EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION OF
CORNERSTONE BRANDS, INC.
Cornerstone 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 as follows:
That the Board of Directors of the Corporation duly adopted, pursuant to
Section 242 of the DGCL, a resolution declaring the advisability of the
amendments to the Certificate of Incorporation of the Corporation, as amended to
date (the "Certificate"), set forth in this Certificate of Amendment. The
stockholders of the Corporation duly approved, pursuant to Section 242 of the
DGCL, the amendments set forth in this Certificate of Amendment. The amendments
so approved by the Board of Directors and the stockholders of the Corporation
are:
1. ARTICLE IV of the Certificate is hereby deleted in its entirety and the
following ARTICLE IV is inserted in lieu thereof:
ARTICLE IV
The total number of shares of all classes of stock which the
Corporation has authority to issue is 155,000,000 shares, consisting of (i)
150,000,000 shares of Common Stock, $.001 par value per share ("Common
Stock"), and (ii) 5,000,000 shares of Preferred Stock, $.01 par value per
share ("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
of each class of capital stock of the Corporation.
A. COMMON STOCK
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1. General. The voting, dividend and liquidation rights of the
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holders of the Common Stock are subject to and qualified by the rights of
the holders of the Preferred Stock of any series as may be designated by
the Board of Directors upon any issuance of the Preferred Stock of any
series.
2. Voting. The holders of the Common Stock are entitled to one
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vote for each share held at all meetings of stockholders (and written
actions in lieu of meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common
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Stock from funds lawfully available therefor as and when determined by the
Board of Directors and subject to any preferential dividend rights of any
then outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
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Corporation, whether voluntary or involuntary, holders of Common Stock will
be entitled to receive all assets of the Corporation available for
distribution to its stockholders, subject to any preferential rights of any
then outstanding Preferred Stock.
B. PREFERRED STOCK.
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Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in
the resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of the Corporation as hereinafter
provided. Any shares of Preferred Stock which may be redeemed, purchased
or acquired by the Corporation may be reissued except as otherwise provided
by law. Different series of Preferred Stock shall not be construed to
constitute different classes of shares for the purposes of voting by
classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and
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in connection with the creation of any such series, by resolution or
resolutions providing for the issue of the shares thereof, to determine and
fix such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof,
including without limitation thereof, dividend rights, conversion rights,
redemption privileges and liquidation preferences, as shall be stated and
expressed in such resolutions, all to the full extent now or hereafter
permitted by the General Corporation Law of Delaware. Without limiting the
generality of the foregoing, the resolutions providing for issuance of any
series of Preferred Stock may provide that such series shall be superior or
rank equally or be junior to the Preferred Stock of any other series to the
extent permitted by law. Except as otherwise provided in this Certificate
of Incorporation, no vote of the holders of the Preferred Stock or Common
Stock shall be a prerequisite to the designation or issuance of any shares
of any series of the Preferred Stock authorized by and complying with the
conditions of this Certificate of Incorporation, the right to have such
vote being expressly waived by all present and future holders of the
capital stock of the Corporation.
2. ARTICLE V of the Certificate is hereby deleted in its entirety and the
following ARTICLE V is inserted in lieu thereof:
ARTICLE V
The Board of Directors is expressly authorized to adopt, amend or
repeal the By-Laws of the Corporation.
3. ARTICLE VI of the Certificate is hereby deleted in its entirety and the
following ARTICLE VI is inserted in lieu thereof:
ARTICLE VI
This Article is inserted for the management of the business and for
the conduct of the affairs of the Corporation.
1. Number of Directors. The number of directors of the Corporation
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shall not be less than three. The exact number of directors within the
limitation specified in the preceding sentence shall be fixed from time to
time pursuant to a resolution adopted by the Board of Directors.
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2. Classes of Directors. The Board of Directors shall be and is
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divided into three classes: Class I, Class II and Class III. No one class
shall have more than one director more than any other class. If a fraction
is contained in the quotient arrived at by dividing the authorized number
of directors by three, then, if such fraction is one-third, the extra
director shall be a member of Class I, and if such fraction is two-thirds,
one of the extra directors shall be a member of Class I and one of the
extra directors shall be a member of Class II, unless otherwise provided
for from time to time by resolution adopted by the Board of Directors.
3. Election of Directors. Elections of Directors need not be by
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written ballot except as and to the extent provided in the By-Laws of the
Company.
4. Terms of Office. Each director shall serve for a term ending on
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the date of the third annual meeting following the annual meeting at which
such director was elected; provided, that each initial director in Class I
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shall serve for a term ending on the date of the annual meeting next
following the end of the corporation's fiscal year ending January 30, 1999;
each initial director in Class II shall serve for a term ending on the date
of the annual meeting next following the end of the Corporation's fiscal
year ending January 29, 2000; and each initial director in Class III shall
serve for a term ending on the date of the annual meeting next following
the fiscal year ending February 3, 2001; and provided further, that the
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term of each director shall continue until the election and qualification
of his/her successor and shall be subject to his/her earlier death,
resignation or removal.
5. Allocation of Directors among Classes in the Event of Increases or
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Decreases in the Number of Directors. In the event of any increase or
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decrease in the authorized number of directors, (i) each director then
serving as such shall nevertheless continue as a director of the class of
which he/she is a member until the expiration of his/her current term,
subject to his/her earlier death, resignation or removal, and (ii) the
newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board of Directors among the three
classes of directors in accordance with the provisions of Section 2 above.
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6. Quorum; Action at Meeting. A majority of the total number of
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directors then in office shall constitute a quorum at all meetings of the
Board of Directors. In the event one or more of the directors shall be
disqualified to vote at any meeting, then the required quorum shall be
reduced by one for each such director so disqualified; provided, however,
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that in no case shall less than one-third of the number of directors fixed
pursuant to Section 1 above constitute a quorum. If at any meeting of the
Board of Directors there shall be less than such a quorum, a majority of
those present may adjourn the meeting from time to time. Every act or
decision done or made by a majority of the directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of the
Board of Directors unless a greater number is required by law, by the By-
Laws of the Corporation or by this Certificate of Incorporation.
7. Removal. If and for so long as the Board of Directors is
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classified pursuant to Section 141(d) of the General Corporation Law of
Delaware, stockholders may effect the removal of a director or the entire
Board of Directors only for cause, unless this Certificate of Incorporation
provides otherwise.
8. Vacancies. Unless and until filled by the stockholders, any
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vacancy in the Board of Directors, however occurring, including a vacancy
resulting from an enlargement of the Board, may be filled by a vote of a
majority of the directors then in office, although less than a quorum, or
by a sole remaining director. A director elected to fill a vacancy shall
be elected to hold office until the next election of the class for which
such director shall have been chosen, subject to the election and
qualification of his/her successor and to his/her earlier death,
resignation or removal.
9. Stockholder Nominations and Introduction of Business, Etc. Advance
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notice of stockholder nominations for election of directors and other
business to be brought by stockholders before a meeting of stockholders
shall be given in the manner provided by the By-Laws of the Corporation.
10. Amendments. Notwithstanding any other provisions of law, this
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Certificate of Incorporation or the By-Laws of the Corporation, and
notwithstanding the fact that a lesser percentage may be specified by law,
the affirmative vote of the holders of at least seventy-five percent (75%)
of the votes which all of the stockholders would be entitled to cast at an
annual election of directors or class of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article
VI.
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4. ARTICLE VII of the Certificate is hereby deleted in its entirety and the
following ARTICLE VII is inserted in lieu thereof:
ARTICLE VII
Except to the extent that the General Corporation Law of Delaware
prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty, no director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary
damages for any breach of fiduciary duty as a director, notwithstanding any
provision of law imposing such liability. No amendment to or repeal of
this provision shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment.
5. ARTICLE VIII of the Certificate is hereby deleted in its entirety and the
following ARTICLE VIII is inserted in lieu thereof:
ARTICLE VIII
1. Actions, Suits and Proceedings Other than by or in the Right of
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the Corporation. The Corporation shall indemnify each person who was or is
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a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Corporation), by reason of the fact that he is or was, or has agreed to
become, a director or officer of the Corporation, or is or was serving, or
has agreed to serve, at the request of the Corporation, as a director,
officer or trustee of, or in a similar capacity with, another corporation,
partnership, joint venture, trust or other enterprise (including any
employee benefit plan) (all such persons being referred to hereafter as an
"Indemnitee"), or by reason of any action alleged to have been taken or
omitted in such capacity, against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
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settlement, conviction or upon a plea of nolo contendere or its equivalent,
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shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful. Notwithstanding anything to the contrary in this
Article, except as set forth in Section 7 below, the Corporation shall not
indemnify an Indemnitee seeking indemnification in connection with a
proceeding (or part thereof) initiated by the Indemnitee unless the
initiation thereof was approved by the Board of Directors of the
Corporation. Notwithstanding anything to the contrary in this Article, the
Corporation shall not indemnify an Indemnitee to the extent such Indemnitee
is reimbursed from the proceeds of insurance, and in the event the
Corporation makes any indemnification payments to an Indemnitee and such
Indemnitee is subsequently reimbursed from the proceeds of insurance, such
Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement.
2. Actions or Suits by or in the Right of the Corporation. The
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Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was, or has agreed to
become, a director or officer of the Corporation, or is or was serving, or
has agreed to serve, at the request of the Corporation, as a director,
officer or trustee of, or in a similar capacity with, another corporation,
partnership, joint venture, trust or other enterprise (including any
employee benefit plan), or by reason of any action alleged to have been
taken or omitted in such capacity, against all expenses (including
attorneys' fees) and, to the extent permitted by law, amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such action, suit or proceeding and any appeal therefrom,
if he acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of
Delaware shall determine upon application that, despite the adjudication of
such liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses
(including attorneys' fees) which the Court of Chancery of Delaware shall
deem proper.
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3. Indemnification for Expenses of Successful Party. Notwithstanding
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the other provisions of this Article, to the extent that an Indemnitee has
been successful, on the merits or otherwise, in defense of any action, suit
or proceeding referred to in Sections 1 and 2 of this Article, or in
defense of any claim, issue or matter therein, or on appeal from any such
action, suit or proceeding, he shall be indemnified against all expenses
(including attorneys' fees) actually and reasonably incurred by him or on
his behalf in connection therewith. Without limiting the foregoing, if any
action, suit or proceeding is disposed of, on the merits or otherwise
(including a disposition without prejudice), without (i) the disposition
being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee
was liable to the Corporation, (iii) a plea of guilty or nolo contendere by
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the Indemnitee, (iv) an adjudication that the Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, and (v) with respect to any
criminal proceeding, an adjudication that the Indemnitee had reasonable
cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with
respect thereto.
4. Notification and Defense of Claim. As a condition precedent to
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his right to be indemnified, the Indemnitee must notify the Corporation in
writing as soon as practicable of any action, suit, proceeding or
investigation involving him for which indemnity will or could be sought.
With respect to any action, suit, proceeding or investigation of which the
Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee. After
notice from the Corporation to the Indemnitee of its election so to assume
such defense, the Corporation shall not be liable to the Indemnitee for any
legal or other expenses subsequently incurred by the Indemnitee in
connection with such claim, other than as provided below in this Section 4.
The Indemnitee shall have the right to employ his own counsel in connection
with such claim, but the fees and expenses of such counsel incurred after
notice from the Corporation of its assumption of the defense thereof shall
be at the expense of the Indemnitee unless (i) the employment of counsel by
the Indemnitee has been authorized by the Corporation, (ii) counsel to the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest or position on any significant issue between the Corporation and
the Indemnitee in the conduct of the defense of such action or (iii) the
Corporation shall not in fact have employed counsel to assume the defense
of such action, in each of which cases the fees and expenses of counsel for
the Indemnitee
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shall be at the expense of the Corporation, except as otherwise expressly
provided by this Article. The Corporation shall not be entitled, without
the consent of the Indemnitee, to assume the defense of any claim brought
by or in the right of the Corporation or as to which counsel for the
Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6
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below, in the event that the Corporation does not assume the defense
pursuant to Section 4 of this Article of any action, suit, proceeding or
investigation of which the Corporation receives notice under this Article,
any expenses (including attorneys' fees) incurred by an Indemnitee in
defending a civil or criminal action, suit, proceeding or investigation or
any appeal therefrom shall be paid by the Corporation in advance of the
final disposition of such matter; provided, however, that the payment of
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such expenses incurred by an Indemnitee in advance of the final disposition
of such matter shall be made only upon receipt of an undertaking by or on
behalf of the Indemnitee to repay all amounts so advanced in the event that
it shall ultimately be determined that the Indemnitee is not entitled to be
indemnified by the Corporation as authorized in this Article. Such
undertaking shall be accepted without reference to the financial ability of
the Indemnitee to make such repayment.
6. Procedure for Indemnification. In order to obtain indemnification
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or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this
Article, the Indemnitee shall submit to the Corporation a written request,
including in such request such documentation and information as is
reasonably available to the Indemnitee and is reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification or advancement of expenses. Any such indemnification or
advancement of expenses shall be made promptly, and in any event within 60
days after receipt by the Corporation of the written request of the
Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines within such 60-day period that the Indemnitee did
not meet the applicable standard of conduct set forth in Section 1 or 2, as
the case may be. Such determination shall be made in each instance by (a)
a majority vote of the directors of the Corporation consisting of persons
who are not at that time parties to the action, suit or proceeding in
question ("disinterested directors"), whether or not a quorum, (b) a
majority vote of a quorum of the outstanding shares of stock of all classes
entitled to vote for directors, voting as a single class, which quorum
shall consist of stockholders who are not at that time parties to
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the action, suit or proceeding in question, (c) independent legal counsel
(who may, to the extent permitted by law, be regular legal counsel to the
Corporation), or (d) a court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by
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this Article shall be enforceable by the Indemnitee in any court of
competent jurisdiction if the Corporation denies such request, in whole or
in part, or if no disposition thereof is made within the 60-day period
referred to above in Section 6. Unless otherwise required by law, the
burden of proving that the Indemnitee is not entitled to indemnification or
advancement of expenses under this Article shall be on the Corporation.
Neither the failure of the Corporation to have made a determination prior
to the commencement of such action that indemnification is proper in the
circumstances because the Indemnitee has met the applicable standard of
conduct, nor an actual determination by the Corporation pursuant to Section
6 that the Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. The
Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this
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Article or of the relevant provisions of the General Corporation Law of
Delaware or any other applicable laws shall affect or diminish in any way
the rights of any Indemnitee to indemnification under the provisions hereof
with respect to any action, suit, proceeding or investigation arising out
of or relating to any actions, transactions or facts occurring prior to the
final adoption of such amendment, termination or repeal.
9. Other Rights. The indemnification and advancement of expenses
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provided by this Article shall not be deemed exclusive of any other rights
to which an Indemnitee seeking indemnification or advancement of expenses
may be entitled under any law (common or statutory), agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in any other capacity while holding
office for the Corporation, and shall continue as to an Indemnitee who has
ceased to be a director or officer, and shall inure to the benefit of the
estate, heirs, executors and administrators of the Indemnitee. Nothing
contained in this Article shall be deemed to prohibit, and the Corporation
is specifically authorized to enter into, agreements with officers and
directors
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providing indemnification rights and procedures different from those set
forth in this Article. In addition, the Corporation may, to the extent
authorized from time to time by its Board of Directors, grant
indemnification rights to other employees or agents of the Corporation or
other persons serving the Corporation and such rights may be equivalent to,
or greater or less than, those set forth in this Article.
10. Partial Indemnification. If an Indemnitee is entitled under any
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provision of this Article to indemnification by the Corporation for some or
a portion of the expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by him or on
his behalf in connection with any action, suit, proceeding or investigation
and any appeal therefrom but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify the Indemnitee for the portion
of such expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement to which the Indemnitee is entitled.
11. Insurance. The Corporation may purchase and maintain insurance,
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at its expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise (including any employee benefit plan)
against any expense, liability or loss incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the General Corporation Law of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or
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consolidated with another corporation and the Corporation is not the
surviving corporation, the surviving corporation shall assume the
obligations of the Corporation under this Article with respect to any
action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or facts occurring prior to the date of such merger
or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be
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invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with any action, suit, proceeding or
investigation, whether civil, criminal or administrative, including an
action by or in the right of the Corporation, to the fullest extent
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permitted by any applicable portion of this Article that shall not have
been invalidated and to the fullest extent permitted by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and
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Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and
Section 145(i).
15. Subsequent Legislation. If the General Corporation Law of
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Delaware is amended after adoption of this Article to expand further the
indemnification permitted to Indemnitees, then the Corporation shall
indemnify such persons to the fullest extent permitted by the General
Corporation Law of Delaware, as so amended.
6. ARTICLE IX of the Certificate is hereby deleted in its entirety and the
following ARTICLE IX is inserted in lieu thereof:
ARTICLE IX
Any action required or permitted to be taken at any annual or special
meeting of stockholders of the Corporation may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
forth the action so taken, is signed by the holders of all of the
outstanding shares of stock that would be entitled to vote thereon at a
meeting of stockholders. Notwithstanding any other provision of law, this
Certificate of Incorporation or the By-Laws of the Corporation, and
notwithstanding the fact that a lesser percentage may be specified by law,
the affirmative vote of the holders of at least seventy-five percent (75%)
of the votes which all of the stockholders would be entitled to cast at an
annual election of directors or class of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with, this ARTICLE
IX.
7. ARTICLE X of the Certificate is hereby deleted in its entirety and the
following ARTICLE X is inserted in lieu thereof:
ARTICLE X
Section 203 of the General Corporation Law of Delaware, as it may be
amended from time to time, shall apply to the Corporation.
8. ARTICLE XI of the Certificate is hereby deleted in its entirety and the
following ARTICLE XI is inserted in lieu thereof:
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ARTICLE XI
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute and this Certificate of Incorporation, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
9. ARTICLE XII of the Certificate is hereby deleted in its entirety
IN WITNESS WHEREOF, Cornerstone Brands, Inc. has caused this Certificate of
Amendment to be executed as of this ___ day of ________, 1998.
CORNERSTONE BRANDS, INC.
By: _______________________________
Mark Fasold
Executive Vice President
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