SCHOLASTIC BRANDS, INC.
CERTIFICATE OF DESIGNATIONS OF
SERIES A PREFERRED STOCK SETTING FORTH THE POWERS,
PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS OF SUCH PREFERRED STOCK
Pursuant to Section 151 of the Delaware General Corporation Law, the
undersigned DOES HEREBY CERTIFY that the Board of Directors of Scholastic
Brands, Inc., a Delaware corporation (the "Corporation"), duly adopted the
following resolution on December 10, 1996, with the preferences and rights set
forth therein having been fixed by the Board of Directors pursuant to Article 4
of the Corporation's Certificate of Incorporation, as amended, and that such
resolution has not been modified and is in full force and effect:
RESOLVED that, pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of the 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 the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations and
restrictions thereof, are as follows:
Section 1. Designation, Number and Ranking.
(a) The shares of such series shall be designated as "Series A Preferred
Stock" (the "Series A Preferred Stock"). The number of shares constituting the
Series A Preferred Stock shall be 100,000.
(b) The Series A Preferred Stock shall, with respect to dividend rights
and rights on liquidation, dissolution or winding up, rank senior to the Series
B Preferred Stock, par value $.01 per share, of the Corporation ("Series B
Preferred Stock") and the Common Stock, par value $.01 per share, of the
Corporation ("Common Stock") and shall, at all times and with respect to
dividend rights and rights on liquidation, dissolution and winding-up, rank
senior to all other classes and series of capital stock of the Corporation,
other than capital stock authorized as provided in Section 3(b), now or
hereafter authorized.
Section 2. Dividends.
(a) The holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds of the
Corporation legally available therefor, cumulative dividends at an annual rate
on the Liquidation Preference (as defined in Section 6 below) thereof equal to
12%, calculated on the basis of a 360-day year consisting of twelve 30-day
months, accruing and payable in equal quarterly payments, in cash in
immediately available funds on the last Business Day (as defined in paragraph
(e) below) of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing
January 31, 1997.
(b) Dividends payable pursuant to Section 2(a) shall begin to accrue and
be cumulative from the date on which the shares of Series A Preferred Stock are
issued, and shall accrue on a daily basis, in each case whether or not declared
and whether or not in any fiscal year there shall be surplus, net profits or the
assets of the Company legally available for the payment of dividends. All
dividends declared upon Series A Preferred Stock shall be paid pro rata to the
holders entitled thereto. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of the dividends payable pursuant to Section 2(a), which record
date shall be no more than 60 days or less than 10 days prior to the date fixed
for the payment thereof. Accumulated but unpaid dividends for any past quarterly
dividend periods may be declared and paid at any time, without reference to any
regular Quarterly Dividend Payment Date, to holders of record on such date, not
more than 60 days nor less than 10 days preceding the payment date thereof, as
may be fixed by the Board of Directors.
(c) No dividends shall be paid upon, or declared and set apart for payment
on, any shares of Series A Preferred Stock, unless and until all the cumulative
dividends required to be paid to the holders of the shares of Series A Preferred
Stock for all prior dividend periods shall have been declared and paid in full.
(d) The holders of shares of Series A Preferred Stock shall not be
entitled to receive any dividends except as provided herein.
(e) For the purposes of this Certificate of Designations, "Business Day"
shall mean any day other than a Saturday, Sunday or other day on which
commercial banks in the City of New York are authorized or required by law or
executive order to close.
Section 3. Voting Rights.
In addition to any voting rights required by law, unless the consent or
approval of a greater number of shares shall then be required by law, the
affirmative vote of the holders of at least a majority of the outstanding shares
of Series A Preferred Stock, voting separately as a single class, in person or
by proxy, at a special or annual meeting of stockholders called for that purpose
(or by written consent), shall be necessary to (i) amend, alter or repeal any
provision of the Certificate of Incorporation or Bylaws of the Corporation so as
to affect adversely any of the preferences, rights, powers or privileges of the
Series A Preferred Stock or the holders thereof, and (ii) effect the
consolidation or merger of the Corporation with or into any other person or the
sale or other distribution to another person of all or substantially all of the
assets of the Corporation, in either case so as to affect adversely any of the
preferences, rights, powers or privileges of the Series A Preferred Stock or the
holders thereof.
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Section 4. Certain Restrictions.
So long as any share of Series A Preferred Stock shall be issued and
outstanding, the Corporation shall not declare, pay or set aside for payment,
any dividends on, or make any other distributions with respect to, or redeem or
otherwise repurchase, any shares of Common Stock or other shares of capital
stock of the Corporation ranking, as to dividend rights or rights on
liquidation, dissolution or winding up, junior to the Series A Preferred Stock,
other than dividends payable in Common Stock or in another stock ranking junior
to the Series A Preferred Stock as to dividend rights and rights on liquidation,
dissolution and winding up.
Section 5. Redemption.
(a) The Corporation, at its option, may redeem all or any portion of the
outstanding shares of Series A Preferred Stock at the liquidation preference of
$100 per share plus an amount equal to any dividends thereon cumulated or
accrued but unpaid, whether or not declared, if any, to the date fixed for
redemption (such amount being referred to herein as the "Redemption Price"), at
any time or from time to time (any such date of redemption being referred to
herein as a "Redemption Date").
(b) In the event of any redemption of only a part of the then outstanding
Series A Preferred Stock, the Corporation shall effect such redemption pro rata
among the holders thereof (based on the number of shares of Series A Preferred
Stock held on the date of notice of redemption).
(c) At least thirty (30) days prior to any proposed Redemption Date,
written notice shall be mailed, postage prepaid, to each holder of record of
Series A Preferred Stock to be redeemed, at his or its post office address last
shown on the records of the Corporation, notifying such holder of the number of
shares so to be redeemed, specifying the Redemption Date and calling upon such
holder to surrender to the Corporation, in the manner and at the place
designated, his or its certificate or certificates representing the shares to be
redeemed (such notice being referred to herein as the "Redemption Notice"). On
or prior to each Redemption Date, each holder of record of Series A Preferred
Stock to be redeemed shall surrender his or its certificate or certificates
representing such shares to the Corporation, in the manner and at the place
designated in the Redemption Notice, and thereupon the Redemption Price of such
shares shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after the Redemption Date, unless
there shall have been a default in payment of the Redemption Price, all rights
of the holders of the Series A Preferred Stock designated for redemption in the
Redemption Notice as holders of Series A Preferred Stock of the Corporation
(except the right to receive the Redemption Price upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed outstanding for any purpose whatsoever.
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(d) Except as provided in paragraph (a) above, the Corporation shall have
no right to redeem the shares of Series A Preferred Stock. Any shares of Series
A Preferred Stock so redeemed shall be permanently retired, shall no longer be
deemed outstanding and shall not under any circumstances be reissued, and the
Corporation may from time to time take such appropriate corporate action as may
be necessary to reduce the amount of authorized Series A Preferred Stock
accordingly. Nothing herein contained shall prevent or restrict the purchase by
the Corporation, from time to time either at public or private sale, of the
whole or any part of the Series A Preferred Stock at such price or prices as the
Corporation and the selling holders of the Series A Preferred Stock may mutually
determine, subject to the provisions of applicable law.
Section 6. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the holders of shares of Series A Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders before any payment
shall be made to the holders of the Series B Preferred Stock, the Common Stock
or any other capital stock of the Corporation ranking junior to the Series A
Preferred Stock upon liquidation, dissolution or winding up (such stock being
referred to herein as "Junior Stock"), an amount equal to $100 per share (the
"Liquidation Preference"), plus any dividends thereon cumulated or accrued but
unpaid, whether or not declared, if any. If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for the distribution to its stockholders shall be
insufficient to pay the holders of shares of Series A Preferred Stock and the
holders of shares of capital stock of the Corporation ranking on a parity with
the Series A Preferred Stock upon liquidation, dissolution or winding up (such
stock being referred to herein as "Parity Stock") the full amount to which they
shall be entitled, the holders of shares of Series A Preferred Stock and shares
of Parity Stock shall share ratably in any distribution of the remaining assets
and funds of the Corporation in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to said shares were paid
in full.
(b) Neither the consolidation or merger of the Corporation with or into
any other person nor the sale or other distribution to another person of all or
substantially all the
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assets of the Corporation, in each case when permitted by Section 3(b), shall be
deemed to be a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 6.
IN WITNESS WHEREOF, Scholastic Brands, Inc. has caused this Certificate of
Designations to be duly executed by its President on this 12th day of December,
1996.
SCHOLASTIC BRANDS, INC.
By:/s/ David B. Pittaway
---------------------------
Name: David B. Pittaway
Title: President
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COMMEMORATIVE BRANDS, INC.
CERTIFICATE OF CORRECTION FILED TO CORRECT CERTAIN
ERRORS IN THE CERTIFICATE OF DESIGNATIONS OF SERIES A
PREFERRED STOCK SETTING FORTH THE POWERS, PREFERENCES,
RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF SUCH PREFERRED STOCK FILED IN THE OFFICE OF THE
SECRETARY OF STATE OF DELAWARE ON DECEMBER 13, 1996
Commemorative Brands, Inc. (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL"), DOES HEREBY CERTIFY:
1. The name of the corporation is Commemorative Brands, Inc.
2. That a Certificate of Designations of Series A Preferred Stock
setting forth the Powers, Preferences, Rights, Qualifications,
Limitations and Restrictions of Such Preferred Stock was filed by
the Secretary of State of Delaware on December 13, 1996 and that
said Certificate requires correction as permitted by Section 103 of
the DGCL.
3. The inaccuracies or defects of said Certificate to be corrected are
as follows:
(i) the following language was inadvertently omitted from the end
of Section 4 of said Certificate: "and other than redemptions
or repurchases of shares of Common Stock or other capital
stock of the Corporation issued to or held by any officer,
director, employee, independent sales representative or agent
of the Corporation or its subsidiaries (including, without
limitation, any former officer, director, employee,
independent sales representative or agent of the Corporation
or its subsidiaries) or any employee stock ownership plan or
similar trust for the account of any such person;"
(ii) Sections 1(b) and 6(b) of said Certificate inaccurately
reference Section 3(b) instead of Section 3; and
(iii) the last sentence of Section 3 of said Certificate was
inadvertently omitted.
4. Section 1(b) of said Certificate is hereby corrected to read in its
entirety as follows:
"(b) The Series A Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding
up, rank senior to the Series B Preferred Stock, par value $.01 per
share, of the Corporation ("Series B Preferred Stock") and the
Common Stock, par value $.01 per share, of the Corporation ("Common
Stock") and shall, at all times and with respect to dividend rights
and rights on liquidation, dissolution and winding-up, rank senior
to all other classes and series of capital stock of the Corporation,
other than capital stock authorized as provided in Section 3, now or
hereafter authorized."
5. Section 3 of said Certificate is hereby corrected to read in its
entirety as follows:
"Section 3. Voting Rights
"In addition to any voting rights required by law, unless the
consent or approval of a greater number of shares shall then be
required by law, the affirmative vote of the holders of at least a
majority of the outstanding shares of Series A Preferred Stock,
voting separately as a single class, in person or by proxy, at a
special or annual meeting of stockholders called for that purpose
(or by written consent), shall be necessary to (i) amend, alter or
repeal any provision of the Certificate of Incorporation or Bylaws
of the Corporation so as to affect adversely any of the preferences,
rights, powers or privileges of the Series A Preferred Stock or the
holders thereof, and (ii) effect the consolidation or merger of the
Corporation with or into any other person or the sale or other
distribution to another person of all or substantially all of the
assets of the Corporation, in either case so as to affect adversely
any of the preferences, rights, power or privileges of the Series A
Preferred Stock or the holders thereof. The outstanding shares of
Series A Preferred Stock shall have no voting rights other than as
set forth in this Section 3."
6. Section 4 of said Certificate is hereby corrected to read in its
entirety as follows:
"Section 4. Certain Restrictions
So long as any share of Series A Preferred Stock shall be
issued and outstanding, the Corporation shall not declare, pay or
set aside for payment, any dividends on, or make any other
distributions with respect to, or redeem or otherwise repurchase,
any shares of Common Stock or other shares of capital stock of the
Corporation ranking, as to dividend rights or rights on liquidation,
dissolution or winding up, junior to the Series A Preferred Stock,
other than dividends payable in Common Stock or in another stock
ranking junior to the Series A Preferred Stock as to dividend rights
and rights on liquidation, dissolution and winding up and other than
redemptions or repurchases of shares of Common Stock or other
capital stock of the Corporation issued to or held by any officer,
director, employee, independent sales representative or agent of the
Corporation or its subsidiaries (including, without limitation, any
former officer, director, employee, independent sales representative
or agent of the Corporation or its subsidiaries) or any employee
stock ownership plan or similar trust for the account of any such
person."
7. Section 6(b) of said Certificate is hereby corrected to read in its
entirety as follows:
"(b) Neither the consolidation or merger of the Corporation
with or into any other person nor the sale or other distribution to
another person of all or substantially all of the assets of the
Corporation, in each case when permitted by Section 3, shall be
deemed to be a liquidation, dissolution or winding up of the
Corporation for purposes of this Section 6."
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Correction to be duly executed by its Chief Executive Officer on this 28 day of
January, 1997.
COMMEMORATIVE BRANDS, INC.
By:/s/ Jeffrey H. Brennan
----------------------------------
Name: Jeffrey H. Brennan
Title: Chief Executive Officer & President