EXHIBIT 3.3
CERTIFICATE OF INCORPORATION
OF
RAMP NETWORKS, INC.
ARTICLE I
The name of the corporation is Ramp Networks, Inc. (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of Delaware is
1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19805. The
name of its registered agent at such address is Corporation Service 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 General Corporation Law of
Delaware.
ARTICLE IV
A. Authorized Stock. The corporation is authorized to issue two classes
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of stock to be designated, respectively, "Common Stock" and "Preferred Stock".
The total number of shares which the corporation is authorized to issue is
Thirty Five Million Eight Hundred Twenty Six Thousand Five Hundred Five
(35,826,505) shares. The number of shares of Preferred Stock authorized to be
issued is Eleven Million Eight Hundred Twenty Six Thousand Five Hundred Five
(11,826,504) shares, having no par value, of which Four Million Seven Hundred
Ninety Seven Thousand Seven Hundred Eighty Seven (4,797,787) shares shall be
designated as Series A Preferred Stock, Two Million Fifteen Thousand Fourteen
(2,615,014) shares shall be designated as Series B Preferred Stock, One Million
Seven Hundred Eighty Nine Thousand One Hundred Forty Seven (1,789,147) shares
shall be designated as Series C Preferred Stock, and Two Million Six Hundred
Twenty Four Thousand Five Hundred Fifty Seven (2,624,557) shares shall be
designated as Series D Preferred Stock. The number of shares of Common Stock
authorized to be issued is Forty Million (24,000,000) shares, having no par
value.
B. Preferred Stock. The rights, preferences, privileges and restrictions
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granted to and imposed on the Preferred Stock are as follows:
1. Dividend Provisions. The holders of shares of Series A Preferred
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Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock shall be entitled to receive dividends at the annual rate of $0.05,
$0.26, $0.37 and $0.49 per share, respectively (adjusted to reflect stock
splits, stock dividends and recapitalizations), payable out of funds legally
available therefor. All such dividends shall be payable only when, as, and if
declared by the Board of Directors and shall not be cumulative. No dividends
(other than those 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 of the
corporation) shall be payable on any Common Stock of the corporation during any
fiscal year of the corporation until dividends in the amount of $0.046, $0.258,
$0.37 and $0.987 per share (adjusted to reflects stock splits, stock dividends,
and recapitalizations) on the Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, respectively,
shall have been paid or declared and set apart during that fiscal year.
2. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of
the corporation, either voluntary or involuntary, the holders of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of the assets or surplus funds of the corporation to the holders of
Common Stock by reason of their ownership thereof, the amount of $0.62 per
share for each share of Series A Preferred Stock then held by them and the
amount of $3.44 per share for each share of Series B Preferred Stock then held
by them and the amount of $4.93 per share for each share of Series C Preferred
Stock then held by them and the amount of $6.59 per share for each share of
Series D Preferred Stock then held by them (adjusted to reflect stock splits,
stock dividends and recapitalizations), plus all declared but unpaid dividends
on their respective shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock then held by them
and no more. The Series A, B, C and D Preferred Stock shall rank on a parity as
to the receipt of the respective preferential amounts for each such Series upon
the occurrence of such event. If, upon the occurrence of such an event, the
assets and funds thus distributed among the holders of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then 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, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock in proportion to the
preferential amount each such holder is entitled to receive.
(b) Upon the completion of the distribution required by Section
2(a) above, the remaining assets of the Corporation available for distribution
to shareholders shall be distributed among the holders of the Common Stock of
the corporation pro rata based on the number of shares of Common Stock held by
each such shareholder.
(c) For purposes of this Section 2, any acquisition of the
corporation by means of merger or other form of corporate reorganization in
which the outstanding shares of the corporation are exchanged for securities or
other consideration issued, or caused to be issued, by the acquiring corporation
or its subsidiary (other than a reincorporation transaction), a sale of all or
substantially all of the assets of the corporation or a transaction (or series
of related transactions) in which more than fifty percent (50%) of the voting
power of the corporation is disposed of to a single person or entity or group of
affiliated persons or entities shall be treated as a liquidation, dissolution or
winding up of the corporation and shall entitle the holders of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Common Stock to receive at the closing in cash, securities
or other property amounts as specified in Sections 2(a) and 2(b) above.
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(d) Any securities to be delivered to the holders of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and/or Common Stock pursuant to Section 2(c) above shall be
valued as follows:
(i) Securities not subject to investment letter or other
similar restrictions on free marketability:
(A) If traded on a securities exchange or the NASDAQ
National Market System, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the thirty (30) day
period ending three (3) days prior to the distribution;
(B) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid prices over the thirty (30)
day period ending three (3) days prior to the distribution; and
(C) If there is no active public market, the value
shall be the fair market value thereof, as determined in good faith by the Board
of Directors of the corporation.
(ii) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be to make
an appropriate discount from the market value determined as above in (i) (A),
(B) or (C) to reflect the approximate fair market value thereof, as determined
in good faith by the Board of Directors of the corporation.
3. Conversion. The holders of the Preferred Stock shall have
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conversion rights as follows (the "Conversion Rights"):
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(a) Right to Convert.
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(i) Subject to subsection (c), each share of 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 the Preferred Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing (i) in the case of the
Series A Preferred Stock, $0.62 for each share of Series A Preferred Stock or
(ii) in the case of the Series B Preferred Stock, $3.44 for each share of
Series B Preferred Stock, or (iii) in the case of the Series C Preferred Stock,
$4.93 for each share of Series C Preferred Stock, or (iv) in the case of the
Series D Preferred Stock, $6.59 for each share of Series D Preferred Stock, in
each case by the applicable Conversion Price at the time in effect for such
share. The initial Conversion Price for shares of Series A Preferred Stock shall
be $0.62 per share, the initial Conversion Price for shares of Series B
Preferred Stock shall be $3.44 per share, the initial Conversion Price for
shares of Series C Preferred Stock shall be $4.93 per share and the initial
Conversion Price for shares of Series D Preferred Stock shall be $6.59 per
share; provided, however, that the Conversion Price for each Series of Preferred
Stock shall be subject to adjustment as set forth in subsection 3(c).
(ii) Each share of Preferred Stock shall automatically be
converted into shares of Common Stock at the Conversion Price at the time in
effect for such
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shares of Preferred Stock upon the earlier, as to each series, of (A) the date
specified by vote or written consent or agreement of holders of a majority of
the shares of such Series then outstanding or of (B) the consummation of the
corporation's sale of its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement on Form S-1 (or any successor
such form) under the Securities Act of 1933, as amended (the "Securities Act"),
which results in aggregate gross cash proceeds to the corporation in excess of
Ten Million ($10,000,000) Dollars and the public offering price of which is not
less than Eight Dollars and Thirty Three Cents ($8.33) per share (adjusted to
reflect subsequent stock dividends, stock splits or recapitalizations).
(b) Mechanics of Conversion. Before any holder of Preferred Stock
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shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Preferred Stock, and shall
give written notice by mail, postage prepaid, 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 Preferred Stock,
or to the nominee or nominees of such holder, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of
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 offer of
securities registered pursuant to the Securities Act, the conversion will be
conditioned upon the closing with the underwriter of the sale of securities
pursuant to such offering, unless otherwise designated in writing by the holders
of such Preferred Stock, in which event the person(s) entitled to receive the
Common Stock issuable upon such conversion of the Preferred Stock shall not be
deemed to have converted such Preferred Stock until immediately prior to the
closing of such sale of securities.
(c) Conversion Price Adjustments of Preferred Stock. The
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Conversion Price of each Series of Preferred Stock shall be subject to
adjustment from time to time as follows:
(i) (A) If the corporation, at any time or from time to time
after the date of the first issuance of shares of Series D Preferred Stock (the
"Purchase Date"), shall issue any Additional Stock (as defined below) without
consideration or for a consideration per share less than the Conversion Price
for the Series A, Series B, Series C or Series D Preferred Stock in effect
immediately prior to the issuance of such Additional Stock, the Conversion Price
for such Series of Preferred Stock in effect immediately prior to each such
issuance shall forthwith be adjusted to a price determined by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issuance plus the
number of shares of Common Stock which the aggregate consideration received by
the corporation for the total number of shares of Additional Stock so issued
would purchase at such Conversion Price, and the denominator of which shall be
the number of shares of Common Stock outstanding immediately prior to such
issuance plus the
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number of such shares of Additional Stock so issued. For the purposes of this
subsection, the number of shares of Common Stock outstanding immediately prior
to such issue shall be calculated on a fully diluted basis, as if all shares of
Preferred Stock and all convertible securities had been fully converted into
shares of Common Stock immediately prior to such issuance and any outstanding
warrants, options or other rights for the purchase of shares of stock or
convertible securities 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
Preferred Stock, convertible securities, or outstanding options, warrants or
other rights for the purchase of shares of stock or convertible securities,
solely as a result of the adjustment of the respective Conversion Prices (or
other conversion ratios) resulting from the issuance of the Additional Stock
causing the adjustment in question. Immediately after any Additional Stock is
deemed issued, such Additional Stock shall be deemed to be outstanding.
(B) No adjustment of the Conversion Price for a Series
of Preferred Stock 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 (E)(3) and (E)(4), no adjustment of the Conversion Price for any
Series of Preferred Stock pursuant to this subsection 3(c)(i) shall have the
effect of increasing such Conversion Price above the Conversion Price for such
Series of Preferred Stock 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 Purchase Date, of options to purchase or rights to subscribe for
Common Stock, securities by their terms convertible into or exchangeable for
Common Stock or options to purchase or rights to subscribe for such convertible
or exchangeable securities (which are not excluded from the definition of
Additional Stock), the following provisions shall apply:
1. The aggregate maximum number of shares of
Common Stock deliverable upon exercise 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 3(c)(i)(C) and 3(c) (i)(D)),
if any, received by the corporation upon the issuance of
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such options or rights plus the minimum purchase price provided in such options
or rights for the Common Stock covered thereby.
2. The aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange 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
additional consideration, if any, to be received by the corporation 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 3(c)(i)(C) and 3(c)(i)(D)).
3. In the event of any change in the number of
shares of Common Stock deliverable or any increase 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
Conversion Price of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock obtained with respect to
the adjustment which was made upon the issuance of such options, rights or
securities, and any subsequent adjustments based thereon, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.
4. Upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock obtained
with respect to the adjustment which was made upon the issuance of such options,
rights or securities or options or rights related to such securities, and any
subsequent adjustments based thereon, shall be recomputed to reflect the
issuance of only the number of shares of Common Stock 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. Upon the expiration of any such options or rights, the termination
of any such rights to convert or exchange or the expiration of any options or
rights related to such convertible or exchangeable securities, only the number
of shares of Common Stock 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 shall continue to be deemed
to be issued.
5. All Common Stock deemed issued pursuant to this
subsection 3(c)(i)(E) shall be considered issued only at the time of its deemed
issuance and any actual issuance of such stock shall not be an actual issuance
or a deemed issuance of the corporation's Common Stock under the provisions of
this Section 3; provided however, that in
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the case of any options to purchase or rights to subscribe for Common Stock
which expire by their terms not more than thirty (30) days after the date of
issue thereof, no adjustment of the Conversion Price for any Series of Preferred
Stock shall be made until the expiration or exercise of all such options or
rights, whereupon such adjustment shall be made in the same manner provided in
subsection (E)(4) above.
(ii) "Additional Stock" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to subsection 3(c)(i)(E))
by the corporation on or after the Purchase Date other than shares of Common
Stock issued or issuable:
(A) pursuant to a transaction described in subsection
3(c)(iii) hereof;
(B) to officers, directors, employees and consultants
of the corporation directly or pursuant to a stock option plan or restricted
stock plan approved by the shareholders and directors of the corporation;
(C) for which adjustment of the Conversion Price is
made pursuant to this Section 3; or
(D) upon conversion of the Series A, Series B, Series C
or Series D Preferred Stock.
(iii) In the event the corporation should at any time or
from time to time after the Purchase Date fix a record date for the effectuation
of a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
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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 Conversion
Prices of the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of such Series shall be increased in proportion to such increase of
the aggregate shares of Common Stock outstanding and those issuable with respect
to such Common Stock Equivalents.
(iv) If the number of shares of Common Stock outstanding at
any time after the Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Conversion Price for the Series A Preferred Stock and Series B
Preferred Stock and Series C Preferred Stock and Series D Preferred Stock shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of each share of such Series shall be decreased in proportion to
such decrease in outstanding shares.
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(d) Other Distributions. In the event the corporation shall
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declare a distribution payable in securities of other persons, evidences of
indebtedness issued by the corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 3(c)(iii), then,
in each such case for the purpose of this subsection 3(d), the holders of the
Series A Preferred Stock and Series B Preferred Stock and Series C Preferred
Stock and Series D Preferred Stock shall be entitled to a proportionate share of
any such distribution as though they were the holders of the number of shares of
Common Stock of the corporation into which their shares of Series A and Series B
and Series C and Series D 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 distribution.
(e) Recapitalizations. If at any time or from time to time there
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shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
Sections 2 or 3) provision shall be made so that each holder of Preferred Stock
shall thereafter be entitled to receive upon conversion of the Preferred Stock
the number of shares of stock or other securities or property of the corporation
or otherwise, to which a holder of the number of shares of Common Stock
deliverable upon conversion of such Preferred Stock 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 3 with respect to the
rights of the holders of Preferred Stock after the recapitalization to the end
that the provisions of this Section 3 (including adjustment of the Conversion
Price then in effect and the number of shares purchasable upon conversion of the
Series A, Series B, Series C and Series D Preferred Stock) shall be applicable
after that event as nearly equivalent as may be practicable.
(f) No Impairment. Without the consent of the holders of
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Preferred Stock in accordance with Article III(B)(5) below, the corporation will
not, by amendment of its Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 3 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 Preferred Stock against impairment .
(g) No Fractional Shares and Certificate as to Adjustments.
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(i) No fractional shares shall be issued upon conversion of
the Preferred Stock, and the number of shares of Common Stock to be issued upon
conversion 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 Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment
of any Conversion Price of Series A, Series B, Series C or Series D Preferred
Stock pursuant to this Section 3, the corporation, at its expense, shall
promptly compute such adjustment or
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readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A, Series B, Series C and Series D Preferred Stock 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, Series B,
Series C or Series D Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (A) such adjustment and readjustment,
(B) the Conversion Price 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 Series A, Series B, Series C or
Series D Preferred Stock.
(h) Notices of Record Date. In the event of any taking by the
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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 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.
(i) Reservation of Stock Issuable Upon Conversion. The
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corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of the Preferred Stock such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the 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 Preferred Stock, in
addition to such other remedies as shall be available to the holder of such
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.
(j) Notices. Any notice required by the provisions of this
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Section 3 to be given to the holders of shares of Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at its address appearing on the books of the
corporation.
4. Voting Rights.
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(a) The holder of each share of Preferred Stock shall have the
right to one vote for each share of Common Stock into which such Preferred Stock
could then be converted (with any fractional share determined on an aggregate
conversion basis being rounded to the nearest whole share), and with respect to
such vote, such holder shall have full voting rights and powers equal to the
voting rights and powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any shareholders' meeting in
accordance with the by-laws 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. Notwithstanding the foregoing,
the holders of Series C Preferred Stock,
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voting as a single class, shall be entitled to elect one (1) member of the
corporation's board of directors; the holders of Series B Preferred Stock,
voting as a single class, shall be entitled to elect two (2) members of the
corporation's board of directors; the holders of Series A Preferred Stock,
voting as a single class, shall be entitled to elect one (1) member of the
corporation's board of directors; and the holders of the Common Stock (excluding
the Preferred Stock on an as-converted basis), voting as a single class, shall
be entitled to elect the remaining members of the corporation's board of
directors.
(b) In the case of any vacancy in the office of a director
occurring among the directors elected by the holders of a Series of Preferred
Stock or Common Stock pursuant to Section 4(a) hereof, the remaining director or
directors so elected by the holders of such Series of Preferred Stock or Common
Stock may, by affirmative vote of a majority thereof (or the remaining director
so elected if there is but one, or if there is no such director remaining, by
the affirmative vote of the holders of a majority of the shares of that class)
elect a successor or successors to hold the office for the unexpired term of the
director or directors whose place or places shall be vacant. Any director who
shall have been elected by the holders of the Series A, Series B or Series C
Preferred Stock or Common Stock or any director so elected as provided in the
preceding sentence hereof, may be removed during the aforesaid term of office,
whether with or without cause, only by the affirmative vote of the holders of a
majority of the Series A, Series B or Series C Preferred Stock, or Common Stock,
as the case may be.
5. Protective Provisions. So long as shares of Preferred Stock are
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outstanding, the corporation shall not without first obtaining the approval (by
vote or written consent, as provided by law) of (i) the holders of at least a
majority of the then outstanding shares of Preferred Stock, voting together as a
class, and (ii) the holders of at least a majority of the then outstanding
shares of Series C Preferred Stock, voting as a separate class, except where
otherwise required by law:
(a) sell, convey, or otherwise dispose of all or substantially
all of its property or business or merge into or consolidate with any other
corporation (other than a wholly owned subsidiary corporation in a merger not
involving a third party) 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;
(b) liquidate, dissolve, recapitalize or reorganize the
corporation;
(c) create or issue any new class or Series of stock or any other
securities convertible into equity securities of the corporation (i) having a
preference over, or being on a parity with, the Series A, Series B, Series C or
Series D Preferred Stock with respect to voting, dividends, conversion or upon
liquidation, or (ii) having rights similar to any of the rights of the Series A,
Series B, Series C and Series D Preferred Stock under this Section 5;
(d) adversely alter or change the rights, preferences or
privileges of any of the Preferred Stock; or
(e) reclassify any of the Company's outstanding capital stock.
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6. Status of Converted Stock. In the event any shares of Preferred
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Stock shall be converted pursuant to Section 3 hereof, the shares so converted
shall be canceled and shall not be issuable by the corporation, and the Articles
of Incorporation of the corporation shall be appropriately amended to effect the
corresponding reduction in the corporation's authorized capital stock.
7. Repurchase of Shares. In connection with repurchases by the
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corporation of its Common Stock pursuant to its agreements with certain of the
holders thereof providing for such repurchases in the event of the termination
of the status of such holder as an employee, director or consultant to the
Company, each holder of Preferred Stock shall be deemed to have consented, for
purposes of Sections 502, 503 and 506 of the California General Corporation Law,
to distributions made by the corporation with respect to such repurchases.
8. Redemption.
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(a) Subject to the limitations of Section 500 et seq. of the
California Corporations Code, at any time after April 30, 2002, upon the written
request from the holders of not less than a majority of the then outstanding
shares of a Series of Preferred Stock, voting as one class, that such Series of
Preferred Stock be redeemed, this corporation shall, within thirty (30) days
(the "Initial Redemption Date") after the receipt by this corporation of such
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written request, from any source of funds legally available therefor, redeem all
of the then outstanding shares of such Series of Preferred Stock in three annual
installments beginning on the Initial Redemption Date (the Initial Redemption
Date, together with the first and second anniversary of such date shall each be
referred to herein as a "Redemption Date"). The corporation shall effect such
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redemptions by paying in cash therefor, $0.62 per share of Series A Preferred
Stock, $3.44 per share of Series B Preferred Stock, $4.93 per share of Series
C Preferred Stock and $6.59 per share of Series D Preferred Stock (as adjusted
for any stock dividends, combinations or splits with respect to such shares)
plus all declared but unpaid dividends on such shares to be redeemed (the
"Redemption Price"), in exchange for the shares of Series A, Series B, Series C
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and Series D Preferred Stock to be redeemed (as adjusted for any stock
dividends, combinations or splits with respect to such shares), respectively.
The number of shares of Preferred Stock that the corporation shall be required
under this subsection 8(a) to redeem on any Redemption Date shall be equal to
the one-third (1/3) of the total number of shares of a Series of Preferred Stock
outstanding immediately prior to the Initial Redemption Date. Any redemption
effected pursuant to this subsection 8(a) shall be made on a pro rata basis
among the holders of a Series of Preferred Stock in proportion to the number of
shares of such Series of Preferred Stock then held by such holders.
(b) 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 Preferred Stock to be
redeemed, at the address last shown on the records of this 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
Redemption Price, the place at which payment may be obtained and calling upon
such holder to surrender to this corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing the shares
to be redeemed (the "Redemption Notice"). Except as
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provided in subsection 8(c) below, on or after the Redemption Date, each holder
of Preferred Stock to be redeemed shall surrender to this corporation the
certificate or certificates representing such shares, in the manner and at the
place designated in the Redemption Notice, and thereupon the 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 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 the applicable Redemption Date, unless there
shall have been a default in payment of the Redemption Price, all rights of the
holders of shares of Preferred Stock designated for redemption in the Redemption
Notice for redemption as of the applicable Redemption Date as holders of
Preferred Stock (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. Subject to the rights of any Series of Preferred Stock which may
from time to time come into existence, if the funds of the corporation legally
available for redemption of shares of Preferred Stock on any Redemption Date are
insufficient to redeem the total number of shares of 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 based upon their holdings of Preferred Stock. The
shares of Preferred Stock not redeemed shall remain outstanding and entitled to
all the rights and preferences provided herein. Subject to the rights of a
Series of Preferred Stock which 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 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, this corporation shall
deposit the Redemption Price of all shares of a Series of 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 One Hundred Million Dollars ($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
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 8(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, and from and after the date of the 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 shareholders with respect
to such shares and shall have no rights with respect thereto except the right to
receive from the bank or trust corporation payment of the Redemption Price of
the shares, without interest, upon surrender of their certificates therefor.
Such instructions shall also provide that any moneys deposited by the
corporation pursuant to this subsection 8(d) for the redemption of shares
thereafter converted into shares of the corporation's Common Stock pursuant to
Article III(B)(3) hereof prior to the Redemption Date shall be returned to the
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corporation forthwith upon such conversion. The balance of any moneys deposited
by this corporation pursuant to this subsection 8(d) remaining unclaimed at the
expiration of two (2) years following the Redemption Date shall thereafter be
returned to this corporation upon its request expressed in a resolution of its
Board of Directors.
C. Common Stock.
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1. Dividend Rights. Subject to the prior rights of holders of all
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classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of 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
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up of the corporation, the assets of the corporation shall be distributed as
provided in Section B.2. of this Article III.
3. Redemption. The Common Stock is not redeemable.
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4. Voting Rights. The holder of each share of Common Stock shall
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have the right to one vote, and shall be entitled to notice of any shareholders
meeting in accordance with the By-laws of the corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
ARTICLE V
The Board of Directors of the Corporation is expressly authorized to make,
alter or repeal Bylaws of the Corporation.
ARTICLE VI
Elections of directors need not be by written ballot unless otherwise provided
in the Bylaws of the Corporation.
ARTICLE VII
(A) To the fullest extent permitted by the Delaware General Corporation
Law, as the same exists or as may hereafter be amended, 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.
(B) The Corporation shall indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director or officer of the
Corporation or any predecessor of the Corporation, or serves or served at any
other enterprise as a director or officer at the request of the Corporation or
any predecessor to the Corporation.
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(C) Neither any amendment nor repeal of this Article VII, nor the adoption
of any provision of the Corporation's Certificate of Incorporation inconsistent
with this Article VII, shall eliminate or reduce the effect of this Article VII
in respect of any matter occurring, or any action or proceeding accruing or
arising or that, but for this Article VII, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE VIII
The name and mailing address of the incorporator are as follows:
David Lee
VENTURE LAW GROUP
2800 Sand Hill Road
Menlo Park, CA 94025
Executed this ___ day of April, 1999.
______________________________
David Lee, Incorporator
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