion to the redemption price of
such shares. On or after the foregoing redemption dates, each holder of Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series F Preferred Stock shall surrender his certificate or
certificates representing such shares to the office of the transfer agent for
the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock and Series F Preferred Stock, respectively (or
to the principal office of the Corporation if the Corporation serves as its own
transfer agent), and thereupon the redemption price of such a share shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
cancelled. From and after the foregoing redemption dates, unless there shall
have been a default in payment of the redemption price, all rights of the
holders of such shares as holders of Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F
Preferred Stock of the Corporation (except the right to receive the redemption
price without interest upon surrender of their certificate or certificates)
shall cease with respect to such shares, such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever.
6. CHANGES.
So long as Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock are outstanding, the Corporation shall not, without
first obtaining the approval by vote or written consent, in the manner provided
by law, of the holders of at least a majority of the total number 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 F Preferred Stock
outstanding, each voting separately as a class: (1) alter or change any of the
powers, preferences, privileges or rights of, or create or issue any securities
having a preference over or senior to, Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series F Preferred Stock; (2) increase the authorized number
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 F
Preferred Stock; (3) amend the provisions of this Section 6; (4) undertake or
effect any consolidation or merger of the Corporation with or into another
corporation or any acquisition by or the conveyance of all or substantially all
of the assets of the Corporation to another person; (5) pay any dividends to the
holders of Common Stock; (6) amend the Certificate of Incorporation or Bylaws of
the Corporation; or (7) repurchase or redeem any outstanding securities of the
Corporation other than upon termination of employees pursuant to agreements
containing vesting provisions approved by the Board of Directors.
7. ADDITIONAL SERIES C PREFERRED STOCK, SERIES D PREFERRED STOCK,
SERIES E PREFERRED STOCK AND SERIES F PREFERRED STOCK PROVISIONS.
(a) So long as shares of Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Series F Preferred Stock are
outstanding, the Corporation shall furnish the following reports to each holder
of Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock
and Series F Preferred Stock: Within 90 days after the end of each fiscal year
and within 45 days after the end of each fiscal quarter, consolidated balance
sheets of the Corporation and its subsidiaries, if
<PAGE> 14
any, as of the end of such period, and consolidated statements of income and
changes in financial position of the Corporation and its subsidiaries, if any,
for such period, prepared in accordance with generally accepted accounting
principles and setting forth in each case in comparative form the figures for
the equivalent period of the previous fiscal year. The annual statements shall
be certified by a nationally recognized accounting firm. All such reports to
holders of Series F Preferred Stock shall be accompanied by management's
discussion and analysis thereof.
(b) So long as shares of Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Series F Preferred Stock are
outstanding, unless the holders of a majority of the total number of shares of
Series C Preferred Stock, the holders of a majority of the total number of
shares of Series D Preferred Stock, the holders of a majority of the total
number of shares of Series E Preferred Stock, and the holders of a majority of
the total number of shares of Series F Preferred Stock outstanding shall have
waived the provisions of this Section 7(b) as applicable, each holder of Series
C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock shall have the right to purchase, pro rata, a portion
of any New Securities (as defined below) which the Corporation may, from time
to time, propose to sell and issue. A holder's pro rata share, for purposes of
this right to maintain, is the ratio of the number of shares of Common Stock
into which the Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series F Preferred Stock are convertible and which are held
by such holder immediately preceding the issuance of New Securities to the
total number of shares of Common Stock and Preferred Stock (on an as converted
basis), then outstanding. This right to maintain shall be subject to the
following provisions:
(1) "New Securities" shall mean any capital stock of the
Corporation whether or not now authorized, and any rights, options or warrants
to purchase capital stock and securities of any type whatsoever that are, or
may become, convertible into capital stock; provided that the term "New
Securities" does not include (i) securities issuable upon exercise or
conversion of securities outstanding on the date of issuance of Series F
Preferred Stock; (ii) the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stock or the Series
E Preferred Stock or the Common Stock into which any of such shares are
convertible; (iii) securities issued pursuant to a firm commitment underwritten
initial public offering pursuant to an effective registration statement under
the Securities Act at a public offering price of not less than $9.00 per share
for the Series C Preferred Stockholders, $10 per share for the Series D
Preferred Stockholders, $11 per share for the Series E Preferred Stockholders
and $14.00 per share for the Series F Preferred Stockholders and pursuant to
which the Corporation receives net proceeds of not less than $10,000,000 (an
"IPO"); (iv) securities issued pursuant to the Corporation's acquisition of
another corporation or other entity by merger, purchase of assets or other
reorganization or acquisition; (v) securities issued to employees, directors
and consultants of the Corporation pursuant to plans and arrangements approved
by the Board of Directors; (vi) securities issued in connection with lease
financing arrangements or strategic partnerships approved by the Board of
Directors; and (vii) securities issued in connection with any stock split,
stock dividend or recapitalization of the Corporation.
(2) In the event the Corporation proposes to undertake an
issuance of New Securities and after it has received a bona fide offer to
purchase such New Securities, it shall give each holder written notice of its
intention, describing the type of New Securities, the price and general terms
upon which the Corporation proposes to issue the same. Each holder shall have
fifteen (15) business days from the date of receipt of any such notice to agree
to purchase any amount of New Securities up to such holder's pro rata share of
such New Securities as well as its pro rata share of any shares not purchased
by other holders for the price and upon the general terms specified in the
notice by giving written notice to the Corporation and stating therein the
quantity of New Securities to be purchased.
<PAGE> 15
(3) In the event any holder fails to exercise in full the right
to maintain within said fifteen (15) business day period, the Corporation shall
have ninety (90) days thereafter to sell or enter into an agreement (pursuant
to which the sale of new Securities covered thereby shall be closed, if at all,
within sixty (60) days from the date of said agreement) to sell New Securities
in respect to which the holder's option was not exercised, at the price and
upon the terms specified in the Corporation's notice.
ARTICLE V - LIMITATION OF DIRECTORS'S LIABILITY
A director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that this provision shall not eliminate or limit
the liability of a director (i) for any breach of his duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of the law,
(iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derives an
improper personal benefit. If the General Corporation Law of the State of
Delaware is hereafter amended to authorize corporate action further limiting
or eliminating the personal liability of directors, then the liability of the
directors of the Corporation shall be limited or eliminated to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as so
amended from to time. Any repeal or modification of this Article V by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
4. The foregoing Amended and Restated Certificate of Incorporation
has been approved by the Board of Directors by written consent in accordance
with Section 141(f) of the General Corporation Law of the State of Delaware.
5. The foregoing Amended and Restated Certificate of Incorporation
has been approved by the stockholders of the Corporation by written consent in
accordance with Section 228 of the General Corporation Law of the State of
Delaware.
6. The foregoing Amended and Restated Certificate of Incorporation
has been duly adopted in accordance with the applicable provisions of Sections
242 and 245 of the General Corporation Law of the State of Delaware.
<PAGE> 16
IN WITNESS WHEREOF, MASIMO CORPORATION have caused this certificate to be
signed by the undersigned, and the undersigned have executed this certificate
and to affirm the foregoing as true under penalty of perjury this 4th day of
September, 1999.
/s/ JOE E. KIANI
-------------------------------------------
Joe E. Kiani, President
/s/ BRADLEY R. LANGDALE
-------------------------------------------
Bradley R. Langdale, Secretary
