Jamba Juice 2009 Annual Report Download - page 121

Table of Contents


event of any stock split, dividend or combination or reclassification or reorganization of Jamba Juice Company’s capital stock or completion of an initial
public offering, under certain conditions. The conversion price of Preferred Stock also will be adjusted upon the issuance of additional shares of common
stock or warrants or rights to purchase common stock or securities convertible into common stock for per-share consideration that is less than the initial
conversion price of the applicable series of Preferred Stock. Jamba Juice Company has reserved for the issuance of 30,839,000 common shares for conversion
of Preferred Stock, stock options, and warrants.
The Preferred Stock converts automatically into common stock upon the earlier to occur of the completion of a public offering raising gross proceeds of
$10 million or more and at a stipulated offering price per share or upon the written consent of the holders of the various classes of Preferred Stock.
Dividend Preference—The holders of Series A, Series B, Series C, Series D, and Series E Preferred Stock are entitled, if and when declared by the
Board of Directors, to non-cumulative dividends of $0.10, $0.133, $0.21847, $0.25, and $0.20, respectively, per share per annum. No dividends have been
declared as of November 28, 2006.
Liquidation Preference—If there is a liquidation event (the “Event”) the holders of shares of Preferred Stock then outstanding shall be entitled to be
paid, out of the assets of the corporation available for distribution to its stockholders, whether from capital, surplus or earnings (the “Available Assets”),
before any payment shall be made in respect of the common stock, an amount equal to $1.00 per share of Series A, $1.33 per share of Series B, $2.18 per
share of Series C, $2.50 per share of Series D and $6.00 per share of Series E (in each case, adjusted for stock dividends, stock splits, stock combinations
and the like), plus all declared and unpaid dividends thereon to the date fixed for distribution of assets (the “Liquidation Preference Amount”). If upon an
Event the Available Assets shall be insufficient to pay the Liquidation Preference Amount, then the entire assets of the corporation legally available for
distribution shall be distributed ratably among the holders of the Preferred Stock so that the per share amount distributed to each series constitutes the same
percentage of the full per share Liquidation Preference Amount for each such series. Assets legally available for distribution are defined as (a) positive retained
earnings after deducting redemptions and dividends or (b) certain net asset to certain net liability ratios, both as defined by Section 500 of the California
Corporations Code.
If there is an Event after the distribution of the Liquidation Preference Amount in accordance with the above, the remaining assets of the Corporation
legally available for distribution, if any, to stockholders shall be distributed ratably to the holders of the common stock, the Preferred Stock then outstanding,
with each share of the Preferred Stock being treated for such purposes as if it had been converted into common stock at the then-effective rate of conversion.
Voting—Each Series of Preferred Stock is entitled to the number of votes equal to the number of shares of common stock into which it could be
converted, with certain restrictions.
Registration Rights—The holders of at least 50% of the shares of Preferred Stock who propose to dispose of at least 15% of such stock at an aggregate
offering price to the public of not less than $5 million may require that Jamba Juice Company, with certain limitations, effect a registration of the stock to be
disposed. In addition, the holders of Jamba Juice Company’s Series E Preferred Stock are entitled to unlimited piggyback registration rights on registrations
initiated by Jamba Juice Company, with certain limitations.
Redemption—Holders of a majority of shares of each of the Series A, Series B, Series C, Series D, and Series E Preferred Stock may elect, at any time
after September 1, 2003, to have Jamba Juice Company redeem
121