EXHIBIT 3.1(c)
CERTIFICATE OF DESIGNATION
OF
SERIES ONE JUNIOR PARTICIPATING PREFERRED STOCK
Of
ENERGY BIOSYSTEMS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
ENERGY BIOSYSTEMS CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "Company"), DOES HEREBY CERTIFY
that, at a meeting of the Company's Board of Directors duly called and held on
March 8, 1995 at which a quorum was present and acting throughout, the following
resolutions were adopted pursuant to Section 151 of the Delaware General
Corporation Law (the "Delaware Act"):
WHEREAS, Article Four of the Company's Amended and Restated Certificate
of Incorporation (the "Charter"), authorizes 35,000,000 shares of capital stock,
consisting of 5,000,000 shares of preferred stock, par value $0.01 per share
(the "Preferred Stock"), issuable from time to time in one or more series, and
30,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), issuable from time to time; and
WHEREAS, in accordance with Section 151 of the Delaware Act and
pursuant to Article Four of the Charter, the Company's Board of Directors is
authorized to fix the designations, powers, preferences and relative,
participating, optional or other special rights, if any, and qualifications,
limitations or restrictions thereof, of any wholly unissued series of Preferred
Stock, and to fix the number of shares constituting such series, and to increase
or decrease the number of shares of any such series (but not below the number of
shares thereof then outstanding); and
WHEREAS, it is the desire of the Board of Directors of this
Corporation, in accordance with the authority conferred upon it as described
above, to issue a series of Preferred Stock and to fix the rights, preferences,
restrictions and other matters relating thereto;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
establish a series of Preferred Stock of this Company and does hereby fix and
determine the rights, preferences, restrictions and other matters relating to
said series of Preferred Stock, as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series One Junior Participating Preferred Stock" ("Series One
Preferred Stock") and the number of shares constituting such series shall be
300,000.
Such number of shares may be adjusted by appropriate action of the Board of
Directors.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series One Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends contemporaneously declared on the Common Stock, and (ii) a
preferential cash dividend ("Preferential Dividends"), if any, on the tenth day
of March, June, September and December of each year (each 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 One Preferred
Stock, in an amount equal to $1.00 per share of Series One Preferred Stock less
the per share amount of all cash dividends declared on the Series One Preferred
Stock pursuant to clause (i) of this sentence 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 One Preferred Stock. In the event the Company shall, at any time after
the issuance of any share or fraction of a share of Series One Preferred Stock,
make any distribution on the shares of Common Stock, whether by way of a
dividend or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable in cash or any
debt security, debt instrument, real or personal property or any other property
(other than cash dividends subject to the immediately preceding sentence and
other than a distribution of shares of Common Stock or other capital stock of
the Company and other than a distribution of rights or warrants to acquire any
such share, including any debt security convertible into or exchangeable for any
such share, at a price less than the Current Market Price (as hereinafter
defined) of such share), then and in each such event the Company shall
simultaneously pay on each then outstanding share of Series One Preferred Stock
a distribution, in like kind, of 100 times (subject to the provisions for
adjustment hereinafter set forth) such distribution paid on a share of Common
Stock. The dividends and distributions on the Series One Preferred Stock to
which holders thereof are entitled pursuant to clause (i) of the first sentence
of this paragraph and pursuant to the second sentence of this paragraph are
hereinafter referred to as "Participating Dividends" and the multiple of such
cash and non-cash dividends on the Common Stock applicable to the determination
of the Participating Dividends, which shall be 100 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple." In the event the Company shall at any time after
March 8, 1995 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter
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applicable to the determination of the amount of Participating Dividends
which holders of shares of Series One Preferred Stock shall be entitled to
receive shall be the Dividend Multiple applicable immediately prior to such
event multiplied by a fraction, of which the numerator is the number of
shares of Common Stock outstanding immediately after such event and of which
the denominator is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare each Participating Dividend at the same
time it declares any cash or non-cash dividend or distribution on the Common
Stock in respect of which a Participating Dividend is required to be paid. No
cash or non-cash dividend or distribution on the Common Stock in respect of
which a Participating Dividend is required to be paid shall be paid or set aside
for payment on the Common Stock unless a Participating Dividend in respect of
such dividend or distribution on the Common Stock shall be simultaneously paid,
or set aside for payment, on the Series One Preferred Stock.
(C) Preferential Dividends shall begin to accrue on outstanding
shares of Series One Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issuance of any shares of Series One Preferred
Stock. Accrued but unpaid Preferential Dividends shall cumulate but shall not
bear interest. Preferential Dividends paid on the shares of Series One
Preferred 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.
Section 3. VOTING RIGHTS. The holders of shares of Series One Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series One Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Company. The
number of votes which a holder of Series One Preferred Stock is entitled to
cast, as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the Company shall
at any time after March 8, 1995 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series One Preferred
Stock shall be entitled after such event shall be the Vote Multiple immediately
prior to such event multiplied by a fraction, of which the numerator is the
number of shares of Common Stock outstanding immediately after such event and of
which the denominator is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series One Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
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(C) In the event that the Preferential Dividends accrued on the
Series One Preferred Stock for six or more quarterly dividend periods,
whether consecutive or not, shall not have been declared and paid or set
apart for payment, the holders of record of preferred stock of the Company of
all series (including the Series One Preferred Stock), other than any series
in respect of which the right is expressly withheld by the Charter or the
authorizing resolutions included in the Certificate of Designation therefor,
shall have the right, at the next meeting of stockholders called for the
election of directors, to elect two members to the Board of Directors, which
directors shall be in addition to the number required by the Company's bylaws
as in effect prior to such event, to serve until the next annual meeting of
the stockholders and until their successors are elected and qualified or
their earlier resignation, removal or incapacity or until such earlier time
as all accrued and unpaid Preferential Dividends upon the outstanding shares
of Series One Preferred Stock shall have been paid (or set aside for payment)
in full. The holders of shares of Series One Preferred Stock shall continue
to have the right to elect directors as provided by the immediately preceding
sentence until all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series One Preferred Stock shall have been paid (or set
aside for payment) in full. Such directors may be removed and replaced by
such stockholders, and vacancies in such directorships may be filled only by
such stockholders (or by the remaining director elected by such stockholders,
if there be one) in the manner permitted by law; provided, however, that any
such action by stockholders shall be taken at a meeting of stockholders and
shall not be taken by written consent thereof.
(D) Except as otherwise required by law or set forth herein, holders of
Series One Preferred 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 the taking of any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Company shall be in default of payment thereof, thereafter and
until all accrued and unpaid Preferential Dividends and Participating Dividends,
whether or not declared, on shares of Series One Preferred Stock outstanding
shall have been paid or set aside for payment in full, and in addition to any
and all other rights which any holder of shares of Series One Preferred Stock
may have in such circumstances, the Company 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 One Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as
to dividends with the Series One Preferred Stock, unless
dividends are paid ratably on the Series One
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Preferred 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) except as permitted by sub-clause (iv) of this Section
4(A), 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 One Preferred Stock, provided that the
Company may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any
stock of the Company ranking junior (both as to dividends and
upon liquidation, dissolution or winding up) to the Series One
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series One Preferred Stock, or any shares of stock
ranking on a parity with the Series One Preferred Stock
(either as to dividends or upon liquidation, dissolution or
winding up), 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 Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, in accordance with Section 4(A), purchase or
otherwise acquire such shares at such time and in such manner.
(C) The Company shall not issue any shares of Series One Preferred
Stock except upon exercise of rights issued pursuant to that certain Rights
Agreement dated as of March 8, 1995 between the Company and Society National
Bank, a copy of which is on file with the Secretary of the Company at its
principal executive office and shall be made available to stockholders of record
without charge upon written request therefor addressed to the Secretary.
Notwithstanding the foregoing sentence, nothing contained in the provisions
hereof shall prohibit or restrict the Company from issuing for any purpose any
series of preferred stock with rights and privileges similar to, different from,
or greater than, those of the Series One Preferred Stock.
Section 5. REACQUIRED SHARES. Any shares of Series One Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. The Company shall
cause all such shares upon their retirement and cancellation to become
authorized but unissued shares of Preferred Stock, without designation as to
series, and such shares may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors.
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Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series One Preferred Stock unless the holders of shares of Series One Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$1.00 per share plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(B) if greater than the amount specified in clause (i)(A) of this sentence, the
amount equal to 100 times the aggregate amount to be distributed per share to
holders of Common Stock, or (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series One Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series One
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series One Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series One Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the immediately preceding sentence is hereinafter referred to
as the "Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to such clause to
the determination of the Participating Liquidation Amount, as such multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple." In the event the Company shall at any time
after March 8, 1995 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each such case the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series One Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction, of which the numerator
is the number of shares of Common Stock outstanding immediately after such event
and of which the denominator is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(A) In the event that holders of shares of Common Stock of the Company
receive after March 8, 1995 in respect of their shares of Common Stock any share
of capital stock of the Company (other than any share of Common Stock), whether
by way of reclassification, recapitalization, reorganization, dividend or other
distribution or otherwise ("Transaction"), then and in each such event the
dividend rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series One Preferred Stock shall be
adjusted so that after such event the holders of Series One Preferred Stock
shall be entitled, in respect of each share of Series One Preferred Stock held,
in addition to such rights in respect thereof to which such holder was entitled
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immediately prior to such adjustment, to (i) such additional dividends as equal
the Dividend Multiple in effect immediately prior to such Transaction multiplied
by the additional dividends which the holder of a share of Common Stock shall be
entitled to receive by virtue of the receipt in the Transaction of such capital
stock, (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such Transaction multiplied by the additional voting rights
which the holder of a share of Common Stock shall be entitled to receive by
virtue of the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company by virtue of the receipt in the Transaction of such
capital stock, as the case may be, all as provided by the terms of such capital
stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after March 8, 1995 in respect of their shares of Common Stock any right
or warrant to purchase Common Stock (including as such a right, for all purposes
of this paragraph, any security convertible into or exchangeable for Common
Stock) at a purchase price per share less than the Current Market Price of a
share of Common Stock on the date of issuance of such right or warrant, then and
in each such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series
One Preferred Stock shall each be adjusted so that after such event the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple shall each be the
product of the Dividend Multiple, the Vote Multiple and the Liquidation
Multiple, as the case may be, in effect immediately prior to such event
multiplied by a fraction, of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Current Market Price of the
Common Stock at the time of such issuance, by the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after March 8, 1995 in respect of their shares of Common Stock any right
or warrant to purchase capital stock of the Company (other than shares of Common
Stock), including as such a right, for all purposes of this paragraph, any
security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Current
Market Price of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series One Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series One Preferred Stock shall be entitled, in
respect of each share of Series One Preferred Stock held, in addition to such
rights in respect thereof to which
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such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately
prior to such event multiplied, first, by the additional dividends to which
the holder of a share of Common Stock shall be entitled upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by the additional
voting rights to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise and multiplied again by the
Discount Fraction and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such event multiplied, first, by the additional
amount which the holder of a share of Common Stock shall be entitled to
receive upon liquidation, dissolution or winding up of the Company upon
exercise of such right or warrant by virtue of the capital stock which could
be acquired upon such exercise and multiplied again by the Discount Fraction.
For purposes of this paragraph, the "Discount Fraction" shall be a fraction,
of which the numerator shall be the difference between the Current Market
Price of a share of the capital stock subject to a right or warrant
distributed to holders of shares of Common Stock as contemplated by this
paragraph immediately after the distribution thereof and the purchase price
per share for such share of capital stock pursuant to such right or warrant
and of which the denominator shall be the Current Market Price of a share of
such capital stock immediately after the distribution of such right or
warrant.
(D) For purposes of this Section 7, the "Current Market Price" of a
share of capital stock of the Company (including a share of Common Stock) on any
date shall be deemed to be the average of the daily closing prices per share
thereof over the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that, in the event
that such Current Market Price of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading Days after the
ex-dividend date for (i) a dividend or distribution on stock payable in shares
of such stock or securities convertible into shares of such stock, or (ii) any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each such case, the Current Market
Price shall be appropriately adjusted by the Board of Directors of the Company
to reflect the Current Market Price of such stock to take into account
ex-dividend trading. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares are listed or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices as
reported by the Nasdaq Stock Market or such other system then in use, or if on
any such date the shares are not quoted by any such organization, the average of
the closing bid
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and asked prices as furnished by a professional market maker making a market
in the shares selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares are listed or admitted to trading is open for
the transaction of business or, if the shares are not listed or admitted to
trading on any national securities exchange, a day on which the New York
Stock Exchange or such other national securities exchange as may be selected
by the Board of Directors of the Company is open. If the shares are not
publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Current Market Price thereof
as aforesaid, "Current Market Price" shall mean the fair market value thereof
per share as determined in good faith by the Board of Directors of the
Company. In either case referred to in the foregoing sentence, the
determination of Current Market Price shall be described in a statement filed
with the Secretary of the Company.
Section 8. 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
outstanding share of Series One Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series One Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event requiring
such adjustment occurs.
(B) The Company shall give prompt written notice to each holder of a
share of Series One Preferred Stock of the effect of any adjustment to the
voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
Section 10. NO REDEMPTION. The shares of Series One Preferred Stock
shall not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series One Preferred Stock in any other manner permitted by law, the
provisions hereof and the Charter.
Section 11. RANKING. Unless otherwise provided in the Charter or a
Certificate of Designation relating to a subsequent series of Preferred Stock,
the Series One Preferred Stock shall rank junior to all other series of the
Preferred Stock as to the payment of
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dividends and the distribution of assets on liquidation, dissolution or
winding up and senior to the Common Stock.
Section 12. AMENDMENT. The provisions hereof and of the Charter shall
not be amended in any manner which would materially affect the rights,
privileges or powers of the Series One Preferred Stock without, in addition to
any other vote of stockholders required by law, the affirmative vote of the
holders of two-thirds or more of the outstanding shares of Series One Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Designation and do affirm the foregoing as true under the penalties of perjury
this 24th day of March, 1995.
----------------------------
John H. Webb
Chairman, President and
Chief Executive Officer
Attest:
/s/ PAUL G. BROWN, III
- ------------------------------------------
Paul G. Brown, III
Secretary
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