EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") is entered into
as of __________ __, 1999 by and between Extreme Networks, a California
corporation ("Extreme California"), and Extreme Networks, Inc., a Delaware
corporation ("Extreme Delaware").
WITNESSETH:
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WHEREAS, Extreme Delaware is a corporation duly organized and existing
under the laws of the State of Delaware;
WHEREAS, Extreme California is a corporation duly organized and existing
under the laws of the State of California;
WHEREAS, on the date of this Merger Agreement, Extreme Delaware has
authority to issue One Thousand (1,000) shares of Common Stock, par value $0.001
per share (the "Extreme Delaware Common Stock"), of which One Thousand (1,000)
shares are issued and outstanding and owned by Extreme California;
WHEREAS, on the date of this Merger Agreement, Extreme California has
authority to issue 50,000,000 shares of Common Stock (the "Extreme California
Common Stock"), of which 11,732,613 shares are issued and outstanding, and
29,900,000 shares of Preferred Stock (the "Extreme California Preferred Stock"),
of which 15,000,000 shares are designated as Series A Preferred Stock, 9,000,000
shares are designated as Series B Preferred Stock and 5,900,000 shares are
designated as Series C Preferred Stock and 14,579,999 shares of Series A
Preferred Stock are issued and outstanding, 8,886,228 shares of Series B
Preferred Stock are issued and outstanding and 5,595,088 shares of Series C
Preferred Stock are issued and outstanding;
WHEREAS, the respective Boards of Directors for Extreme Delaware and
Extreme California have determined that, for the purpose of effecting the
reincorporation of Extreme California in the State of Delaware, it is advisable
and to the advantage of said two corporations and their shareholders that
Extreme California merge with and into Extreme Delaware upon the terms and
conditions herein provided; and
WHEREAS, the respective Boards of Directors of Extreme Delaware and Extreme
California, the stockholders of Extreme California, and the sole stockholder of
Extreme Delaware have adopted and approved this Merger Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Extreme California and Extreme Delaware hereby agree to merge as
follows:
1. Merger. Extreme California shall be merged with and into Extreme
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Delaware, and Extreme Delaware shall survive the merger ("Merger"), effective
upon the date when this Merger Agreement is made effective in accordance with
applicable law (the "Effective Date").
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2. Governing Documents. The Certificate of Incorporation of Extreme
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Delaware shall be amended to read in full as follows:
"FIRST: The name of the corporation is Extreme Networks, Inc.
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(hereinafter sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in
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the State of Delaware is Incorporating Services, Ltd., 00 Xxxx Xxxxx
Xxxxxx, xx xxx Xxxx xx Xxxxx, Xxxxxx of Kent. The name of the registered
agent at that address is Incorporating Services, Ltd.
THIRD: The purpose of the Corporation is to engage in any lawful act
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or activity for which a corporation may be organized under the General
Corporation Law of Delaware.
FOURTH: The Corporation is authorized to issue two classes of shares
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to be designated respectively Preferred Stock ("Preferred") and Common
Stock ("Common"). The total number of shares of Preferred this Corporation
shall have authority to issue is 31,900,000 par value $0.001 per share, and
the total number of shares of Common this Corporation shall have authority
to issue is 150,000,000, par value $0.001 per share. The shares of
Preferred authorized by this Certificate of Incorporation may be issued
from time to time in one or more series.
There shall be three series of Preferred with one series
designated as Series A Preferred Stock ("Series A Preferred"), which shall
consist of 15,000,000 shares, one series designated as Series B Preferred
Stock ("Series B Preferred"), which shall consist of 9,000,000 shares, and
a third series designated Series C Preferred Stock ("Series C Preferred"),
which shall consist of 5,900,000 shares. The remaining 2,000,000 authorized
shares of Preferred shall initially be undesignated. As used herein, the
term "Preferred" without designation shall refer to shares of Series A
Preferred, Series B Preferred, and Series C Preferred.
The relative rights, preferences, privileges and restrictions
granted to or imposed upon the Common and the Preferred are as follows:
1. Dividends.
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(a) The holders of outstanding Preferred shall be entitled to
receive in any fiscal year, when, as and if declared by the Board of
Directors, out of any assets at the time legally available therefor, non
cumulative dividends in cash at the rate of $0.0267 per share of Series A
Preferred, $0.1104 per share of Series B Preferred and $0.2936 per share of
Series C Preferred, as adjusted for any consolidations, combinations, stock
distributions, stock dividends, stock splits or similar events
(collectively a "Recapitalization Event") per annum. Dividends may be
declared and paid upon Common in any fiscal year of the Corporation only if
dividends in the total amount of $0.0267 per share, $0.1104 per share, and
$0.2936 per share (as adjusted for any Recapitalization Event) shall have
been paid or declared and set apart upon all shares of Series A Preferred,
Series B Preferred and Series C Preferred, respectively, during that
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fiscal year, and no dividends shall be paid on any share of Common unless a
dividend (including the amount of any dividends paid pursuant to the above
provisions of this Section 1(a)) is paid with respect to all outstanding
shares of Preferred in an amount for each such share of Preferred equal to
or greater than the aggregate amount of such dividends for all shares of
Common into which each such share of Preferred could then be converted. The
right to dividends on Preferred shall not be cumulative, and no right shall
accrue to holders of Preferred by reason of the fact that distributions on
said shares are not declared in any prior year, nor shall any undeclared or
unpaid distribution bear or accrue interest.
(i) Each holder of shares of Preferred shall be deemed to
have consented to distributions made by the Corporation in connection
with the repurchase of shares of Common issued to or held by
employees, directors or consultants upon termination of their
employment or services pursuant to agreements providing for such
repurchase.
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, distributions to the
shareholders of the Corporation shall be made in the following manner:
(i) The holders of Preferred shall be entitled to receive,
prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common or any
other class or series of stock of the Corporation by reason of their
ownership of such stock, an amount for each share of Preferred then
held by them equal to the sum of (i) $0.333 per share of Series A
Preferred (hereinafter such amount shall be referred to as the
"Original Series A Issue Price"), $1.38 per share of Series B
Preferred (hereinafter such amount shall be referred to as the
"Original Series B Issue Price"), and $3.67 per share of Series C
Preferred (hereinafter such amount shall be referred to as "Original
Series C Issue Price"), appropriately adjusted for any
Recapitalization Event with respect to such shares; (ii) $0.0267 per
share of Series A Preferred, $0.1104 per share of Series B Preferred,
and $0.2936 per share of Series C Preferred per annum accruing
annually on the anniversary of the date of issuance of the Series A
Preferred, Series B Preferred, or Series C Preferred, respectively,
and (iii) all declared and unpaid dividends thereon of the Series A
Preferred, the Series B Preferred, and the Series C Preferred,
respectively. If upon occurrence of such event of liquidation,
dissolution or winding up, the assets and property legally available
to be distributed among the holders of the Preferred shall be
insufficient to permit the payment to such holders of the liquidation
preferences set forth in this section 2(a)(i), then the entire assets
and property of the Corporation legally available for distribution
shall be distributed ratably among the holders of Preferred.
(ii) After payment has been made to the holders of the
Preferred of the full amounts to which they shall be entitled pursuant
to Section 2(a)(i) above, all
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remaining assets available for distribution, if any, shall be
distributed, (x) first, ratably among the holders of the Common and
the Series A Preferred, Series B Preferred and Series C Preferred
based upon the number of shares of Common then held (assuming for such
purpose the conversion of Preferred unto common) until the holders of
the Series C Preferred have received under this Section 2(a)(ii) an
amount (in addition to any amounts received under Section 2(a)(i)) of
$1.23 per share of Common then held (assuming for such purpose the
conversion of Preferred into Common, and (y) thereafter, ratable among
the holders of the Common and the Series A Preferred and Series B
Preferred based upon the number of shares of Common then held
(assuming for such purposes the conversion of Preferred into Common).
(b) For purposes of this Section 2, a merger or consolidation of
the Corporation with or into any other corporation or corporations, or the
merger or consolidation of any other corporation or corporations into the
Corporation, shall be treated as a liquidation, dissolution or winding up
of the Corporation if as a result of such consolidation or merger, or a
sale of all or substantially all of the assets of the Corporation holders
of capital stock of the Corporation (but without taking into account the
shares of Series C Preferred) would receive distributions in cash or
securities of another corporation or corporations of less than $3.33 per
share of capital stock of the Corporation, on an as converted basis and
appropriately adjusted for any Recapitalization Event; provided further,
that any such transaction which is not treated as a liquidation,
dissolution or winding up under this Section 2(b), the Series C Preferred
shall be entitled to receive the liquidation amount to which its would
otherwise be entitled to under Section 2(a)(i) and (ii) and the Series A
Preferred and Series B Preferred shall be entitled to receive the
liquidation amount to which they would otherwise be entitled under Section
2(a)(i) above. The valuation of any securities or other property other than
cash received by the Corporation in any transaction covered by this Section
2(b) shall be computed at the fair value thereof at the time of receipt as
determined in good faith by the Board of Directors.
(c) The holders of Preferred shall have no priority or preference
with respect to distributions made by the Corporation in connection with
the repurchase of shares of Common issued to or held by employees,
directors or consultants upon termination of their employment or services
pursuant to agreements providing for the right of said repurchase between
the Corporation and such persons.
3. Conversion. The holders of the Preferred shall have
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conversion rights (the "Conversion Rights") as follows:
(a) Each share of Preferred 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, into Common as more fully described below. The number of shares
of fully paid and nonassessable Common into which each share of Series A
Preferred, Series B Preferred, and Series C Preferred may be converted
shall be determined, respectively, by dividing $0.333 by the Series A
Conversion Price
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(as hereinafter defined), $1.38 by the Series B Conversion Price (as
hereinafter defined), and $3.67 by the Series C Conversion Price (as
hereinafter defined) in effect at the time of conversion. The Series A
Conversion Price, Series B Conversion Price, and Series C Conversion Price
shall initially be $0.333, $1.38, and $3.67, respectively, subject to
adjustment as provided in Section 4 below.
(b) Each share of Preferred shall automatically be converted into
shares of Common utilizing the then effective Conversion Price for each
such share upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common
for the account of the Corporation to the public at a price to the public
of not less than $5.00 per share (subject to adjustment in the event of any
recapitalization, stock split, stock dividend or other similar event) and
an aggregate offering price to the public of not less than $10,000,000. In
the event of such an offering, the person(s) entitled to receive the Common
issuable upon such automatic conversion of Preferred shall not be deemed to
have converted such Preferred until immediately prior to the closing of
such sale of securities.
(c) Each share of Series A Preferred, Series B Preferred, and
Series C Preferred shall automatically be converted into shares of Common
utilizing the then effective respective Conversion Price for each such
share upon the written consent of holders of at least a majority of each
series voting separately of the then outstanding shares of Preferred voting
on an as-converted basis.
(d) No fractional shares of Common shall be issued upon
conversion of Preferred. In lieu of any fractional shares to which the
holder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the fair market value of the Common on the
Conversion Date, as determined by the Corporation's board of directors.
Before any holder of Preferred shall be entitled to convert the same into
full shares of Common, he shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Preferred, and shall give written notice to the
Corporation at such office that he elects to convert the same; provided,
however, that in the event of an automatic conversion pursuant to
subparagraph 3(b) or subparagraph 3(c), the outstanding shares of all
Preferred shall be converted automatically without any further action by
the holders of such shares and whether or not the certificates representing
such shares are surrendered to the Corporation or its transfer agent; and
provided further, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common issuable upon such automatic
conversion unless either the certificates evidencing such shares of
Preferred are delivered to the Corporation or its transfer agent as
provided above, or the holder notifies the Corporation or its transfer
agent that such 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 with such
certificates.
(e) The Corporation shall, as soon as practicable after such
delivery, or after such agreement and indemnification, issue and deliver at
such office to such holder of
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Preferred, a certificate or certificates for the number of shares of Common
to which he shall be entitled as aforesaid and a check payable to the
holder, or order, in the amount of any cash amounts payable as the result
of a conversion into fractional shares of Common, plus any declared and
unpaid dividends on the converted Preferred, and a certificate for any
shares of Preferred not so converted. 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 to be converted, or in the case
of automatic conversion on the date of the closing of the offering or the
receipt of the written consent (as the case may be), and the person or
persons entitled to receive the shares of Common issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares of Common on such date.
(f) Upon the conversion of any outstanding shares of Preferred
into Common pursuant to this Section 3, all such shares of Preferred
previously designated Series A Preferred, Series B Preferred, and Series C
Preferred shall resume the status of authorized but unissued shares of
Preferred, undesignated as to series.
(g) In the event of any taking by the Corporation of a record of
the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right, the Corporation shall mail to
each holder of Preferred, at least 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.
4. Adjustments to Conversion Price.
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(a) In the event the Corporation at any time or from time to time
effects a subdivision or combination of its outstanding Common into a
greater or lesser number of shares without a proportionate and
corresponding subdivision or combination of its outstanding Preferred, then
and in each such event the respective Conversion Price of each outstanding
series of Preferred shall be decreased or increased proportionately.
(b) In the event the Corporation at any time or from time to time
shall make or issue, or fix a record date for the determination of holders
of Common entitled to receive, a dividend or other distribution payable in
additional shares of Common or other securities or rights (hereinafter
referred to as "Common Stock Equivalents") convertible into or entitling
the holder thereof to receive additional shares of Common without payment
of any consideration by such holder for such Common Stock Equivalents or
the additional shares of Common, then and in each such event the maximum
number of shares (as set forth in the instrument relating thereto without
regard to any provisions contained therein for a subsequent adjustment of
such number) of Common issuable in payment of such dividend or distribution
or upon conversion or exercise of such Common Stock Equivalents shall be
deemed to be issued and outstanding 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. In each such event, the Conversion Price
shall be
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proportionately 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.
(c) If at any time after the first date on which a share of Series
A Preferred is first issued ("Series A Original Issue Date"), Series B
Preferred is first issued ("Series B Original Issue Date"), or Series C
Preferred is first issued ("Series C Original Issue Date"), the Corporation
shall issue or sell Equity Securities, as defined in subsection (A) below,
at a consideration per share (the "Lower Price") less than the Series A
Preferred, Series B Preferred, or Series C Preferred Conversion Price, as
applicable, in effect immediately prior to the time of such issue or sale,
then forthwith upon such issue or sale, the Conversion Price of each share
of Series A Preferred, Series B Preferred, and Series C Preferred, as
applicable, shall be adjusted to a price (calculated to the nearest cent)
determined by:
(i) an amount equal to the sum of (x) the number of shares
of Common outstanding immediately prior to such issue or sale
multiplied by the then existing Series A Preferred, Series B
Preferred, or Series C Preferred Conversion Price, as applicable, (y)
the number of shares of Common issuable upon conversion or exchange of
any obligations or of any shares of stock of the Corporation
outstanding immediately prior to such issue or sale multiplied by the
then existing Series A Preferred, Series B Preferred, or Series C
Preferred Conversion Price, as applicable, and (z) an amount equal to
the aggregate "consideration actually received" by the Corporation
upon such issue or sale, divided by
(ii) an amount equal to the sum of the number of shares of
Common outstanding immediately after such issue or sale and the number
of shares of Common issuable upon conversion or exchange of any
obligations or of any shares of stock of the Corporation outstanding
immediately prior to such issue or sale and the additional shares of
Common issued and/or issuable upon conversion or exchange of the
Equity Securities issued in such issuance or sale.
For purposes hereof the following provisions shall be applicable:
(A) The term "Equity Securities" shall mean any shares
of Common, or any other security of the Corporation convertible
into or exchangeable for Common, except for (1) up to 9,014,309
shares of Common issued or issuable, after the Series A Original
Issue Date, to officers, directors, full time employees or
consultants of the Corporation pursuant to stock grant, stock
purchase and/or stock option plans or any other stock incentive
program, agreement or arrangement approved by the Board of
Directors, (2) securities issued pursuant to the acquisition of
all or part of another company by the Corporation by merger or
other reorganization, or by the purchase of all or part of the
assets of another company, pursuant to a plan, agreement or
arrangement approved by the Board of Directors, (3) shares issued
pursuant to subsection 4(a) or 4(b) of this Article III, (4)
Common and/or Preferred issuable upon exercise,
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conversion or exchange of warrants to purchase Common or
Preferred issued in connection with a bank line or equipment
financing approved by the Board of Directors, (5) shares of
Common and/or Preferred reissued by the Corporation following
repurchase of such shares pursuant to any restricted stock
purchase agreement, and (6) shares of Common Stock issued upon
conversion of the Preferred Stock.
(B) In the case of an issue or sale for cash of shares
of Common, the "consideration actually received" by the
Corporation therefor shall be deemed to be the amount of cash
received, before deducting therefrom any commissions or expenses
paid by the Corporation.
(C) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the
Corporation) of additional shares of Common for consideration
other than cash or consideration partly other than cash, the
amount of the consideration other than cash received by the
Corporation for such shares shall be deemed to be the fair value
of such consideration as determined in good faith by the Board of
Directors.
(D) In case of the issuance by the Corporation in any
manner of any rights to subscribe for or to purchase shares of
Common , or any options for the purchase of shares of Common or
stock convertible into Common, all shares of Common or stock
convertible into Common to which the holders of such rights or
options shall be entitled to subscribe for or purchase pursuant
to such rights or options shall be deemed "outstanding" as of the
date of the offering of such rights or the granting of such
options, as the case may be, and the minimum aggregate
consideration named in such rights or options for the shares of
Common or stock convertible into Common covered thereby, plus the
consideration, if any, received by the Corporation for such
rights or options, shall be deemed to be the "consideration
actually received" by the Corporation (as of the date of the
offering of such rights or the granting of such options, as the
case may be) for the issuance of such shares.
(E) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of
stock of the Corporation that shall be convertible into or
exchangeable for Common, all shares of Common issuable upon the
conversion or exchange of such obligations or shares shall be
deemed issued as of the date such obligations or shares are
issued, and the amount of the "consideration actually received"
by the Corporation for such additional shares of Common shall be
deemed to be the total of (1) the amount of consideration
received by the Corporation upon the issuance of such obligations
or shares, as the case may be, plus (2) the minimum aggregate
consideration, if any, other than such
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obligations or shares, receivable by the Corporation upon such
conversion or exchange, except in adjustment of dividends.
(F) The amount of the "consideration actually
received" by the Corporation upon the issuance of any rights or
options referred to in subsection (D) above or upon the issuance
of any obligations or shares which are convertible or
exchangeable as described in subsection (E) above, and the amount
of the consideration, if any, other than such obligations or
shares so convertible or exchangeable, receivable by the
Corporation upon the exercise, conversion or exchange thereof
shall be determined in the same manner provided in subsections
(B) and (C) above with respect to the consideration received by
the Corporation in case of the issuance of additional shares of
Common; provided, however, that if such obligations or shares of
stock so convertible or exchangeable are issued in payment or
satisfaction of any dividend upon any stock of the Corporation
other than Common, the amount of the "consideration actually
received" by the Corporation upon the original issuance of such
obligations or shares of stock so convertible or exchangeable
shall be deemed to be the fair value of such obligations or
shares of stock, as of the date of the adoption of the resolution
declaring such dividend, as determined by the Board of Directors
at or as of that date. On the expiration of any rights or options
referred to in subsection (D), or the termination of any right of
conversion or exchange referred to in subsection (E), or any
change in the number of shares of Common deliverable upon
exercise of such options or rights or upon conversion of or
exchange of such convertible or exchangeable securities, the
Series A, Series B, and Series C Conversion Prices then in effect
shall forthwith be readjusted to such Conversion Prices as would
have been obtained had the adjustments made upon the issuance of
such option, right or convertible or exchangeable securities been
made upon the basis of the delivery of only the number of shares
of Common Stock actually delivered or to be delivered upon the
exercise of such rights or options or upon the conversion or
exchange of such securities.
(G) In the event this Corporation shall declare a
distribution payable in securities of other persons, evidences of
indebtedness issued by this Corporation or other persons or
options or rights not referred to in this subsection (c), then,
in each such case, the holders of Preferred shall be entitled to
the distributions provided for in Section 1 of this Article III
above, and no adjustment to the Conversion Prices provided for in
this subsection (c) shall be applicable.
(d) Without the consent of the holders of a majority in interest of
the outstanding Preferred, the Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, 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
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hereunder by the Corporation but will at all times in good faith assist in
the carrying out of all the provisions of this Section 4 and in the taking
of all such action as may be necessary or appropriate in order to protect
the conversion rights of the holders of the Preferred against impairment.
(e) Upon the occurrence of each adjustment or readjustment of the
Series A Preferred, Series B Preferred, or Series C Preferred Conversion
Price pursuant to this Section 4, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of shares of the respective series
of Preferred 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 Preferred, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii)
the Series A, Series B, or Series C Conversion Price at the time in effect,
and (iii) the number of shares of Common and the amount, if any, of other
property which at the time would be received upon the conversion of Series
A, Series B, or Series C Preferred.
(f) This Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common solely for the purpose
of effecting the conversion of the shares of the Series A Preferred, Series
B Preferred, and Series C Preferred such number of its shares of Common as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred, Series B Preferred, and
Series C Preferred; and if at any time the number of authorized but
unissued shares of Common shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A Preferred, Series B
Preferred and Series C Preferred, in addition to such other remedies as
shall be available to the holder of such shares, this 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 to such number of
shares as shall be sufficient for such purposes.
5. Voting Rights.
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(a) Each share of Common issued and outstanding shall have
one vote, and each share of Preferred issued and outstanding shall have the
number of votes equal to the number of Common shares into which such share
of Preferred could be converted at the record date for determination of the
shareholders 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
shareholders is solicited, such votes to be counted together with all other
shares of stock of the Corporation having general voting power and not
separately as a class. The Preferred and the Common shall vote as a single
class on all matters except as otherwise required by this Certificate or by
law.
(b) Three (3) members of the Board of Directors shall be subject
to election and removal by the holders of Preferred voting as a separate
class. All remaining members of the Board of Directors shall be subject to
election and removal by the holders of Common voting as a separate class.
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6. Protective Provisions.
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(a) So long as shares of Preferred are outstanding, the consent
of the majority in interest of the holders of each of the Series A
Preferred , Series B Preferred and Series C Preferred then outstanding,
voting as separate series, shall be required for any action which:
(i) amends or repeals any provision of the Corporation's
Certificate of Incorporation or Bylaws, if such action would alter or
change the designations, preferences and relative, participating,
optional and other special rights, or the restrictions provided for
the Series A Preferred, Series B Preferred or Series C Preferred;
(ii) authorizes or issues shares of any class of stock
having any preference or priority as to dividends or liquidation
preference superior to any such preference or priority of any series
of the Series A Preferred, Series B Preferred, or Series C Preferred;
(b) So long as shares of Preferred are outstanding, the consent of
the majority in interest of the holders of the Preferred then outstanding
shall be required for any action which:
(i) authorizes or issues shares of any class of stock
having any preference or priority as to dividends or liquidation
preference on parity with any such preference or priority of any
series of the Series A Preferred, Series B Preferred, or Series C
Preferred;
(ii) pays or declares any dividend on any junior securities;
(iii) authorizes a merger, sale of all or substantially all
its assets, consolidation, recapitulation, or reorganization of the
Corporation; or
(iv) involves any repurchase or other acquisition by the
Corporation of its own shares other than pursuant to the Certificate
of Incorporation or employee stock purchase agreements which provided
for the right of repurchase by the Corporation upon termination.
7. Status of Converted Stock.. In case any shares of Series A
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Preferred, Series B Preferred or Series C Preferred shall be converted
pursuant to Section 3 hereof, all certificates of the shares so converted
shall be appropriately canceled on the books of the Corporation and the
shares so converted shall not be reissued by the Corporation.
FIFTH: The following provisions are inserted for the management of
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the business and the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
1. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the
powers and authority expressly conferred upon them by statute or by this
Certificate of Incorporation or the Bylaws of
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the Corporation, the directors are hereby empowered to exercise all such
powers and do all such acts and things as may be exercised or done by the
Corporation.
2. The directors of the Corporation need not be elected by written
ballot unless the Bylaws so provide.
3. On and after the closing date of the first sale of the
Corporation's Common Stock pursuant to a firmly underwritten registered
public offering which results in the automatic conversion of the
Corporation's Preferred Stock (the "IPO"), any action required or permitted
to be taken by the stockholders of the Corporation must be effected at a
duly called annual or special meeting of stockholders of the Corporation
and may not be effected by any consent in writing by such stockholders.
Prior to such sale, unless otherwise provided by law, any action which may
otherwise be taken at any meeting of the stockholders may be taken without
a meeting and without prior notice, if a written consent describing such
actions is signed by the holders of outstanding shares having not less than
the minimum number of votes which would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
4. Special meetings of stockholders of the Corporation may be called
only (1) by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there
exist any vacancies in previously authorized directorships at the time any
such resolution is presented to the Board for adoption) or (2) by the
holders of not less than ten percent (10%) of all of the shares entitled to
cast votes at the meeting.
SIXTH:
-----
1. The number of directors shall initially be set at five (5) and,
thereafter, shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total
number of authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time any such resolution is
presented to the Board for adoption). Upon the closing of the IPO, the
directors shall be divided into three classes with the term of office of
the first class (Class I) to expire at the first annual meeting of the
stockholders following the IPO; the term of office of the second class
(Class II) to expire at the second annual meeting of stockholders held
following the IPO; the term of office of the third class (Class III) to
expire at the third annual meeting of stockholders; and thereafter for each
such term to expire at each third succeeding annual meeting of stockholders
after such election. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, a vacancy resulting from the removal of a
director by the stockholders as provided in Section 3 below may be filled
at a special meeting of the stockholders held for that purpose. All
directors shall hold office until the expiration of the term for which
elected, and until their respective successors are elected, except in the
case of the death, resignation, or removal of any director.
2. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any
increase in the authorized
12
number of directors or any vacancies in the Board of Directors resulting
from death, resignation or other cause (other than removal from office by a
vote of the stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have
been elected expires, and until their respective successors are elected,
except in the case of the death, resignation, or removal of any director.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
3. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of Directors,
may be removed from office at any time, with or without cause, but only by
the affirmative vote of the holders of at least a majority of the voting
power of all of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class. Vacancies in the Board of Directors resulting
from such removal may be filled by a majority of the directors then in
office, though less than a quorum, or by the stockholders as provided in
Section 1 above. Directors so chosen shall hold office for a term expiring
at the next annual meeting of stockholders at which the term of office of
the class to which they have been elected expires, and until their
respective successors are elected, except in the case of the death,
resignation, or removal of any director.
SEVENTH: The Board of Directors is expressly empowered to adopt,
-------
amend or repeal Bylaws of the Corporation. Any adoption, amendment or
repeal of Bylaws of the Corporation by the Board of Directors shall require
the approval of a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized
directorships at the time any resolution providing for adoption, amendment
or repeal is presented to the Board). The stockholders shall also have
power to adopt, amend or repeal the Bylaws of the Corporation. Any
adoption, amendment or repeal of Bylaws of the Corporation by the
stockholders shall require, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66-2/3%) of the voting power of all
of the then outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as
a single class.
EIGHTH: A director of the Corporation shall not be personally liable
------
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involved intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a
director, then the liability of a director
13
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing provisions of this Article
EIGHTH by the stockholders of the Corporation shall not adversely affect
any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
NINTH: The Corporation reserves the right to amend or repeal any
-----
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred
upon stockholders are granted subject to this reservation; provided,
--------
however, that, notwithstanding any other provision of this Certificate of
-------
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any vote of the holders of any class or
series of the stock of this Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at
least 66-2/3% of the voting power of all of the then outstanding shares of
the capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be required
to amend or repeal this Article NINTH, Article FIFTH, Article SIXTH,
Article SEVENTH or Article EIGHTH.
The Certificate of Incorporation of Extreme Delaware, as amended
herein, shall continue to be the Certificate of Incorporation of Extreme
Delaware as the surviving Corporation without change or amendment until
further amended in accordance with the provisions thereof and applicable
laws. The Bylaws of Extreme Delaware, in effect on the Effective Date,
shall continue to be the Bylaws of Extreme Delaware as the surviving
Corporation without change or amendment until further amended in accordance
with the provisions thereof and applicable laws."
3. Directors and Officers. The directors and officers of Extreme
----------------------
California shall become the directors and officers of Extreme Delaware upon the
Effective Date and any committee of the Board of Directors of Extreme California
shall become the members of such committees for Extreme Delaware.
4. Succession. On the Effective Date, Extreme Delaware shall succeed to
----------
Extreme California in the manner of and as more fully set forth in Section 259
of the General Corporation Law of the State of Delaware.
5. Further Assurances. From time to time, as and when required by Extreme
------------------
Delaware or by its successors and assigns, there shall be executed and delivered
on behalf of Extreme California such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action, as
shall be appropriate or necessary in order to vest, perfect or confirm, of
record or otherwise, in Extreme Delaware the title to and possession of all the
property, interests, assets, rights, privileges, immunities, powers, franchises
and authority of Extreme California, and otherwise to carry out the purposes of
this Merger Agreement and the officers and directors of Extreme Delaware are
fully authorized in the name and on behalf of
14
Extreme California or otherwise to take any and all such action and to execute
and deliver any and all such deeds and other instruments.
6. Stock of Extreme California.
---------------------------
a. Common Stock. Upon the Effective Date, by virtue of the Merger
------------
and without any action on the part of the holder thereof, each share of Extreme
California Common Stock outstanding immediately prior thereto shall be changed
and converted into one fully paid and nonassessable share of Extreme Delaware
Common Stock.
b. Preferred Stock. Upon the Effective Date, by virtue of the Merger
---------------
and without any action on the part of the holder thereof, each share of each
series of Extreme California Preferred Stock outstanding immediately prior
thereto shall be changed and converted into one fully paid and nonassessable
share of Extreme Delaware Preferred Stock of an equivalent series.
7. Stock Certificates. On and after the Effective Date, all of the
------------------
outstanding certificates which prior to that time represented shares of Extreme
California stock shall be deemed for all purposes to evidence ownership of and
to represent the shares of Extreme Delaware stock into which the shares of
Extreme California stock represented by such certificates have been converted as
herein provided. The registered owner on the books and records of Extreme
Delaware or its transfer agent of any such outstanding stock certificate shall,
until such certificate shall have been surrendered for transfer or otherwise
accounted for to Extreme Delaware or its transfer agent, have and be entitled to
exercise any voting and other rights with respect to and to receive any dividend
and other distributions upon the shares of Extreme Delaware stock evidenced by
such outstanding certificate as above provided.
8. Options, Warrants and All Other Rights to Purchase Stock. Upon the
--------------------------------------------------------
Effective Date, each outstanding option, warrant or other right to purchase
shares of Extreme California stock, including those options granted under the
Amended 1996 Stock Option Plan (the "Option Plan") of Extreme California, shall
be converted into and become an option, warrant or right to purchase the
identical number of shares of Extreme Delaware stock at a price per share equal
to the exercise price of the option, warrant or right to purchase Extreme
California stock, and upon the same terms and subject to the same conditions as
set forth in the Option Plan and other agreements entered into by Extreme
California pertaining to such options, warrants, or rights. A number of shares
of Extreme Delaware stock shall be reserved for purposes of such options,
warrants and rights equal to the number of shares of Extreme California stock so
reserved as of the Effective Date. As of the Effective Date, Extreme Delaware
shall assume all obligations of Extreme California under agreements pertaining
to such options and rights, including the Option Plan, and the outstanding
options, warrants or other rights, or portions thereof, granted pursuant
thereto.
9. Other Employee Benefit Plans. As of the Effective Date, Extreme
----------------------------
Delaware hereby assumes all obligations of Extreme California under any and all
employee benefit plans in effect as of said date or with respect to which
employee rights or accrued benefits are outstanding as of said date, including
but not limited to the 1999 Employee Stock Purchase Plan. A number
15
of shares of Extreme Delaware stock shall be reserved for purposes of such plans
equal to the number of shares of Extreme California stock so reserved as of the
Effective Date. As of the Effective Date, Extreme Delaware shall assume all
obligations of Extreme California under agreements pertaining to such plans, and
the outstanding rights granted pursuant thereto.
10. Outstanding Common Stock of Extreme Delaware. Forthwith upon the
--------------------------------------------
Effective Date, the One Thousand (1,000) shares of Extreme Delaware Common Stock
presently issued and outstanding in the name of Extreme California shall be
canceled and retired and resume the status of authorized and unissued shares of
Extreme Delaware Common Stock, and no shares of Extreme Delaware Common Stock or
other securities of Extreme Delaware shall be issued in respect thereof.
11. Covenants of Extreme Delaware. Extreme Delaware covenants and agrees
-----------------------------
that it will, on or before the Effective Date:
a. Qualify to do business as a foreign corporation in the State of
California, and in all other states in which Extreme California is so qualified
and in which the failure so to qualify would have a material adverse impact on
the business or financial condition of Extreme Delaware. In connection
therewith, Extreme Delaware shall irrevocably appoint an agent for service of
process as required under the provisions of Section 2105 of the California
Corporations Code and under applicable provisions of state law in other states
in which qualification is required hereunder.
b. File any and all documents with the California Franchise Tax Board
necessary to the assumption by Extreme Delaware of all of the franchise tax
liabilities of Extreme California.
12. Amendment. At any time before or after approval and adoption by the
---------
stockholders of Extreme California, this Merger Agreement may be amended in any
manner as may be determined in the judgment of the respective Boards of
Directors of Extreme Delaware and Extreme California to be necessary, desirable
or expedient in order to clarify the intention of the parties hereto or to
effect or facilitate the purposes and intent of this Merger Agreement.
13. Abandonment. At any time before the Effective Date, this Merger
-----------
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of either Extreme California or Extreme Delaware or both,
notwithstanding approval of this Merger Agreement by the sole stockholder of
Extreme Delaware and the shareholders of Extreme California.
14. Counterparts. In order to facilitate the filing and recording of this
------------
Merger Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original.
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IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved
by resolution of the Board of Directors of Extreme California and Extreme
Delaware, is hereby executed on behalf of each of said two corporations by their
respective officers thereunto duly authorized.
EXTREME NETWORKS, INC.,
a Delaware corporation
By:
-------------------------------------
Xxxxxx X. Xxxxx,
President and Chief Executive Officer
EXTREME NETWORKS,
a California corporation
By:
------------------------------------
Xxxxxx X. Xxxxx,
President and Chief Executive Officer
17
CERTIFICATE OF SECRETARY
OF
EXTREME NETWORKS, INC.
(a Delaware corporation)
I, Xxxx Xxxxxxx, the Secretary of Extreme Networks, Inc., a Delaware
corporation (the "Corporation"), hereby certify that the Agreement and Plan of
Merger to which this Certificate is attached was duly signed on behalf of the
Corporation by its President under the corporate seal of the Corporation and was
duly approved and adopted by a unanimous vote of the outstanding stock entitled
to vote thereon by written consent of the sole stockholder of the Corporation
dated __________ ____, 1999.
Executed effective on the ___________ day of _________, 1999.
By: ___________________________________
Xxxx Xxxxxxx, Secretary
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CERTIFICATE OF APPROVAL OF
AGREEMENT AND PLAN OF MERGER OF
EXTREME NETWORKS
(a California corporation)
Xxxxxx X. Xxxxx and Xxxx Xxxxxxx certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of Extreme Networks, a California corporation (the "Corporation").
2. This Certificate is attached to the Agreement and Plan of Merger
dated as of ________________, 1999, providing for the merger of the Corporation
with and into Extreme Networks, Inc., a Delaware corporation.
3. The Agreement and Plan of Merger in the form attached hereto (the
"Merger Agreement") was approved by the Board of Directors of the Corporation at
a meeting duly noticed and held on January 22, 1999.
4. The total number of outstanding shares of the Corporation entitled
to vote on the merger was 11,732,613 shares of Common Stock, 14,579,999 shares
of Series A Preferred Stock, 8,886,228 shares of Series B Preferred Stock and
5,595,088 shares of Series C Preferred Stock.
5. The principal terms of the Merger Agreement were approved by an
affirmative vote which exceeded the vote required, such vote being a majority of
the total number of outstanding shares of Common Stock and a majority of the
outstanding shares of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock, each voting separately as a class.
Dated: _____________, 1999.
----------------------------------------------
Xxxxxx X. Xxxxx, President
-----------------------------------------------
Xxxx Xxxxxxx, Secretary
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The undersigned, Xxxxxx X. Xxxxx and Xxxx Xxxxxxx, President and Secretary,
respectively, of Extreme Networks, a California corporation, declare under
penalty of perjury under the laws of the State of California that the matters
set forth in this Certificate are true and correct of their own knowledge.
Executed at Cupertino, California, on __________ ______, 1999.
-----------------------------------------------
Xxxxxx X. Xxxxx, President
-----------------------------------------------
Xxxx Xxxxxxx, Secretary
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