Exhibit 3.4
AMENDED CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES C PREFERRED STOCK
OF
MAXYGEN, INC.
Maxygen, Inc., a Delaware corporation (the "Corporation"), organized and
existing under the laws of the State of Delaware, the Certificate of
Incorporation of which was filed in the office of the Secretary of State of
Delaware on May 7, 1996, does by its President and under its corporate seal
hereby certify as follows:
FIRST: That pursuant to the authority vested in the Board of Directors of
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the Corporation in accordance with the provisions of its Certificate of
Incorporation and Section 151 of the Delaware General Corporations Law, the
Amended Certificate of Designations, Preferences and Rights of the Series C
Preferred Stock of the Corporation shall be amended to read as follows:
"A. SERIES C PREFERRED STOCK
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1. Designation of Series.
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1,000,000 shares of the Preferred Stock of the Corporation shall
constitute a series of Preferred Stock designated as Series C Preferred Stock
("Series C Preferred"), the powers, preferences and relative and other rights
and the qualifications, limitations and restrictions of which are fixed and
determined in this Section A.
2. Dividends.
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The holders of the then outstanding shares of Series C Preferred
shall be entitled to receive, when, as and if declared by the Board out of any
funds legally available therefor, noncumulative dividends at the rate of $0.40
per share (as adjusted for any stock dividend, combination or split with respect
to such shares) per annum. No dividends shall be paid on any other series of
Preferred Stock of the Company unless dividends are paid ratably, in proportion
to the respective annual dividend rates fixed therefor, on the Series C
Preferred which dividend rates are set based on a percentage of the liquidation
preference of such shares. No dividends (other than those payable solely in
Common Stock) shall be paid or declared on the Common Stock during any fiscal
year of the Corporation until dividends in the total amount of $0.40 per share
(as adjusted for any stock dividend, combination or split with respect to such
shares) on the Series C Preferred shall have been paid or declared and set apart
during such fiscal year. So long as shares of Series C Preferred remain
outstanding, no dividends shall be paid or declared
on the Common Stock at an annual rate in excess of $0.40 per share (as adjusted
for any stock dividend, combination or split with respect to such shares) or on
any other shares of Preferred Stock at a rate per share of more than 8% of the
liquidation preference of such shares of Preferred Stock. No right shall accrue
to holders of shares of Series C Preferred by reason of the fact that dividends
on such shares are not declared, nor shall any undeclared or unpaid dividends
bear or accrue interest.
3. Liquidation Rights.
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(a) In the event of any (i) reorganization, merger or
consolidation of the Corporation in which the holders of the Common Stock and
Preferred Stock of the Corporation immediately preceding the merger or
consolidation do not own 50% or more of the capital stock of the entity
surviving such merger or consolidation, or if such capital stock is not entitled
to elect a majority of the directors of the surviving entity, (ii) sale, lease,
assignment, license, transfer or other conveyance of all or substantially all
the assets of the Corporation or (iii) liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, (collectively,
a "Liquidating Event"), after payment or provision for payment of the debts and
other liabilities and obligations of the Corporation and subject to Section
A(3)(c) below, the holders of each share of Series C Preferred then outstanding
shall be entitled to elect to be paid out of the net assets of the Corporation
available for distribution to its stockholders, before any payment or
declaration and setting apart for payment of any amount shall be made in respect
of the Common Stock, an amount equal to $5.00 per share of Series C Preferred
(as adjusted for any stock dividend, combination or split with respect to such
shares), plus an amount equal to any previously declared but unpaid dividends
thereon (collectively, the "Series C Liquidation Preference"). In the event
insufficient funds are available to pay the Series C Liquidation Preference
together with any liquidation preference payable on any other series of
Preferred Stock of the Company, the net assets of the Company shall be paid
ratably to the holders of the Series C Preferred and holders of any other series
of Preferred Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive.
(b) After payment in full of the Series C Liquidation Preference
and any liquidation preferences payable on any other series of Preferred Stock,
the remaining net assets of the Corporation available for distribution shall be
distributed ratably to the holders of Common Stock.
(c) Upon the occurrence of a Liquidating Event described in
clauses (i) or (ii) of Section A(3)(a) above, the holders of a majority of the
shares of Series C Preferred then outstanding shall have the right to elect on
behalf of all of the holders of Series C Preferred the benefits of the
provisions of Section A(5)(i) below in
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lieu of receiving payment of the Series C Liquidation Preference and other
payments pursuant to this Section A(3).
4. Voting Rights.
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Except as otherwise provided herein or as required by law, the
holders of each share of Series C Preferred shall be entitled to vote on all
matters upon which holders of Common Stock have the right to vote and with
respect to such vote, shall be entitled to notice of any stockholders' meeting
in accordance with the Bylaws of the Corporation, and shall be entitled to a
number of votes equal to the largest number of full shares of Common Stock into
which such shares of Series C Preferred could be converted, pursuant to the
provisions of Section A(5) below, at the record date for the determination of
stockholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited. Except as otherwise expressly provided herein or to
the extent class or series voting is otherwise required by law or agreement, the
holders of shares of Series C Preferred Stock, the holders of any other series
of Preferred Stock that have such voting rights and the holders of Common Stock
shall vote together as a single class and not as separate classes on all
matters.
5. Conversion.
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The holders of the Series C Preferred shall have the following
conversion rights (the "Conversion Rights"):
(a) Right to Convert. Each share of Series C Preferred shall be
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convertible, at the option of the holder thereof, at any time after the date of
issuance of such share but prior to the closing date for a Qualified Public
Offering (as that term is hereinafter defined), at the office of the Corporation
or any transfer agent, into fully paid and nonassessable shares of Common Stock,
at the Conversion Price (as that term is hereinafter defined) therefor in effect
at the time of conversion determined as provided in this Section A(5) without
payment of any kind. A "Qualified Public Offering" shall mean an underwritten
public offering of the Corporation's Common Stock registered under the
Securities Act of 1933, as amended, the gross proceeds of which to the
Corporation and/or selling stockholders, if any, are at least $10 million
(before deducting any underwriting fees or selling commissions), provided that
the public offering price per share (before deducting any underwriting fees or
selling commissions) is at least $8.00 per share (as adjusted for any stock
dividend, combination or split with respect to such shares).
(b) Conversion Price. Shares of Series C Preferred shall be
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convertible into the number of shares of Common Stock that results from dividing
$5.00 by the Conversion Price per share in effect at the time of conversion for
each share of
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Series C Preferred being converted. The Conversion Price per share for the
Series C Preferred at the date on which the first share of the Series C
Preferred is issued (the "Original Issue Date") shall be $5.00 and shall be
subject to adjustment from time to time thereafter as provided in this Section
A(5).
(c) Automatic Conversion. Each share of Series C Preferred which
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remains outstanding on the closing date for a Qualified Public Offering (the
"Registration Date") shall automatically, and without any action on the part of
the holder thereof or the Corporation, be converted on the same basis and at the
same Conversion Price without any payment as if each holder thereof had properly
exercised his right to convert on the day next preceding the Registration Date;
provided that (i) such conversion shall be effective immediately prior to the
consummation of a Qualified Public Offering and (ii) the Corporation shall have
no obligation to issue and deliver to any such holder of Series C Preferred on
such date a certificate for the number of shares of Common Stock to which he
shall be entitled until such time as such holder shall have surrendered his
certificate or certificates for his Series C Preferred, duly endorsed, at the
office of the Corporation or any transfer agent or the holder notifies the
Corporation that such certificate or certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith. All rights
with respect to shares of Series C Preferred outstanding on the Registration
Date shall forthwith after the Registration Date terminate, except only the
right of the holders of such shares to receive Common Stock upon surrender of
their certificates for the Series C Preferred.
(d) Mechanics of Conversion; Unpaid Dividends. Before any of
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holder Series C Preferred 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, and shall
give written notice by mail, postage prepaid, to the Corporation at such office
that he elects to convert the same and shall state therein the number of shares
of Series C Preferred being converted and the name or names in which the
certificate or certificates for shares of Common Stock are to be issued.
Thereupon the Corporation shall promptly issue and deliver at such office to
such holder of Series C Preferred or to the nominee or nominees of such holder a
certificate or certificates for the number of shares of Common Stock to which he
shall be entitled. In case the number of shares of Series C Preferred
represented by the certificate or certificates surrendered for conversion
pursuant to this Section A(5) exceeds the number of shares converted, the
Corporation shall, upon such conversion, execute and deliver to the holder at
the expense of the Corporation a new certificate or certificates for the number
of shares of Series C Preferred represented by the certificate or certificates
surrendered which are not to be converted.
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Such conversion shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of the shares of Series C
Preferred 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 on such
date notwithstanding that the stock transfer books are closed or certificates
evidencing shares of Common Stock have not been delivered. Any dividends
previously declared but unpaid on shares of Series C Preferred surrendered for
conversion shall be paid in cash contemporaneously with the issuance of
certificates evidencing shares of Common Stock upon the conversion.
(e) Adjustment for Stock Splits and Combinations. If the
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Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the Conversion Price then
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 Original Issue Date reduce the outstanding shares of Common Stock by
reverse stock split, the Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment pursuant to this
Section A(5)(e) shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the
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event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix 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, then and in each such event the Conversion
Price for the Series C Preferred then in effect shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion
Price for the Series C Preferred then in effect by a fraction:
(1) the numerator of which shall be 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 shall be 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, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price for the Series C Preferred shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Conversion Price for the Series C Preferred shall be
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adjusted pursuant to this Section A(5)(f) as of the time of actual payment of
such dividends or distributions.
(g) Adjustments to Dividends and Distributions. In the event the
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Corporation at any time or from time to time after the Original Issue Date shall
make or issue, or fix 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, then and in
each such event provision shall be made so that the holders of Series C
Preferred shall receive upon conversion thereof in addition to the number of
shares of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Series C Preferred been
converted into Common Stock on the date of such event and had 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
giving application to all adjustments called for during such period under this
Section A(5) with respect to the rights of the holders of the Series C
Preferred.
(h) Adjustment for Reclassification, Exchange or Substitution.
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If the Common Stock issuable upon the conversion of the Series C Preferred shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for in sections A(5)(f) and (g) above, or a reorganization, merger,
consolidation or sale of assets provided for in Section A(5)(i) below) then and
in each such event the holder of each share of Series C Preferred shall have the
right thereafter to convert such share into the kind and amounts of shares of
stock and other securities and property receivable upon such reorganization,
reclassification or other change, by holders of the numbers of shares of Common
Stock into which such shares of Series C Preferred might have been converted
immediately prior to such reorganization, reclassification or change, all
subject to further adjustment as provided in this Section A(5).
(i) Reorganization, Mergers, Consolidations or Sales of Assets.
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If at any time or from time to time after the Original Issue Date there shall be
a capital reorganization of the Common Stock (other than a subdivision,
combination, reclassification or exchange of shares provided for elsewhere in
this Section A(5)) or a merger or consolidation of the Corporation in which the
holders of the Common Stock and Preferred Stock of the Corporation immediately
preceding the merger or consolidation do not own 50% or more of the capital
stock of the entity surviving such merger or consolidation or if such capital
stock is not entitled to elect a majority of the directors of the surviving
entity, or the sale, lease, assignment, license, transfer or other conveyance of
all or substantially all the Corporation's properties and assets to any other
person (each a "Reorganization Event"), and if as a part of such Reorganization
Event,
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the Series C Preferred is not canceled, exchanged, redeemed or otherwise
retired, then provision shall be made so that the holders of the Series C
Preferred shall thereafter be entitled to receive upon conversion of the Series
C Preferred, the number of shares of stock or other securities or property of
the Corporation, or of the successor corporation resulting from such
Reorganization Event, to which a holder of that number of shares of Common Stock
deliverable upon conversion of the Series C Preferred would have been entitled
on such Reorganization Event. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section A(5) with respect to
the rights of the holders of the Series C Preferred after the Reorganization
Event to the end that the provisions of this Section A(5) (including adjustment
of the Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series C Preferred) shall be applicable after that event as
nearly equivalent as may be practicable. The holders of at least a majority of
the Series C Preferred upon the occurrence of a Reorganization Event shall have
the option of electing on behalf of all of the holders of Series C Preferred
treatment of all shares of Series C Preferred under either this Section A(5)(i)
or Section A(3) hereof, notice of which election shall be submitted in writing
to the Corporation at its principal office no later than ten days before the
effective date of such event.
(j) Sale of Shares Below Conversion Price.
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(1) If at any time or from time to time after the Original
Issue Date, the Corporation shall issue or sell Additional Shares of Common
Stock (as hereinafter defined), other than as a dividend as provided in Section
A(5)(f) above, and other than upon a subdivision or combination of shares of
Common Stock as provided in Section A(5)(e) above, for a consideration per share
less than the then existing Conversion Price for the Series C Preferred, then
and in each such case the then existing Conversion Price for the Series C
Preferred shall be reduced, as of the opening of business on the date of such
issue or sale, to a price determined by multiplying such Conversion Price by a
fraction:
(A) the numerator of which shall be (i) the number of
shares of Common Stock outstanding immediately prior to such issue or sale, plus
(ii) the number of shares of Common Stock that the aggregate consideration
received by the Corporation for the total number of Additional Shares of Common
Stock so issued would purchase at such Conversion Price; and
(B) the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue or sale plus
the number of such Additional Shares of Common Stock so issued or sold.
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(2) For the purpose of making any adjustment in the
Conversion Price or number of shares of Common Stock purchasable on conversion
of Series C Preferred as provided above, the consideration received by the
Corporation for any issue or sale of securities shall:
(A) to the extent it consists of cash, be computed at
the net amount of cash received by the Corporation after deduction of any
underwriting or similar commissions, concessions or compensation paid or allowed
by the Corporation in connection with such issue or sale;
(B) to the extent it consists of services or property
other than cash, be computed at the fair market value of such services or
property as determined in good faith by the board of directors; and
(C) if Additional Shares of Common Stock, Convertible
Securities (as hereinafter defined), or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Corporation for a
consideration that covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the board of
directors to be allocable to such Additional Shares of Common Stock, Convertible
Securities or rights or options.
(3) For the purpose of the adjustment provided in Section
A(5)(j)(1), if at any time or from time to time after the Original Issue Date
the Corporation shall issue any rights or options for the purchase of, or stock
or other securities convertible into, Additional Shares of Common Stock (such
convertible stock or securities being hereinafter referred to as "Convertible
Securities"), then, in each case, if the Effective Price (as hereinafter
defined) of such rights, options or Convertible Securities shall be less than
the then existing Conversion Price for the Series C Preferred, the Corporation
shall be deemed to have issued at the time of the issuance of such rights or
options or Convertible Securities the maximum number of Additional Shares of
Common Stock, issuable upon exercise or conversion thereof and to have received
as consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Corporation for the
issuance of such rights or options or Convertible Securities, plus, in the case
of such options or rights, the minimum amounts of consideration, if any, payable
to the Corporation upon exercise or conversion of such options or rights. For
purposes of the foregoing, "Effective Price" shall mean the quotient determined
by dividing the total of all such consideration by such maximum number of
Additional Shares of Common Stock. No further adjustment of the Conversion Price
adjusted upon the issuance of such rights, options or Convertible Securities
shall be made as a result of the actual issuance of Additional Shares of
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Common Stock on the exercise of any such rights or options or the conversion of
any such Convertible Securities.
If any such rights or options or the conversion privilege represented by
any such Convertible Securities shall expire without having been exercised, the
Conversion Price adjusted upon the issuance of such rights, options or
Convertible Securities shall be readjusted to the Conversion Price that would
have been in effect had an adjustment been made on the basis that the only
Additional Shares of Common Stock so issued were the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise of such rights or
options, or rights of conversion of such Convertible Securities, and such
Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation for the granting of
all such rights and options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted
plus the consideration, if any, actually received by the Corporation on the
conversion of such, Convertible Securities.
(4) For the purpose of the adjustment provided for in
Section A(5)(j)(1), if at any time or from time to time after the Original Issue
Date the Corporation shall issue any rights or options for the purchase of
Convertible Securities, then in each such case, if the Effective Price thereof
is less than the then existing Conversion Price, the Corporation shall be deemed
to have issued at the time of the issuance of such rights or options the maximum
number of Additional Shares of Common Stock issuable upon conversion of the
total amount of Convertible Securities covered by such rights or options and to
have received as consideration for the issuance of such Additional Shares of
Common Stock an amount equal to the amount of consideration, if any, received by
the Corporation for the issuance of such rights or options, plus the minimum
amounts of consideration, if any, payable to the Corporation upon the exercise
of such options or rights and upon the conversion of such Convertible
Securities. For the purposes of the foregoing, "Effective Price" shall mean the
quotient determined by dividing the total amount of such consideration by such
maximum number of Additional Shares of Common Stock. No further adjustment of
such Conversion Price adjusted upon the issuance of such rights or options shall
be made as a result of the actual issuance of the Convertible Securities upon
the exercise of such rights or options or upon the actual issuance of Additional
Shares of Common Stock upon the conversion of such Convertible Securities.
The provisions of Section A(5)(j)(3) above for the readjustment of such
Conversion Price upon the expiration of rights or options or the rights of
conversion of Convertible Securities, shall apply mutatis mutandis to the
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rights, options and Convertible Securities referred to in this Section 13
(5)(j)(4).
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(k) Definition. The term "Additional Shares of Common Stock" as
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used herein shall mean all shares of Common Stock or Common Stock Equivalents
(as hereinafter defined) issued or deemed to be issued by the Corporation after
the Original Issue Date, whether or not subsequently reacquired or retired by
the Corporation, other than (1) shares of Common Stock issued upon conversion of
the Series A Preferred Stock of the Company; Series B Preferred Stock of the
Company or Series C Preferred; (2) up to 6,000,000 shares of Common Stock (as
adjusted for any stock dividend, combination or split with respect to such
shares) or Common Stock Equivalents issued to employees, officers, directors,
consultants or other persons performing services for the Corporation (if so
issued solely because of any such person's status as an officer, director,
employee, consultant or other person performing services for the Corporation and
not as part of any offering of the Corporation's securities) pursuant to any
stock option plan, stock purchase plan, management incentive plan, consulting
agreement or arrangement or other contract or undertaking approved in the good
faith and reasonable judgment of the disinterested members of the board of
directors; and (3) shares of Common Stock or Common Stock Equivalents issued in
the good faith and reasonable judgment of the disinterested members of the board
of directors as consideration for more favorable interest or rental terms in
connection with equipment leasing or loan transactions approved by the board of
directors. "Common Stock Equivalents," as used in this Section A(5)(k), shall
mean any securities of the Corporation to the extent such securities by the
terms thereof (i) are not effectively limited in amount as to dividends or
amounts payable upon liquidation of the Corporation, (ii) are otherwise a
substantial equivalent of Common Stock with respect to rights to dividends,
rights upon liquidation of the Corporation and rights upon consummation of a
merger or other extraordinary transaction in which the outstanding shares of
Common Stock participate and (iii) contain voting rights in the election of
directors.
(l) Accountants' Certificate of Adjustment. In each case of an
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adjustment or readjustment of the Conversion Price for the number of shares of
Common Stock or other securities issuable upon conversion of the Series C
Preferred, the Corporation, at its expense, shall cause independent certified
public accountants of recognized standing selected by the Corporation (who may
be the independent certified public accountants then auditing the books of the
Corporation) to compute such adjustment or readjustment in accordance herewith
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first class mail, postage prepaid, to each registered
holder of the Series C Preferred at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based including a statement of (1) the consideration received or
to be received by the Corporation for any Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold, (2) the Conversion Price
at that time in effect for the Series C Preferred, and (3) the number of
Additional Shares of Common Stock and the type and
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amount, if any, of other property which at the time would be received upon
conversion of the Series C Preferred.
(m) Notices of Record Date. In the event that the Corporation
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shall propose at any time, or from time to time, to (1) declare any dividend or
distribution upon its Common Stock or Preferred Stock, (2) effect any
reclassification or recapitalization of the Common Stock or Preferred Stock, (3)
reorganize, merge or consolidate the Corporation with or into any other
corporation, (4) sell, lease, assign, license, transfer or otherwise convey all
or substantially all of the assets of the Corporation, (5) dissolve or wind up
the affairs of the Corporation, or (6) offer for sale to the public any shares
of Common Stock, the Corporation shall provide notice to each holder of Series C
Preferred, or if any matter is to be voted on by any stockholder of the
Corporation, the Corporation shall provide notice to each holder of Series C
Preferred, as follows:
(1) with respect to item (1) above, at least 30 days prior
written notice of the date on which a record shall be taken for such dividend or
distribution;
(2) with respect to items (2), (3), (4) and (5) above, at
least 30 days prior written notice of the date on which a record shall be taken
for determining the right to vote on such matter, and, in addition, the date on
which the proposed transaction will be effective and the date on which the
holders of shares of Common Stock and Preferred Stock shall be entitled to
exchange their shares for securities or other property deliverable upon the
occurrence of the proposed transaction;
(3) with respect to item (6), at least 30 days prior
written notice of the date on which shares of Common Stock shall be offered to
the public; and
(4) with respect to the last item above, at least 30 days
prior written notice of the date on which a record shall be taken for
determining the right to vote on such matter.
(n) Fractional Shares. No fractional Common Stock shall be
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issued upon conversion of Series C Preferred. In lieu of any fractional shares
to which the holder would otherwise be entitled, the Corporation shall pay cash
equal to the product of such fraction multiplied by the fair market value of one
share of the Corporation's Common Stock on the date of conversion, as determined
in good faith by a unanimous vote of the board of directors. Whether or not
fractional shares are issuable upon such conversion shall be determined on the
basis of the total number of shares of Series C Preferred the holder is at the
time converting into Common Stock and the number of shares of Common Stock
issuable upon such conversion.
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(o) 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 Series C Preferred, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series C Preferred. As a condition precedent to
the taking of any action which would cause an adjustment to the Conversion
Price, the Corporation will take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient to enable it to validly and legally issue the
shares of its Common Stock that are issuable based upon such adjusted Conversion
Price.
(p) Notices. Any notice required by the provisions of this
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Section A(5) to be given to the holder of shares of the Series C Preferred shall
be deemed given when received by such holder after the same has been sent by
means of certified mail, return receipt requested, postage prepaid, by a
reputable overnight courier or messenger for hand delivery and addressed to each
holder of record at his address appearing on the books of the Corporation.
(q) Payment of Taxes. The Corporation shall pay all taxes and
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other governmental charges (other than taxes measured by the revenue or income
of the holders of the Series C Preferred) that may be imposed in respect of the
issue or delivery of shares of Common Stock upon conversion of the shares of the
Series C Preferred.
(r) No Dilution or Impairment. The Corporation shall not amend
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this Certificate of Designation or participate in any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action for the purpose of avoiding
or seeking to avoid the observance or performance of any of the terms to be
observed or performed under this Section A(5) by the Corporation, but will at
all times in good faith assist in carrying out all such action as may be
reasonably necessary or appropriate in order to protect the conversion rights of
the holders of the Series C Preferred against dilution or other impairment.
6. Restrictions and Limitations.
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So long as 1,750,000 shares of Preferred Stock remain
outstanding, the Corporation shall not, and shall not permit any corporation at
least 50% of whose outstanding voting stock shall at that time be owned directly
or indirectly by the Corporation (a "Subsidiary") to, without the vote or
written consent of the holders of a majority of the then outstanding shares of
Preferred Stock:
(1) effect any sale, lease, assignment, license, transfer or
other conveyance of all or substantially all the assets of the Corporation or
any of its
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Subsidiaries, or any reorganization, consolidation or merger involving the
Corporation or any of its Subsidiaries;
(2) effect any liquidation, dissolution or winding up of the
affairs of the Corporation or any of its Subsidiaries, whether voluntary or
involuntary, or file any voluntary petition in bankruptcy, or file any answer or
other pleading seeking any reorganization, arrangement, composition,
readjustment, liquidation or similar relief under any federal or state law
relative to bankruptcy, insolvency or other relief of debtors, or seek, consent
to or acquiesce in the appointment of any trustee, receiver, conservator or
liquidator for any assets of the Corporation or any of its Subsidiaries, or any
reorganization or reclassification of any capital stock of the Corporation or
any of its Subsidiaries; or
(3) amend the Certificate of Incorporation of the Corporation.
7. No Reissuance of Preferred Stock.
--------------------------------
No share or shares of Series C Preferred acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise shall be
reissued, and all such shares shall be canceled, retired and eliminated from the
shares which the Corporation shall be authorized to issue."
RESOLVED FURTHER, that the said resolutions of the board of directors,
and creation and authorization of issuance thereby of said Series of Series C
Preferred Stock, was duly made by the board of directors pursuant to authority
as aforesaid and in accordance with section 151 of the General Corporation Law
of the State of Delaware."
SECOND: That said amendment was duly adopted in accordance with the
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provisions of Section 242 of the Delaware General Corporations Law.
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IN WITNESS WHEREOF, Maxygen, Inc. has caused this Certificate of
Designations, Preferences and Rights to be signed by the undersigned this 14th
day of June, 1999.
MAXYGEN, INC.
By: /s/ Julian N. Stern
--------------------------
Julian N. Stern, Secretary
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