AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
barnesandnoble.com inc.
barnesandnoble.com inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of this corporation is barnesandnoble.com inc. The original
Certificate of Incorporation was filed on March 11, 1999.
2. This Amended and Restated Certificate of Incorporation restates and
amends the original Certificate of Incorporation to read in its entirety as
follows:
"FIRST: The name of the corporation is barnesandnoble.com inc. (the
"Corporation").
SECOND: The registered office of the Corporation is to be located at
Loockerman Square, Suite L-100, City of Dover, County of Kent, State of
Delaware. The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware (the "GCL").
FOURTH: (a) Authorized Capital Stock. The total number of shares of
stock that the Corporation shall have the authority to issue is 750,000,000
shares, consisting of: (i) 500,000,000 shares of Class A Common Stock, par value
$.001 per share (the "Class A Common Stock"); (ii) 100,000,000 shares of Class B
Common Stock, par value $.001 per share (the "Class B Common Stock"); (iii)
100,000,000 shares of Class C Common Stock, par value $.001 per share (the
"Class C Common Stock"); and (iv) 50,000,000 shares of Preferred Stock, par
value $.001 per share (the "Preferred Stock"), issuable in one or more series as
hereinafter provided. The Class A Common Stock, the Class B Common Stock and the
Class C Common Stock shall hereinafter collectively be called the "Common
Stock." The number of authorized shares of any class or classes of capital stock
of the Corporation may be increased or decreased (but not below the number of
shares thereof then outstanding) by each of the following, voting separately as
a class: (x) the affirmative vote of the holders of a majority of the voting
power of the stock of the Corporation entitled to vote generally in the election
of directors ("Voting Stock") irrespective of the provisions of Section
242(b)(2) of the GCL or any corresponding
provision hereinafter enacted; (y) if a Class B Director (as defined below) is
then entitled to be a member of the Special Committee (as defined in the By-laws
of the Corporation (the "Bylaws")), by the affirmative vote of the holders of a
majority of the Class B Common Stock; and (z) if a Class C Director (as defined
below) is then entitled to be a member of the Special Committee, by the
affirmative vote of the holders of a majority of the Class C Common Stock.
(b) Terms of Common Stock; Voting; Directors.
(i) Rights and Privileges; Voting Rights. (A)
All shares of Common Stock will be identical in all respects and will entitle
the holders thereof to the same rights and privileges, except as otherwise
provided in this Certificate of Incorporation.
(B) The holders of shares of Common
Stock shall have the following voting rights:
(1) Each holder of Class A
Common Stock shall be entitled to the following number of votes in person or by
proxy on all matters submitted to a vote of the stockholders of the Corporation:
one (1) multiplied by the number of shares of Class A Common Stock held by such
holder.
(2) Each holder of Class B
Common Stock and/or Class C Common Stock shall be entitled to the following
number of votes in person or by proxy on all matters submitted to a vote of the
stockholders of the Corporation: ten (10) multiplied by the sum of (x) the
number of shares of Class B Common Stock and/or Class C Common Stock held by
such holder and (y) the number of Membership Units (as defined below) held by
such holder. "Membership Units" shall mean membership units in
barnesandnoble.com llc, the Delaware limited liability company in which the
Corporation is the sole Manager, or any successor entity thereto (the "Operating
Company"), issued under its Limited Liability Company Agreement (as amended, the
"LLC Agreement").
(3) Except as may be provided
pursuant to resolutions of the Board, adopted pursuant to the provisions of this
Certificate of Incorporation and the By-laws, establishing any series of
Preferred Stock and granting to the holders of such shares of Preferred Stock
rights to elect additional directors under specified circumstances, and subject
to Article FOURTH, Clause (b)(iii)(D) and (E) and Article SIXTH, Clause (b)
below, the Board of Directors shall consist of nine (9) directors; provided,
however, that if there shall be less than three (3) classes of Common Stock
issued and outstanding, the Board of Directors shall consist of three (3)
directors multiplied by the number of classes of Common Stock issued and
outstanding. Subject to Article FOURTH, Clause (b)(iii)(D) and (E) and Article
SIXTH, Clause (b) below: (x) the holders of the Class B Common Stock, voting
separately as a class, shall be entitled to elect three (3) of the nine (9)
directors of the Board, one (1) director for each of the three (3) classes
referred to in Clause (a) of Article SIXTH below (each a "Class B Director");
(y) the holders of the Class C Common Stock, voting separately as a class, shall
be
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entitled to elect three (3) of the nine (9) directors of the Board, one (1)
director for each of the three (3) classes referred to in Clause (a) of Article
SIXTH below (each a "Class C Director"); and (z) the remaining three (3)
directors, one (1) director for each of the three (3) classes referred
to in Clause (a) of Article SIXTH below (each a "Class A Director"), shall be
elected by the vote of the holders of the Common Stock, voting as one class.
(4) Except as otherwise
required in this Certificate of Incorporation or the By-laws or by applicable
law, the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation (or if any
holders of shares of Preferred Stock are entitled to vote together with the
holders of Common Stock, as a single class with such holders of shares of
Preferred Stock).
(C) Notwithstanding anything in this
Certificate of Incorporation to the contrary, no vote of the holders of Class A
Common Stock, and only the vote of seventy-five percent (75%) of the holders of
each of the Class B Common Stock and the Class C Common Stock, each voting
separately as a class, shall be required to approve a merger of the Operating
Company (and optionally any one or more of its subsidiaries) into the
Corporation, and to amend this Certificate of Incorporation accordingly;
provided that the Corporation is the surviving entity in the merger and the
economic and voting interests of the holders of Class A Common Stock in the
merged entities (taken as a whole) immediately after such merger is the same as
the economic and voting interests of the holders of Class A Common Stock in the
merged entities (taken as a whole) immediately before such merger.
(ii) Dividends and Distributions.
(A) Subject to the preferences
applicable to Preferred Stock, if any, outstanding at any time, the holders of
shares of Common Stock shall be entitled to receive such dividends and other
distributions in cash, property or shares of stock of the Corporation as may be
declared thereon by the Corporation's Board of Directors (the "Board") from time
to time out of assets or funds of the Corporation legally available therefor;
provided, that, subject to the provisions of this Section, the Corporation shall
not pay dividends or make distributions to any holders of any class of Common
Stock unless simultaneously with such dividend or distribution, as the case may
be, the Corporation makes the same dividend or distribution with respect to each
outstanding share of Common Stock regardless of class.
(B) In the case of dividends or other
distributions payable in Class A Common Stock, Class B Common Stock or Class C
Common Stock including distributions pursuant to stock splits or divisions of
Class A Common Stock, Class B Common Stock or Class C Common Stock which occur
after the first date upon which the Corporation has issued shares of any of
Class A Common Stock, Class B Common Stock or Class C Common Stock, only shares
of Class A Common Stock shall be distributed with respect to Class A Common
Stock, only shares of Class B Common Stock shall be distributed with respect to
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Class B Common Stock, and only shares of Class C Common Stock shall be
distributed with respect to Class C Common Stock. In the case of any such
dividend or distribution payable in shares of Class A Common Stock, Class B
Common Stock or Class C Common Stock, the number of shares of each class of
Common Stock payable per share of such class of Common Stock shall be equal in
number.
(C) In the case of dividends or other
distributions consisting of other voting securities of the Corporation or of
voting securities of any corporation which is a wholly owned subsidiary of the
Corporation, the Corporation shall declare and pay such dividends in three
separate classes of such voting securities, identical in all respects, except
that: (1) the voting rights of each such security paid to the holders of Class B
Common Stock and Class C Common Stock, when compared to the voting rights of
each such security paid to the holders of Class A Common Stock, shall have
voting rights determined pursuant to the same formula as provided in Clause
(b)(i)(B)(2) of Article FOURTH above; (2) such security paid to the holders of
Class B Common Stock shall convert into the security paid to the holders of
Class A Common Stock upon the same terms and conditions applicable to the
conversion of Class B Common Stock into Class A Common Stock and shall have the
same restrictions on transfer and ownership applicable to the transfer and
ownership of Class B Common Stock; (3) such security paid to the holders of
Class C Common Stock shall convert into the security paid to the holders of
Class A Common Stock upon the same terms and conditions applicable to the
conversion of Class C Common Stock into Class A Common Stock and shall have the
same restrictions on transfer and ownership applicable to the transfer and
ownership of Class C Common Stock; and (4) with respect only to dividends or
other distributions of voting securities of any corporation which is a wholly
owned subsidiary of the Corporation, the respective voting rights of each such
security paid to holders of Class A Common Stock, Class B Common Stock and Class
C Common Stock with respect to the election of directors shall otherwise be as
comparable as is practicable to those of the Class A Common Stock, Class B
Common Stock and Class C Common Stock, respectively.
(D) In the case of dividends or other
distributions consisting of securities convertible into, or exchangeable for,
voting securities of the Corporation or voting securities of another corporation
which is a wholly owned subsidiary of the Corporation, the Corporation shall
provide that such convertible or exchangeable securities and the underlying
securities be identical in all respects (including, without limitation, the
conversion or exchange rate), except that: (1) the voting rights of each
security underlying the convertible or exchangeable security paid to the holders
of Class B Common Stock and Class C Common Stock, when compared to the voting
rights of each security underlying the convertible or exchangeable security paid
to the holders of the Class A Common Stock, shall have voting rights determined
pursuant to the same formula as provided in Clause (b)(i)(B)(2) of Article
FOURTH above; (2) such underlying securities paid to the holders of the Class B
Common Stock shall convert into the underlying securities paid to the holders of
Class A Common Stock upon the same terms and conditions applicable to the
conversion of Class B Common Stock into Class A
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Common Stock and shall have the same restrictions on transfer and ownership
applicable to the transfer and ownership of the Class B Common Stock; and (3)
such underlying securities paid to the holders of the Class C Common Stock shall
convert into the underlying securities paid to the holders of Class A Common
Stock upon the same terms and conditions applicable to the conversion of Class C
Common Stock into Class A Common Stock and shall have the same restrictions on
transfer and ownership applicable to the transfer and ownership of the Class C
Common Stock.
(iii) Conversion of Class B Common Stock and Class
C Common Stock; Exchange of Membership Units.
(A) Each holder of Class B Common Stock
or Class C Common Stock shall be entitled to convert, at any time and from time
to time, any or all of the shares of such holder's Class B Common Stock or Class
C Common Stock, as the case may be, on a one-for-one basis, into the same number
of fully paid and non-assessable shares of Class A Common Stock. Such right
shall be exercised by the surrender to the Corporation of the certificate or
certificates representing the shares of Class B Common Stock or Class C Common
Stock to be converted at any time during normal business hours at the principal
executive offices of the Corporation or at the office of the Corporation's
transfer agent (the "Transfer Agent"), accompanied by a written notice of the
holder of such shares stating that such holder desires to convert such shares,
or a stated number of the shares represented by such certificate or
certificates, into an equal number of shares of Class A Common Stock, and (if so
required by the Corporation or the Transfer Agent) by instruments of transfer,
in form satisfactory to the Corporation and to the Transfer Agent, duly executed
by such holder or such holder's duly authorized attorney, and transfer tax
stamps or funds therefor, if required pursuant to Article FOURTH, Clause
(b)(iii)(I) below.
(B) Subject to adjustment as provided in
Article FOURTH, Clause (b)(iv) below, each holder (other than the Corporation)
of a Membership Unit shall be entitled to exchange, at any time and from time to
time, any or all of such holder's Membership Units, on a one-for-one basis, into
the same number of fully paid and non-assessable shares of Class A Common Stock.
Such right shall be exercised by the surrender to the Corporation of the
certificate or certificates representing the Membership Units to be exchanged at
any time during normal business hours at the principal executive offices of the
Corporation or at the office of the Transfer Agent, accompanied by a written
notice of the holder of such Membership Units stating that such holder desires
to exchange such Membership Units, or a stated number of Membership Units
represented by such certificate or certificates, into an equal number of shares
of Class A Common Stock, and by instruments of transfer to the Corporation, in
form satisfactory to the Corporation and to the Transfer Agent, duly executed by
such holder or such holder's duly authorized attorney, and transfer tax stamps
or funds therefor, if required pursuant to Article FOURTH, Clause (b)(iii)(I)
below.
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(C) Each share of Class B Common Stock or
Class C Common Stock transferred by one or more Parent Entities (as defined
below) to one or more persons or entities other than Parent Entities shall
automatically convert into one (1) fully paid and non-assessable share of Class
A Common Stock upon such disposition, provided that no such conversion shall
occur solely as a result of the pledge or hypothecation of any Class B Common
Stock or Class C Common Stock by a Parent Entity. "Parent Entities" shall mean,
collectively, Barnes & Noble, Inc. ("B&N"), Bertelsmann AG ("BAG"), and any of
their respective Affiliates (other than an Affiliate in which a Restricted
Transferee owns an interest). "Affiliate" and "Restricted Transferee" shall have
the meanings ascribed thereto in the LLC Agreement.
(D) If at any time the number of shares of
Class B Common Stock outstanding, together with the number of outstanding
Membership Units held by the holders of such Class B Common Stock, constitutes
less than fifteen percent (15%) of the number of then outstanding Membership
Units, then each share of Class B Common Stock then issued and outstanding shall
thereupon be converted automatically as of such date into one (1) fully paid and
non-assessable share of Class A Common Stock. Upon the determination by the
Corporation that such automatic conversion has occurred, notice of such
automatic conversion shall be given by the Corporation by means of a press
release and written notice to all holders of Class B Common Stock, and shall be
given as soon as practicable, and the Secretary of the Corporation shall be
instructed to, and shall promptly, request from each holder of Class B Common
Stock that each such holder promptly deliver, and each such holder shall
promptly deliver, the certificate representing each such share of Class B Common
Stock to the Corporation for exchange hereunder, together with instruments of
transfer, in form satisfactory to the Corporation and the Transfer Agent, duly
executed by such holder or such holder's duly authorized attorney, and together
with transfer tax stamps or funds therefor, if required pursuant to Article
FOURTH, Clause (b)(iii)(I) below. Effective upon such automatic conversion of
the Class B Common Stock, the Class B Directors shall be deemed to have resigned
from the Board and all committees of the Board upon which they serve, and the
Board and all such committees shall be deemed reduced in size (and no vacancies
shall be created) by such resignations.
(E) If at any time the number of shares of
Class C Common Stock outstanding, together with the number of outstanding
Membership Units held by the holders of such Class C Common Stock, constitutes
less than fifteen percent (15%) of the number of then outstanding Membership
Units, then each share of Class C Common Stock then issued and outstanding shall
thereupon be converted automatically as of such date into one (1) fully paid and
non-assessable share of Class A Common Stock. Upon the determination by the
Corporation that such automatic conversion has occurred, notice of such
automatic conversion shall be given by the Corporation by means of a press
release and written notice to all holders of Class C Common Stock, and shall be
given as soon as practicable, and the Secretary of the Corporation shall be
instructed to, and shall promptly, request from each holder of Class C Common
Stock that each such holder promptly deliver, and each such holder shall
promptly deliver, the certificate representing each such share of Class C Common
Stock to the Corporation
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for exchange hereunder, together with instruments of transfer, in form
satisfactory to the Corporation and the Transfer Agent, duly executed by such
holder or such holder's duly authorized attorney, and together with transfer tax
stamps or funds therefor, if required pursuant to Article FOURTH, Clause
(b)(iii)(I) below. Effective upon such automatic conversion of the Class C
Common Stock, the Class C Directors shall be deemed to have resigned from the
Board and all committees of the Board upon which they serve, and the Board and
all such committees shall be deemed reduced in size (and no vacancies shall be
created) by such resignations.
(F) As promptly as practicable following
the surrender for conversion of a certificate representing shares of Class B
Common Stock or Class C Common Stock in the manner provided in Article FOURTH,
Clauses (b)(iii)(A), (C), (D) or (E) above, or the surrender for exchange of a
certificate representing Membership Units in the manner provided in Article
FOURTH, Clause (b)(iii)(B) above, as applicable, and the payment in cash of any
amount required by the provisions of Article FOURTH, Clause (b)(iii)(I) below,
the Corporation will deliver or cause to be delivered at the office of the
Transfer Agent, a certificate or certificates representing the number of full
shares of Class A Common Stock issuable upon such conversion or exchange, issued
in such name or names as such holder may direct. Such conversion or exchange
shall be deemed to have been effected immediately prior to the close of business
on the date of the surrender of the certificate or certificates representing
shares of Class B Common Stock, Class C Common Stock or Membership Units, as the
case may be. Upon the date any such conversion or exchange is made or effected,
all rights of the holder of such shares of Class B Common Stock, Class C Common
Stock or Membership Units as such holder shall cease, and the person or persons
in whose name or names the certificate or certificates representing the shares
of Class A Common Stock are to be issued shall be treated for all purposes as
having become the record holder or holders of such shares of Class A Common
Stock; provided, however, that if any such surrender and payment occurs on any
date when the stock transfer books of the Corporation shall be closed, the
person or persons in whose name or names the certificate or certificates
representing shares of Class A Common Stock are to be issued shall be deemed the
record holder or holders thereof for all purposes immediately prior to the close
of business on the next succeeding day on which the stock transfer books are
open.
(G) In the event of a reclassification or
other similar transaction as a result of which the shares of Class A Common
Stock are converted into another security, then a holder of Class B Common
Stock, Class C Common Stock or Membership Units shall be entitled to receive
upon conversion or exchange the amount of such security that such holder would
have received if such conversion or exchange had occurred immediately prior to
the record date of such reclassification or other similar transaction. No
adjustments in respect of dividends shall be made upon the conversion or
exchange of any share of Class B Common Stock, Class C Common Stock or
Membership Unit; provided, however, that if a share of Class B Common Stock,
Class C Common Stock or Membership Unit shall be converted or exchanged
subsequent to the record date for the payment of a dividend or other
distribution on shares of Class B Common Stock, Class C Common Stock or
Membership Units but prior to
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such payment, then the registered holder of such share or Membership Unit at the
close of business on such record date shall be entitled to receive the dividend
or other distribution payable on such share or Membership Unit on such date
notwithstanding the conversion or exchange thereof or the default in payment of
the dividend or distribution due on such date.
(H) The Corporation covenants that it will
at all times reserve and keep available out of its authorized but unissued
shares of Class A Common Stock, solely for the purpose of issuance upon
conversion or exchange of the outstanding shares of Class B Common Stock, Class
C Common Stock or Membership Units, such number of shares of Class A Common
Stock that shall be issuable upon the conversion of all such outstanding shares
of Class B Common Stock and Class C Common Stock and the exchange of all such
outstanding Membership Units; provided that nothing contained herein shall be
construed to preclude the Corporation from satisfying its obligations in respect
of the conversion or exchange of the outstanding shares of Class B Common Stock,
Class C Common Stock or Membership Units by delivery of purchased shares of
Class A Common Stock which are held in the treasury of the Corporation. The
Corporation covenants that if any shares of Class A Common Stock require
registration with or approval of any governmental authority under any federal or
state law before such shares of Class A Common Stock may be issued upon
conversion or exchange, the Corporation will cause such shares to be duly
registered or approved, as the case may be. The Corporation will use its best
efforts to list the shares of Class A Common Stock required to be delivered upon
conversion or exchange prior to such delivery upon each national securities
exchange upon which the outstanding Class A Common Stock is listed at the time
of such delivery. The Corporation covenants that all shares of Class A Common
Stock that shall be issued upon conversion or exchange of the shares of Class B
Common Stock, Class C Common Stock or Membership Units will, upon issue, be
validly issued, fully paid and non-assessable.
(I) The issuance of certificates for shares
of Class A Common Stock upon conversion or exchange of shares of Class B Common
Stock, Class C Common Stock or Membership Units shall be made without charge to
the holders of such shares or Membership Units for any stamp or other similar
tax in respect of such issuance; provided, however, that if any such certificate
is to be issued in a name other than that of the holder of the share or shares
of Class B Common Stock or Class C Common Stock converted or the Membership
Units exchanged, then the person or persons requesting the issuance thereof
shall pay to the Corporation the amount of any tax that may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid or is not payable.
(J) Shares of Class B Common Stock or
Class C Common Stock that are converted into shares of Class A Common Stock as
provided herein shall continue to be authorized shares of Class B Common Stock
or Class C Common Stock, as the case may be, and available for reissue by the
Corporation; provided, however, that no shares of Class B
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Common Stock or Class C Common Stock shall be reissued except as expressly
permitted by Article FOURTH, Clause (b)(ii) above and Article FOURTH, Clause
(b)(iv) below.
(iv) Stock Splits. The Corporation shall not in
any manner subdivide (by any stock split, stock dividend, reclassification,
recapitalization or otherwise) or combine (by reverse stock split,
reclassification, recapitalization or otherwise) the outstanding shares of one
class of Common Stock unless the outstanding shares of all classes of Common
Stock shall be proportionately subdivided or combined. The exchange rights for
Membership Units shall be adjusted accordingly if there is: (A) any subdivision
(by any unit split, unit distribution, reclassification, recapitalization or
otherwise) or combination (by reverse unit split, reclassification,
recapitalization or otherwise) of the Membership Units that is not accompanied
by an identical subdivision or combination of the Common Stock; or (B) any
subdivision (by any stock split, stock dividend, reclassification,
recapitalization or otherwise) or combination (by reverse stock split,
reclassification, recapitalization or otherwise) of the Common Stock that is not
accompanied by an identical subdivision or combination of the Membership Units.
(v) Options, Rights or Warrants.
(A) The Corporation shall not make any
offering of options, rights or warrants to subscribe for shares of Class B
Common Stock or Class C Common Stock. If the Corporation makes an offering of
options, rights or warrants to subscribe for shares of any class or classes of
capital stock, other than Class B Common Stock or Class C Common Stock, to all
holders of a class of Common Stock, then the Corporation shall simultaneously
make an identical offering to all holders of the other classes of Common Stock
other than to any class of Common Stock the holders of which, voting as a
separate class, determine that such offering need not be made to such class. All
such options, rights or warrants offerings shall offer the respective holders of
Class A Common Stock, Class B Common Stock and Class C Common Stock the right to
subscribe at the same rate per share.
(B) Subject to Article FOURTH, Clauses
(b)(iii)(E) and (b)(v)(A) above, the Corporation shall have the power to create
and issue, whether or not in connection with the issue and sale of any shares of
stock or other securities of the Corporation, rights or options entitling the
holders thereof to purchase from the Corporation any shares of its capital stock
of any class or classes at the time authorized (other than Class B Common Stock
or Class C Common Stock), such rights or options to have such terms and
conditions, and to be evidenced by or in such instrument or instruments, as
shall be approved by the Board.
(vi) Mergers, Consolidation, Etc. In the event
that the Corporation shall enter into any consolidation, merger, combination or
other transaction in which shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then, and in
such event, the shares of each class of Common Stock shall be exchanged for or
changed into either (A) the same amount of stock, securities, cash and/or any
other
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property, as the case may be, into which or for which each share of any other
class of Common Stock is exchanged or changed; provided, however, that if shares
of Common Stock are exchanged for or changed into shares of capital stock, such
shares so exchanged for or changed into may differ to the extent and only to the
extent that the Class A Common Stock, the Class B Common Stock and the Class C
Common Stock differ as provided herein, or (B) if holders of each class of
Common Stock are to receive different distributions of stock, securities, cash
and/or any other property, an amount of stock, securities, cash and/or property
per share having a value, as determined by an independent investment banking
firm of national reputation selected by the Board, equal to the value per share
into which or for which each share of any other class of Common Stock is
exchanged or changed.
(vii) Liquidation Rights. In the event of any
dissolution, liquidation or winding-up of the affairs of the Corporation,
whether voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Corporation and after making provision for
the holders of each series of Preferred Stock, if any, the remaining assets and
funds of the Corporation, if any, shall be divided among and paid ratably to the
holders of the shares of the Class A Common Stock, the Class B Common Stock and
the Class C Common Stock treated as a single class.
(viii) No Preemptive Rights. Except as provided
in Article FOURTH, Clause (b)(v) above, the holders of shares of Common Stock
are not entitled to any preemptive right to subscribe for, purchase or receive
any part of any new or additional issue of stock of any class, whether now or
hereafter authorized, or of bonds, debentures or other securities convertible
into or exchangeable for stock.
(c) Preferred Stock.
(i) Authorization. Subject to the voting and
approval procedures set forth in the By-laws, the Board is hereby expressly
granted authority to authorize in accordance with law from time to time the
issue of one or more series of Preferred Stock and with respect to any such
series to fix by resolution or resolutions the numbers, powers, designations,
preferences and relative, participating, optional or other special rights of
such series and the qualifications, limitations or restrictions thereof,
including but without limiting the generality of the foregoing, the following:
(A) entitling the holders thereof to
cumulative, non-cumulative or partially cumulative dividends, or to no
dividends;
(B) entitling the holders thereof to receive
dividends payable on a parity with, junior to, or in preference to, the
dividends payable on any other class or series of capital stock of the
Corporation;
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(C) entitling the holders thereof to
rights upon the voluntary or involuntary liquidation, dissolution or winding up
of, or upon any other distribution of the assets of, the Corporation, on a
parity with, junior to or in preference to, the rights of any other class or
series of capital stock of the Corporation;
(D) providing for the conversion, at the
option of the holder or of the Corporation or both, of the shares of Preferred
Stock into shares of any other class or classes of capital stock of the
Corporation or of any series of the same or any other class or classes or into
property of the Corporation or into the securities or properties of any other
corporation or person, including provision for adjustment of the conversion rate
in such events as the Board shall determine, or providing for no conversion;
(E) providing for the redemption, in
whole or in part, of the shares of Preferred Stock at the option of the
Corporation or the holder thereof, in cash, bonds or other property, at such
price or prices (which amount may vary under different conditions and at
different redemption dates), within such period or periods, and under such
conditions as the Board shall so provide, including provisions for the creation
of a sinking fund for the redemption thereof, or providing for no redemption;
(F) lacking voting rights or having
limited voting rights or enjoying general, special or multiple voting rights;
and
(G) specifying the number of shares
constituting that series and the distinctive designation of that series.
All shares of any one series of Preferred Stock shall be identical in all
respects with the other shares of such series, except that shares of any one
series of Preferred Stock issued at different times may differ as to the dates
from which dividends thereon shall be cumulative. The Board may change the
powers, designation, preferences, rights, qualifications, limitations and
restrictions of, and number of shares in, any series of Preferred Stock as to
which no shares are issued and outstanding.
(ii) Dividends. Dividends on outstanding shares
of Preferred Stock shall be paid or declared and set apart for payment before
any dividends shall be paid or declared and set apart for payment on the Common
Stock with respect to the same dividend period.
(iii) Liquidation Rights. If upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, the
assets available for distribution to holders of shares of Preferred Stock of all
series shall be insufficient to pay such holders the full preferential amount to
which they are entitled, then such assets shall be distributed in accordance
with the respective priorities and preferential amounts (including unpaid
cumulative dividends, if
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any, and interest thereon, if any) payable with respect thereto, and among
shares of any series of Preferred Stock, ratably among the shares of such
series.
FIFTH: The duration of this Corporation is to be perpetual.
SIXTH: (a) Classification of Directors. Subject to Article FOURTH,
Clause (b)(iii)(D) and (E) above and Article SIXTH, Clause (b) below, the
directors, other than those who may be elected by the holders of any series of
Preferred Stock, shall be classified, with respect to the time for which they
severally hold office, into three classes of three (3) directors each, one class
initially to be elected for a term expiring at the annual meeting of
stockholders to be held in 2000, another class initially to be elected for a
term expiring at the annual meeting of stockholders to be held in 2001 and
another class initially to be elected for a term expiring at the annual meeting
of stockholders to be held in 2002, with the members of each class to hold
office until their successors have been elected and qualified. Subject to
Article FOURTH, Clause (b)(iii)(D) and (E) above and Article SIXTH, Clause (b)
below, each class of three (3) directors shall consist of one (1) Class A
Director, one (1) Class B Director and one (1) Class C Director. At each annual
meeting of stockholders, the successors of the class of directors whose term
expires at that meeting shall be elected to hold office for a term expiring at
the annual meeting of stockholders held in the third (3rd) year following the
year of their election. Directors need not be stockholders of the Corporation.
(b) Reduction in Number. (i) At any time that the holders
of Class B Common Stock transfer (other than to Parent Entities) in the
aggregate (i.e. together with all other shares of Common Stock and/or Membership
Units previously transferred by holders of Class B Common Stock other than to
Parent Entities) a number of shares of Common Stock and/or Membership Units
constituting an aggregate of more than ten percent (10%) of the number of
outstanding Membership Units (a "Class B Triggering Event"), then the number of
Class B Directors (and the resulting size of the Board) shall be reduced from
three (3) to two (2) by the automatic resignation of one of the Class B
Directors (such resigning Class B Director to be selected by the Class B
Directors within ten (10) days prior to the occurrence of the Class B Triggering
Event). In the absence of such selection within said ten-day period, the Class C
Directors shall select the Class B Director who shall be deemed to have
resigned. In calculating whether the Class B Triggering Event has occurred, each
time a transfer of shares of Common Stock and/or Membership Units occurs (other
than to a Parent Entity), a calculation shall be made with respect to the
percentage that such number of shares and/or units transferred bears to the
number of then outstanding Membership Units. This percentage shall be added to
the aggregate of such percentages calculated at the respective times of all
prior transfers by the holders of the Class B Common Stock (other than to a
Parent Entity).
(ii) At any time that the holders of Class
C Common Stock transfer (other than to Parent Entities) in the aggregate (i.e.
together with all other shares of Common Stock and/or Membership Units
previously transferred by holders of Class C Common
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Stock other than to Parent Entities) a number of shares of Common Stock and/or
Membership Units constituting an aggregate of more than ten percent (10%) of the
number of outstanding Membership Units (a "Class C Triggering Event"), then the
number of Class C Directors (and the resulting size of the Board) shall be
reduced from three (3) to two (2) by the automatic resignation of one of the
Class C Directors (such resigning Class C Director to be selected by the Class C
Directors within ten (10) days prior to the occurrence of the Class C Triggering
Event). In the absence of such selection within said ten-day period, the Class B
Directors shall select the Class C Director who shall be deemed to have
resigned. In calculating whether the Class C Triggering Event has occurred, each
time a transfer of shares of Common Stock and/or Membership Units occurs (other
than to a Parent Entity), a calculation shall be made with respect to the
percentage that such number of shares and/or units transferred bears to the
number of then outstanding Membership Units. This percentage shall be added to
the aggregate of such percentages calculated at the respective times of all
prior transfers by the holders of the Class C Common Stock (other than to a
Parent Entity).
(c) Vacancies in the Board. Except as provided in Article
FOURTH, Clause (b)(iii)(D) and (E) and Article SIXTH, Clause (b) above, any
vacancies resulting from death, resignation, disqualification, removal or other
cause with respect to a Class A Director shall be filled by the affirmative vote
of the remaining directors then in office, even if less than a quorum of the
Board. Any vacancies resulting from death, resignation, disqualification,
removal or other cause with respect to a Class B Director shall be filled only
by the affirmative vote of the remaining Class B Directors then in office, even
if less than a quorum of the Board, or by a sole remaining Class B Director. In
the absence of a sole remaining Class B Director, such vacancies shall be filled
by a majority vote of the holders of the Class B Common Stock, voting separately
as a class. Any vacancies resulting from death, resignation, disqualification,
removal or other cause with respect to a Class C Director shall be filled only
by the affirmative vote of a majority of the remaining Class C Directors then in
office, even if less than a quorum of the Board, or by a sole remaining Class C
Director. In the absence of a sole remaining Class C Director, such vacancies
shall be filled by a majority vote of the holders of the Class C Common Stock,
voting separately as a class. Any director elected in accordance with this
Clause (c) shall hold office until the annual meeting of stockholders at which
the term of office of the class to which such director has been elected expires,
and until such director's successor shall have been duly elected and qualified.
(d) Removal of Directors. (i) Subject to Article SIXTH, Clause
(d)(ii) below, any director may be removed from office only for cause by the
affirmative vote of the holders of at least seventy percent (70%) of the voting
power of the Voting Stock, voting together as a single class.
(ii) Notwithstanding the foregoing, (i) any Class
A Director may be removed at any time , with or without cause, by majority vote
of the holders of the Voting Stock, voting together as one class, (ii) any Class
B Director may be removed at any time, with or
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without cause, by majority vote of the holders of the Class B Common Stock,
voting separately as a class, and (iii) any Class C Director may be removed at
any time, with or without cause, by majority vote of the holders of the Class C
Common Stock, voting separately as a class.
SEVENTH: The affirmative vote of the holders of at least seventy
percent (70%) of the issued and outstanding Voting Stock, voting as one class,
shall be required to amend or repeal this Certificate of Incorporation;
provided, however, that no such amendment shall adversely affect the rights of
the holders of Class A Common Stock, Class B Common Stock or Class C Common
Stock, respectively, unless the holders of such Class A Common Stock, Class B
Common Stock or Class C Common Stock, as the case may be, voting separately as a
class, shall by majority vote approve such amendment. Subject to Section 4.1 of
the By-laws, the Board may from time to time make, amend, supplement or repeal
the By-laws by vote of a majority of the Board; provided, however, that the
stockholders may change or amend or repeal any provision of the By-laws by each
of: (i) the affirmative vote of the holders of a majority of the Voting Stock,
voting as one class; (ii) if a Class B Director is then entitled to be a member
of the Special Committee, by the affirmative vote of the holders of a majority
of the Class B Common Stock, voting separately as a class; and (iii) if a Class
C Director is then entitled to be a member of the Special Committee, by the
affirmative vote of the holders of a majority of the Class C Common Stock,
voting separately as a class.
EIGHTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, provided that such action is
approved in the manner, and otherwise complies with the requirements, set forth
in this Certificate of Incorporation, and all rights conferred upon stockholders
herein are granted subject to this reservation.
TENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability: (i) for any breach of the director's
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 law; (iii) under Section 174 of the GCL; or (iv) for any
transaction from which the director derived an improper personal benefit. If the
GCL is amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the GCL, as so amended. Any repeal or modification of this provision shall be
prospective only and shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
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ELEVENTH: The Corporation, to the fullest extent permitted by Section
145 of the GCL, as the same may be amended and supplemented, may indemnify any
and all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters referred
to in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person."
3. This Amended and Restated Certificate of Incorporation has been duly
adopted by the Board of Directors of the Corporation and consented to in writing
and authorized by the holders of all of the issued and outstanding stock
entitled to vote thereon.
4. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the applicable provisions of Sections 228 and 242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, barnesandnoble.com inc. has caused this Amended and
Restated Certificate of Incorporation to be signed and attested as of
the ____ day of _________, 1999.
barnesandnoble.com inc.
By:______________________________
Name:
Title:
Attest:
By:_______________________
Name:
Title: