Exhibit 3.1
STATEMENT WITH RESPECT TO SHARES
OF SERIES D CONVERTIBLE PREFERRED STOCK
OF
PENN NATIONAL GAMING, INC.
In compliance with the requirements of 15
Pa.C.S. § 1522(b) (relating to statement with respect to shares), the undersigned corporation, desiring to state the designation
and voting rights, preferences, limitations, and special rights, if any, of a class or series of its shares, hereby states that:
| (1) | The name of the corporation is Penn National Gaming, Inc. (the “Company”); |
| (2) | The resolution amending the Amended and Restated Articles of Incorporation of the Company (the “Articles”)
under 15 Pa.C.S. § 1522(b) is set forth in full in Exhibit 1 attached hereto and made a part hereof; |
| (3) | The aggregate number of shares of such class or series established and designated by (a) such resolution, (b) all prior statements,
if any, filed under 15 Pa.C.S. § 1522 or corresponding provisions of prior law with respect thereto, and (c) any other provision
of the Articles is 5,000 shares; |
| (4) | The resolution was adopted by the Board of Directors of the Company at a duly called meeting held on January 22, 2020; and |
| (5) | The resolution shall be effective upon the filing of this statement with respect to shares in the Department of State. |
IN TESTIMONY WHEREOF the undersigned corporation
has caused this statement to be signed by a duly authorized officer thereof this 19th day of February, 2020.
| |
PENN NATIONAL GAMING, INC. |
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|
| |
By: |
/s/ Carl Sottosanti |
| |
Name: |
Carl Sottosanti |
| |
Title: |
Executive
Vice President, General Counsel and Secretary |
Exhibit 1
RESOLVED, that pursuant to the authority granted
to and vested in the Board of Directors (the “Board of Directors”) of Penn National Gaming, Inc. (the “Company”),
in accordance with the provisions of the Amended and Restated Articles of Incorporation of the Company (the “Articles”),
the Board of Directors hereby creates a series of Preferred Stock, par value $0.01 per share, of the Company (the “Preferred
Stock”), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations
thereof as follows:
Series D Convertible Preferred Stock:
Section 1. Designation
and Amount. The shares of such series shall be designated as “Series D Convertible Preferred Stock” (the “Series
D Preferred Stock”) and the number of shares constituting the Series D Preferred Stock shall be five thousand (5,000). Such
number of shares may be increased or decreased by resolution of the Board of Directors and the requisite filing with the Department
of State of the Commonwealth of Pennsylvania; provided, that any such increase shall be limited to the number of authorized and
unissued shares of undesignated Preferred Stock; and provided, further, that no decrease shall reduce the number of shares of
Series D Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the
Company, in each case, convertible into Series D Preferred Stock.
Section 2. Dividends
and Distributions. The holders of record of the issued and outstanding shares of Series D Preferred Stock shall be entitled to
receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
(A) Holders
of shares of Series D Preferred Stock shall be entitled to participate equally, ratably and pari passu with the holders of shares
of common stock of the Company (“Common Stock”) in all dividends and distributions paid (whether in the form
of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock
or other equity, or evidences of indebtedness, of any person, including, without limitation, the Company or any subsidiary, but
not including any repurchase of Common Stock or other equity interests in the Company) on the shares of Common Stock, in the amount
that such holders would have received if, immediately prior to each record date in respect of which dividends or distributions
are paid, each 1/1,000th of a share of Series D Preferred Stock were converted into one share of Common Stock. Dividends or distributions
payable to the holders of shares of Series D Preferred Stock pursuant to this Section 2(A) shall be declared and paid on the same
dates that such dividends or distributions are declared and paid, and in the same form payable, to holders of shares of Common
Stock.
(B) Each
dividend or distribution payable pursuant to Section 2(A) hereof shall be payable to the holders of record of shares of Series
D Preferred Stock as they appear on the stock records of the Company at the close of business on the record date designated by
the Board of Directors for such dividends or distributions, which shall be the same day as the record date for the payment of
such dividends or distributions to holders of shares of Common Stock. In the event that any distribution of securities, recapitalization,
reclassification, change to organizational form, stock split, reverse stock split, or other similar transaction or event affects
the capital structure of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares
of Series D Preferred Stock were entitled immediately prior to such event under Section 2(A) hereof shall be equitably adjusted
(if an adjustment would be equitable).
Section 3. Voting
Rights.
(A) Except
as set forth below or as required by applicable law, the holders of Series D Preferred Stock shall not be entitled to vote at
any meeting of the shareholders for election of members of the Board of Directors or for any other purpose or otherwise to participate
in any action taken by the Company or the shareholders thereof, or to receive notice of any meeting of shareholders.
(B) So
long as any Series D Preferred Stock remains outstanding, the Company will not, without the affirmative vote or consent of the
holders of a majority of the shares of Series D Preferred Stock outstanding at the time, given in person or by proxy, either in
writing or at a meeting (such series voting separately as a class) amend, alter or repeal the provisions of this Resolution, including
by merger or consolidation (an “Event”), so as to adversely affect any right or privilege of the Series D Preferred
Stock; provided, however, that no Event shall be deemed to adversely affect the rights and privileges of the Series
D Preferred Stock, and the holders thereof shall have no right to vote with respect to such Event, if (x) following such Event,
the Series D Preferred Stock remains outstanding with the terms thereof not adversely changed and represent an interest in the
same issuer in which holders of Common Stock prior to such Event will hold their shares following such Event or (y) in connection
with an Event in which the Company is not the surviving entity, the Series D Preferred Stock is exchanged for a security (a “Replacement
Security”) with rights, preferences, privileges and voting powers that are no less favorable than the rights, preferences,
privileges and voting powers of the Series D Preferred Stock (it being understood that a Replacement Security shall not be deemed
to have rights, preferences, privileges or voting power that are less favorable than the Series D Preferred Stock if the difference
in the rights, preferences, privileges or voting power is caused solely by differences between the state law of the jurisdiction
of incorporation of the Company and the jurisdiction of incorporation of the issuer of the Replacement Security).
(C) On each matter submitted to a vote of the holders of Series D Preferred Stock in accordance with this Resolution, or as
otherwise required by applicable law, each share of Series D Preferred Stock shall be entitled to one vote. With respect to each
share of Series D Preferred Stock, the holder thereof may designate a proxy, with each such proxy having the right to vote on behalf
of such holder.
Section 4. Reacquired
Shares. Any shares of Series D Preferred Stock duly converted in accordance with this Resolution or otherwise reacquired by
the Company in any manner whatsoever shall be retired and cancelled 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 subject to the conditions and restrictions on issuance set forth herein, in the Articles, or in any other resolution
of the Board of Directors creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 5. Liquidation,Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Preferred Stock unless, prior thereto, the holders of shares of Series D Preferred Stock shall have
received the greater of: (A) $1.00 per share, plus an amount equal to declared and unpaid dividends and distributions thereon,
to the date of such payment; or (B) an aggregate amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders
of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series
D Preferred Stock, except distributions made ratably on the Series D Preferred Stock and all 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 that any distribution of securities, recapitalization, reclassification, change to organizational form, stock split, reverse
stock split, or other similar transaction or event affects the capital structure of the Company (other than a dividend of shares
of Common Stock), the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be equitably adjusted (if an adjustment would be equitable).
Section 6. Consolidation,
Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any
such case each share of Series D Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment set forth in the following sentence, equal to 1,000 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 is changed or exchanged. In the event that any distribution of securities, recapitalization, reclassification, change to
organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure of
the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred Stock
were entitled immediately prior to such event as set forth in the previous sentence shall be equitably adjusted (if an adjustment
would be equitable).
Section 7. Conversion. If, at any time, any share of Series D Preferred is proposed to be Transferred to any person other than the
Company or an Affiliate of the person to whom the Company initially issued such share (such person, the “Initial Holder”,
and such share, a “Transferred Share”), each 1/1,000 of a Transferred Share shall automatically convert into one share
of Common Stock, effective as of the close of business on the date such shares are Transferred (the “Conversion Date”).
In no event shall any Initial Holder or any of its Affiliates be permitted to own the shares of Common Stock issuable upon such
conversion (it being understood that nothing in this Section 7 shall prevent the Initial Holder from making open market purchases
of shares of the Company’s Common Stock). In the event that any distribution of securities, recapitalization, reclassification,
change to organizational form, stock split, reverse stock split, or other similar transaction or event affects the capital structure
of the Company (other than a dividend of shares of Common Stock), the amount to which holders of shares of Series D Preferred
Stock were entitled immediately prior to such event as set forth in the first sentence of this Section 7 shall be equitably adjusted
(if an adjustment would be equitable). For purposes of this Resolution, “Affiliate” means, with respect to any person
or entity, (i) any other person or entity directly, or indirectly through one or more intermediaries, controlling, controlled
by, under common control with such person or entity, or (ii) any trustee under any trust for the primary benefit of such person;
the term “control” (and correlative terms “controlling,” “controlled by” and “under
common control with”) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies
or management of a person or entity; and “Transfer” means the sale, transfer, assignment, or other disposition of
any share of Series D Preferred Stock.
Section 8. Conversion
Procedures.
(A) An
Initial Holder shall immediately provide written notice to the Company of any Transfer by such Initial Holder of any share of
Series D Preferred Stock to a person other than the Company or an Affiliate of such Initial Holder, which notice shall state the
number of shares of Series D Preferred Stock subject to the Transfer, the person acquiring such shares and the Conversion Date.
(B) Effective
immediately prior to the close of business on the Conversion Date with respect to any Transferred Share, but subject to the consummation
of the Transfer of such share, dividends shall no longer be declared on such Transferred Share and such Transferred Share shall
cease to be outstanding.
(C) Prior
to the close of business on the Conversion Date with respect to any Transferred Share, shares of Common Stock issuable upon conversion
thereof shall not be deemed outstanding for any purpose, and the holder of such Transferred Share shall have no rights with respect
to Common Stock (including voting rights or rights to respond to tender offers for Common Stock) by virtue of holding such Transferred
Share.
(D) The
person or persons entitled to receive Common Stock issuable upon conversion of Transferred Shares shall be treated for all purposes
as the record holder(s) of such shares of Common Stock as of the close of business on the Conversion Date with respect thereto.
In the event that an Initial Holder fails to by written notice designate the name in which shares of Common Stock to be issued
upon conversion of Transferred Shares should be registered in the Company’s transfer records or the manner in which such
shares should be delivered, the Company shall not be obligated to register or deliver such shares, until such written notice is
provided, and until such time, such shares of Common Stock shall be issued in the name of the Company, which will hold such shares
and all distributions thereon in trust for the transferee, subject to reimbursement by the rightful owner for reasonable out-of-pocket
expenses incurred in connection therewith.
(E) As
soon as reasonably practicable following the Conversion Date with respect to any Transferred Share, certificates representing
shares of Common Stock shall be issued and delivered to the holder thereof or such holder’s designee upon presentation and
surrender of the certificate evidencing the Transferred Share to the Company, or in the case of book-entry shares, a book-entry
transfer and, if applicable, notice to the Company’s transfer agent, will be made by the Company upon the furnishing of
appropriate endorsements and transfer documents and the payment of all transfer and similar taxes, as applicable.
(F) For the avoidance of doubt, the Company shall at all times keep authorized that number of shares of Common Stock such that
all outstanding shares of Series D Preferred Stock could be converted into such shares without the authorization of any additional
shares of Common Stock.
Section 9. No
Redemption. The shares of Series D Preferred Stock shall not be redeemable.
Section 10. Rank. The Series D Preferred Stock shall rank junior to any other class of the Company’s Preferred Stock with respect
to the payment of dividends and the distribution of assets.
Section 11. Destroyed / Lost Certificates. If any Series D Preferred Stock certificate shall be mutilated, lost, stolen or destroyed,
the Company will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and
substitution for the certificate lost, stolen or destroyed, a new Series D Preferred Stock certificate of like tenor and representing
an equivalent amount of Series D Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate
and, if requested by the Company, an indemnity on customary terms for such situations reasonably satisfactory to the Company.
Section 12. Certain Tax Matters. The Company shall be entitled to deduct and withhold from any payment of cash, shares of Common Stock
or other consideration payable to a holder of a share of Series D Preferred Stock, any amounts required to be deducted or withheld
under applicable U.S. federal, state, local or foreign tax laws with respect to such payment. In the event the Company previously
remitted withholding taxes to a governmental authority in respect of any amount treated as a distribution on a share of Series
D Preferred Stock, the Company shall be entitled to offset any such taxes against any amounts otherwise payable in respect of such
share of Series D Preferred Stock.
Section 13. Rule
144. So long as any shares of the Series D Preferred Stock constitute “restricted securities” within the meaning
of Rule 144(a)(3) under the Securities Act of 1933, as amended (the “Securities Act”), the Company, at all
times while it shall be a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further
covenants that it shall as promptly as reasonably practicable take such further action as any holder of Series D Preferred Stock
may reasonably request, to the extent required from time to time to enable such holder to sell its shares of Series D Preferred
Stock without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under
the Securities Act, including providing customary legal opinions in connection therewith.
