Exhibit 3.3

 

**CERTIFICATE OF DESIGNATION**

 

**OF**

 

**SERIES H PREFERRED STOCK**

 

**OF**

 

**INSPIRE PHARMACEUTICALS, INC.**

 

Pursuant to Section 151 of the General Corporation Law of theState of Delaware, Inspire Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBYCERTIFY: 

 

That, pursuant to the authorityconferred upon the Board of Directors of the Corporation by Article Fourth of the Amended and Restated Certificate of Incorporation, as Amended, of the Corporation (the “Certificate of Incorporation”), the Board of Directors of theCorporation adopted the following resolution creating a series of Preferred Stock designated as Series H Preferred Stock: 

 

RESOLVED, That pursuant to the authority vested in the Board of the Corporation in accordance with the provisions of the Amended andRestated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), a series of Preferred Stock of the Corporation is hereby created and that the designation and number of shares thereof and thevoting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof, are as follows:

 

SECTION 1.    Designation and Number ofShares.    The shares of such series shall be designated as “Series H Preferred Stock” (the “Series H Preferred Stock”), par value $.001 per share. The number of shares initially constituting the Series HPreferred Stock shall be 60,000; provided, however, that, if more than a total of 60,000 shares of Series H Preferred Stock shall be issuable upon the exercise of Rights (the “Rights”) issued pursuant to the Rights Agreement dated as ofOctober 21**,**2002, between the Corporation and Computershare Trust Company, as Rights Agent (the “Rights Agreement”), the Board of Directors of the Corporation, pursuant to Section 151 (g) of the General Company Law of the State ofDelaware, shall 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 H PreferredStock authorized to be issued to be increased (to the extent that the Certificate of 

 

 

Incorporation 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 or Distributions.

 

(a)  Subject to the prior and superiorrights of the holders of shares of any other series of Preferred Stock or other class of capital stock of the Corporation ranking prior and superior to the shares of Series H Preferred Stock with respect to dividends, the holders of shares of theSeries H Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the assets of the Corporation legally available therefore, (1) quarterly dividends payable in cash on the last day of each fiscalquarter in each year, or such other dates as the Board of Directors of the Corporation shall approve (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Dateafter the first issuance of a share or a fraction of a share of Series H Preferred Stock, in the amount of $.001 per whole share (rounded to the nearest cent) less the amount of all cash dividends declared on the Series H Preferred Stock pursuant tothe following clause (2) 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 H Preferred Stock (thetotal of which shall not, in any event, be less than zero) and (2) dividends payable in cash on the payment date for each cash dividend declared on the Common Stock in an amount per whole share (rounded to the nearest cent) equal to the FormulaNumber (as hereinafter defined) then in effect times the cash dividends then to be paid on each share of Common Stock. In addition, if the Corporation shall pay any dividend or make any distribution on the Common Stock payable in assets, securitiesor other forms of noncash consideration (other than dividends or distributions solely in shares of Common Stock), then, in each such case, the Corporation shall simultaneously pay or make on each outstanding, whole share of Series H Preferred Stocka dividend or distribution in like kind equal to the Formula Number then in effect times such dividend or distribution on each share of the Common Stock. As used herein, the “Formula Number” shall be one thousand (1,000); provided,however, that, if at any time after November 4, 2002, the Corporation shall (i) declare or pay any dividend on the Common Stock payable in shares of Common Stock or make any distribution on the Common Stock in shares of Common Stock, (ii) subdivide(by a stock split or otherwise) the outstanding shares of Common Stock into a larger number of shares of Common Stock or (iii) combine (by a reverse stock split or otherwise) the outstanding shares of Common Stock, into a smaller number of shares ofCommon Stock, then in each such event the Formula Number shall be adjusted to a number determined by multiplying the Formula Number in effect immediately prior to such event by a fraction, the numerator of which is the number of shares of CommonStock that are outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that are outstanding immediately prior to such event (and rounding the result to the nearest whole number); and providedfurther, that, if at any time after November 4, 2002, the Corporation shall 

 

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issue any shares of its capital stock in a merger, reclassification, or change of the outstanding shares of Common Stock, then in each such event the Formula Number shall be appropriately adjusted toreflect such merger, reclassification or change so that each share of Preferred Stock continues to be the economic equivalent of a Formula Number of shares of Common Stock prior to such merger, reclassification or change. 

 

(b)  The Corporation shall declare a dividend ordistribution on the Series H Preferred Stock as provided in Section 2(a) immediately prior to or at the same time it declares a dividend or distribution on the Common Stock (other than a dividend or distribution solely in shares of Common Stock);provided, however, that, in the event no dividend or distribution (other than a dividend or distribution in shares of Common Stock) shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and thenext subsequent Quarterly Dividend Payment Date, a dividend of $.001 per share on the Series H Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a record date for thedetermination of holders of shares of Series H Preferred Stock entitled to receive a dividend or distribution declared thereon, which record date shall be the same as the record date for a corresponding dividend or distribution on the Common Stock.

 

(c)  Dividends shall begin to accrueand be cumulative on outstanding shares of Series H Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the date of original issue of such shares of Series H Preferred Stock; provided, however, that dividends on suchshares which are originally issued after the record date for the determination of holders of shares of Series H Preferred Stock entitled to receive a quarterly dividend and on or prior to the next succeeding Quarterly Dividend Payment Date shallbegin to accrue and be cumulative from and after such Quarterly Dividend Payment Date. Notwithstanding the foregoing, dividends on shares of Series H Preferred Stock which are originally issued prior to the record date for the determination ofholders of shares of Series H Preferred Stock entitled to receive a quarterly dividend on the first Quarterly Dividend Payment Date shall be calculated as if cumulative from and after the last day of the fiscal quarter next preceding the date oforiginal issuance of such shares. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series H Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such sharesshall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. 

 

(d)  So long as any shares of the Series H Preferred Stock are outstanding, no dividends or other distributions shall bedeclared, paid or distributed, or set aside for payment or distribution, on the Common Stock unless, in each case, the dividend required by this Section 2 to be declared on the Series H Preferred Stock shall have been declared. 

 

(e)  The holders of the shares of Series H PreferredStock shall not be entitled to receive any dividends or other distribution except as provided herein. 

 

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SECTION3.    Voting Rights.    The holders of shares of Series H Preferred Stock shall have the following voting rights: 

 

(a)  Each holder of Series H Preferred Stock shall be entitled to a number of votes equal to theFormula Number then in effect, for each share of Series H Preferred Stock held of record on each matter on which holders of the Common Stock or stockholders generally are entitled to vote, multiplied by the maximum number of votes per share whichany holder of the Common Stock or stockholders generally then have with respect to such matter (assuming, any holding period or other requirement to vote a greater number of shares is satisfied). 

 

(b)  Except as otherwise provided herein or byapplicable law, the holders of shares of Series H Preferred Stock and the holders of shares of Common Stock shall vote together as one class for the election of directors of the Corporation and on all other matters submitted to a vote ofstockholders of the Corporation. 

 

(c)  If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series H Preferred Stock arein default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holdersof record of the Series H Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividendsin arrears have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series H Preferred Stock being entitled to cast a number of votes per share of Series HPreferred Stock equal to the Formula Number. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the next preceding sentence maybe removed at any time, either with or without cause, only by the affirmative vote of the holders of the shares of Series H Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any suchdirector at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series H Preferred Stock shall bedivested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all personswho may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(c) shall be inaddition to any other voting rights granted to the holders of the Series H Preferred Stock in this Section 3. 

 

(d)  Except as provided herein, in Section 11 or by applicable law, holders of Series H Preferred Stock shall have no specialvoting rights and their consent 

 

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shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for authorizing or taking any corporate action. 

 

SECTION 4.    Certain Restrictions. 

 

(a)  Whenever quarterly dividends or other dividendsor distributions payable on the Series H 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 H Preferred Stock outstandingshall 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 orwinding up) to the Series H Preferred Stock; 

 

(ii)  declare or pay dividends on, or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series H Preferred Stock, exceptdividends paid ratably on the Series H 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)  redeem or purchase or otherwise acquire forconsideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series H Preferred Stock; provided that the Corporation may at any time redeem, purchase or otherwise acquireshares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series H Preferred Stock; or 

 

(iv)  purchase or otherwise acquire forconsideration any shares of Series H Preferred Stock, or any shares of stock ranking on a parity with the Series H Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board ofDirectors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in goodfaith 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 stock of the Corporation unless the Corporation could,under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 

 

SECTION 5.    Liquidation Right.    Upon the liquidation, dissolution or winding up of the Corporation,whether voluntary or involuntary, no distribution shall be made 

 

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(1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series H Preferred Stock unless, prior thereto, the holders of sharesof Series H Preferred Stock shall have received an amount equal to the 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 (x) $.001 per whole share or(y) an aggregate amount per share equal to the Formula Number then in effect times the aggregate amount to be distributed per share to holders of Common Stock or (2) to the holders of stock ranking on a parity (either as to dividends or uponliquidation, dissolution or winding up) with the Series H Preferred Stock, except distributions made ratably on the Series H Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such sharesare entitled upon such liquidation, dissolution or winding up. 

 

SECTION 6.    Consolidation, Merger, etc.    In case the Corporation shall enter into any consolidation, merger, “business combination” or other transaction in which the sharesof Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then in any such case the then outstanding shares of Series H Preferred Stock shall at the same time be similarly exchanged or changed into anamount per share equal to the Formula Number then in effect times the aggregate amount of stock, securities, cash or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is exchanged orchanged. In the event both this Section 6 and Section 2 appear to apply to a transaction, this Section 6 will control. 

 

SECTION 7.    No Redemption; No Sinking Fund.

 

(a)  The shares of Series H Preferred Stock shall not be subject to redemption by the Corporationor at the option of any holder of Series H Preferred Stock except as set forth in the Certificate of Incorporation of the Corporation; provided, however, that the Corporation may purchase or otherwise acquire outstanding shares of Series H PreferredStock in the open market or by offer to any holder or holders of shares of Series H Preferred Stock. 

 

(b)  The shares of Series H Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinkingfund. 

 

SECTION8.    Ranking.    The Series H Preferred Stock shall rank junior to all other series of Preferred Stock of the Corporation, unless the Board of Directors shall specifically determine otherwise in fixingthe powers, preferences and relative, participating, optional and other special rights of the shares of such series and the qualifications, limitations and restrictions thereof. 

 

SECTION 9.    Fractional Shares.    The Series H Preferred Stock shall beissuable upon exercise of the Rights issued pursuant to the Rights Agreement in whole shares or in any fraction of a share that is one one-thousandths (1/1,000ths) of a share or any integral multiple of such fraction which shall entitle the holder,in proportion to 

 

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such holder’s fractional shares, to receive dividends, exercise voting rights, participate in distributions and to have the benefit of all other rights of holders of Series H Preferred Stock. Inlieu of fractional shares, the Corporation, prior to the first issuance of a share or a fraction of a share of Series H Preferred Stock, may elect (1) to make a cash payment as provided in the Rights Agreement for fractions of a share other than oneone-thousandths (1/1,000ths) of a share or any integral multiple thereof or (2) to issue depository receipts evidencing such authorized fraction of a share of Series H Preferred Stock pursuant to an appropriate agreement between the Corporation anda depository selected by the Corporation; provided that such agreement shall provide that the holders of such depository receipts shall have all the rights, privileges and preferences to which they are entitled as holders of the Series H PreferredStock. 

 

SECTION 10.    ReacquiredShares.    Any shares of Series H 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 upontheir cancellation become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board of Directors pursuant to the provisions of ArticleFourth of the Certificate of Incorporation. 

 

SECTION11.    Amendment.    None of the powers, preferences and relative, participating, optional and other special rights of the Series H Preferred Stock as provided herein or in the Certificate ofIncorporation shall be amended in any manner which would alter or change the powers, preferences, rights or privileges of the holders of Series H Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least66-2/3% of the outstanding shares of Series H Preferred Stock, voting as a separate class; provided, however, that no such amendment approved by the holders of at least 66-2/3% of the outstanding shares of Series H Preferred Stock shall be deemed toapply to the powers, preferences, rights or privileges of any holder of shares of Series H Preferred Stock originally issued upon exercise of the Rights after the time of such approval without the approval of such holder. 

 

* * * * * 

 

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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed in its corporate name by its President, Secretary and Treasurer and attested to by its Vice President on this27 day of December, 2002. 

 

 

INSPIRE PHARMACEUTICALS, INC.

By:
 
/s/    GREGORY J. MOSSINGHOFF        

Name:
 
Gregory J. Mossinghoff

Title:
 
President, Treasurer and Secretary

 

 

Attest:
 
/s/    MARYBENNETT        

Name:
 
Mary Bennett

Title:
 
Vice President

 

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