EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF PLACEWARE, INC.
a Delaware Corporation
The undersigned, Barry James Folsom and Kevin R. Evans hereby certify
that:
ONE: They are the duly elected and acting President and Secretary,
respectively, of said corporation.
TWO: The name of the corporation is PlaceWare, Inc. and that the
corporation was originally incorporated on October 24, 1996, under the name
Coyote Hill Systems, Inc., pursuant to the Delaware General Corporation Law.
THREE: The Certificate of Incorporation of said corporation shall be
amended and restated to read in full as follows:
ARTICLE I
The name of this corporation is PlaceWare, Inc.
ARTICLE II
The address of the registered office of this corporation in the State
of Delaware is 15 East North Street, in the city of Dover, 19901, County of
Kent. The name of its registered agent at such address is Incorporating
Services, Ltd.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV
A. Classes of Stock. This corporation is authorized to issue two
-- ----------------
classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares that this corporation is authorized to issue
is forty-seven million eight hundred five thousand (47,805,000) shares. Thirty
million (30,000,000) shares shall be Common Stock, par value $.0001 per share,
and seventeen million eight hundred five thousand (17,805,000) shares shall be
Preferred Stock, par value $.0001 per share.
B. Rights, Preferences and Restrictions of Preferred Stock. The
-- -------------------------------------------------------
Preferred Stock authorized by this Restated Certificate of Incorporation may be
issued from time to time in one or more series. The rights, preferences,
privileges, and restrictions granted to and imposed on the Series A Preferred
Stock, which series shall consist of 1,705,000 shares (the "Series A Preferred
Stock"), the Series B Preferred Stock, which series shall consist of 5,200,000
shares
(the "Series B Preferred Stock"), the Series C Preferred Stock, which series
shall consist of 5,400,000 shares (the "Series C Preferred Stock"), and the
Series D Preferred Stock, which series will consist of 5,500,000 shares (the
"Series D Preferred Stock"), are as set forth below in this Article IV(B).
1. Dividend Provisions. Subject to the rights of series of
-------------------
Preferred Stock that may from time to time come into existence, the holders of
shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock shall be entitled to receive dividends, out
of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of this
corporation) on the Common Stock of this corporation, at the rate of $.08 per
share per annum for the Series A Preferred Stock, $.16 per share per annum for
the Series B Preferred Stock, $.304 per share per annum for the Series C
Preferred Stock and $0.40 per share per annum for the Series D Preferred Stock
(such prices per share to be appropriately adjusted to reflect any subsequent
stock dividends, combinations, splits, recapitalizations and the like with
respect to the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock) or, if greater (as determined on a
per annum basis and an as converted basis for the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock), an amount equal to that paid on any other outstanding shares of this
corporation, payable quarterly when, as and if declared by the Board of
Directors. Such dividends shall not be cumulative.
2. Liquidation Preference.
----------------------
(a) In the event of any liquidation, dissolution or winding up of
this corporation, either voluntary or involuntary, subject to the rights of
series of Preferred Stock that may from time to time come into existence, the
holders of Series D Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of this corporation to the
holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Common Stock by reason of their ownership thereof, an amount
per share equal to $1.20 for each outstanding share of Series D Preferred Stock
(such price per share to be appropriately adjusted to reflect any subsequent
stock dividends, combinations, splits, recapitalizations and the like with
respect to the Series D Preferred Stock).
(b) After payment of the amount set forth in 2(a) above, the holders
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of this corporation to the
holders of Common Stock by reason of their ownership thereof, an amount per
share equal to (i) $1.00 for each outstanding share of Series A Preferred Stock
(the "Original Series A Issue Price") (such price per share to be appropriately
adjusted to reflect any subsequent stock dividends, combinations, splits,
recapitalizations and the like with respect to the Series A Preferred Stock)
plus any declared but unpaid dividends on such share, (ii) $2.00 for each
outstanding share of Series B Preferred Stock (the "Original Series B Issue
Price") (such price per share to be appropriately adjusted to reflect any
subsequent stock dividends, combinations, splits, recapitalizations and the like
with respect to the Series B
2
Preferred Stock) plus any declared but unpaid dividends on such share, (iii)
$3.80 for each outstanding share of Series C Preferred Stock (the "Original
Series C Issue Price") (such price per share to be appropriately adjusted to
reflect any subsequent stock dividends, combinations, splits, recapitalizations
and the like with respect to the Series C Preferred Stock) plus any declared but
unpaid dividends on such share and (iv) $3.80 for each outstanding share of
Series D Preferred Stock (such $3.80 combined with the $1.20 paid pursuant to
2(a) above equal to the "Original Series D Issue Price") (such price per share
to be appropriately adjusted to reflect any subsequent stock dividends,
combinations, splits, recapitalizations and the like with respect to the Series
D Preferred Stock) plus any declared but unpaid dividends on such share. If upon
the occurrence of such event, the assets and funds thus distributed among the
holders of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then,
subject to the rights of series of Preferred Stock that may from time to time
come into existence, the entire assets and funds of this corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock in proportion to the preferential amount each such
holder is otherwise entitled to receive.
(c) Upon the completion of the distribution required by subsections
(a) and (b) of this Section 2 and any other distribution that may be required
with respect to series of Preferred Stock that may from time to time come into
existence, the remaining assets of this corporation available for distribution
to stockholders shall be distributed among the holders of Series C Preferred
Stock, Series D Preferred Stock and Common Stock pro rata based on the number of
shares of Common Stock held by each (assuming full conversion of all such Series
C Preferred Stock and Series D Preferred Stock) until (i) with respect to the
holders of Series C Preferred Stock, such holders shall have received an
aggregate of $7.60 per share (as adjusted for any stock splits, stock dividends,
recapitalizations or the like) (including amounts paid pursuant to subsection
(b) of this Section 2) and (ii) with respect to the holders of Series D
Preferred Stock, such holders shall have received an aggregate $10.00 per share
(as adjusted for any stock splits, stock dividends, recapitalizations or the
like) (including amounts paid pursuant to subsections (a) and (b) of this
Section 2); thereafter, subject to the rights of series of Preferred Stock that
may from time to time come into existence, if assets remain in this corporation,
the holders of the Common Stock of this corporation shall receive all of the
remaining assets of this corporation pro rata based on the number of shares of
Common Stock held by each.
(d) (i) For purposes of this Section 2, a liquidation, dissolution
or winding up of this corporation shall be deemed to be occasioned by, or to
include, (A) the acquisition of this corporation by another entity by means of
any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) that results in the
transfer of fifty percent (50%) or more of the outstanding voting power of this
corporation; or (B) a sale, conveyance or other disposition of all or
substantially all of the assets of this corporation.
(ii) In any of such events, if the consideration received by this
corporation is other than cash, its value will be deemed its fair market value.
Any securities shall be valued as follows:
3
(A) Securities not subject to investment letter or other similar
restrictions on free marketability covered by (B) below:
(1) If traded on a securities exchange or through the
Nasdaq National Market System, the value shall be deemed to be the average of
the closing prices of the securities on such exchange or system over the thirty
(30) day period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days prior to the
closing; and
(3) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by this corporation and
the holders of at least a majority of the voting power of all then outstanding
shares of Preferred Stock.
(B) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as above in (A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by this corporation and the holders
of at least a majority of the voting power of all then outstanding shares of
such Preferred Stock.
(iii) In the event the requirements of this subsection 2(d) are not
complied this corporation shall forthwith either:
(A) cause such closing to be postponed until such time as the
requirements of this Section 2 have been complied with; or
(B) cancel such transaction, in which event the rights, preferences
and privileges of the holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall
revert to and be the same as such rights, preferences and privileges existing
immediately prior to the date of the first notice referred to in subsection
2(d)(iv) hereof.
(iv) This corporation shall give each holder of record of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock written notice of such impending transaction not later than
twenty (20) days prior to the stockholders' meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this Section 2, and this corporation shall thereafter give such holders prompt
notice of any material changes. The
4
transaction shall in no event take place sooner than twenty (20) days after this
corporation has given the first notice provided for herein or sooner than ten
(10) days after this corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the written consent of the holders of Preferred Stock that are entitled to such
notice rights or similar notice rights and that represent at least a majority of
the voting power of all then outstanding shares of such Preferred Stock.
3. Redemption. The Series A Preferred Stock, the Series B Preferred
----------
Stock, Series C Preferred Stock and Series D Preferred Stock are not redeemable.
4. Conversion. The holders of Preferred Stock shall have conversion
----------
rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock, Series
----------------
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance of such share, at the office of this corporation or any transfer
agent for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined (i) for the Series A Preferred Stock by dividing
the Original Series A Issue Price by the Series A Conversion Price applicable to
such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion, (ii) for the Series B Preferred Stock
by dividing the Original Series B Issue Price by the Series B Conversion Price
applicable to such share, determined as hereafter provided, in effect on the
date the certificate is surrendered for conversion, (iii) for the Series C
Preferred Stock by dividing the Original Series C Issue Price by the Series C
Conversion Price applicable to such share, determined as hereafter provided, in
effect on the date the certificate is surrendered for conversion, and (iv) for
the Series D Preferred Stock by dividing the Original Series D Issue Price by
the Series D Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
The initial Conversion Price per share for shares of Series A Preferred Stock
shall be the Original Series A Issue Price; provided, however, that the
Conversion Price for the Series A Preferred Stock shall be subject to adjustment
as set forth in subsection 4(d). The initial Conversion Price per share of
Series B Preferred Stock shall be the Original Series B Issue Price; provided,
however, that the Conversion Price for the Series B Preferred Stock shall be
subject to adjustment as set forth in subsection 4(d). The initial Conversion
Price per share of Series C Preferred Stock shall be the Original Series C Issue
Price; provided, however, that the Conversion Price for the Series C Preferred
Stock shall be subject to adjustment as set forth in subsection 4(d). The
initial Conversion Price per share of Series D Preferred Stock shall be the
Original Series D Issue Price; provided, however, that the Conversion Price for
the Series D Preferred Stock shall be subject to adjustment as set forth in
subsection 4(d).
(b) Automatic Conversion. Each share of Series A Preferred Stock,
--------------------
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
shall automatically be converted into such number of fully paid and
nonassessable shares of Common Stock as is determined (i) for the Series A
Preferred Stock by dividing the Original Series A Issue Price by the Conversion
5
Price at the time in effect for such Series A Preferred Stock, (ii) for the
Series B Preferred Stock by dividing the Original Series B Issue Price by the
Conversion Price at the time then in effect for such Series B Preferred Stock,
(iii) for the Series C Preferred Stock by dividing the Original Series C Issue
Price by the Conversion Price at the time then in effect for such Series C
Preferred Stock and (iv) for the Series D Preferred Stock by dividing the
Original Series D Issue Price by the Conversion Price at the time then in effect
for such Series D Preferred Stock immediately upon the earlier of (x) this
corporation's sale of its Common Stock in a firm commitment underwritten public
offering pursuant to a registration statement on Form S-1 or Form SB-2 (or any
successor to such forms) under the Securities Act of 1933, as amended, the
public offering price of which was not less than $10.00 per share (adjusted to
reflect subsequent stock dividends, stock splits or recapitalization) and
raising proceeds to the Company of at least $20,000,000 in the aggregate (net of
underwriting discounts and commissions) or (y) as to each series of Preferred
Stock, the date specified by written consent or agreement of the holders of a
majority of the then outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock,
respectively, each voting as a separate class.
(c) Mechanics of Conversion. Before any holder of Series A Preferred
-----------------------
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock shall be entitled to convert the same into shares of Common Stock, he
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of this corporation or of any transfer agent for the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock, and shall give written notice to this corporation at its principal
corporate office, of the election to convert the same and shall state therein
the name or names in which the certificate or certificates for shares of Common
Stock are to be issued. This corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock or Series D Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date. If the conversion is in connection with an
underwritten offering of securities registered pursuant to the Securities Act of
1933, as amended, the conversion may, at the option of any holder tendering
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock for conversion, be conditioned upon the closing with
the underwriters of the sale of securities pursuant to such offering, in which
event the person(s) entitled to receive the Common Stock upon conversion of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock shall not be deemed to have converted such Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock until immediately prior to the closing of such sale of
securities.
(d) Conversion Price Adjustments of Preferred Stock for Certain
-----------------------------------------------------------
Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series
- -------------------------------------------
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock shall be subject to adjustment from time to time as follows:
6
(i) (A) If after the date upon which any shares of Series D
Preferred Stock first issued (the "Purchase Date"), this corporation shall issue
any Additional Stock (as defined below) without consideration or for a
consideration per share less than the Conversion Price for the Series A
Preferred Stock, the Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock, as applicable, in effect immediately prior to the
issuance of such Additional Stock, the Conversion Price for the Series A
Preferred Stock, the Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock, as applicable, in effect immediately prior to each
such issuance of Additional Stock shall forthwith (except as otherwise provided
in this clause (i)) be adjusted to a price determined by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issuance of
Additional Stock (including Common Stock deemed outstanding pursuant to
subsection 4(d)(i)(E) below) plus the number of shares of Common Stock that the
aggregate consideration received by this corporation for such issuance of
Additional Stock would purchase at such Conversion Price, and the denominator of
which shall be the number of shares of Common Stock outstanding (including
Common Stock deemed outstanding pursuant to subsection 4(d)(i)(E) below)
immediately prior to such issuance of Additional Stock plus the number of shares
of such Additional Stock.
(B) No adjustment of the Conversion Price for the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock shall be made in an amount less than one cent per share,
provided that any adjustments that are not required to be made by reason of this
sentence shall be carried forward and shall be either taken into account in any
subsequent adjustment made prior to three years from the date of the event
giving rise to the adjustment being carried forward, or shall be made at the end
of three years from the date of the event giving rise to the adjustment being
carried forward. Except to the limited extent provided for in subsections (E)(3)
and (E)(4), no adjustment of the Conversion Price for the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock pursuant to this subsection 4(d)(i) shall have the effect of increasing
such Conversion Price above the Conversion Price for such series in effect
immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor after
deducting any reasonable discounts, commissions or the like, but without
deducting any other expenses allowed, paid or incurred by this corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.
(D) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as reasonably determined by
the Board of Directors irrespective of any accounting treatment.
(E) In the case of the issuance (whether before, on or after the
Purchase Date) of options to purchase or rights to subscribe for Common Stock,
securities by their terms convertible into or exchangeable for Common Stock, or
options to
7
purchase or rights to subscribe for such convertible or exchangeable securities,
the following provisions shall apply for all purposes of this subsection 4(d)(i)
and subsection 4(d)(ii):
(1) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subsections
4(d)(i)(C) and (d)(i)(D), if any, received by this corporation upon the issuance
of such options or rights plus the minimum exercise price provided in such
options or rights (without taking into account potential antidilution
adjustments) for the Common Stock covered thereby.
(2) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangeability, including, without limitation,
the passage of time, but without taking into account potential antidilution
adjustments) for any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration, if any, received by this corporation for any such securities and
related options or rights, plus the minimum additional consideration, if any, to
be received by this corporation (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the consideration in each case to
be determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D).
(3) In the event of any change in the number of shares of Common
Stock deliverable or in the consideration payable to this corporation upon
exercise of such options or rights or upon conversion of or in exchange for such
convertible or exchangeable securities, including, but not limited to, a change
resulting from the antidilution provisions thereof, the Conversion Price of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock, to the extent in any way affected by or computed using
such options, rights or securities, shall be recomputed to reflect such change,
but no further adjustment shall be made for the actual issuance of Common Stock
or any payment of such consideration upon the exercise of any such options or
rights or the conversion or exchange of such securities.
(4) Upon the expiration of any such options or rights, the
termination of any such rights to convert or exchange, or the expiration of any
options or rights related to such convertible or exchangeable securities, the
Conversion Price of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D
8
Preferred Stock, to the extent in any way affected by or computed using such
options, rights or securities, or options or rights related to such securities,
shall be recomputed to reflect the issuance of only the number of shares of
Common Stock (and convertible or exchangeable securities that remain in effect)
actually issued upon the exercise of such options or rights, upon the conversion
or exchange of such securities, or upon the exercise of the options or rights
related to such securities.
(5) The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to subsections
4(d)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in either subsection
4(d)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to subsection 4(d)(i)(E))
by this corporation after the Purchase Date other than
(A) Common Stock issued pursuant to a transaction
described in subsection 4(d)(iii) hereof;
(B) Shares of Common Stock issuable or issued to
employees consultants, directors or vendors (if in transactions with primarily
non-financing purposes) of this corporation directly or pursuant to a stock
option plan or restricted stock plan approved by the Board of Directors of this
corporation;
(C) Common Stock issued upon conversion of shares of
Preferred Stock;
(D) Warrants issued to banks or equipment lessors for
other than primarily equity financing purposes approved by the Company's Board
of Directors;
(E) Shares of Common or Preferred Stock issued in
connection with business combinations or corporate partnering agreements
approved by the Board of Directors; or
(F) Up to one hundred thousand (100,000) shares issued
for any purpose as determined in the sole discretion of the Board of Directors.
(iii) In the event this corporation should at any time
or from time to time after the Purchase Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
9
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series A Preferred Stock, the Conversion Price of
the Series B Preferred Stock, the Conversion Price of the Series C Preferred
Stock and the Conversion Price of the Series D Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of each share of such series shall be increased in proportion to such
increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.
(iv) If the number of shares of Common Stock
outstanding at any time after the Purchase Date is decreased by a combination of
the outstanding shares of Common Stock, then, following the record date of such
combination, the Conversion Price for the Series A Preferred Stock, the
Conversion Price for the Series B Preferred Stock, the Conversion Price of the
Series C Preferred Stock and the Conversion Price of the Series D Preferred
Stock shall be appropriately increased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be decreased in
proportion to such decrease in outstanding shares.
(e) Other Distributions. In the event this corporation
-------------------
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by this corporation or other persons, assets (excluding
cash dividends) or options or rights not referred to in subsection 4(d)(iii),
then, in each such case for the purpose of this subsection 4(e), the holders of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock shall be entitled to a proportionate share of any
such distribution as though they were the holders of the number of shares of
Common Stock of this corporation into which their shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of this corporation entitled to receive such
distribution.
(f) Recapitalizations. If at any time or from time to time
-----------------
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 4 or in Section 2) provision shall be made so that the holders of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock the number of shares of stock or
other securities or property of the Company or otherwise, to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock after the recapitalization to the
end that the provisions of this Section 4 (including adjustment of the
applicable Conversion Price then in effect and the number of shares purchasable
upon conversion of the Series A Preferred Stock, the Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock) shall be applicable after
that event as nearly equivalent as may be practicable.
10
(g) No Impairment. Without the consent of the holders of a
-------------
majority of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock, voting together as a single class,
this corporation will not, by amendment of its Restated Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by this corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock against impairment.
(h) No Fractional Shares and Certificate as to Adjustments.
------------------------------------------------------
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock, and the
number of shares of Common Stock to be issued shall be rounded to the nearest
whole share. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock the holder is at the time converting into Common Stock and the
number of shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock pursuant
to this Section 4, this corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock, as the case may be, a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. This corporation
shall, upon the written request at any time of any holder of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (A) such adjustment and readjustment, (B) the Conversion Price for
such series of Preferred Stock at the time in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property that at the
time would be received upon the conversion of a share of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock.
(i) Notices of Record Date. In the event of any taking by
----------------------
this corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
corporation shall mail to each holder of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, at least
twenty (20) days prior to the date specified therein, a notice
11
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
(j) Reservation of Stock Issuable Upon Conversion. This
---------------------------------------------
corporation 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, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D 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, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Preferred Stock, this corporation 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 purposes, including, without limitation, engaging
in best efforts to obtain the requisite stockholder approval of any necessary
amendment to this certificate.
(k) Notices. Any notice required by the provisions of this
-------
Section 4 to be given to the holders of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
shall be deemed given upon personal delivery to the holder notified, five (5)
days after having been sent by certified or registered mail, return receipt
requested, postage prepaid, one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery with written
verification of receipt, addressed to each holder of record at his address
appearing on the books of this corporation or when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day.
5. Voting Rights.
-------------
(a) General Voting Rights. The holder of each share of
---------------------
Preferred Stock shall have the right to one vote for each share of Common Stock
into which such share of Preferred Stock could then be converted, and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any stockholders'
meeting in accordance with the bylaws of this Corporation, and shall be entitled
to vote, together with holders of Common Stock, with respect to any question
upon which holders of Common Stock have the right to vote, except as otherwise
provided by law. Fractional votes shall not, however, be permitted and any
fractional voting rights available on an as-converted basis (after aggregating
all shares into which shares of Preferred Stock held by each holder could be
converted) shall be rounded to the nearest whole number (with one-half being
rounded upward).
(b) Voting for the Election of Directors. As long as five
------------------------------------
hundred thousand (500,000) or more of the shares of Series A Preferred Stock
originally issued remain outstanding (such number of shares being subject to
proportional adjustment to reflect any
12
subsequent stock dividends, combinations, splits, recapitalizations and the like
with respect to the Preferred Stock), the holders of such shares of Series A
Preferred Stock shall be entitled to elect one (1) director of this corporation
at each annual election of directors. As long as five hundred thousand (500,000)
or more of the shares of Series B Preferred Stock originally issued remain
outstanding (such number of shares being subject to proportional adjustment to
reflect any subsequent stock dividends, combinations, splits, recapitalizations
and the like with respect to the Preferred Stock), the holders of such shares of
Series B Preferred Stock shall be entitled to elect two (2) directors of this
corporation at each annual election of directors. As long as five hundred
thousand (500,000) or more of the shares of Series C Preferred Stock originally
issued remain outstanding (such number of shares being subject to proportional
adjustment to reflect any subsequent stock dividends, combinations, splits,
recapitalizations and the like with respect to the Preferred Stock), the holders
of such shares of Series C Preferred Stock shall be entitled to elect one (1)
director of this corporation at each annual election of directors. As long as
five hundred thousand (500,000) or more of the shares of Series D Preferred
Stock originally issued remain outstanding (such number of shares being subject
to proportional adjustment to reflect any subsequent stock dividends,
combinations, splits, recapitalizations and the like with respect to the
Preferred Stock), the holders of such shares of Series D Preferred Stock shall
be entitled to elect one (1) director of this corporation at each annual
election of directors. The holders of outstanding Common Stock shall be entitled
to elect one (1) director of this corporation at each annual election of
directors. The holders of Preferred Stock and Common Stock (voting together as a
single class and not as a separate series, and on an as-converted basis) shall
be entitled to elect any remaining directors of this corporation.
In the case of any vacancy (other than a vacancy caused by removal) in
the office of a director occurring among the directors elected by the holders of
a class or series of stock pursuant to this Section 5(b), the remaining
directors so elected by that class or series may by affirmative vote of a
majority thereof (or the remaining director so elected if there be but one, or
if there are no such directors remaining, by the affirmative vote of the holders
of a majority of the shares of that class or series), elect a successor or
successors to hold office for the unexpired term of the director or directors
whose place or places shall be vacant. Any director who shall have been elected
by the holders of a class or series of stock or by any directors so elected as
provided in the immediately preceding sentence hereof may be removed during the
aforesaid term of office, either with or without cause, by, and only by, the
affirmative vote of the holders of the shares of the class or series of stock
entitled to elect such director or directors, given either at a special meeting
of such stockholders duly called for that purpose or pursuant to a written
consent of stockholders, and any vacancy thereby created may be filled by the
holders of that class or series of stock represented at the meeting or pursuant
to unanimous written consent.
6. Protective Provisions.
---------------------
(a) So long as any shares of Preferred Stock are
outstanding, this corporation shall not without first obtaining the approval (by
vote or written consent, as provided by law) of the holders of at least a
majority of the then outstanding shares of Preferred Stock (voting together as
one class and on an as-converted basis):
13
(i) sell, convey, or otherwise dispose of all or
substantially all of its property or business or merge into or consolidate with
any other corporation (other than a wholly-owned subsidiary corporation) or
effect any transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of this corporation is disposed of;
(ii) alter or change the rights, preferences or
privileges of the shares of any series of Preferred Stock so as to affect
adversely the shares;
(iii) increase or decrease (other than by conversion)
the total number of authorized shares of Preferred Stock;
(iv) authorize or issue, or obligate itself to issue,
any other equity security, including any other security convertible into or
exercisable for any equity security having a preference over, or being on a
parity with, the Preferred Stock with respect to voting, dividends or upon
liquidation;
(v) effect a reclassification or recapitalization of
the outstanding capital stock of the corporation; or
(vi) pay, declare or set aside any sums for the
payment of any dividends, or make any distributions on, any shares of its
capital stock, or redeem or repurchase any of its capital stock; provided,
however that this corporation may repurchase the unvested shares of former
service providers to this corporation at the original issue price of such
shares.
(b) So long as any shares of Series C Preferred Stock are
outstanding, this corporation shall not without first obtaining the approval (by
vote or written consent, as provided by law) of the holders of at least two-
thirds of the then outstanding shares of Series C Preferred Stock:
(i) amend its Certificate of Incorporation or Bylaws
to alter or change the rights, preferences or privileges of the Series C
Preferred Stock; or
(ii) increase or decrease the total number of
authorized shares of Series C Preferred Stock.
(c) So long as any shares of Series D Preferred Stock are
outstanding, this corporation shall not without first obtaining the approval (by
vote or written consent, as provided by law) of the holders of at least a
majority of the then outstanding shares of Series D Preferred Stock:
(i) amend its Certificate of Incorporation or Bylaws
to alter or change the rights, preferences or privileges of the Series D
Preferred Stock;
(ii) increase or decrease the total number of
authorized shares of Series D Preferred Stock;
14
(iii) create or issue any other class of capital stock
having a preference over , or being on parity with, the Series D Preferred
Stock; or
(iv) pay or declare any dividends or redemption with
respect to junior stock (except for acquisitions of Common Stock by the
corporation pursuant to agreements which permit the corporation to repurchase
such shares upon termination of services to the corporation or in exercise of
the corporation's right of first refusal upon a proposed transfer).
7. Status of Converted Stock. In the event any shares of
-------------------------
Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so
converted shall be canceled and shall not be issuable by this corporation. The
Restated Certificate of Incorporation of this corporation shall be appropriately
amended to effect the corresponding reduction in this corporation's authorized
capital stock.
C. Common Stock.
------------
1. Dividend Rights. Subject to the prior rights of holders
---------------
of all classes of stock at the time outstanding having prior rights as to
dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of this corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution
------------------
or winding up of this corporation, the assets of this corporation shall be
distributed as provided in Section 2 of Division (B) of this Article IV hereof.
3. Redemption. The Common Stock is not redeemable.
----------
4. Voting Rights. The holder of each share of Common Stock
-------------
shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the bylaws of this corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.
ARTICLE V
Except as otherwise provided in this Restated Certificate of
Incorporation, in furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend and rescind any or all of the Bylaws of this corporation.
ARTICLE VI
The number of directors of this corporation shall be fixed from
time to time by a bylaw or amendment thereof duly adopted by the Board of
Directors or by the stockholders.
15
ARTICLE VII
Elections of directors need not be by written ballot unless the
Bylaws of this corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of this corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of this corporation.
ARTICLE IX
A director of this corporation shall, to the fullest extent
permitted by the Delaware General Corporation Law as it now exists or as it may
hereafter be amended, not be personally liable to this 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
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 any improper personal benefit. If
the Delaware General Corporation Law is amended, after approval by the
stockholders of this Article, to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of this corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law as so amended.
Any amendment, repeal or modification of the foregoing provisions
of this Article IX, or the adoption of any provision in an amended or restated
Certificate of Incorporation inconsistent with this Article IX, by the
stockholders of this corporation shall not apply to or adversely affect any
right or protection of a director of this corporation existing at the time of
such amendment, repeal, modification or adoption.
ARTICLE X
To the fullest extent permitted by applicable law, this
corporation is authorized to provide indemnification of (and advancement of
expenses to) such agents of this corporation (and any other persons to which
Delaware law permits this corporation to provide indemnification) through bylaw
provisions, agreements with such agents or other persons, vote of stockholders
or disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to this
corporation, its stockholders, and others.
Any amendment, repeal or modification of any of the foregoing
provisions of this Article X shall not adversely affect any right or protection
of a director, officer, agent or other person existing at the time of, or
increase the liability of any director of this corporation with
16
respect to any acts or omissions of such director, officer or agent occurring
prior to such amendment, repeal or modification.
ARTICLE XI
This corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, except as otherwise provided
in this Restated Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
* * *
FOUR: That thereafter said amendment and restatement was duly
adopted in accordance with the provisions of Section 242 and Section 245 of the
General Corporation Law.
17
IN WITNESS WHEREOF, the undersigned have executed this certificate on
June 30, 2000.
________________________________________________
Barry James Folsom, President
________________________________________________
Kevin R. Evans, Secretary