EXHIBIT 10.1
RESTATED CERTIFICATE OF INCORPORATION OF
CRESCENDO PHARMACEUTICALS CORPORATION
(Originally incorporated under the same name on June 26, 1997)
FIRST: Name. The name of this corporation is
Crescendo Pharmaceuticals Corporation (the "corporation").
SECOND: Registered Office; Registered Agent. The
address of the registered office of this corporation in the
State of Delaware is 1013 Centre Road, in the City of
Wilmington, County of New Castle. The name of the
registered agent of this corporation at such address is
Corporation Service Company.
THIRD: Purpose. The purpose of this corporation is to
engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: Authorized Capital Stock.
(A) This corporation is authorized to issue two
classes of shares, which shall be known as Class A Common
Stock ("Class A Common Stock") and Class B Common Stock
("Class B Common Stock"). The total number of shares of
stock of all classes that this corporation is authorized to
issue is 6,001,000. The total number of shares of Class A
Common Stock which this corporation is authorized to issue
is 6,000,000. The total number of shares of Class B Common
Stock which this corporation is authorized to issue is
1,000. Each share of Class A Common Stock shall have a par
value of $0.01, and each share of Class B Common Stock shall
have a par value of $1.00.
Effective immediately upon the filing of this Restated
Certificate of Incorporation, each share of Common Stock,
par value $1.00 per share, of this corporation outstanding
immediately prior to such filing shall be converted into and
reclassified as ten shares of Class B Common Stock.
(B) The powers, designations, preferences, and
relative, participating, optional or other special rights
granted to, and the qualifications, limitations and
restrictions imposed upon, the Class A Common Stock and
Class B Common Stock and the respective holders thereof are
as follows:
(1) Redemption. The shares of Class A Common
Stock are redeemable and may be redeemed as provided in (but
only as provided in) Article FIFTH, Section (F).
(2) Dividends. The holders of shares of Class A
Common Stock and Class B Common Stock shall be entitled to
receive per share and without preference such dividends as
may be declared by the Board of Directors from time to time
out of funds legally available therefor. No dividend may be
declared on the Class A Common Stock unless the same per
share dividend is declared on the Class B Common Stock, and
no dividend may be declared on the Class B Common Stock
unless the same per share dividend is declared on the Class
A Common Stock. Dividends may not be declared, nor may
shares of Class A Common Stock or Class B Common Stock be
repurchased, or redeemed (other than pursuant to Section (F)
of Article FIFTH), if, after payment of such dividend, or
after effecting such repurchase or redemption, the amount of
this corporation's cash, cash equivalents, short-term and
long-term investments would be less than the amount of
Available Funds remaining after expenditures pursuant to the
Development Agreement, as of the date of such dividend,
repurchase or redemption.
(3) Liquidation. In the event of voluntary or
involuntary liquidation of this corporation, the holders of
the Class A Common Stock and Class B Common Stock of the
corporation shall be entitled to receive, on a pro rata per
share basis and without preference, all of the remaining
assets of this corporation available for distribution to its
stockholders.
(4) Voting Rights. Except as otherwise required
by law or provided herein, the holders of Class A Common
Stock and Class B Common Stock shall vote together as a
single class. Each holder of Class A Common Stock and Class
B Common Stock shall have one vote for each share standing
in his or her name on all matters submitted to a vote of
holders of the common shares. At any meeting of the
stockholders of this corporation, the determination of a
quorum shall be based upon the presence of shares of Class A
Common Stock and Class B Common Stock representing a
majority of the voting power of all of the shares of Class A
Common Stock and Class B Common Stock. This corporation
shall not, without the affirmative vote of the holders of a
majority of the issued and outstanding shares of Class B
Common Stock, voting separately and as a class, (a) alter or
change the powers, designations, preferences and relative,
participating, optional or other special rights granted to,
or the qualifications, limitations and restrictions imposed
upon, the Class A Common Stock or the Class B Common Stock,
(b) alter or change this Article FOURTH or any of Articles
FIFTH, SIXTH or SEVENTH of this Restated Certificate of
Incorporation, or otherwise make any amendment to this
Restated Certificate of Incorporation that would alter the
rights of the holders of the Class B Common Stock, (c)
authorize the creation or issuance of any additional class
or series of stock, (d) undertake the voluntary dissolution,
liquidation or winding up of this corporation, (e) merge or
consolidate this corporation with or into any other
corporation or entity, (f) sell, lease, exchange, transfer
or otherwise dispose of any substantial asset of this
corporation or (g) alter the bylaws of this corporation in a
manner described in the last sentence of Article EIGHTH.
Furthermore, from and after the Purchase Option Exercise
Date, as defined in Article FIFTH, (i) the Board of
Directors of this corporation shall cease to be classified
and the holders of the Class B Common Stock shall be
entitled to remove directors with or without cause; (ii) the
number of directors of this corporation shall be increased
to a number equal to (a) two times the maximum number of
directors then authorized pursuant to Article SEVENTH,
Section (A) (counting for this purpose both directors in
office and vacant directorships), plus (b) one; and (iii)
the holders of the Class B Common Stock shall
have the sole right to elect the directors of this
corporation, including directors to fill the new
directorships created pursuant to clause (ii). No new
directorships created as a result of the increase in the
size of the Board of Directors pursuant to the preceding
sentence shall be filled other than by the holders of the
Class B Common Stock. From and after the Purchase Option
Exercise Date all directors shall be elected to one year
terms; provided, however, that the term of any director then
in office shall not be reduced.
(5) Conversion. The Class B Common Stock shall
automatically convert into fully paid and nonassessable
shares of Class A Common Stock of this corporation at 12:01
a.m. New York time on the day immediately following the
expiration of the Purchase Option without exercise granted
in Article FIFTH. The Class B Common Stock shall convert
into Class A Common Stock at the rate of one share of Class
A Common Stock for each share of Class B Common Stock.
FIFTH: Purchase Option.
(A) Definitions. For purposes of this Restated
Certificate of Incorporation, the following terms shall have
the following definitions:
(1) ALZA means ALZA Corporation and its
successors, or assigns of the Purchase Option.
(2) ALZA Common Stock means the Common Stock of
ALZA or, if such Common Stock is converted into or exchanged
for another class or series of stock of ALZA or any other
corporation, such other class or series of stock.
(3) Available Funds means, as of any date of
determination, $300 million (contributed by ALZA on or about
September 30, 1997), plus any investment income earned
thereon, less (i) this corporation's reasonable ongoing
administrative expenses, (ii) the Technology Fee and (iii)
reserves of up to $2 million as determined in good faith by
the Board of Directors.
(4) Crescendo Product means an Identified
Product, or another human pharmaceutical product which has
been recommended by ALZA and accepted by the Board of
Directors of this corporation for development as such under
the Development Agreement.
(5) Developed Technology means any technology
generated or otherwise obtained pursuant to the Development
Agreement.
(6) Developed Technology Product means any
product other than a Crescendo Product (i) covered, at the
time of sale in a country, by one or more unexpired patents
issued in such country that are included in Developed
Technology and (ii) with respect to which ALZA receives any
consideration.
(7) Developed Technology Royalties means the
payments made by ALZA to this corporation with respect to
sales of Developed Technology Products.
(8) Development Agreement means the Development
Agreement between ALZA and this corporation, dated as of
September 5, 1997, as such agreement may be amended or
modified from time to time by amendments approved by ALZA
and the Board of Directors of this corporation.
(9) Fair Market Value means, with reference to
ALZA Common Stock, (a) if ALZA Common Stock is listed on the
New York Stock Exchange or any other securities exchange
reporting closing sales prices (including without limitation
the Nasdaq National Market), the average of the closing
sales price of ALZA Common Stock on such exchange (which
shall be the New York Stock Exchange or, if ALZA Common
Stock is not then traded on such exchange, on the principal
exchange on which ALZA Common Stock is then traded), for the
twenty trading days ending with the trading day that is two
trading days prior to the date of determination, (b) if ALZA
Common Stock is not listed on any securities exchange
described in clause (a) but is quoted on Nasdaq or another
quotation system providing bid prices, the average (over the
twenty day period described in clause (a)) of the bid prices
for each day in such period on Nasdaq (or, if ALZA Common
Stock is not then quoted on Nasdaq, the largest quotation
system on which ALZA Common Stock is then quoted), and (c)
if ALZA Common Stock is not listed on any exchange or quoted
on any quotation system, the value thereof as determined in
good faith by ALZA's board of directors.
(10) Final Purchase Option Exercise Price means
the Purchase Option Exercise Price minus (a) the amount by
which this corporation's Liabilities existing at the
Purchase Option Exercise Date (other than liabilities under
the Development Agreement, Services Agreement and Technology
License Agreement) exceed the aggregate of this
corporation's then existing cash, cash equivalents and short
term and long-term investments (but excluding from such
cash, cash equivalents and short-term and long-term
investments the amount of Available Funds determined as of
the Purchase Option Exercise Date which had not, as of such
date, been paid by this corporation in accordance with the
Development Agreement) and minus (b), if the Purchase Option
Exercise Price was determined based upon the provisions of
clause (c) of Section (A)(19) of this Article FIFTH, any
additional amounts not already included in the calculation
set forth in Article FIFTH, Section (A)(18) that are paid by
(or due from) this corporation under the Development
Agreement from the date of the last report of such
expenditures provided by this corporation to ALZA in a
Status Statement through the Purchase Option Exercise Date
pursuant to the Development Agreement.
(11) Identified Products means the following
products: OROSr oxybutynin, DUROST leuprolide, OROSr
methylphenidate, IUTS progesterone, D-TRANST testosterone
matrix, E-TRANST LHRH and E-TRANST (skin interface
technology) insulin.
(12) Liabilities means, with respect to this
corporation, (a) all liabilities required to be reflected or
reserved against in this corporation's financial statements
under generally accepted accounting principles consistently
applied ("GAAP"), (b) any guaranty of any indebtedness of
another person and (c) any reimbursement or similar
obligation with respect to any letter of credit issued for
the account of this corporation or as to which this
corporation is otherwise liable. Liabilities of the type
described in (b) and (c) shall be valued at the full amount
of the potential liability of the corporation thereon.
(13) License Agreement means any License Agreement
between ALZA and this corporation entered into upon the
exercise by ALZA of the license option granted to it
pursuant to the License Option Agreement, as any such
agreement may be amended or modified from time to time by
amendments approved by ALZA and the Board of Directors of
this corporation.
(14) License Option Agreement means the License
Option Agreement between ALZA and this corporation dated as
of September 5, 1997, as such agreement may be amended or
modified from time to time by amendments approved by ALZA
and the Board of Directors of this corporation.
(15) Licensed Product means a Crescendo Product as
to which the license option under the License Option
Agreement has been exercised by ALZA.
(16) Product Payments means payments made by ALZA
to this corporation under a License Agreement with respect
to Licensed Products.
(17) Purchase Option Exercise Date means the date
upon which ALZA notifies this corporation in writing of its
exercise of the Purchase Option as provided in Section (C)
of this Article FIFTH.
(18) Purchase Option Exercise Price means the
greatest of the following:
(a) (i) 25 times the actual worldwide
Product Payments, Developed Technology Royalties and
Technical Evaluation Product Payments made by or due from
ALZA to this corporation with respect to all Licensed
Products, Developed Technology Products and Technical
Evaluation Products (and, in addition, such Product
Payments, Developed Technology Royalties and Technical
Evaluation Product Payments as would have been made by or
due from ALZA to this corporation if ALZA had not previously
exercised its payment buy-out option with respect to any
such Licensed Product, Developed Technology Product or
Technical Evaluation Product) for the four calendar quarters
immediately preceding the quarter in which the Purchase
Option is exercised (provided, however, that for any
Licensed Product, Developed Technology Product or Technical
Evaluation Product which has not been commercially sold
during each of the four calendar quarters immediately
preceding the quarter in which the Purchase Option is
exercised, the portion of the Purchase Option Exercise Price
for such Licensed Product, Developed Technology Product or
Technical Evaluation Product will be 100 times the average
of the quarterly Product Payments, Developed Technology
Royalties or Technical Evaluation Product Payments made by
or due from ALZA to this corporation for each of such
calendar quarters during which such product was commercially
sold) less (ii) any amounts previously paid to exercise any
payment buy-out option for any Licensed Product, Developed
Technology Product or Technical Evaluation Product pursuant
to a License Agreement or the Development Agreement.
(b) the Fair Market Value of one million
shares of ALZA Common Stock (which number of shares shall be
proportionately adjusted for any stock dividend, splitup,
combination or reclassification of the ALZA Common Stock)
determined as of the Purchase Option Exercise Date;
(c) $325 million less the total amount paid
by or due from this corporation under the Development
Agreement as last reported by this corporation to ALZA in a
Status Statement through the Purchase Option Exercise Date;
and (d) $100 million.
(19) Purchase Option Expiration Time means 11:59
p.m. New York time on January 31, 2002; provided that such
date will be extended for successive six month periods if,
as of any July 31 or January 31 beginning with July 31,
2001, this corporation has not paid (or accrued expenses
for) at least 95% of all Available Funds pursuant to the
Development Agreement. Notwithstanding the foregoing
sentence, the Purchase Option Expiration Time will in no
event occur later than 11:59 p.m. New York time on the 60th
day after this corporation provides ALZA with a statement
that, as of the end of any calendar month, there are less
than $2.5 million of Available Funds remaining after
expenditures pursuant to the Development Agreement,
accompanied by a report of this corporation's independent
auditors stating that nothing has come to their attention
indicating that there are $2.5 million or more of Available
Funds remaining at that date.
(20) Services Agreement means the Services
Agreement between ALZA and this corporation, dated as of
September 5, 1997, as such agreement may be amended or
modified from time by amendments approved by ALZA and the
Board of Directors of this corporation.
(21) Status Statement means, as of any date, a
balance sheet prepared by the Company and delivered to ALZA
dated as of such date, together with (a) a statement and
brief description of all other liabilities of this
corporation constituting Total Liabilities as of such date
not reflected on such balance sheet, (b) a statement of the
amount of Available Funds remaining as of such date, and (c)
a statement of the total amounts paid by and due from this
corporation pursuant to the Development Agreement through
such date.
(22) Technical Evaluation means limited technical
evaluation involving a proprietary therapeutic agent of a
third party undertaken in order to determine the suitability
of such therapeutic agent in an ALZA drug delivery system or
to induce the third party to license the therapeutic agent
to ALZA or this corporation or otherwise collaborate with
ALZA and this corporation in the development of a product.
(23) Technical Evaluation Product means a product,
other than one which becomes a Crescendo Product, for which
this corporation funds a Technical Evaluation.
(24) Technical Evaluation Product Payments means
the payments made by ALZA to this corporation with respect
to sales of Technical Evaluation Products.
(25) Technology Fee means the payments to be made
over a maximum period of three years by this corporation to
ALZA in exchange for ALZA granting this corporation a
license to use certain technology relating to the Identified
Products.
(26) Technology License Agreement means the
Technology License Agreement between ALZA and this
corporation , dated as of September 5, 1997, as such
agreement may be amended or modified from time to time by
amendments approved by ALZA and the Board of Directors of
this corporation.
(27) Total Liabilities means (a) all Liabilities,
plus (b) any other debts, liabilities or obligations,
absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown,
whenever arising, including all costs and expenses relating
thereto, and including those debts, liabilities and
obligations arising under any law, rule or regulation, or
under any pending or threatened action, suit or proceeding,
or any order or consent decree of any governmental entity or
any award of any arbitrator of any kind, and those arising
under any contract, commitment or undertaking.
(B) Grant of Option. ALZA is hereby granted an
exclusive irrevocable purchase option to purchase all issued
and outstanding shares of Class A Common Stock of this
corporation for the Final Purchase Option Exercise Price
(the "Purchase Option"). The Purchase Option, if exercised,
must be exercised as to all, but not less than all, issued
and outstanding shares of Class A Common Stock and may be
exercised at any time at or
prior to the Purchase Option Expiration Time. ALZA shall
elect, at the time of exercise of the Purchase Option, to
pay all or any portion of the Final Purchase Option Exercise
Price in cash, ALZA Common Stock (valued at its Fair Market
Value determined as of the Purchase Option Exercise Date),
or any combination thereof. The Purchase Option, together
with the other rights of ALZA under this Article FIFTH and
Article SIXTH, may, at ALZA's option, be assigned or
otherwise transferred to any person or entity, including
this corporation.
(C) Manner of Exercise. The Purchase Option shall be
exercised, if at all, at or before the Purchase Option
Expiration Time by written notice (the "Exercise Notice")
from ALZA to this corporation stating that the Purchase
Option is being exercised and setting forth (1) the Purchase
Option Exercise Price; (2) the portion, if any, of the Final
Purchase Option Exercise Price to be paid in cash and the
portion, if any, of the Final Purchase Option Exercise Price
to be paid in ALZA Common Stock, and if any portion of the
Final Purchase Option Exercise Price is to be paid in ALZA
Common Stock, stating the Fair Market Value of such ALZA
Common Stock determined as of the Purchase Option Exercise
Date; and (3) a closing date (the "Closing Date") on which
all of the issued and outstanding shares of Class A Common
Stock will be purchased. The Purchase Option shall be
deemed to be exercised as of the date of mailing by first
class mail of the Exercise Notice to this corporation at its
principal offices.
(D) Closing.
(1) Closing Date; Cooperation. Except as set
forth below, the Closing Date shall be the date specified as
such in the Exercise Notice, which date specified shall be
no later than 60 days after the Purchase Option Exercise
Date. The Closing Date may be extended by ALZA if, in the
judgment of ALZA, an extension of the Closing Date is
necessary to obtain any governmental or third party consent
to the purchase of the Class A Common Stock, to permit any
necessary registration statement or similar filing to be
declared effective, or to permit the expiration prior to the
Closing Date of any statutory or regulatory waiting period.
ALZA may extend the Closing Date for the reasons set forth
in the preceding sentence by delivering written notice of
such extension to this corporation on or prior to the
previously specified Closing Date. This corporation shall
cooperate with ALZA to effect the closing of the Purchase
Option, including without limitation seeking any required
third-party or governmental consents, and filing any
applications, notifications, registration statements or the
like which may be necessary to effect the closing.
(2) Certain Restrictions Following Purchase
Option Exercise Date. From the Purchase Option Exercise
Date until the Closing Date, this corporation will not take
any of the following actions (or permit any such actions to
be taken on its behalf) e
xcept with the prior written consent of ALZA:
(a) borrow money, or mortgage, remortgage,
pledge, hypothecate or otherwise encumber any of its assets;
(b) sell, lease, lend, exchange or otherwise
dispose of any of its assets, other than sales of inventory
in the ordinary course of business;
(c) pay or declare any dividends or make any
distributions on or in respect of any shares of its capital
stock;
(d) default in its obligations under any
material contract, agreement, commitment or undertaking of
any kind or enter into any material contract, agreement,
purchase order or other commitment; or
(e) enter into any other transaction or
agreement or arrangement, or incur any liabilities, not in
the ordinary course of this corporation's business.
(3) Determination of Final Purchase Option
Exercise Price. Not later than 15 business days following
the Purchase Option Exercise Date, this corporation shall
deliver a final Status Statement to ALZA prepared as of the
Purchase Option Exercise Date. Following receipt of such
Status Statement and completion of any other investigation
as ALZA shall deem necessary or appropriate, and prior to
the Closing Date, ALZA shall determine the Final Purchase
Option Exercise Price by making the adjustments to the
Purchase Option Exercise Price contemplated by Section
(A)(10) of this Article FIFTH and shall notify this
corporation of such determination.
(4) Payment of Final Purchase Option Exercise
Price. On or before the Closing Date, ALZA shall deposit the
full amount of the Final Purchase Option Exercise Price with
a bank or banks or similar entities designated by ALZA
(which may include ALZA's transfer agent if shares of ALZA
Common Stock are being delivered) to pay, on ALZA's behalf,
the Final Purchase Option Exercise Price (the "Payment
Agent"). Funds, if any, and ALZA Common Stock, if any,
deposited with the Payment Agent shall be delivered in trust
for the benefit of the holders of Class A Common Stock, and
ALZA shall provide the Payment Agent with irrevocable
instructions to pay, on or after the Closing Date, the Final
Purchase Option Exercise Price for the shares of Class A
Common Stock to the holders of record thereof determined as
of the Closing Date. Payment for shares of Class A Common
Stock shall be mailed to each holder at the address set
forth in this corporation's records or at the address
provided by each holder or, if no address is set forth in
this corporation's records for a holder or provided by such
holder, to such holder at the address of this corporation.
As soon as practicable upon ALZA's request, this corporation
shall provide, or shall cause its transfer agent to provide,
to ALZA or to the Payment Agent, free of charge, a complete
list of the record holders of shares of Class A Common
Stock, as of a specified date, including the number of
shares of Class A Common Stock held of record and the
address of each record holder as set forth in the records of
this corporation's transfer agent.
(E) Transfer of Title. Transfer of title to all of
the issued and outstanding shares of Class A Common Stock
shall be deemed to occur automatically on the Closing Date
and thereafter this corporation shall be entitled to treat
ALZA as the sole holder of all of the issued and outstanding
shares of its Class A Common Stock, notwithstanding the
failure of any holder of Class A Common Stock to tender the
certificates representing such shares to the Payment Agent,
whether or not such tender is required or requested by the
Payment Agent. This corporation shall instruct its transfer
agent not to accept any shares of Class A Common Stock for
transfer on and after the Closing Date. This corporation
shall take all actions reasonably requested by ALZA to
assist in effectuating the transfer of shares of Class A
Common Stock in accordance with this Article FIFTH.
(F) Redemption of Class A Common Stock. At ALZA's
election (which election may be made at any time, provided
it is made, by delivery of written notice thereof to this
corporation, not less than five days prior to the Closing
Date), this corporation shall, subject to applicable
restrictions in the Delaware General Corporation Law, redeem
on the Closing Date all issued and outstanding shares of
Class A Common Stock for an aggregate redemption price equal
to the Final Purchase Option Exercise Price. Such
redemption shall be in lieu of ALZA paying the Final
Purchase Option Exercise Price directly to the stockholders
of this corporation, and shall be subject to ALZA providing
the Final Purchase Option Exercise Price to this corporation
to allow this corporation to pay the redemption price.
SIXTH: Protective Provisions.
(A) Legend. Certificates evidencing shares of Class A
Common Stock issued by or on behalf of this corporation
shall bear a legend in substantially the following form:
"The shares of Crescendo Pharmaceuticals Corporation
evidenced hereby are subject to an option in favor of ALZA
Corporation, its successors and assigns, as described in the
Restated Certificate of Incorporation of Crescendo
Pharmaceuticals Corporation to purchase such shares at a
purchase price determined in accordance with Article FIFTH
thereof exercisable by notice delivered to this corporation
at or prior to the Purchase Option Expiration Time (as
defined in the Restated Certificate of Incorporation of
Crescendo Pharmaceuticals Corporation). Copies of the
Restated Certificate of Incorporation of Crescendo
Pharmaceuticals Corporation are available at the principal
place of business of Crescendo Pharmaceuticals Corporation
at 1454 Page Mill Road, Palo Alto, California 94304 and will
be furnished to any stockholder on request and without
cost."
(B) No Conflicting Action. This corporation shall not
take, nor permit any other person or entity within its
control to take, any action inconsistent with ALZA's rights
under Article FIFTH. This corporation shall not enter into
any arrangement, agreement or understanding, whether oral or
in writing, that is inconsistent with or limits or impairs
the rights of ALZA and the obligations of this corporation
hereunder, including without limitation any arrangement,
agreement or understanding which imposes any obligation upon
this corporation, or deprives this corporation of any
material rights, as a consequence of the exercise of the
Purchase Option or the acquisition of the outstanding Class
A Common Stock pursuant thereto.
(C) Inspection and Visitation Rights; Status
Statements. ALZA shall have the right to inspect and copy,
on reasonable notice and during regular business hours, the
books and records of this corporation. ALZA shall also have
the right to request from time to time (but not more
frequently than monthly) a Status Statement as of such date
as ALZA may request. Each Status Statement shall be sent
within seven days of request by ALZA. ALZA shall also have
the right to send a non-voting representative to attend all
meetings of this corporation's Board of Directors and any
committees thereof. Any representative, if designated in
writing by ALZA as such, shall receive notice of all
meetings of this corporation's Board of Directors and each
committee thereof, as well as copies of all documents and
other materials provided to any directors of this
corporation in connection with any such meeting not later
than the time such materials are provided to other
directors. Such representative shall also be provided with
copies of all resolutions adopted or proposed to be adopted
by unanimous written consent not later than the time such
resolutions are provided to other directors.
SEVENTH: Board of Directors.
(A) The number of directors which shall constitute the
whole Board of Directors of this corporation shall initially
be three, but may be increased or decreased from time to
time by a resolution duly adopted by the Board of Directors
and shall be automatically increased as provided in Article
FOURTH, Section (B)(4).
(B) Nomination of candidates for election to the Board
of Directors shall be made as provided in the bylaws of this
corporation. Election of directors need not be by written
ballot.
(C) Subject to Article FOURTH, Section (B)(4), the
Board of Directors shall be and is divided into three
classes: Class I, Class II and Class III. Each director
shall serve for a term ending on the date of the third
annual meeting of stockholders following the annual meeting
at which the director was elected; provided, however, that
each initial director in Class I shall hold office until the
annual meeting of stockholders in 1998; each initial
director in Class II shall hold office until the annual
meeting of stockholders in 1999; and each initial director
in Class III shall hold office until the annual meeting of
stockholders in 2000. Notwithstanding the foregoing
provisions of this Article SEVENTH, each director shall
serve, until his or her successor is duly elected and
qualified or until his or her death, resignation,
disqualification or removal.
(D) In the event of any increase or decrease in the
authorized number of directors, the newly created or
eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board of Directors
among the three classes of directors. No decrease in the
number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
(E) Except as otherwise provided in Article FOURTH,
Section (B)(4), or as required by law, newly created
directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal
or other cause shall be filled by the affirmative vote of a
majority of the remaining directors then in office (and not
by stockholders), even though less than a quorum of the
Board of Directors. Any director elected in accordance with
the preceding sentence shall hold office for the remainder
of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until
such director's successor shall have been elected and
qualified.
(F) The name and mailing address of each person who is
to serve as a director until the annual meeting of the
stockholders entitled to vote for the class or until a
successor is elected or appointed and qualified are as
follows:
NAME MAILING ADDRESS CLASS
James Butler 950 Page Mill Road I
Palo Alto, CA 94304
Dr. Samuel R. Saks 950 Page Mill Road II
Palo Alto, CA 94304
Dr. James W. Young 950 Page Mill Road III
Palo Alto, CA 94304
EIGHTH: Bylaws. In furtherance and not in limitation
of the powers conferred by statute, and subject to the next
sentence, the Board of Directors and the stockholders of
this corporation are each expressly authorized to adopt,
amend or repeal the bylaws of this corporation subject to
any particular provisions concerning amendments set forth in
this Restated Certificate of Incorporation or the bylaws of
this corporation. No amendment to the bylaws may be adopted
by the stockholders without the approval of holders of a
majority of the Class B Common Stock voting separately as a
class if such amendment would affect the classification of
the Board of Directors, or would otherwise regulate the
conduct of the Board's affairs or the manner in which it may
act.
NINTH: Stockholder Meetings.
(A) Special Meetings. Special meetings of the
stockholders for any purpose or purposes whatsoever may be
called at any time only by the Board of Directors, the
Chairman of the Board or the President of this corporation.
(B) No Action Without Meeting. At any time when
this corporation has more than one stockholder of any class
of capital stock, no action required to be taken or which
may be taken at any annual or special meeting of the
stockholders may be taken without a meeting, and the power
of stockholders to consent in writing, without a meeting, to
the taking of any action is specifically denied.
Notwithstanding the foregoing, the holder or holders of the
Class B Common Stock may take any action permitted to be
taken by such holders as a class by written consent without
a meeting.
TENTH: Limitation of Liability and Indemnification of
Directors.
(A) Elimination of Certain Liability of
Directors. No director of this corporation shall be
personally liable to this corporation or its stockholders
for monetary damages for breach of fiduciary duty as a
director except, to the extent provided by applicable law,
for liability (i) for any breach of the director's duty of
loyalty to this corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of
this Article TENTH shall apply to or have any effect on the
liability or alleged liability of any director of this
corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment.
(B) Indemnification and Insurance.
1. Right to Indemnification. Each person who was
or is made a party or is threatened to be made a party to or
is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a
"proceeding"), because he or she, or a person of whom he or
she is the legal representative, is or was a director or
officer of this corporation or is or was serving at the
request of this corporation as a director, officer, employee
or agent of another corporation or of a partnership, joint
venture, trust or other enterprise (including service with
respect to employee benefit plans), whether the basis of the
proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by this
corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to
the extent that such amendment permits this corporation to
provide broader indemnification rights than that law
permitted this corporation to provide before such
amendment), against all expense, liability and loss
(including attorneys' fees, judgments, penalties, fines,
Employee Retirement Income Security Act of 1974 excise taxes
or penalties, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith; provided, however, that this corporation shall
indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by
such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of this corporation.
Such indemnification shall continue as to a person who has
ceased to be a director or officer of this corporation and
shall inure to the benefit of his or her heirs, executors
and administrators. The right to indemnification conferred
by this Section shall be a contract right which may not be
retroactively amended and shall include the right to be paid
by this corporation the expenses incurred in defending any
such proceeding in advance of its final disposition;
provided, however, that the payment of such expenses
incurred by a director or officer in his or her capacity as
a director or officer (and not in any other capacity in
which service was or is rendered by such person while a
director or officer, including, without limitation, service
with respect to an employee benefit plan) in advance of the
final disposition of the proceeding shall be made only upon
delivery to this corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so
advanced if ultimately it shall be determined that such
director or officer is not entitled to be indemnified under
this Section or otherwise. This corporation may, by action
of its Board of Directors, provide indemnification to
employees and agents of this corporation with the same scope
and effect as the indemnification of directors and officers.
2. Right of Claimant to Bring Suit. If a claim
under Paragraph 1 of this Section is not paid in full by
this corporation within ninety (90) days after a written
claim has been received by this corporation, the claimant
may at any time thereafter bring suit against this
corporation to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred
in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been
tendered to this corporation) that the claimant has not met
the standards of conduct which make it permissible under the
Delaware General Corporation Law for this corporation to
indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on this corporation.
Neither the failure of this corporation (including its Board
of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual
determination by this corporation (including its Board of
Directors, independent legal counsel, or its stockholders)
that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a
presumption that claimant has not met the applicable
standard of conduct.
3. Nonexclusivity of Rights. The right to
indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition
conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire
under any statute, provision of this Restated Certificate of
Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
4. Insurance. This corporation may maintain
insurance, at its expense, to protect itself and any
director, officer, employee or agent of this corporation or
another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or
loss, whether or not this corporation would have the power
to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law. IN WITNESS
WHEREOF, the undersigned officer has executed this Restated
Certificate of Incorporation on September 4, 1997 and does
hereby certify that this Restated Certificate of
Incorporation, which restates and integrates, and also
further amends, the provisions of this corporation's
Certificate of Incorporation, was duly adopted by the
stockholders of this corporation in accordance with Sections
242 and 245 of the Delaware General Corporation Law.
CRESCENDO PHARMACEUTICALS CORPORATION
By: /s/Dr. James W. Young
_____________________
Dr. James W. Young
President and
Chief Executive Officer