EXHIBIT 2.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES A JUNIOR PARTICIPATING CUMULATIVE PREFERRED STOCK
OF
DISCOVERY LABORATORIES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
DISCOVERY LABORATORIES, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), does hereby certify that,
pursuant to the authority conferred on the Board of Directors of the Corporation
by the Restated Certificate of Incorporation of the Corporation and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation adopted the following
resolution establishing a series of 50,000 shares of Preferred Stock of the
Corporation designated as "Series A Junior Participating Cumulative Preferred
Stock":
RESOLVED, that pursuant to the authority conferred on the Board of
Directors of the Corporation by the Restated Certificate of Incorporation, as
amended, a series of Preferred Stock, par value $.001 per share (as adjusted for
stock splits, stock dividends and reclassifications, if any), of the Corporation
is hereby established and created, and that the designation and number of shares
thereof and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series and the
qualifications, limitations and restrictions thereof are as follows:
Series A Junior Participating Cumulative Preferred Stock
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares initially constituting
such series shall be 50,000; provided, however, that if more than a total of
50,000 shares of Series A Preferred Stock shall be issuable upon the exercise of
Rights (the "Rights") issued pursuant to the Shareholder Rights Agreement dated
as of February 6, 2004, between the Corporation and Continental Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agreement"), the Board of Directors
of the Corporation, pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware, may direct by resolution or resolutions that a
certificate be properly executed, acknowledged, filed and recorded, in
accordance with the provisions of Section 103 thereof, providing for the total
number of shares of Series A Preferred Stock authorized to be issued to be
increased (to the extent that the Restated Certificate of Incorporation of the
Corporation then permits) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of such Rights.
Section 2. Dividends and Distributions.
(A)(i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, if any, the holders of
shares of Series A Preferred Stock, in preference to the holders of shares of
Common Stock of the Corporation and of any other junior stock of the
Corporation, shall be entitled to receive, when, as and if declared by the Board
of Directors of the Corporation out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provisions for
adjustment hereinafter set forth, 10,000 times the aggregate per share amount of
all cash dividends distributed by the Corporation, and 10,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock of the
Corporation or a subdivision of the outstanding shares of Common Stock of the
Corporation (by reclassification or otherwise), declared on the Common Stock of
the Corporation since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. The
multiple of cash and non-cash dividends declared on the Common Stock of the
Corporation of the Corporation to which holders of the Series A Preferred Stock
are entitled, which shall be 10,000 initially but which shall be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the
"Dividend Multiple." In the event that the Corporation shall at any time after
February 6, 2004 (the "Rights Declaration Date") (i) declare or pay any dividend
on the Common Stock of the Corporation of the Corporation payable in shares of
Common Stock of the Corporation of the Corporation, or (ii) effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock of the
Corporation of the Corporation (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock of the Corporation) into a greater or
lesser number of shares of Common Stock of the Corporation, then in each such
case the Dividend Multiple thereafter applicable to the determination of the
amount of dividends which holders of shares of Series A Preferred Stock shall be
entitled to receive shall be the Dividend Multiple applicable immediately prior
to such event multiplied by a fraction, the numerator of which is the number of
shares of Common Stock of the Corporation outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock of
the Corporation that were outstanding immediately prior to such event.
(ii) Notwithstanding anything else contained in this Section
2(A), the Corporation shall, out of funds legally available for that purpose,
declare a dividend or distribution on the Series A Preferred Stock as provided
in this Section 2(A) immediately after it declares a dividend or distribution on
the Common Stock of the Corporation (other than a dividend payable in shares of
Common Stock of the Corporation); provided, that in the event no dividend or
distribution shall have been declared on the Common Stock of the Corporation
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
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(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors of the
Corporation may fix in accordance with applicable law a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than such number of days prior to the date fixed for the
payment thereof as may be allowed by applicable law.
Section 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series A Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
10,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. The number of votes which a holder of a share of Series A Preferred
Stock is entitled to cast, which shall initially be 10,000 but which may be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Vote Multiple." In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare or pay any dividend on Common Stock of the
Corporation payable in shares of Common Stock of the Corporation or (ii) effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock of the Corporation (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock of the Corporation) into a
greater or lesser number of shares of Common Stock of the Corporation, then in
each such case the Vote Multiple thereafter applicable to the determination of
the number of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled shall be the Vote Multiple immediately prior to such
event multiplied by a fraction, the numerator of which is the number of shares
of Common Stock of the Corporation outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock of the
Corporation that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock of
the Corporation and the holders of shares of any other capital stock of the
Corporation having general voting rights, shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
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(C) Except as otherwise required by applicable law or as set forth
herein, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock of the Corporation as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of capital Stock of the Corporation ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) except as permitted in Section 4(A)(iv) below, redeem,
purchase or otherwise acquire for consideration shares of capital Stock of the
Corporation ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock; provided, that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of capital Stock of the Corporation of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of any stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors of
the Corporation) to all holders of such shares upon such terms as the Board of
Directors of the Corporation, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
capital stock of the Corporation unless the Corporation could, under subsection
(A) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
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Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors of the
Corporation, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (x) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $10,000 per share or
(2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 10,000 times the aggregate amount to be
distributed per share to holders of Common Stock of the Corporation or (y) to
the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time after the Rights Declaration Date
(i) declare or pay any dividend on Common Stock of the Corporation payable in
shares of Common Stock of the Corporation or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock of the
Corporation (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock of the Corporation) into a greater or lesser number of
shares of Common Stock of the Corporation, then in each such case the aggregate
amount per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (x) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock of the Corporation
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock of the Corporation that were outstanding
immediately prior to such event.
Neither the consolidation of nor merging of the Corporation with or into
any other corporation or corporations, nor the sale or other transfer of all or
substantially all of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 6.
Section 7. Consolidation, Merger, etc. In the event that the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock of the Corporation are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock of the Corporation is
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changed or exchanged, plus accrued and unpaid dividends, if any, payable with
respect to the Series A Preferred Stock. In the event that the Corporation shall
at any time after the Rights Declaration Date (i) declare or pay any dividend on
Common Stock of the Corporation payable in shares of Common Stock of the
Corporation or (ii) effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock of the Corporation (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock of the
Corporation) into a greater or lesser number of shares of Common Stock of the
Corporation, then in each such case, the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock of the Corporation outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock of the Corporation that were outstanding immediately
prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock shall not be
redeemable; provided, however, that the foregoing shall not limit the ability of
the Corporation to purchase or otherwise deal in such shares to the extent
otherwise permitted hereby and by law.
Section 9. Ranking. Unless otherwise expressly provided in the Restated
Certificate of Incorporation of the Corporation, as may be amended or restated
from time to time, or a Certificate of Designations relating to any other series
of preferred stock of the Corporation, the Series A Preferred Stock shall rank
junior to every other series of the Corporation's preferred stock previously or
hereafter authorized, as to the payment of dividends and the distribution of
assets on liquidation, dissolution or winding up and shall rank senior to the
Common Stock of the Corporation.
Section 10. Amendment. The Restated Certificate of Incorporation and this
Certificate of Designations shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of two-thirds or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in
whole shares or in any fraction of a share that is one ten-thousandth
(1/10,000th) of a share or any integral multiple of such fraction, which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock. In
lieu of fractional shares, the Corporation may elect to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
ten-thousandth (1/10,000th) of a share or any integral multiple thereof.
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IN WITNESS WHEREOF, Discovery Laboratories, Inc., has caused this
certificate to be signed on its behalf by its President and Chief Executive
Officer, this 6th day of February, 2004.
DISCOVERY LABORATORIES, INC.
By: /s/ Robert J. Capetola
--------------------------------
Name: Robert J. Capetola, Ph.D.
Its: President and
Chief Executive Officer
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