FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SILICON LABORATORIES INC.
Silicon Laboratories Inc., a corporation organized and existing under
the Delaware General Corporation Law (the "DGCL") DOES HEREBY CERTIFY:
FIRST: The original Certificate of Incorporation of this corporation
was filed with the Secretary of State of Delaware on August 19, 1996 under the
name "Silicon Laboratories Inc."
SECOND: The Fourth Amended and Restated Certificate of Incorporation
of Silicon Laboratories Inc. in the form attached hereto as ANNEX A has been
duly adopted in accordance with the provisions of Sections 245 and 242 of the
DGCL by the directors and stockholders of the Corporation.
THIRD: The Fourth Amended and Restated Certificate of Incorporation so
adopted reads in full as set forth in ANNEX A attached hereto and is hereby
incorporated herein by this reference.
IN WITNESS WHEREOF, Silicon Laboratories Inc. has caused this Fourth
Amended and Restated Certificate to be signed by its duly authorized and elected
Chairman and Chief Executive Officer this ___ day of January, 2000.
SILICON LABORATORIES INC.
By:
-------------------------------------
Navdeep S. Sooch
Chairman and Chief Executive Officer
ANNEX A
FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SILICON LABORATORIES INC.
ARTICLE I
The name of this Corporation shall be Silicon Laboratories Inc. (the
"CORPORATION").
ARTICLE II
The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
State of Delaware. The name of the registered agent at that address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
ARTICLE IV
4.1 Prior to a Qualified Public Offering (as defined in Section B.4(b)
of this Section 4.1 of this Article IV hereof), the Corporation's capital
stock shall be comprised as follows:
A. CLASSES OF STOCK. The Corporation is authorized to issue two
classes of capital stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares of capital stock authorized to
be issued is 60,000,000 shares. 52,000,000 shares shall be Common Stock, par
value $0.0001 per share. 8,000,000 shares shall be Preferred Stock, par
value $0.0001 per share, of which 5,391,267 shares shall be designated as
"Series A Convertible Preferred Stock" (the "Series A Preferred Stock") and
1,610,638 shares shall be designated as "Series B Convertible Preferred
Stock" (the "Series B Preferred Stock").
B. RIGHTS, PREFERENCES AND RESTRICTIONS OF PREFERRED STOCK.
Undesignated Preferred Stock may be issued from time to time in one or more
series. The Corporation's Board of Directors (the "Board of Directors") is
hereby authorized to fix or alter the rights, preferences, privileges and
restrictions granted to or imposed upon additional series of Preferred Stock,
and the number of shares constituting any such series and the designation
thereof, or of any of them. Subject to compliance with applicable protective
voting rights which may be granted to the Preferred Stock or series thereof
in Certificates of Designation or the Corporation's Certificate of
Incorporation, as amended and as hereafter may be amended ("Protective
Provisions"), but notwithstanding any other rights of the Preferred Stock or
any series thereof, the rights, privileges, preferences and restrictions of
any such additional series may be subordinated to, pari passu with
(including, without limitation, inclusion in provisions with respect to
liquidation and
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acquisition preferences, redemption and/or approval of matters by vote or
written consent), or senior to any of those of any present or future class or
series of Preferred Stock or Common Stock. Subject to compliance with
applicable Protective Provisions, the Board of Directors is also authorized
to increase or decrease the number of shares of any series, prior or
subsequent to the issue of that series, but not below the number of shares of
such series then outstanding. In case the number of shares of any series
shall be so decreased, the shares constituting such decrease shall resume the
status that they had prior to the adoption of the resolution originally
fixing the number of shares of such series. The rights, preferences,
privileges and restrictions granted to and imposed on the Series A Preferred
Stock and the Series B Preferred Stock are as set forth below in this Article
IV(B).
1. DIVIDEND PROVISIONS.
(a) Subject to the rights of Preferred Stock which may
hereafter come into existence, prior to January 1, 2002, the holders of shares
of Series A Preferred Stock and Series B Preferred Stock shall be entitled to
receive dividends, out of any assets legally available therefor, when, as and if
declared by the Board of Directors.
(b) Subject to the rights of Preferred Stock which may
hereafter come into existence, beginning January 1, 2002 and continuing
thereafter, the holders of shares of Series A Preferred Stock shall be entitled
to receive dividends, out of any assets legally available therefor, at the rate
of $0.0589286 (as adjusted to reflect stock dividends, stock splits,
combinations, recapitalizations or the like with respect to such series after
March 21, 1997 (the "Initial Series A Issue Date")) per share of Series A
Preferred Stock per annum, payable when, as and if declared by the Board of
Directors, and such dividends shall be cumulative and shall accrue on each share
from January 1, 2002, from day to day thereafter, whether or not earned or
declared. Subject to the rights of Preferred Stock which may hereafter come
into existence, beginning January 1, 2002 and continuing thereafter, the holders
of shares of Series B Preferred Stock shall be entitled to receive dividends,
out of any assets legally available therefor, at the rate of $0.2856 (as
adjusted to reflect stock dividends, stock splits, combinations,
recapitalizations or the like with respect to such series after the date upon
which shares of Series B Preferred Stock were first issued (the "Initial Series
B Issue Date")) per share of Series B Preferred Stock per annum, payable when,
as and if declared by the Board of Directors, and such dividends shall be
cumulative and shall accrue on each share from January 1, 2002, from day to day
thereafter, whether or not earned or declared. Any accumulation of dividends on
the Series A Preferred Stock or Series B Preferred Stock shall not bear
interest. Cumulative dividends with respect to shares of Series A Preferred
Stock or Series B Preferred Stock which are accrued, payable and/or in arrears
shall, upon conversion of such shares to Common Stock, at the option of the
Corporation either: (i) subject to the rights of series of Preferred Stock which
may from time to time come into existence, be paid in cash to the extent assets
are legally available therefor or (ii) be convertible into such additional
shares of Common Stock determined by dividing the amount of such dividends by
the fair market value of the Common Stock (as determined by the Corporation's
Board of Directors) on the date of such conversion (with any fractional share
rounded to the nearest whole share, with 0.5 being rounded upward).
(c) Each share of Series A Preferred Stock and Series B
Preferred Stock shall rank equally in all respects with respect to dividends;
provided, however, that the
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Corporation shall not declare or pay dividends which are insufficient to pay
all accrued dividends on each series of Preferred Stock outstanding unless
such dividends are declared and paid to each series of Preferred Stock pro
rata based on the accrued dividends with respect to such series as a
percentage of accrued dividends for all series of Preferred Stock.
(d) Until such time as neither shares of Series A Preferred
Stock nor Series B Preferred Stock are outstanding, no dividend whatsoever shall
be paid or declared, and no distribution shall be made, on Common Stock (other
than a dividend payable solely 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).
(e) Any dividend or distribution which is declared by the
Corporation and payable with assets of the Corporation, other than cash, shall
be deemed to have such value as determined by the Board of Directors.
2. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, subject to the rights of
series of Preferred Stock that may from time to time come into existence, (A)
each holder of Series A Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets of the Corporation to the
holders of Common Stock by reason of their ownership thereof, an amount per
share (the "Series A Liquidation Amount") equal to the sum of: (i) $0.982144225
(the "Original Series A Issue Price") (as adjusted to reflect stock dividends,
stock splits, combinations, recapitalizations or the like with respect to such
series after the Initial Series A Issue Date) for each outstanding share of
Series A Preferred Stock held by such holder and (ii) an amount equal to all
accrued but unpaid dividends on the shares of Series A Preferred Stock held by
such holder and (B) each holder of Series B Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock by reason of their ownership thereof,
an amount per share (the "Series B Liquidation Amount") equal to the sum of: (i)
$4.76 (the "Original Series B Issue Price") (as adjusted to reflect stock
dividends, stock splits, combinations, recapitalizations or the like with
respect to such series after the Initial Series B Issue Date) for each
outstanding share of Series B Preferred Stock held by such holder and (ii) an
amount equal to all accrued but unpaid dividends on the shares of Series B
Preferred Stock held by such holder. If upon the occurrence of such event, the
assets and funds thus distributed among the holders of the Series A Preferred
Stock and Series B 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 the Corporation legally available for
distribution shall be distributed ratably among the holders of the Series A
Preferred Stock and Series B Preferred Stock in proportion to the relative
liquidation preference of the shares of Series A Preferred Stock and Series B
Preferred Stock then held by them.
(b) After the distribution described in Subsection 2(a)
above 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 the Corporation available for distribution to stockholders shall be
distributed among the holders of the Series A Preferred
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Stock, Series B Preferred Stock and Common Stock pro rata based on the number
of shares of Common Stock held by each (determined on an as-converted basis
with respect to outstanding shares of Series A Preferred Stock and Series B
Preferred Stock); provided that the amount which the holders of Series A
Preferred Stock and Series B Preferred Stock shall be entitled to receive
pursuant to Subsection 2(a) and this Subsection 2(b), if any, in the
aggregate shall not exceed (i) $2.946432675 (as adjusted to reflect stock
dividends, stock splits, combinations, recapitalizations or the like with
respect to such series after the Initial Series A Issue Date) for each
outstanding share of Series A Preferred Stock held by such holder and (ii)
$14.28 (as adjusted to reflect stock dividends, stock splits, combinations,
recapitalizations or the like with respect to such series after the Initial
Series B Issue Date) for each outstanding share of Series B Preferred Stock
held by such holder.
(c) After the distributions described in Subsections (a)
and (b) above have been paid, subject to the rights of series of Preferred Stock
that may from time to time come into existence, the remaining assets of the
Corporation available for distribution to stockholders shall be distributed
among the holders of Common Stock pro rata based on the number of shares of
Common Stock held by each.
(d) (i) For purposes of this Section 2, upon the
affirmative vote of the holders of at least sixty-seven percent (67%) of the
shares of Series A Preferred Stock and Series B Preferred Stock then
outstanding, voting together as a single class, a liquidation, dissolution or
winding up of the Corporation shall be deemed to be occasioned by, or to
include: (A) the acquisition of the Corporation by another entity by means of
any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) or (B) a sale of all or
substantially all of the assets of the Corporation; unless the Corporation's
stockholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Corporation's acquisition or sale or otherwise)
hold at least fifty percent (50%) of the voting power of the surviving or
acquiring entity; provided, however, that shares of the surviving entity held by
holders of the capital stock of the Corporation acquired by means other than the
exchange or conversion of the capital stock of the Corporation for shares of the
surviving entity shall not be used in determining if the stockholders of the
Corporation own more than fifty percent (50%) of the voting power of the
surviving or acquiring entity, but shall be used for determining the total
outstanding voting power of such entity.
(ii) In any of such events, if the consideration
received by the Corporation is other than cash, its value will be deemed its
fair market value. Any securities to be delivered to the holders of the Series
A Preferred Stock, Series B Preferred Stock or Common Stock, as the case may be,
shall be valued as follows:
(A) If traded on a securities exchange or through the
Nasdaq National Market, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the thirty-day period
ending three (3) days prior to the closing;
(B) 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-day period ending three (3) days prior to the
closing; and
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(C) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined by the
Corporation and the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock and Series B Preferred Stock, voting together
as a single class.
(iii) In the event the requirements of this Subsection
2(d) are not complied with, the 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
respective rights, preferences and privileges of the holders of the Series A
Preferred Stock and Series B 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) below.
(iv) The Corporation shall give each holder of record
of Series A Preferred Stock and Series B 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 the Corporation shall
thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after the
Corporation has given the first notice provided for herein or sooner than ten
(10) days after the Corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the Corporation's receipt of written consent of the holders of at least a
majority of the Series A Preferred Stock and Series B Preferred Stock (voting
together as a single class) entitled to such notice rights or similar notice
rights.
3. REDEMPTION.
(a) Subject to the rights of series of Preferred Stock that
may from time to time come into existence, the holders of not less than a
majority of the then outstanding Series A Preferred Stock and Series B Preferred
Stock, voting together as a single class, may elect to require the Corporation
to redeem (a "Redemption Request") on or after the dates specified below up to a
cumulative total of that percentage of the shares of Series A Preferred Stock
and Series B Preferred Stock held by each such requesting holder as set forth
below opposite such Redemption Date, less the number of shares of Series A
Preferred Stock and Series B Preferred Stock redeemed by the Company pursuant to
this Subsection 3(a) from such holder (or its predecessors) prior to the date of
such election:
5
Cumulative
Percentage of
Shares
Redemption Which May be
Date Redeemed
--------------- -------------
March 21, 2005 33 1/3%
March 21, 2006 66 2/3%
March 21, 2007 100%.
In each such event, the Corporation shall, to the extent it may
lawfully do so, redeem the shares specified in such Redemption Request within
thirty (30) days following the later of the date of receipt of such Redemption
Notice or the applicable Redemption Date, upon surrender by the requesting
holders of the certificates representing such shares by paying a sum per share
of Series A Preferred Stock equal to the Series A Liquidation Amount and a sum
per share of Series B Preferred Stock equal to the Series B Liquidation Amount
(such sums being the respective "Redemption Price" for the Series A Preferred
Stock and Series B Preferred Stock). Any redemption effected pursuant to this
Subsection (3)(a) shall be made on a pro rata basis among the requesting holders
of the Series A Preferred Stock and Series B Preferred Stock in proportion to
the number of shares of Series A Preferred Stock and Series B Preferred Stock
then held by such holders. If any date fixed for redemption of shares pursuant
to this Subsection 3(a) is a Saturday, Sunday or legal holiday, then such
redemption shall occur on the first business day thereafter.
(b) As used herein and in Subsections (3)(a) above and
(3)(c) and (3)(d) below, the term "Redemption Date" shall refer to each date on
which shares of Series A Preferred Stock or Series B Preferred Stock are
requested to be redeemed as provided in Subsection 3(a). Subject to the rights
of series of Preferred Stock that may from time to time come into existence, at
least fifteen (15) but no more than thirty (30) days prior to each Redemption
Date, written notice shall be mailed, first class postage prepaid, to each
holder of record (at the close of business on the business day next preceding
the day on which notice is given) of the Series A Preferred Stock and Series B
Preferred Stock requested to be redeemed, at the address last shown on the
records of the Corporation for such holder, notifying such holder of the
redemption to be effected, specifying the number of shares to be redeemed from
such holder, the Redemption Date, the applicable Redemption Price, the place at
which payment may be obtained and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, his, her or its
certificate or certificates representing the shares of Series A Preferred Stock
and Series B Preferred Stock to be redeemed (the "Redemption Notice"). Except
as provided in Subsection (3)(c), on or after the Redemption Date, each holder
of Series A Preferred Stock and Series B Preferred Stock to be redeemed shall
surrender to the Corporation the certificate or certificates representing such
shares, in the manner and at the place designated in the Redemption Notice, and
thereupon the applicable Redemption Price of such shares shall be payable to the
order of the person whose name appears on such certificate or certificates as
the owner thereof and each surrendered certificate shall be canceled. In the
event
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less than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares.
(c) From and after each Redemption Date, unless there shall
have been a default in payment of the applicable Redemption Price, all rights of
the holders of shares of Series A Preferred Stock and Series B Preferred Stock
designated for redemption in the Redemption Notice as holders of such shares of
Series A Preferred Stock and Series B Preferred Stock (except the right to
receive the applicable Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. Subject to the rights of
Preferred Stock that may from time to time come into existence, if the funds of
the Corporation legally available for redemption of shares of Series A Preferred
Stock and Series B Preferred Stock on any Redemption Date are insufficient to
redeem the total number of shares of Series A Preferred Stock and Series B
Preferred Stock to be redeemed on such date, those funds which are legally
available will be used to redeem the maximum possible number of such shares
ratably among the holders of such shares to be redeemed on the basis of the
relative Redemption Prices of the shares of Series A Preferred Stock and Series
B Preferred Stock to be redeemed. The shares of Series A Preferred Stock and
Series B Preferred Stock not redeemed shall remain outstanding and entitled to
all the rights and preferences provided herein. Subject to the rights of
Preferred Stock that may from time to time come into existence, at any time
thereafter when additional funds of the Corporation are legally available for
the redemption of shares of Series A Preferred Stock and Series B Preferred
Stock, such funds will immediately be used to redeem the balance of the shares
which the Corporation has become obliged to redeem on any Redemption Date but
which it has not redeemed.
(d) On or prior to each Redemption Date, the Corporation
may deposit the applicable Redemption Price of all shares of Series A Preferred
Stock and Series B Preferred Stock designated for redemption in the Redemption
Notice, and not yet redeemed or converted, with a bank or trust corporation
having aggregate capital and surplus in excess of $100,000,000 as a trust fund
for the benefit of the respective holders of the shares designated for
redemption and not yet redeemed, with irrevocable instructions and authority to
the bank or trust corporation to publish the notice of redemption thereof and
pay the applicable Redemption Price for such shares to their respective holders
on or after the Redemption Date, upon receipt of notification from the
Corporation that such holder has surrendered his, her or its share certificate
to the Corporation pursuant to Subsection (3)(b) above. As of the date of such
deposit (even if prior to the Redemption Date), the deposit shall constitute
full payment of the shares to their holders. From and after the date of such
deposit the shares so called for redemption shall be redeemed and shall be
deemed to be no longer outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and shall have no rights with respect
thereto, except the rights to receive from the bank or trust corporation payment
of the applicable Redemption Price of the shares, without interest, upon
surrender of their certificates therefor and the right to convert such shares as
provided in Article IV(B)(4) below. Such instructions shall also provide that
any monies deposited by the Corporation pursuant to this Subsection (3)(d) for
the redemption of shares thereafter converted into shares of Common Stock
pursuant to Article IV(B)(4) below prior to the Redemption Date shall be
returned to the Corporation forthwith upon such conversion. The balance of any
monies deposited by the Corporation pursuant to this
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Subsection (3)(d) remaining unclaimed at the expiration of two (2) years
followingthe final Redemption Date shall thereafter be returned to the
Corporation upon its request expressed in a resolution of its Board of
Directors.
4. CONVERSION. The holders of the Series A Preferred Stock and
Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Series A Preferred
Stock and Series B 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 the Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Common Stock as is determined, (i)
with respect to each share of Series A Preferred Stock, by dividing the Original
Series A Issue Price plus any accrued but unpaid dividends by the "Series A
Conversion Price" in effect on the date the certificate therefor is surrendered
for conversion and (ii) with respect to each share of Series B Preferred Stock,
by dividing the Original Series B Issue Price plus any accrued but unpaid
dividends by the "Series B Conversion Price" in effect on the date the
certificate therefor is surrendered for conversion. The initial Series A
Conversion Price shall be equal to the Original Series A Issue Price and the
initial Series B Conversion Price shall be equal to the Original Series B Issue
Price; provided, however, that such Series A Conversion Price and Series B
Conversion Price shall be subject to adjustment as set forth in Subsections
4(d), (e) and (f) below.
(b) AUTOMATIC CONVERSION. Each share of Series A Preferred
Stock shall automatically be converted into shares of Common Stock at the Series
A Conversion Price at the time in effect immediately upon the earlier of: (i)
except as provided below in Subsection 4(c), the sale of Common Stock in a firm
commitment underwritten public offering pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), the public
offering price per share of which is not less than $9.52 (as adjusted to reflect
stock dividends, stock splits, combinations, recapitalizations or the like with
respect to the Common Stock after the Initial Series A Issue Date) and with
gross proceeds to the Corporation and selling stockholders therein of at least
$10,000,000 in the aggregate (a "Qualified Public Offering") or (ii) the date
that, through the conversion or redemption of the Series A Preferred Stock,
fewer than 1,781,816 shares (as adjusted to reflect stock dividends, stock
splits, combinations, recapitalizations or the like with respect to such series
after the Initial Series A Issue Date) of the Series A Preferred Stock remain
outstanding. Each share of Series B Preferred Stock shall automatically be
converted into shares of Common Stock at the Series B Conversion Price at the
time in effect immediately upon the earlier of: (i) except as provided below in
Subsection 4(c), the sale of Common Stock in a firm commitment underwritten
public offering pursuant to a registration statement under the Securities Act
the public offering price per share of which is not less than $9.52 (as adjusted
to reflect stock dividends, stock splits, combinations, recapitalizations or the
like with respect to the Common Stock after the Initial Series B Issue Date) and
with gross proceeds to the Corporation and selling stockholders therein of at
least $10,000,000 in the aggregate or (ii) the date that, through the conversion
or redemption of the Series B Preferred Stock, fewer than 525,213 shares (as
adjusted to reflect stock dividends, stock splits, combinations,
recapitalizations or the like with respect to such series after the Initial
Series B Issue Date) of Series B Preferred Stock remain outstanding.
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(c) MECHANICS OF CONVERSION. Before any holder of Series A
Preferred Stock or Series B Preferred Stock shall be entitled to convert the
same into shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred Stock or Series B Preferred Stock, as
the case may be, and shall give written notice to the 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. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock or Series B Preferred Stock, as the case may be, 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 or Series B 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,
the conversion shall 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 such Preferred Stock
shall not be deemed to have converted such Preferred Stock until immediately
prior to the closing of such sale of securities.
(d) SERIES A AND SERIES B CONVERSION PRICE ADJUSTMENTS.
The Series A Conversion Price and Series B Conversion Price shall be subject to
adjustment from time to time as follows:
(i) (A) If the Corporation shall issue, after the
Initial Series A Issue Date, any Additional Stock (as defined below) without
consideration or for a consideration per share less than the Series A Conversion
Price in effect immediately prior to the issuance of such Additional Stock, the
Series A Conversion Price in effect immediately prior to each such issuance
shall forthwith (except as otherwise provided in this clause (i)) be adjusted to
a price determined by multiplying such Series A Conversion Price by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock
that the aggregate consideration received by the Corporation for such issuance
would purchase at such Series A Conversion Price; and the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issuance plus the number of shares of such Additional Stock. If the
Corporation shall issue, after the Initial Series B Issue Date, any Additional
Stock without consideration or for a consideration per share less than the
Series B Conversion Price in effect immediately prior to the issuance of such
Additional Stock, the Series B Conversion Price in effect immediately prior to
each such issuance shall forthwith (except as otherwise provided in this clause
(i)) be adjusted to a price determined by multiplying such Series B Conversion
Price by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus the number of
shares of Common Stock that the aggregate consideration received by the
Corporation for such issuance would purchase at such Series B Conversion Price;
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of shares of such
Additional
9
Stock. For the purposes of this subsection, the number of shares of Common
Stock outstanding immediately prior to suh issuance shall be calculated on a
fully diluted basis, as if all shares of Series A Preferred Stock and Series
B Preferred Stock and all Convertible Securities (as defined below) had been
fully converted into shares of Common Stock immediately prior to such
issuance and any outstanding Options (as defined below) had been fully
exercised immediately prior to such issuance (and the resulting securities
fully converted into shares of Common Stock, if so convertible) as of such
date, but not including in such calculation any additional shares of Common
Stock issuable with respect to shares of Series A Preferred Stock, Series B
Preferred Stock and Convertible Securities or Options, solely as a result of
the adjustment of the Series A Conversion Price or Series B Conversion Price
resulting from the issuance of Additional Stock causing such adjustment.
"Options" shall mean rights, options or warrants to subscribe for, purchase
or otherwise acquire either Common Stock or Convertible Securities.
"Convertible Securities" shall mean any evidences of indebtedness, shares
(other than Common Stock, Series A Preferred Stock and Series B Preferred
Stock) or other securities convertible into or exchangeable for Common Stock.
(B) No adjustment of the Series A Conversion Price or
Series B Conversion Price shall be made in an amount less than one cent per
share, provided that any adjustments which 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 (3) years from the date of the
event giving rise to the adjustment being carried forward, or shall be made at
the end of three (3) years from the date of the event giving rise to the
adjustment being carried forward. Except to the limited extent provided for in
Subsections 4(d)(i)(E)(3) and 4(d)(i)(E)(4) below, no adjustment of such Series
A Conversion Price or Series B Conversion Price pursuant to this Subsection
4(d)(i) shall have the effect of increasing the Series A Conversion Price above
the Series A Conversion Price in effect immediately prior to such adjustment and
no adjustment of such Series B Conversion Price pursuant to this subsection
4(d)(i) shall have the effect of increasing the Series B Conversion Price above
the Series B Conversion Price 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
before deducting any reasonable discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting or otherwise
in connection with the issuance and sale thereof.
(D) In the case of the issuance of the 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 determined by the
Board of Directors irrespective of any accounting treatment.
(E) In the case of the issuance (whether before, on or
after the Initial Series A Issue Date or the Initial Series B Issue 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 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):
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(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
4(d)(i)(D)), if any, received by the 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 the Corporation for any
such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends),
plus the minimum additional consideration, if any, to be received
by the 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 4(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 the 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
Series A Conversion Price and the Series B Conversion Price, 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
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exchangeable securities, the Series A Conversion Price and the
Series B Conversion Price, 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 which 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).
(F) "Additional Stock" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to Subsection 4(d)(i)(E))
by the Corporation after the Initial Series A Issue Date with respect to the
Series A Conversion Price or after the Initial Series B Issue Date with respect
to the Series B Conversion Price other than:
(1) Common Stock issued pursuant to a
transaction described in Subsection 4(d)(iii) hereof,
(2) Common Stock issuable or issued to
employees, consultants, directors or vendors (if in transactions
with primarily non-financing purposes) of the Corporation
directly or pursuant to a stock option plan or restricted stock
plan approved by the Board of Directors,
(3) Common Stock issuable in connection with
lease lines, bank financings, acquisitions of companies or
product lines or other similar transactions with a non-cash
raising purpose approved by the Board of Directors (including,
without limitation, the warrants to purchase 45,818 shares of
Series A Preferred Stock issued to Imperial Bancorp in November
1997),
(4) Common Stock issued upon conversion of
the Preferred Stock, and
(5) Common Stock issued or issuable: (i) in
a public offering before or in connection with which all
outstanding shares of Series A Preferred Stock and Series B
Preferred Stock will be converted to Common Stock or (ii) upon
exercise of warrants or rights granted to underwriters in
connection with such a public offering.
(ii) If the Corporation does not attain gross product
revenues (on a full accrual basis) of at least $10,000,000 for its fiscal year
1999 ("1999 Gross Product Revenues") and upon publication by the Corporation of
audited financial statements indicating
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that such minimum 1999 Gross Product Revenues were not attained, the Series A
Conversion Price (but not the Series B Conversion Price) shall forthwith be
adjusted to a price equal to 70.83325% of the Series A Conversion Price in
effect immediately preceding such publication.
(iii) In the event the Corporation should at any time or
from time to time, after the Initial Series B Issue 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
such dividend distribution, split or subdivision if no record date is fixed),
the Series A Conversion Price and Series B Conversion Price shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of each share of Series A Preferred Stock and Series B Preferred
Stock 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 Initial Series B Issue Date, is decreased by
a reverse split or combination of the outstanding shares of Common Stock, then,
following the record date of such reverse split or combination, the Series A
Conversion Price and Series B Conversion Price shall be appropriately increased
so that the number of shares of Common Stock issuable on conversion of each
share of each such series shall be decreased in proportion to such decrease in
outstanding shares.
(e) OTHER DISTRIBUTIONS. In the event the Corporation
shall declare a dividend or distribution payable in securities of other persons,
evidences of indebtedness issued by the Corporation or other persons, assets
(excluding cash dividends) or Common Stock Equivalents, then, in each such case,
the holders of the Series A Preferred Stock and Series B 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 the Corporation into
which their respective shares of Series A Preferred Stock and Series B Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of the Corporation entitled to receive such dividend or
distribution.
(f) RECAPITALIZATIONS. If at any time or from time to time
after the Initial Series B Issue Date, there shall be a recapitalization of the
Corporation (other than a subdivision, combination or merger or sale of assets
transaction provided for elsewhere in this Section 4 or in Section 2 above),
provision shall be made so that the holders of the Series A Preferred Stock and
Series B Preferred Stock shall thereafter be entitled to receive, upon
conversion of their respective shares of Series A Preferred Stock and Series B
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation 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
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Stock and Series B Preferred Stock after the recapitalization to the end that
the provisions of this Section 4 (including adjustment of the Series A
Conversion Price and Series B Conversion Price then in effect and the number
of shares issuable to such holders upon conversion of the Series A Preferred
Stock and Series B Preferred Stock) shall be applicable after that event as
nearly equivalent as may be practicable.
(g) NO IMPAIRMENT. The Corporation will not, by amendment
of its Certificate of Incorporation, as amended, 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 the 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 and Series B
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 or Series B
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 and Series B Preferred Stock which
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 Series A Conversion Price or Series B Conversion Price
pursuant to this Section 4, the Corporation, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of such series of Preferred Stock for which
the Conversion Price has been so adjusted a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock or Series B
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 at the time in effect and (C) the number of
shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of a share of such series of
Preferred Stock.
(i) NOTICES OF RECORD DATE. In the event of any taking by
the 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, the Corporation
shall mail to each holder of Series A Preferred Stock and Series B Preferred
Stock, at least twenty (20) days prior to the date specified therein, a notice
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.
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(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
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 Series A Preferred Stock and Series B 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 Series A
Preferred Stock and Series B 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 Series A Preferred Stock and
Series B Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Series A Preferred Stock and Series B Preferred
Stock, the 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 its Certificate of
Incorporation, as amended.
(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 or
Series B Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at such holder's
address appearing on the books of the Corporation.
5. VOTING RIGHTS. Each holder of shares of Series A Preferred
Stock and Series B Preferred Stock shall have the right to one (1) vote for each
share of Common Stock into which such holder's respective shares of Series A
Preferred Stock and Series B Preferred Stock could then be converted, with full
voting rights and powers equal to the voting rights and powers of the holders of
Common Stock, except as required by law or as expressly provided herein,
including the Protective Provisions in Section 6 below; shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of the 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 expressly provided
herein. 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 Series A Preferred Stock and Series B Preferred Stock held
by each holder could be converted) shall be rounded to the nearest whole number
(with 0.5 being rounded upward).
6. PROTECTIVE PROVISIONS. So long as any shares of Series A
Preferred Stock or Series B Preferred Stock are outstanding, the Corporation
shall not, without first obtaining the approval (by vote or written consent, as
permitted by law) of the holders of at least sixty-seven percent (67%) of the
then outstanding shares of Series A Preferred Stock and Series B Preferred
Stock, voting or acting, as the case may be, as a single class:
(a) sell, convey or otherwise dispose of all or
substantially all of its property or business; liquidate, dissolve or wind up
the Corporation's 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 the Corporation is disposed of (a "Corporate
Transaction"), unless the Corporation's stockholders of record as constituted
immediately prior to such Corporate Transaction will, immediately after such
Corporate Transaction, hold at least fifty percent (50%)
15
of the voting power of the surviving or acquiring entity; provided, however,
that shares of the surviving entity held by holders of the capital stock of
the Corporation acquired by means other than the exchange or conversion of
the capital stock of the Corporation for shares of the surviving entity shall
not be used in determining if the stockholders of the Corporation own more
than fifty percent (50%) of the voting power of the surviving or acquiring
entity, but shall be used for determining the total outstanding voting power
of such entity;
(b) purchase, redeem or acquire any shares of Common Stock
or options to purchase Common Stock or pay funds into or set aside or make
available a sinking fund for the purchase, redemption or acquisition of shares
of Common Stock or options to purchase Common Stock; provided, however, the
foregoing restrictions shall not apply to the repurchase of shares of Common
Stock held by employees, officers, directors, consultants or other persons
performing services for the Corporation or any wholly owned subsidiary of the
Corporation (including, but not by way of limitation, distributors and sales
representatives) that are subject to restrictive agreements under which the
Corporation has the option to repurchase such shares upon the occurrence of
certain events, such as the proposed sale of such shares;
(c) amend or modify any provision of the Corporation's
Certificate of Incorporation, as amended, or Bylaws so as to affect adversely
the rights, preferences or privileges of the Series A Preferred Stock or the
Series B Preferred Stock;
(d) amend the Bylaws of the Corporation to increase, or
otherwise take any action that would have the effect of increasing, the
authorized number of directors of the Corporation to more than five (5);
(e) increase or decrease (other than by redemption or
conversion) the total number of authorized shares of Series A Preferred Stock or
Series B Preferred Stock;
(f) authorize or issue, or authorize or effect any
reclassification of, or obligate itself to issue, any equity security (other
than the Series A Preferred Stock or Series B Preferred Stock), including any
other security convertible into or exercisable for any equity security, so as to
cause such security to have a preference over, or be on a parity with, the
Series A Preferred Stock or the Series B Preferred Stock with respect to
dividends or upon liquidation;
(g) authorize or issue, or obligate itself to issue, any
equity security, including any other security convertible into or exercisable
for any equity security, of the Corporation to any employee of the Corporation,
other than up to 10,561,808 shares of Common Stock (as adjusted to reflect stock
dividends, stock splits, combinations, recapitalizations or the like after the
date hereof) that may be reserved for issuance or otherwise issued under any
stock option or other plan or agreement of the Corporation, together with
options granted thereunder to purchase such shares; or
(h) amend any of the provisions set forth in this
Subsection 6.
7. STATUS OF CONVERTED OR REDEEMED STOCK. In the event any
shares of Series A Preferred Stock or Series B Preferred Stock shall be
converted pursuant to Section 4 above, or in the event any shares of Series A
Preferred Stock or Series B Preferred Stock shall be redeemed pursuant to
Section 3 above, the shares so converted or redeemed shall be canceled
16
and shall not be issuable by the Corporation. The Certificate of
Incorporation, as amended, of the Corporation shall be amended at such time
or times as the Corporation deems it reasonably practicable to effect the
corresponding reduction in the Corporation's authorized capital stock.
C. COMMON STOCK.
1. DIVIDEND RIGHTS. Subject to the provisions of Section 1 of
Division (B) of this Article IV, 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 the 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 the Corporation, the assets of the Corporation shall be
distributed as provided in Section 2 of Division (B) of this Article IV.
3. REDEMPTION. The Common Stock is not redeemable hereunder.
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 the Corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.
4.2 Effective as of a Qualified Public Offering (as defined in
Section B.8 of Section 4.1 above), the Corporation's capital stock shall be
comprised as follows:
A. AUTHORIZED SHARES. The aggregate number of shares that the
Corporation shall have authority to issue is 260,000,000, (a) 250,000,000 shares
of which shall be Common Stock, par value $0.0001 per share, and (b) 10,000,000
of which shall be Preferred Stock, par value $0.0001 per share.
B. COMMON STOCK. Each share of Common Stock shall have one vote on
each matter submitted to a vote of the stockholders of the Corporation. Subject
to the provisions of applicable law and the rights of the holders of the
outstanding shares of Preferred Stock, if any, the holders of shares of Common
Stock shall be entitled to receive, when and as declared by the Board of
Directors of the Corporation, out of the assets of the Corporation legally
available therefor, dividends or other distributions, whether payable in cash,
property or securities of the Corporation. The holders of shares of Common
Stock shall be entitled to receive, in proportion to the number of shares of
Common Stock held, the net assets of the Corporation upon dissolution after any
preferential amounts required to be paid or distributed to holders of
outstanding shares of Preferred Stock, if any, are so paid or distributed.
C. PREFERRED STOCK.
1. SERIES. The Preferred Stock may be issued from time to time
by the Board of Directors as shares of one or more series. The description of
shares of each additional series of Preferred Stock, including any designations,
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption shall be as set forth in resolutions adopted by the Board of
Directors.
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2. RIGHTS AND PREFERENCES. The Board of Directors is expressly
authorized, at any time, by adopting resolutions providing for the issuance of,
or providing for a change in the number of, shares of any particular series of
Preferred Stock and, if and to the extent from time to time required by law, by
filing certificates of amendment or designation which are effective without
stockholder action, to increase or decrease the number of shares included in
each series of Preferred Stock, but not below the number of shares then issued,
and to set in any one or more respects the designations, preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms and conditions of redemption relating to the shares of
each such series. The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to, setting or
changing the following:
(a) the dividend rate, if any, on shares of such series,
the times of payment and the date from which dividends shall be accumulated, if
dividends are to be cumulative;
(b) whether the shares of such series shall be redeemable
and, if so, the redemption price and the terms and conditions of such
redemption;
(c) the obligation, if any, of the Corporation to redeem
shares of such series pursuant to a sinking fund;
(d) whether shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class of classes and, if
so, the terms and conditions of such conversion or exchange, including the price
or prices or the rate or rates of conversion or exchange and the terms of
adjustment, if any;
(e) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if so, the extent
of such voting rights;
(f) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation; and
(g) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such series.
ARTICLE V
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 (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the Delaware General Corporation Law
or (d) 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 the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law as so amended.
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ARTICLE VI
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by, or in the
manner provided in, the Bylaws of the Corporation.
ARTICLE VII
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the 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 the Corporation.
ARTICLE VIII
Election of directors at an annual or special meeting of stockholders
need not be by written ballot unless the Bylaws of the Corporation shall so
provide.
ARTICLE IX
A. At each annual meeting of stockholders, directors of the
Corporation shall be elected to hold office until the expiration of the term for
which they are elected, and until their successors have been duly elected and
qualified. At the first annual meeting of stockholders following the closing of
the initial public offering (the "FIRST PUBLIC COMPANY ANNUAL MEETING") of the
Corporation's capital stock pursuant to an effective registration statement
filed under the Securities Act of 1933, as amended (the "INITIAL PUBLIC
OFFERING"), the directors of the Corporation shall be divided into three classes
as nearly equal in size as is practicable, hereby designated as Class I, Class
II and Class III. The term of office of the initial Class I directors shall
expire at the next succeeding annual meeting of stockholders, the term of office
of the initial Class II directors shall expire at the second succeeding annual
meeting of stockholders and the term of office of the initial Class III
directors shall expire at the third succeeding annual meeting of stockholders.
For the purposes hereof, the initial Class I, Class II and Class III directors
shall be those directors designated and elected at the First Public Company
Annual Meeting. At each annual meeting after the First Public Company Annual
Meeting, directors to replace those of a Class whose terms expire at such annual
meeting shall be elected to hold office until the third succeeding annual
meeting and until their respective successors shall have been duly elected and
qualified. If the number of directors is hereafter changed, any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as is practicable.
B. Vacancies occurring on the Board of Directors for any reason may
be filled by vote of a majority of the remaining members of the Board of
Directors, although less than a quorum, at a meeting of the Board of Directors.
A person so elected by the Board of Directors to fill a vacancy shall hold
office until the next succeeding annual meeting of stockholders of the
Corporation and until his or her successor shall have been duly elected and
qualified.
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ARTICLE X
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
ARTICLE XI
Effective upon the closing of the Initial Public Offering,
stockholders of the Corporation may not take action by written consent in lieu
of a meeting but must take any actions at a duly called annual or special
meeting.
ARTICLE XII
Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of the
capital stock required by law or this Certificate of Incorporation, the
affirmative vote of the holders of at least two-thirds (2/3) of the combined
voting power of all of the then-outstanding shares of the Corporation entitled
to vote shall be required to alter, amend or repeal Articles IX, XI or XII, or
any provisions thereof.
ARTICLE XIII
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, and all rights conferred on stockholders
herein are granted subject to this reservation.
* * *
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