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EXHIBIT 3.01
EXHIBIT C
Form of
CERTIFICATE OF DETERMINATION
OF
VERSANT CORPORATION
The undersigned certify that:
I. They are the President and Secretary, respectively, of Versant Corporation, a
California corporation (the "COMPANY").
II. Pursuant to an action by unanimous written consent of the Board of Directors
of the Company adopted and effective as of July 12, 1999, the following
resolutions were duly adopted:
"WHEREAS, Article III of the Articles of Incorporation of Versant
Corporation, a California corporation (the "COMPANY") authorizes a class of
shares designated as Preferred Stock, consisting of Three Million (3,000,000)
shares and further authorizes the Board of Directors from time to time to
determine or alter the rights, preferences, privileges, and restrictions granted
to, or imposed upon, any wholly unissued series of Preferred Stock, and to fix
the number of shares of any series of Preferred Stock and the designation of any
such series of Preferred Stock; NOW, THEREFORE BE IT RESOLVED, that the Board of
Directors does hereby designate, and provide for the issuance of, a Series A
Preferred Stock of the Company, and does hereby fix and determine the rights,
preferences, privileges of, and restriction upon, and other matters relating to,
such series, as follows:
(A) The authorized number of shares of Preferred Stock of the Company is
Three Million (3,000,000) shares, none of which are outstanding. Two Million
(2,000,000) of all shares of Preferred Stock are hereby designated as Series A
Preferred Stock, no shares of which series have been issued.
(B) A statement of the preferences, privileges and restrictions granted
to or imposed upon the Series A Preferred Stock and the holders thereof is as
follows:
1. DEFINITIONS. For purposes of this statement of the preferences,
privileges and restrictions granted to or imposed upon the Series A Preferred
Stock, the following definitions shall apply:
1.1 "Board" shall mean the Board of Directors of the Company.
1.2 "Company" shall mean this corporation.
1.3 "Common Stock" shall mean the Common Stock of the Company.
1.4 "Common Stock Dividend" shall mean a stock dividend declared
and paid on the Common Stock that is payable in shares of Common Stock.
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1.5 "Dividend Rate" shall mean eight percent per share per annum
for the Series A Preferred Stock.
1.6 "Original Issue Date" shall mean the date on which the first
share of Series A Preferred Stock is issued by the Company.
1.7 "Original Issue Price" shall mean $4.26 per share for the
Series A Preferred Stock.
1.8 "Permitted Repurchases" shall mean the repurchase by the
Company of shares of Common Stock held by employees, officers, directors,
consultants, independent contractors, advisors, or other persons performing
services for the Company or a subsidiary that are subject to restricted stock
purchase agreements or stock option exercise agreements under which the Company
has the option but not the obligation to repurchase such shares: (i) at cost,
upon the occurrence of certain events, such as the termination of employment or
services; or (ii) at any price pursuant to the Company's exercise of a right of
first refusal to repurchase such shares.
1.9 "Premium" shall mean an amount equal to the Original Issue
Price times (i) 50% percent prior to the first anniversary of Original Issue
Date; (ii) 150% after the second anniversary of the Original Issue Date; and
(iii) 100% from the first anniversary to the second anniversary.
1.10 "Price Contingency" shall mean the closing price of the
Company's Common Stock as reported by Nasdaq or other exchange upon which it is
traded has exceeded twelve dollars per share (subject to adjustment in the same
manner as the Conversion Price as provided in Section 5.4) for forty-five
consecutive trading days.
1.11 "Subsidiary" shall mean any corporation of which at least
fifty percent (50%) of the outstanding voting stock is at the time owned
directly or indirectly by the Company or by one or more of such subsidiary
corporations.
2. DIVIDEND RIGHTS.
2.1 Series A Preferred Stock. Subject to the rights of Preferred Stock
that may be determined by the Board pursuant to Article III of the Company's
Articles of Incorporation in the future, in each calendar year, the holders of
the then outstanding Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board, out of any funds and assets of the
Company legally available therefor, noncumulative dividends at the annual
Dividend Rate for the Series A Preferred Stock, prior and in preference to the
payment of any dividends on the Common Stock in such calendar year (other than a
Common Stock Dividend). No dividends (other than a Common Stock Dividend) shall
be paid, with respect to the Common Stock during any calendar year unless
dividends in the total amount of the annual Dividend Rate for the Series A
Preferred Stock shall have first been paid or declared and set apart for payment
to the holders of the Series A Preferred Stock during that calendar year;
provided, however, that this restriction shall not apply to Permitted
Repurchases. Dividends on the Series A Preferred Stock shall not be mandatory or
cumulative, and no rights or interest shall accrue to the holders of the Series
A Preferred Stock by reason of the fact that the Company shall fail to declare
or pay dividends on the Series A Preferred Stock in the amount of the annual
Dividend Rate for the Series A Preferred Stock or in any other amount in any
calendar year or any fiscal year of the Company,
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whether or not the earnings of the Company in any calendar year or fiscal year
were sufficient to pay such dividends in whole or in part.
2.2 Participation Rights. Unless full dividends of the Series A
Preferred Stock for the current calendar year shall have been paid or declared
and a sum sufficient for the payment thereof set apart pursuant to subsection
2.1 above, no dividend whatsoever (other than a Common Stock Dividend) shall be
paid or declared and no distribution shall be made, on the Common Stock except
as set forth in the balance of this subsection 2.2. If, after dividends in the
full preferential amount specified in this Section 2 for the Series A Preferred
Stock have been paid or declared and set apart in any calendar year of the
Company, the Board shall declare additional dividends out of funds legally
available therefor in that calendar year, then, subject to the rights of
Preferred Stock that may be determined by the Board pursuant to Article III of
the Company's Articles of Incorporation in the future, such additional dividends
shall be declared pro rata on the Common Stock and the Series A Preferred Stock
on a pari passu basis according to the number of shares of Common Stock held by
such holders, where each holder of shares of Series A Preferred Stock is to be
treated for this purpose as holding the greatest whole number of shares of
Common Stock then issuable upon conversion of all shares of Series A Preferred
Stock held by such holder pursuant to Section 5.
2.3 Non-Cash Dividends. Whenever a dividend provided for in this
Section 2 shall be payable in property other than cash, the value of such
dividend shall be deemed to be the fair market value of such property as
determined in good faith by the Board.
2.4 Payment on Conversion. If the Company shall have declared and
unpaid dividends with respect to any Series A Preferred Stock, then immediately
prior to, and upon a conversion of any of the Series A Preferred Stock as
provided in Section 5, the Company shall, subject to the legal availability of
funds and assets therefor, pay in cash to the holder of the shares of Series A
Preferred Stock being converted the full amount of any dividends declared and
unpaid on such shares. If the Company shall not have legally available funds and
assets to make lawful payment of such declared and unpaid dividends, the Company
shall, in lieu of making a full cash payment of all such declared and unpaid
dividends, make payment thereof in cash to the extent the Company has legally
available funds and assets therefor, and shall pay the balance of the declared
and unpaid dividends in whole shares of Common Stock, valued at the fair market
value as determined in good faith by the Board, plus cash in lieu of any
fractional share.
3. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the funds and
assets of the Company that may be legally distributed to the Company's
shareholders (the "Available Funds and Assets") shall be distributed to
shareholders in the following manner:
3.1 Series A Preferred Stock. Subject to the rights of Preferred
Stock that may be determined by the Board pursuant to Article III of the
Company's Articles of Incorporation in the future, the holders of each share of
Series A Preferred Stock then outstanding shall be entitled to be paid, out of
the Available Funds and Assets, and prior and in preference to any payment or
distribution (or any setting apart of any payment or distribution) of any
Available Funds and Assets on any shares of Common Stock, an amount per share
equal to the Original Issue Price of the Series A Preferred Stock
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plus all declared but unpaid dividends on the Series A Preferred Stock plus the
Premium. If upon any liquidation, dissolution or winding up of the Company, and
subject to the rights of Preferred Stock that may be determined by the Board
pursuant to Article III of the Company's Articles of Incorporation in the
future, the Available Funds and Assets shall be insufficient to permit the
payment to holders of the Series A Preferred Stock of their full preferential
amount described in this subsection, then all of the remaining Available Funds
and Assets shall be distributed among the holders of the then outstanding Series
A Preferred Stock pro rata, according to the number of outstanding shares of
Series A Preferred Stock held by each holder thereof.
3.2 Remaining Assets. If there are any Available Funds and Assets
remaining after the payment or distribution (or the setting aside for payment or
distribution) to the holders of the Series A Preferred Stock of their full
preferential amounts described above in this Section 3, then, subject to the
rights of Preferred Stock that may be determined by the Board pursuant to
Article III of the Company's Articles of Incorporation in the future all such
remaining Available Funds and Assets shall be distributed among the holders of
the then outstanding Common Stock and the Series A Preferred Stock pro rata
according to the number of shares of Common Stock held by each holder thereof
(where, for this purpose, the holders of the Series A Preferred Stock will be
deemed to hold the greatest whole number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock.)
3.3 Merger or Sale of Assets. The following shall each be deemed
to be a liquidation, dissolution or winding up of the Company as those terms are
used in this Section 3: (i) a consolidation or merger of the Company with or
into any other corporation or corporations in which the holders of the Company's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock representing a
majority of the voting power of the surviving corporation of such consolidation
or merger; or (ii) a sale of all or substantially all of the assets of the
Company.
3.4 Non-Cash Consideration. If any assets of the Company
distributed to shareholders in connection with any liquidation, dissolution, or
winding up of the Company are other than cash, then the value of such assets
shall be their fair market value as determined by the Board, except that any
securities to be distributed to shareholders in a liquidation, dissolution, or
winding up of the Company shall be valued as follows:
(a) The method of valuation of securities not subject to
investment letter or other similar restrictions on free marketability shall be
as follows:
(i) if the securities are then traded on a
national securities exchange or the Nasdaq National Market (or a similar
national quotation system), then the value shall be deemed to be the average of
the closing prices of the securities on such exchange or system over the 30-day
period ending three (3) days prior to the distribution; and
(ii) if there is no active public market, then
the value shall be the fair market value thereof, as determined in good faith by
the Board of Directors of the Company.
(b) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be to make
an appropriate discount from the market value
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determined as above in subparagraphs (a)(i),(ii) or (iii) of this subsection to
reflect the approximate fair market value thereof, as determined in good faith
by the Board.
4. VOTING RIGHTS.
4.1 Common Stock. Each holder of shares of Common Stock shall be
entitled to one (1) vote for each share thereof held.
4.2 Series A Preferred Stock. Each holder of shares of Series A
Preferred Stock shall be entitled to the largest whole number of votes equal to
one half of the number of shares of Common Stock into which such shares of
Series A Preferred Stock could be converted pursuant to the provisions of
Section 5 below at the record date for the determination of the shareholders
entitled to vote on such matters or, if no such record date is established, the
date such vote is taken or any written consent of shareholders is solicited.
4.3 General. Subject to the foregoing provisions of this Section
4, each holder of Series A Preferred Stock shall have full voting rights and
powers equal to the voting rights and powers of the holders of Common Stock, and
shall be entitled to notice of any shareholders' meeting in accordance with the
bylaws of the Company (as in effect at the time in question) and applicable law,
and shall be entitled to vote, together with the holders of Common Stock, with
respect to any question upon which holders of Common Stock have the right to
vote, except as may be otherwise provided by applicable law. Except as otherwise
expressly provided herein or as required by law, the holders of Series A
Preferred Stock and the holders of Common Stock shall vote together and not as
separate classes.
5. CONVERSION RIGHTS. The outstanding shares of Series A Preferred Stock
shall be convertible into Common Stock as follows:
5.1 Optional Conversion.
(a) At the option of the holder thereof, each share of
Series A Preferred Stock shall be convertible into fully paid and nonassessable
shares of Common Stock as provided herein.
(b) Each holder of Series A Preferred Stock who elects
to convert the same into shares of Common Stock shall surrender the certificate
or certificates therefor, duly endorsed, at the office of the Company or any
transfer agent for the Series A Preferred Stock or Common Stock, and shall give
written notice to the Company at such office that such holder elects to convert
the same and shall state therein the number of shares of Series A Preferred
Stock being converted. Thereupon the Company shall promptly issue and deliver at
such office to such holder a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled upon such conversion.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the certificate or certificates
representing the shares of Series A Preferred Stock to be converted, and the
person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
5.2 Automatic Conversion.
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(a) Each share of Series A Preferred Stock shall
automatically be converted into fully paid and nonassessable shares of Common
Stock (i) upon satisfaction of the Price Contingency or (ii) upon the Company's
receipt of the written consent of the holders of a majority of the then
outstanding shares of Series A Preferred Stock.
(b) Upon the occurrence of any event specified in
subparagraph 5.2(a) above, the outstanding shares of Series A Preferred Stock
shall be converted into Common Stock automatically without the need for any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Company or its transfer agent;
provided, however, that the Company shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificates evidencing such shares of Series A Preferred Stock are either
delivered to the Company or its transfer agent as provided below, or the holder
notifies the Company or its transfer agent that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to the Company
to indemnify the Company from any loss incurred by it in connection with such
certificates. Upon the occurrence of such automatic conversion of the Series A
Preferred Stock, the holders of Series A Preferred Stock shall surrender the
certificates representing such shares at the office of the Company or any
transfer agent for the Series A Preferred Stock or Common Stock. Thereupon,
there shall be issued and delivered to such holder promptly at such office and
in its name as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock into which
the shares of Series A Preferred Stock surrendered were convertible on the date
on which such automatic conversion occurred.
5.3 Conversion Price. Each share of Series A Preferred Stock
shall be convertible in accordance with subsection 5.1 or subsection 5.2 above
into the number of shares of Common Stock which results from dividing the
Original Issue Price for such series of Series A Preferred Stock by the
conversion price for such series of Series A Preferred Stock that is in effect
at the time of conversion (the "Conversion Price"). The initial Conversion Price
for the Series A Preferred Stock shall be the Original Issue Price for the
Series A Preferred Stock divided by two. The Conversion Price shall be subject
to adjustment from time to time as provided below. Following each adjustment of
the Conversion Price, such adjusted Conversion Price shall remain in effect
until a further adjustment of such Conversion Price hereunder.
5.4 Adjustment Upon Common Stock Event. Upon the happening of a
Common Stock Event (as hereinafter defined), the Conversion Price of the Series
A Preferred Stock shall, simultaneously with the happening of such Common Stock
Event, be adjusted by multiplying the Conversion Price of such series of Series
A Preferred Stock in effect immediately prior to such Common Stock Event by a
fraction, (i) the numerator of which shall be the number of shares of Common
Stock issued and outstanding immediately prior to such Common Stock Event, and
(ii) the denominator of which shall be the number of shares of Common Stock
issued and outstanding immediately after such Common Stock Event, and the
product so obtained shall thereafter be the Conversion Price for the Series A
Preferred Stock. The Conversion Price for the Series A Preferred Stock shall be
readjusted in the same manner upon the happening of each subsequent Common Stock
Event. As used herein, the term "Common Stock Event" shall mean (i) the issue by
the Company of additional shares of Common Stock as a dividend on outstanding
Common Stock, (ii) a subdivision of the outstanding shares of Common
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Stock into a greater number of shares of Common Stock, or (iii) a combination of
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock.
5.5 Adjustments for Other Dividends and Distributions. If at any
time or from time to time after the Original Issue Date the Company pays a
dividend or makes another distribution to the holders of the Common Stock
payable in securities of the Company other than shares of Common Stock, then in
each such event provision shall be made so that the holders of the Series A
Preferred Stock shall receive upon conversion thereof, in addition to the number
of shares of Common Stock receivable upon conversion thereof, the amount of
securities of the Company which they would have received had their Series A
Preferred Stock been converted into Common Stock on the date of such event (or
such record date, as applicable) and had they thereafter, during the period from
the date of such event (or such record date, as applicable) to and including the
conversion date, retained such securities receivable by them as aforesaid during
such period, subject to all other adjustments called for during such period
under this Section 5 with respect to the rights of the holders of the Series A
Preferred Stock or with respect to such other securities by their terms.
5.6 Adjustment for Reclassification, Exchange and Substitution.
If at any time or from time to time after the Original Issue Date the Common
Stock issuable upon the conversion of the Series A Preferred Stock is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than by a
Common Stock Event or a stock dividend, reorganization, merger, consolidation or
sale of assets provided for elsewhere in this Section 5), then in any such event
each holder of Series A Preferred Stock shall have the right thereafter to
convert such stock into the kind and amount of stock and other securities and
property receivable upon such recapitalization, reclassification or other change
by holders of the number of shares of Common Stock into which such shares of
Series A Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
5.7 Certificate of Adjustment. In each case of an adjustment or
readjustment of the Conversion Price for a series of Series A Preferred Stock,
the Company, at its expense, shall cause its Chief Financial Officer to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall send
such certificate by Federal Express or other recognized international courier
service to each registered holder of the Series A Preferred Stock at the
holder's address as shown in the Company's stock record books.
5.8 Fractional Shares. No fractional shares of Common Stock shall
be issued upon any conversion of Series A Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the Company
shall pay the holder cash equal to the product of such fraction multiplied by
the Common Stock's fair market value as determined in good faith by the Board as
of the date of conversion.
5.9 Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
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outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose. If any shares of Common Stock reserved for the purpose of conversion of
shares of Series A Preferred Stock require registration, qualification or
listing with, or approval of, any governmental authority, stock exchange or
other regulatory body under any federal or state law or regulation or otherwise
before such shares may be validly issued or delivered upon conversion, the
Company will, in good faith, at its own expense and as expeditiously as
possible, endeavor to secure such registration, qualification, listing or
approval, as the case may be.
5.10 Notices. Any notice required by the provisions of this
Section 5 to be given to the holders of shares of the Series A Preferred Stock
shall be deemed given upon the earlier of actual receipt or three days after
being sent by Federal Express or other recognized international courier
service to each holder of record at the address of such holder appearing on the
books of the Company.
5.11 No Impairment. The Company shall not avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed
hereunder by the Company, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Series A Preferred
Stock against impairment.
5.12 Minimum Adjustment. No adjustment to the Conversion Price of
a series of Series A Preferred Stock shall be made in an amount less than
Three-Tenths of One Cent ($0.003) per share (subject to appropriate adjustment
for stock splits and stock dividends) and provided that at such time as events
causing adjustments accumulating One Cent ($0.01) or more have occurred
adjustment to the Conversion Price of each series of Series A Preferred Stock
shall be made.
6. RESTRICTIONS AND LIMITATIONS
So long as any shares of Series A Preferred Stock remain outstanding,
the Company shall not, without the consent of the holders of a majority of the
Series A Preferred Stock then outstanding, voting as a separate class:
(i) amend or change the rights, preferences, privileges or the
restrictions of the Series A Preferred Stock;
(ii) create any class of stock having rights, preferences or
privileges superior to the Series A Preferred Stock or increase
the rights preferences or privileges or the number of authorized
shares of any class having rights, preferences or privileges
superior to or on a parity with the Series A Preferred Stock;
(iii) reclassify any outstanding shares of securities of the Company
into shares having rights, preferences or privileges senior to
the preferences of the Series A Preferred Stock;
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(iv) merge or consolidate with or into one or more other
corporations in which the shareholders of the Company
after such merger or consolidation hold stock
representing less than a majority of the voting power of
the outstanding stock of the surviving corporation; or
(v) sell all or substantially all of the Company's assets in
a single transaction or series of related transactions.
7. NO REISSUANCE OF PREFERRED STOCK. No share or shares of Series A
Preferred Stock acquired by the Company by reason of purchase, conversion or
otherwise shall be reissued, and all such shares shall be canceled, retired and
eliminated from the shares which the Company shall be authorized to issue.
8. RESERVATION. The Board reserves all rights under Article III of the
Company's Articles of Incorporation to from time to time to determine or alter
the rights, preferences, privileges, and restrictions granted to, or imposed
upon, any wholly unissued series of Preferred Stock, to fix the number of shares
of any series of Preferred Stock and the designation of any such series of
Preferred Stock, and to reduce the number of shares issuable under any series of
Preferred Stock to a number not less than the number of shares previously issued
under such series."
III. The authorized number of shares of Preferred Stock of the Company is Three
Million (3,000,000) shares, none of which have been issued. The number of shares
of Preferred Stock to constitute the Series A Preferred Stock is Two Million
(2,000,000) shares, none of which series have been issued. The Board reserves
all rights under Article III of the Company's Articles of Incorporation to from
time to time to determine or alter the rights, preferences, privileges, and
restrictions granted to, or imposed upon, any wholly unissued series of
Preferred Stock, to fix the number of shares of any series of Preferred Stock
and the designation of any such series of Preferred Stock, and to reduce the
number of shares issuable under any series of Preferred Stock to a number not
less than the number of shares previously issued under such series.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this Certificate of Determination are
true and correct of our own knowledge.
Dated: ___________________, 1999
-----------------------------------------
Nick Ordon, President and Chief Executive
Officer
-----------------------------------------
Gary Rhea, Secretary and Chief Financial
Officer
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