EXHIBIT 3.6
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND OTHER RIGHTS
OF THE SERIES B PREFERRED STOCK
OF XIOX CORPORATION
Pursuant to Section 151(g) of the
Delaware General Corporations Law
It is hereby certified that:
V. The name of the corporation is Xiox Corporation (the "Corporation"), a
Delaware corporation.
VI. Set forth hereinafter is a statement of the voting powers, preferences,
limitations, restrictions, and relative rights of shares of Series B Convertible
Preferred Stock hereinafter designated as contained in a resolution of the Board
of Directors of the Corporation (the "Board of Directors") pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, as amended (the "Certificate of
Incorporation"), and in accordance with Section 151(g) of the Delaware General
Corporations Law, which resolution was duly adopted by the Board of Directors on
December 21, 1999, and remains in full force and effect as of the date hereof:
SERIES B PREFERRED STOCK
Section 1. Designation. The series of Preferred Stock hereby created shall
be designated and known as the "Series B Preferred Stock." The number of shares
constituting such series shall be 1,020,000.
Section 2. Liquidation Rights.
2.1 In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, each holder of
shares of Series B Preferred Stock shall be entitled to receive, prior and in
preference to the payment of any liquidation amount to the holders of the
Corporation's common stock, par value $0.01 per share ("Common Stock"), a
payment equal to $20.00 per share (the "Purchase Price") together with any
declared but unpaid dividends thereon, before any payment is made to the holders
of common stock (the "Preference Amount"). After the full Preference Amount on
all outstanding shares of the Series B Preferred Stock has been paid and the
full preferential amount payable with respect to any other shares having
priority over the Common Stock has been paid, any remaining funds and assets of
the Corporation legally available for distribution to stockholders shall be
distributed pro rata among the holders of the Common Stock. The right of the
Series B Preferred Stock stockholders to receive the Preference Amount shall be
on a parity with the right of the Series A Preferred Stock stockholders to
receive the preferential amount specified in the Certificate of Designations,
Preferences, and Other Rights of the Series A Preferred Stock. If the
Corporation has insufficient assets to permit payment of the Preference Amount
in full to all Series B Preferred Stock stockholders, then the assets of the
Corporation shall be distributed ratably to the holders of the Series A
Preferred Stock and the Series B Preferred Stock and the holders of shares of
any other series of Preferred Stock on a parity with the Series B Preferred
Stock in proportion to the Preference Amount each such holder would otherwise be
entitled to receive.
2.2 A merger or consolidation of the Corporation, or sale of the
Corporation's Common Stock (including, without limitation, pursuant to a tender
offer) in any single transaction or series of related transactions, in any such
case in which its stockholders do not retain a majority of the voting power in
the surviving corporation, or a sale of all or substantially all the
Corporation's assets, shall each be deemed to be a liquidation, dissolution or
winding up of the Corporation.
Section 3. Conversion.
3.1 Voluntary Conversion. Each share of Series B Preferred Stock will
be convertible, at the option of the holder thereof, at the office of the
Corporation or any transfer agent for such shares, into Common Stock. The number
of shares of Common Stock into which each share of Series B Preferred Stock will
be converted will be equal to the Purchase Price of such share divided by the
Conversion Price (as hereinafter defined) of such share. The initial Conversion
Price for each share of Series B Preferred Stock shall be an amount equal to the
Purchase Price of such share. The Conversion Price shall be subject to
adjustment as provided in Section 3.3.
3.2 Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of Series B Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of one share of Common Stock, as reasonably determined in good
faith by the Board of Directors. Before any holder of Series B Preferred Stock
shall be entitled to receive certificates for the shares of Common Stock issued
upon conversion, such holder shall surrender the certificate or certificates for
the shares of Series B Preferred Stock being converted, duly endorsed, at the
principal office of the Corporation and shall state therein its name or the
name, or names, of its nominees in which it wishes the certificate or
certificates for shares of Common Stock to be issued. The Corporation shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Series B Preferred Stock or to such holder's nominee or nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder or such holder's nominee shall be entitled as aforesaid, together
with cash in lieu of any fraction of a share of Common Stock. Subject to the
foregoing, such conversion shall be deemed to have been made immediately and
upon surrender of the certificate representing the shares of Series B Preferred
Stock to be converted in the case of a voluntary conversion pursuant to Section
3.1. The Person or Persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
3.3 Adjustments to Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(a) If the Corporation shall issue shares of Common Stock to the
holders of Common Stock as a dividend or stock split, or in the event that the
Corporation reduces the number of outstanding shares of Common Stock in a
reverse stock split or stock combination, then the Conversion Price shall be
adjusted such that the holders of shares of Series B Preferred Stock shall
receive, upon conversion of the Series B Preferred Stock, that number of shares
of Common Stock that such holder would have owned following such dividend, stock
split, reverse stock split or stock combination if such conversion had occurred
immediately prior to the record date for such stock split, stock dividend,
reverse stock split or stock combination of the Common Stock, as the case may
be. If the Corporation shall issue shares of Series B Preferred Stock to the
holders of Series B Preferred Stock as a stock dividend or stock split, or in
the event that the Corporation reduces the number of outstanding shares of
Series B Preferred Stock in a reverse stock split or stock combination, then the
Conversion Price shall be adjusted such that the holder of shares of Series B
Preferred Stock shall receive, upon conversion of the Series B Preferred Stock,
the number of shares of Common Stock that such holder would have owned if such
conversion had occurred immediately prior to the record date for such stock
split, stock dividend, reverse stock split or stock combination of the Series B
Preferred Stock, as the case may be. In the event of a reclassification or other
similar transaction as a result of which shares of Common Stock are converted
into another security, then the Conversion Price shall be determined such that
the holders of shares of Series B Preferred Stock shall receive, upon conversion
of such Series B Preferred Stock, the number of such securities that such holder
would have owned following such conversion of the Common Stock into another
security if such conversion had occurred immediately prior to the record date of
such reclassification or other similar transaction. No adjustments with respect
to dividends (other than stock dividends) shall be made upon conversion of any
share of Series B Preferred Stock; provided, however, that if a share of Series
B Preferred Stock shall be converted subsequent to the record date for the
payment of a dividend (other than a stock dividend) or other distribution on
shares of Series B Preferred Stock but prior to such payment, then the
registered holder of such share at the close of business on such record date
shall be entitled to receive the dividend (other than a stock dividend) or other
distribution payable on such share on such date notwithstanding the conversion
thereof or the Corporation's default in payment of the dividend (other than a
stock dividend) due on such date.
(b) Upon the issuance by the Corporation of Equity Securities (as
defined in Section 3.3(b)(ii)(A) below) at a consideration per share less than
the Conversion Price of the Series B Preferred Stock in effect immediately prior
to the time of such issue or sale, other than an issuance of stock or securities
pursuant to Section 3.3(a) above or the issuance of shares of Common Stock upon
conversion of any shares of Series B Preferred Stock, then forthwith upon such
issue or sale, such Conversion Price shall be reduced to a price (calculated to
the nearest hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied
by the Conversion Price in effect immediately prior to such adjustment, (y) the
number of shares of Common Stock issuable upon conversion or exchange of any
obligations or securities of the Corporation outstanding immediately prior to
such adjustment multiplied by the Conversion Price in effect immediately prior
to such adjustment, and (z) an amount equal to the aggregate "consideration
actually received" by the Corporation upon such issue or sale; by
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock issuable upon conversion or exchange of any such obligations or
securities of the Corporation outstanding immediately after such issue or sale.
For purposes of this Section 3.3(b), the follow provisions
shall be applicable:
(A) The term "Equity Securities" as used in this
Section 3.3(b) shall mean any shares of Common Stock, or any obligation, or any
share of stock or other security of the Corporation convertible into or
exchangeable for Common Stock, except for shares of Common Stock or options to
purchase Common Stock issued or granted to officers, directors or employees of
the Corporation and its subsidiaries either pursuant to any stock purchase or
stock option plan or other incentive stock arrangement approved by the
Corporation's Board of Directors.
(B) The case of an issue or sale for cash of shares of
Common Stock, the "consideration actually received" by the Corporation therefor
shall be deemed to be the amount of cash received, before deducting therefrom
any commissions or expenses paid by the Corporation.
(C) In case of the issuance (otherwise than upon
conversion or exchange of obligations or securities of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as determined in good faith by the Board of Directors.
(D) In case of the issuance by the Corporation in any
manner of any rights to subscribe for or to purchase shares of Common Stock, or
any options for the purchase of shares of Common Stock or stock convertible into
Common Stock, all shares of Common Stock or stock convertible into Common Stock
to which the holders of such rights or options shall be entitled to subscribe
for or purchase pursuant to such rights or options shall be deemed "outstanding"
as of the date of the offering of such rights or the granting of such options,
as the case may be, and the minimum aggregate consideration named in such rights
or options for the shares of Common Stock or stock convertible into Common Stock
covered thereby, plus the consideration, if any, received by the Corporation for
such rights or options, shall be deemed to be the "consideration actually
received" by the Corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares
(E) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any securities of the
Corporation that shall be convertible into or exchangeable for Common Stock, all
shares of Common Stock issuable upon the conversion or exchange of such
obligations or securities shall be deemed issued as of the date such obligations
or securities are issued, and the amount of the "consideration actually
received" by the Corporation for such additional shares of Common Stock shall be
deemed to be the total of (x) the amount of consideration received by the
Corporation upon the issuance of such obligations or securities, plus (y) the
minimum aggregate consideration, if any, other than such obligations or shares,
receivable by the Corporation upon such conversion or exchange, except in
adjustment of dividends.
(F) The amount of the "consideration actually received"
by the Corporation upon issuance of any rights or options referred to in
subsection (D) above or upon the issuance of any obligations or securities that
are convertible or exchangeable as described in subsection (E) above, and the
amount of the consideration, if any, other than such obligations or securities
so convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (B) and (C) above with respect to the consideration received by
the Corporation in case of the issuance of additional shares of Common Stock;
provided, however, that if such obligations or securities so convertible or
exchangeable are issued in payment or satisfaction of any dividend upon any
stock of the Corporation other than Common Stock, the amount of the
"consideration actually received" by the Corporation upon the original issuance
of such obligations or securities so convertible or exchangeable shall be deemed
to be the value of such obligations or securities as of the date of the adoption
of the resolution declaring such dividend as determined by the Board of
Directors at or as of that date. On the expiration of any rights or options
referred to in subsection (D), or the termination of any right of conversion or
exchange referred to in subsection (E), or any change in the number of shares of
Common Stock deliverable upon exercise of such options or rights or upon
conversion or exchange of such convertible or exchangeable securities, the
Conversion Price then in effect shall forthwith be readjusted to such Conversion
Price as would have obtained had the adjustments made upon the basis of the
delivery of only the number of shares of Common Stock actually delivered or to
be delivered upon the exercise of such rights or options or upon the conversion
or exchange of such securities.
(G) In the event the Corporation shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets or options or rights not
referred to in this Section 3.3(b), then, in each such case, the holders of the
Series B Preferred Stock shall be entitled to the distributions provided for in
Section 4 below, and no adjustment to the Conversion Price provided for in this
Section 3.3(b) shall be applicable.
3.4 Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall, at all times, be sufficient for conversion of all
outstanding Series B Preferred Stock.
Section 4. Dividend Rights.
4.1 Generally. The holders of shares of Series B Preferred Stock will
be entitled to receive, if, when and as declared by the Board of Directors, out
of any funds legally available therefor, noncumulative dividends at the rate of
6% of the Purchase Price per share per annum (appropriately adjusted for stock
splits and combinations) for each share of Series B Preferred Stock then held by
them. Such dividends may be payable quarterly or otherwise as the Board of
Directors may from time to time determine. The right of the Series B Preferred
Stock stockholders shall be on a parity with the right of the Series A Preferred
Stock stockholders to receive the dividends specified in the Certificate of
Designations, Preferences and other Rights of the Series A Preferred Stock.
Dividends may be declared and paid upon shares of Common Stock in any fiscal
year of the Corporation, only if dividends shall have been paid to or declared
and set apart upon all shares of Series A Preferred Stock, Series B Preferred
Stock, and all shares of any other series of Preferred Stock on a parity with
the Series B Preferred Stock, at its annual rate for each quarter of such fiscal
year of the Corporation, including the quarter in which such dividends upon
shares of Common Stock are declared. No right shall accrue to holders of Series
B Preferred Stock by reason of the fact that dividends on said shares are not
declared in any prior year, nor shall any undeclared or unpaid dividends bear or
accrue interest.
4.2 Participation with Common. If any dividend or other distribution
payable in property other than cash is declared on the Common Stock (excluding
any dividend or other distribution for which adjustment to the Conversion Price
is provided by Section 3.3), each holder of Series B Preferred Stock on the
record date for such dividend or distribution shall be entitled to receive on
the date of payment or distribution of such dividend or other distribution the
same property that such holder would have received if on such record date such
holder was the holder of record of the number (including for purposes of this
Section 4 any fraction) of shares of Common Stock into which the shares of
Series B Preferred Stock then held by such holder are convertible.
Section 5. Voting Rights.
5.1 Generally. Each holder of shares of Series B Preferred Stock shall
be entitled to the number of votes equal to the number of shares of Common Stock
into which such shares of Series B Preferred Stock could be converted on the
record date for the vote or consent of stockholders and shall have voting rights
and powers equal to the voting rights and powers of the Common Stock. The
holders of shares of Series B Preferred Stock shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of the Corporation and,
except as provided in Section 5.2 below, shall vote with holders of the Common
Stock upon any matter submitted to a vote of stockholders, except those matters
required by law to be submitted to a class vote.
5.2 Series Vote. So long as any shares of Series B Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the approval by
vote or written consent, in the manner provided by law, of the holders of a
majority of the total number of shares of Series B Preferred Stock outstanding,
voting separately as a single class: (1) alter or change any of the powers,
preferences, privileges or rights of the Series B Preferred Stock; (2) create
any new class or series of shares having preferences prior to the Series B
Preferred Stock in any manner, including, without limitation, as to dividends or
liquidation; (3) take any action that reclassifies any outstanding shares into
shares having preferences prior to the Series B Preferred Stock in any manner,
including, without limitation, as to dividends or liquidation; or (4) alter or
change the Company's Certificate of Incorporation in a manner that adversely
affected the rights of the Series B Preferred Stock.
Section 6. Redemption.
6.1 Redemption Upon Certain Events. Subject to any legal restrictions
on the Corporation's redemption of shares, beginning on the date of completion
of the earlier of the following events (a) the consummation of the closing of a
public offering of the Corporation's Common Stock, registered under the
Securities Act of 1933, as amended, with gross proceeds to the Corporation in
excess of $15 million or (b) the date on which the closing price of the
Corporation's Common Stock on the Nasdaq SmallCap Market exceeds $40/share each
day for a period of 15 consecutive trading days, the Corporation may elect to
redeem all of the Series B Preferred Stock then outstanding. The redemption
price for each share of Series B Preferred Stock shall be the Purchase Price for
such share plus all declared but unpaid dividends thereon to the date of
redemption, as adjusted for stock splits, stock dividends, recapitalizations and
the like. Notwithstanding anything in the foregoing to the contrary, the holder
of any share of Series B Preferred Stock may elect to convert such share prior
to the date of redemption in accordance with Section 3 hereof.
6.2 Notice. The Corporation shall give notice of any redemption of the
Series B Preferred Stock pursuant to Section 6.1 by mailing a copy of such
notice not less than twenty (20) business days prior to the redemption date to
the holders of record of the Series B Preferred Stock (the "Redemption Notice").
The Corporation shall mail such notice to the holders' respective addresses
appearing on the books of the Corporation or to the addresses given by the
holders to the Corporation for the purpose of such notice.
6.3 Effect of Redemption. From and after the redemption, unless there
has been a default in payment of the redemption price, all dividends, if any, on
the Series B Preferred Stock redeemed shall cease to accrue, all rights of the
holders of such shares (except the right to receive the 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 this Corporation or be deemed to be outstanding for any purpose
whatsoever. If the funds of the Corporation legally available for redemption of
shares on the redemption date are insufficient to redeem the total number of
shares of Series B Preferred Stock to be redeemed on such date, then those funds
that are legally available shall be used to redeem the maximum possible number
of the shares ratably among the holders of the shares to be redeemed. Series B
Preferred Stock not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein.
Section 7. Reservation of Rights. Pursuant to the authority vested in it by
the Certificate of Incorporation, the Board of Directors reserves the right to
designate from time to time one or more additional series of Preferred Stock
with powers, designations, preferences, and rights on a parity with or junior to
the Series B Preferred Stock.
Section 8. Notices. In addition to any other notices to which the holders
of Series B Preferred Stock may be entitled pursuant to the Certificate of
Incorporation, the Bylaws of the Corporation, law, contract or otherwise, the
Corporation shall cause to be sent to each holder all written communications
sent generally to the holders of Common Stock. The Corporation shall cause such
communications to be sent to holders of Series B Preferred Stock concurrently
with, and in the same manner as, the sending of such communications to the
holders of Common Stock.
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Signed on this 27th day of December, 1999.
XIOX CORPORATION
By:
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William H. Welling
Chief Executive Officer and President
ATTEST:
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Melanie D. Johnson
Chief Financial Officer