EXHIBIT 3.2
CERTIFICATE OF DESIGNATIONS
OF
SERIES C JUNIOR PARTICIPATING PREFERENCE STOCK
OF
HASBRO, INC.
(Pursuant to Section 7.1.1-15 of the
Rhode Island Business Corporation Act)
Hasbro, Inc., a corporation organized and existing under the Business
Corporation Act of the State of Rhode Island (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors as required by Section 7.1.1-15 of the Rhode Island
Business Corporation Act at a meeting duly called and held on June 16, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of its Restated
Articles of Incorporation, the Board of Directors hereby creates a series of
Preference Stock, par value $2.50 per share (the "Preference Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series C Junior Participating Preference Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series C Junior Participating Preference Stock" and the number
of shares constituting such series shall be 60,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preference Stock ranking prior and superior to the
shares of Series C Junior Participating Preference Stock with respect to
dividends, the holders of shares of Series C Junior Participating Preference
Stock, in preference to the holders of shares of Common Stock, par value $.50
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series C Junior
Participating Preference Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 10,000 times the aggregate per share amount
of all cash dividends, and 10,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than
a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock 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 C Junior Participating Preference Stock. In the event the Corporation
shall at any time after June 30, 1999 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of Series C Junior Participating Preference
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series C Junior Participating Preference Stock as provided in Paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per
share on the Series C Junior Participating Preference Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Junior Participating Preference Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of
Series C Junior Participating Preference Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Junior Participating Preference
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the shares of
Series C Junior Participating Preference Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series C Junior Participating Preference
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series C Junior
Participating Preference Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series C Junior Participating Preference Stock shall entitle the
holder thereof to 10,000 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders
of shares of Series C Junior Participating Preference Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a Series of Preference Stock or any similar stock or by
law, the holders of shares of Series C Junior Participating Preference Stock
and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Series C Junior Participating
Preference Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series
C Junior Participating Preference Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preference Stock (including holders of the Series C Junior
Participating Preference Stock) with dividends in arrears in an amount equal
to six (6) quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) directors.
(ii) During any default period, such voting right of the holders of
Series C Junior Participating Preference Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or
at any annual meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that neither such voting right nor the right of the
holders of any other series of Preference Stock, if any, to increase, in
certain cases, the authorized number of directors shall be exercised unless
the holders of ten percent (10%) in number of shares of Preference Stock
outstanding shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the exercise by the holders of
Preference Stock of such voting right. At any meeting at which the holders of
Preference Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect
directors to fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so elected at
any special meeting does not amount to the required number, the holders of the
Preference Stock shall have the right to make such increase in the number of
directors as shall be necessary to permit the election by them of the required
number. After the holders of the Preference Stock shall have exercised their
right to elect directors in any default period and during the continuance of
such period, the number of directors shall not be increased or decreased
except by vote of the holders of Preference Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series C Junior Participating Preference Stock.
(iii) Unless the holders of Preference Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preference Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preference Stock, which meeting shall thereupon be called by the Chairman of
the Board, any Vice Chairman, the President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Preference Stock are entitled to vote pursuant to this Paragraph
(C)(iii) shall be given to each holder of record of Preference Stock by
mailing a copy of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preference Stock outstanding. Notwithstanding the
provisions of this Paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of
Preference Stock shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the directors so
elected by the holders of Preference Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be
filled by vote of a majority of the remaining directors theretofore elected by
the holders of the class of stock which elected the director whose office
shall have become vacant. References in this Paragraph (C) to directors
elected by the holders of a particular class of stock shall include directors
elected by such directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preference Stock as a class to elect directors shall
cease, (y) the term of any directors elected by the holders of Preference
Stock as a class shall terminate, and (z) the number of directors shall be
such number as may be provided for in the Restated Articles of Incorporation
or the Amended and Restated By-laws irrespective of any increase made pursuant
to the provisions of Paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in the
Restated Articles of Incorporation or Amended and Restated By-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
directors.
(D) Except as set forth herein, holders of Series C Junior Participating
Preference Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series C Junior Participating Preference 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 C
Junior Participating Preference Stock outstanding shall 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
or winding up) to the Series C Junior Participating Preference 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 C Junior Participating
Preference Stock, except dividends paid ratably on the Series C Junior
Participating Preference 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 for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Junior Participating
Preference Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares 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 C Junior
Participating Preference Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series C Junior Participating Preference Stock, or any shares of
stock ranking on a parity with the Series C Junior Participating Preference
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) 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 good faith 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. Reacquired Shares. Any shares of Series C Junior
Participating Preference Stock purchased or otherwise acquired by the
Corporation 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 Preference Stock and may be reissued
as part of a new series of Preference Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein, in the Restated Articles of
Incorporation, or in any other Certificate of Designations creating a series
of Preference Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Junior Participating Preference Stock unless,
prior thereto, the holders of shares of Series C Junior Participating
Preference Stock shall have received an amount equal to $10,000 per share of
Series C Participating Preference Stock, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series C Liquidation Preference"). Following the
payment of the full amount of the Series C Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series C
Junior Participating Preference Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series C
Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth
in subparagraph (C) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment of the full
amount of the Series C Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series C Junior Participating Preference
Stock and Common Stock, respectively, holders of Series C Junior Participating
Preference Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Preference Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series C Liquidation Preference and
the liquidation preferences of all other series of Preference Stock, if any,
which rank on a parity with the Series C Junior Participating Preference
Stock, then such remaining assets shall be distributed ratably to the holders
of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation 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 the
shares of Series C Junior Participating Preference Stock shall at the same
time be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 10,000 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 the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series C Junior
Participating Preference Stock shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series C Junior Participating
Preference Stock shall not be redeemable.
Section 9. Ranking. The Series C Junior Participating Preference Stock
shall rank junior to all other series of the Corporation's Preference Stock as
to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of Series C Junior
Participating Preference Stock are outstanding, neither the Restated Articles
of Incorporation of the Corporation nor this Certificate of Designations shall
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series C Junior Participating Preference
Stock so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series C Junior
Participating Preference Stock, voting separately as a class.
Section 11. Fractional Shares. Series C Junior Participating Preference
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series C Junior Participating Preference Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 29th day
of June, 1999.
/s/ Herbert M. Baum
----------------------
President
/s/ Phillip H. Waldoks
----------------------
Secretary
STATE OF RHODE ISLAND )
: Sc.
COUNTY OF PROVIDENCE )
At Pawtucket in said county on this 29th day of June, 1999, personally
appeared before me Herbert M. Baum, who, being by me first duly sworn,
declared that he is the President of Hasbro, Inc. that he signed the foregoing
document as President of the corporation, and that the statements therein
contained are true.
/s/ Marie W. Pamental
----------------------
Notary Public
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