Exhibit 4.5
CERTIFICATE OF DESIGNATION
OF
CONVERTIBLE PREFERRED STOCK, SERIES E
OF
XOMA CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
XOMA CORPORATION, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify that, pursuant to authority conferred upon the Board of Directors of the
Corporation by the Restated Certificate of Incorporation of the Corporation, as
amended, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors duly adopted
the following resolution on April 18, 1996, which resolution remains in full
force and effect as of the date hereof:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Corporation in accordance with the
provisions of its Amended and Restated Certificate of Incorporation,
the Board of Directors hereby creates a series of Preferred Stock, par
value $.05 per share, of the Corporation and hereby states the
designation and number of shares, and fixes the relative powers,
preferences, rights, qualifications, limitations and restrictions
thereof (in addition to the provisions set forth in the Restated
Certificate of Incorporation of the Corporation, as amended, which are
applicable to the Preferred Stock of all classes and series), as
follows:
Convertible Preferred Stock, Series E:
Section A. Designation and Amount. Seven Thousand Five Hundred
(7,500) shares of Preferred Stock, $.05 par value, are designated
"Convertible Preferred Stock, Series E" with the powers, preferences,
rights, qualifications, limitations and restrictions specified herein
(the "Series E Preferred Stock"). Such number of shares may be
increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Series
E Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities (including indebtedness)
issued by the Corporation convertible into Series E Preferred Stock.
Section B. Dividends. The Corporation shall not be required to
pay, and the holders of the Series E Preferred Stock shall not be
entitled to receive, any dividends on shares of the Series E Preferred
Stock.
Section C. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution shall be
made to the holders of shares of the common stock of the Corporation,
the holders of shares of Series E Preferred Stock shall be entitled to
receive $10,000.00 per share of Series E Preferred Stock then held by
such holders, plus an amount equal to declared and unpaid dividends
and distributions thereon. After payment of the full liquidation
preference of the Series E Preferred Stock set forth in the preceding
sentence, the holders of the Series E Preferred Stock shall not be
entitled to any further payments or distribution from the assets of
the Corporation.
Section D. Voting Rights. The holders of shares of Series E
Preferred Stock shall not have any voting rights, except as required
under the General Corporation Law of the State of Delaware.
Section E. Redemption.
1. General. The Corporation at its option, in accordance with the
terms and provisions of this Section 5, may, at any time and from time
to time, redeem any or all shares of Series E Preferred Stock at a
redemption price per share equal to a cash amount determined by
multiplying the Conversion Price (as defined below) by the number of
shares of Common Stock into which each such share of Series E
Preferred Stock would be convertible pursuant to the provisions of
Section 6 hereof. If fewer than all the outstanding shares of Series E
Preferred Stock are to be redeemed, the shares to be redeemed shall be
selected pro rata as nearly as practicable or by lot, or by such other
method as the Board of Directors of the Corporation may determine to
be fair and appropriate.
2. Notice of Redemption. The Corporation will provide notice of
any redemption of shares of Series E Preferred Stock to the holders of
record of the Series E Preferred Stock to be redeemed not less than
five (5) nor more than sixty (60) days prior to the date fixed for
such redemption. Such notice shall be provided by first-class mail,
postage prepaid, to each holder of record of the Series E Preferred
Stock to be redeemed, at such holder's address as it appears on the
stock transfer books of the Corporation. Each such notice shall state,
as appropriate, the following:
a. the redemption date;
b. the number of shares of Series E Preferred Stock to be
redeemed and, if fewer than all the shares held by any holder are
to be redeemed, the number of such shares to be redeemed from
such holder;
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c. the redemption price;
d. the place or places where certificates for such shares
are to be surrendered for redemption;
e. the then effective Conversion Price (as determined under
Section 6); and
f. that the right of holders to convert shares of Series E
Preferred Stock to be redeemed will terminate at the close of
business on the business day next preceding the date fixed for
redemption (unless the Corporation shall default in the payment
of the redemption price).
Any notice that is mailed as set forth above shall be
conclusively presumed to have been duly given, whether or not the
holder of shares of Series E Preferred Stock receives such notice, and
failure to give such notice by mail, or any defect in such notice, to
the holders of any shares designated for redemption shall not affect
the validity of the proceedings for the redemption of any other shares
of Series E Preferred Stock.
3. Mechanics of Redemption. Upon surrender in accordance with the
aforesaid notice of the certificate for any shares so redeemed (duly
endorsed or accompanied by appropriate instruments of transfer), the
holders of record of such shares shall be entitled to receive the
redemption price, without interest. In case fewer than all the shares
represented by such certificate are redeemed, a new certificate
representing the unredeemed shares shall be issued without cost to the
holder thereof. Upon surrender of any shares so redeemed in accordance
with this Section 5(C), the Corporation shall pay the full redemption
amounts with respect to shares as provided herein.
4. Rights After Redemption. Notwithstanding that any certificates
for shares to be redeemed have not been surrendered in accordance with
Section 5(C), from and after the date of redemption designated in the
notice of redemption (i) the shares represented thereby shall be
deemed to be no longer outstanding, and (ii) all rights of the holders
of such shares of Series E Preferred Stock shall cease and terminate,
except only the right to receive the full redemption amounts as
provided herein without interest.
Section F. Conversion.
1. Right to Convert. Each share of Series E Preferred Stock shall
be convertible, at the option of the holder thereof, into that number
of shares of the Common Stock, par value $.0005 per share, of the
Corporation (herein, the "Common Stock") as determined by dividing
$10,000.00 by the Conversion Price (determined as provided below). The
"Conversion Price" for any shares of Series E Preferred Stock issued
in connection with a conversion pursuant to Section 4(a) of the
Convertible Subordinated Note Agreement, dated as of April 22, 1996,
between the Corporation and Genentech, Inc. (the "Note Agreement")
shall be an amount per share equal to the Current Market Price (as
defined below) of the Common Stock determined as of the first
occurring Conversion Date (as such term is defined in Section 4(a) of
the Note Agreement) (herein, the "Initial Issue Date"). The
"Conversion Price" for any shares of Series E Preferred Stock issued
in connection with a prepayment pursuant to Section
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3(d) of the Note Agreement shall be an amount per share equal to the
Current Market Price of the Common Stock determined as of the date of
the issuance of such shares (herein, the "Prepayment Issue Date"). The
number of shares of Common Stock into which a share of Series E
Preferred Stock is convertible is hereinafter referred to as the
"Conversion Rate" of such series. The Conversion Price shall be
subject to adjustment from time to time after the Initial Issue Date
or applicable Prepayment Issue Date, as the case may be, as set forth
in this Section 6.
For purposes of this Section 6(A), "Current Market Price" shall
mean the average daily Closing Prices (as defined below) per share of
Common Stock for the fifteen (15) consecutive trading days immediately
prior to the Initial Issue Date or applicable Prepayment Issue Date,
as the case may be. "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such day or,
in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on
the New York Stock Exchange, or, if such security is not listed or
admitted to trading on such Exchange, on the principal national
security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as
reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available, in such
manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors of the
Corporation for that purpose, or a price determined in good faith by
the Board of Directors of the Corporation or, to the extent permitted
by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
If any shares of Series E Preferred Stock shall be called for
redemption, the right to convert the shares designated for redemption
shall terminate at the close of business on the business day next
preceding the date fixed for redemption unless the Corporation
defaults in the payment of the redemption price. In the event of a
default in the payment of the redemption price, the right to convert
the shares designated for redemption shall terminate at the close of
business on the business day next preceding the date that such default
is cured.
The shares of Common Stock issuable upon conversion of the shares
of Series E Preferred Stock, when the same shall be issued in
accordance with the terms hereof, are hereby declared to be and shall
be fully paid and non-assessable shares of Common Stock in the hands
of the holders thereof.
2. Automatic Conversion. Each share of Series E Preferred Stock
shall automatically be converted into shares of Common Stock at its
then effective Conversion Rate immediately upon the transfer of
ownership by the initial holder to any third party which is not an
Affiliate (as such term is defined below) of such holder. For purposes
of this Certificate, the term "Affiliate" means, when used with
respect to any specified person, any other person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control," when used with respect to any person, means the
power to direct the management and policies of such person, directly
or indirectly, whether through the
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ownership of voting securities, by contract or otherwise, and the
terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
3. Mechanics of Conversion. Each holder of Series E Preferred
Stock who desires to convert the same into shares of Common Stock
pursuant to this Section 6 shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation
or any transfer agent for the Series E Preferred Stock, and shall give
written notice to the Corporation at such office that such holder
elects to convert the same. Such notice shall state the number of
shares of Series E Preferred Stock being converted. Thereupon, the
Corporation shall promptly issue and deliver at such office to such
holder a certificate or certificates for the number of shares of
Common Stock to which such holder is entitled and shall promptly pay
in cash or, to the extent sufficient funds are not then legally
available therefor, in Common Stock (at the fair market value of the
Common Stock as of the date of such conversion as determined by the
Board of Directors of this Corporation), any declared and unpaid
dividends on the shares of Series E Preferred Stock being converted.
Such conversion shall be deemed to have been made at the close of
business on the date of such surrender of the certificates
representing the shares of Series E Preferred Stock to be converted,
and the person entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record
holder of such shares of Common Stock on such date.
4. Adjustment for Subdivisions and Combinations. If the
Corporation shall at any time or from time to time after the Initial
Issue Date or applicable Prepayment Issue Date, as the case may be,
effect a subdivision of the outstanding Common Stock, the Conversion
Price in effect immediately before that subdivision shall be
proportionately decreased. Conversely, if the Corporation shall at any
time or from time to time after the Initial Issue Date or applicable
Prepayment Issue Date, as the case may be, combine the outstanding
shares of Common Stock into a smaller number of shares, the Conversion
Price in effect immediately before the combination shall be
proportionately increased. Any adjustment under this Section 6(D)
shall become effective at the close of business on the date the
subdivision or combination becomes effective.
5. Adjustment for Certain Dividends and Distributions. If the
Corporation at any time or from time to time after the Initial Issue
Date or applicable Prepayment Issue Date, as the case may be, makes,
or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, in each such event (without
duplication for related events) the Conversion Price that is then in
effect shall be decreased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such
record date, by multiplying the Conversion Price then in effect by a
fraction (1) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and (2)
the denominator of which is the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance
or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date is fixed and such dividend
is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Conversion Price shall be recomputed
accordingly as of the close of business on such record date and
thereafter the
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Conversion Price shall be adjusted pursuant to this Section 6(E) to
reflect the actual payment of such dividend or distribution.
6. Adjustment for Other Dividends and Distributions. If the
Corporation at any time or from time to time after the Initial Issue
Date or applicable Prepayment Issue Date, as the case may be, makes,
or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, in
each such event provision shall be made so that the holders of the
Series E Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon,
the amount of other securities of the Corporation which they would
have received had their Series E Preferred Stock been converted into
Common Stock on the date of such event and had they thereafter, during
the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during
such period, subject to all other adjustments called for during such
period under this Section 6 with respect to the rights of the holders
of the Series E Preferred Stock or with respect to such other
securities by their terms.
7. Adjustment for Recapitalizations, etc. If at any time or from
time to time after the Initial Issue Date or applicable Prepayment
Issue Date, as the case may be, the Common Stock issuable upon the
conversion of the Series E Preferred Stock is changed into the same or
a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a
reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Section 6 or in Section 3), in any such event each
holder of Series E Preferred Stock shall have the right thereafter to
convert such stock into the kind and amount of stock and other
securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of
shares of Common Stock into which such shares of Series E Preferred
Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further
adjustment as provided herein or with respect to such other securities
or property by the terms thereof.
8. Compliance with Laws. Notwithstanding any provision of this
Section 6 to the contrary, no conversion of any share of Series E
Preferred Stock shall be effective unless such conversion is permitted
under then applicable laws.
Section G. Reacquired Shares. Any shares of Series E Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Amended and Restated Certificate of Incorporation, or in any other
Certificate of Designation creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section H. Exclusion of Other Rights. Except as may otherwise be
required by the General Corporation Law of the State of Delaware,
shares of the Series E Preferred Stock shall not have any preferences
or relative, participating, optional or other
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special rights, other than those specifically set forth in this
Certificate of Designation (as such Certificate of Designation may be
amended from time to time) and in the Corporation's Amended and
Restated Certificate of Incorporation, as amended. No shares of Series
E Preferred Stock shall have any preemptive or subscription rights
whatsoever as to any securities of the Corporation.
Section I. Notice. All notices and other communications provided
for or permitted to be given to the Corporation hereunder shall be
made by hand delivery, next day air courier or certified first-class
mail to the Corporation at its principal executive office (currently
located on the date of the adoption of these resolutions at 2910
Seventh Street, Berkeley, California 94710, Attention: General
Counsel).
Section J. Transferability; Registration; Rights of Transferees.
1. Transferability. The Series E Preferred Stock may not be sold,
assigned, conveyed, transferred, pledged, hypothecated or otherwise
disposed of other than as set forth in, and in accordance with, that
certain Common Stock and Convertible Note Purchase Agreement, dated as
of April 22, 1996, between the Corporation and Genentech, Inc.
2. Transfer Mechanics; Registration. The Series E Preferred Stock
certificate representing shares of Series E Preferred Stock to be
transferred shall be duly endorsed by the transferring holder or by
his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In
all cases of a transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be
deposited and remain with the Corporation. In case of a transfer by
executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and
may be required to be deposited and to remain with the Corporation in
its discretion. Upon any registration of a transfer, the Corporation
shall deliver new Series E Preferred Stock certificates to the persons
entitled to the shares of Series E Preferred Stock represented
thereby. The Series E Preferred Stock certificates may be exchanged at
the option of the holder thereof, when surrendered at the offices of
the Corporation, for other Series E Preferred Stock certificates of
different denominations, of like tenor and representing in the
aggregate a like number of shares of Series E Preferred Stock. Any
Series E Preferred Stock certificate so surrendered shall be promptly
canceled by the Corporation and retired. Each Series E Preferred Stock
certificate issued in exchange as provided above shall be
substantially in the form of the Series E Preferred Stock certificate
being exchanged and shall be subject to all of the terms and
provisions hereof.
3. Required Legend(s). Each of the Series E Preferred Stock
certificates shall contain the legend(s) required by that certain
Common Stock and Convertible Note Purchase Agreement, dated as of
April 22, 1996, between the Corporation and Genentech, Inc.
Section K. Amendments. The Certificate of Designation filed
pursuant hereto may be amended without notice to or the consent of any
holder of Series E Preferred Stock to cure any ambiguity, defect or
inconsistency, provided that such amendment does not adversely affect
the rights of any holder of Series E Preferred Stock. Any provisions
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of the Certificate of Designation filed pursuant hereto may be amended
by the Corporation with the written consent of holders of Series E
Preferred Stock representing a majority of the outstanding shares of
Series E Preferred Stock.
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IN WITNESS WHEREOF, the undersigned have executed this certificate as of
April 22, 1996.
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Clarence L. Dellio
Senior Vice President, Operations
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Christopher J. Margolin
Vice President, General Counsel
and Secretary
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