1 EXHIBIT 3.3 CERTIFICATE OF DESIGNATION OF SERIES B PREFERRED STOCK OF FIRSTMERIT CORPORATION John R. Cochran, Chairman of the Board and Chief Executive Officer, and Terry E. Patton, Secretary of FirstMerit Corporation, an Ohio corporation with its principal office in Akron, Ohio (the "Corporation") do hereby certify that they are respectively the Chief Executive Officer and Secretary of the Corporation and that on January 21, 1999, at a meeting of the Board of Directors at which a quorum was present, the Board, by majority vote of the Directors present, authorized, adopted and approved the following resolution to amend the Articles of Incorporation of the Corporation pursuant to the authority of Section 1701.70(B)(l) of the Ohio Revised Code and Article Fourth of the Corporation's Articles of Incorporation: RESOLVED, that pursuant to the authority conferred upon the Board of Directors of the Corporation (hereinafter called the "Board of Directors" or the "Board") by Article Fourth of the Amended and Restated Articles of Incorporation ("Articles"), and pursuant to Section 1701.70 of the Ohio Revised Code, the Board of Directors hereby amends the Articles to create a series of preferred stock, no par value, to be designated as the 6 1/2% Cumulative Convertible Preferred Stock Series B, no par value, initially consisting of 500,000 shares, and to the extent that the designations, powers, preferences and relative and special rights and qualifications, limitations and restrictions of the Series B Preferred Stock are not stated and expressed in the Articles, does hereby fix and state such designations, powers, preferences and relative and other special rights and the qualifications, limitations and restrictions thereof as set forth herein; and RESOLVED, that the Articles be and they hereby are amended by (1) adding the following language to the first sentence of Article FOURTH Part C, Section 5: "Except as provided in Part B or D of these Amended and Restated Articles of Incorporation" and (2) adding at the end of Part C of Article FOURTH thereof a new Part D reading as follows: PART D. 6 1/2% Cumulative Convertible Preferred Stock Series B, no par value. SECTION 1. DESIGNATION AND AMOUNT. -1- 2 Of the 7,000,000 shares of authorized no par value preferred stock, 500,000 shares are hereby designated as a series entitled "6 1/2% Cumulative Convertible Preferred Stock, Series B" (hereinafter called "Series B Preferred Stock"). The number of shares of Series B Preferred Stock may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series B 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 Corporation convertible into Series B Preferred Stock. SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (a) DIVIDEND PAYMENT. The holders of Series B Preferred Stock, in preference to the holders of Common Stock and of any other class of shares ranking junior to the Series B Preferred Stock, shall be entitled to receive out of any funds legally available for Series B Preferred Stock and when and as declared by the Board of Directors, dividends in cash at the annual rate of 6 1/2% of the liquidation preference of $25.00 per share, payable in accordance with this Section 2. (b) DIVIDEND PAYMENT DATES. Dividends on Series B Preferred Stock shall be payable, if declared, quarterly on March 1, June 1, September 1, and December 1 of each year, the first quarterly dividend being payable, if declared, on March 1, 1999. The dividends payable for each full quarterly dividend period on each share of Series B Preferred Stock shall be $.40625. Dividends for a dividend period on the Series B Preferred Stock, or for any period shorter or longer than a full dividend period on the Series B Preferred Stock shall be computed on the basis of 30-day months and a 360-day year. The aggregate dividend payable quarterly to each holder of Series B Preferred Stock shall be rounded to the nearest one cent with $.005 being rounded upward. Each dividend shall be payable to the holders of record on such record date, not less than 15 nor more than 30 days preceding the payment date thereof, as shall be fixed from time to time by the Corporation's Board of Directors. (c) CUMULATIVE DIVIDENDS. Dividends on Series B Preferred Stock shall be cumulative as follows: (1) With respect to shares included in the issue of Series B Preferred Stock and preferred shares issued any time thereafter up to and including the record date for the payment of the first dividend on the issue of Series B Preferred Stock, dividends shall be cumulative from the date of the issue of Series B Preferred Stock; and (2) With respect to preferred shares issued any time after the aforesaid record date for payment of the first dividend on the issue of Series B Preferred Stock, dividends shall be cumulative from the dividend payment date next preceding the date of issue of such shares, except that if such shares are issued during the period commencing the day after the record date for the payment of a dividend on Series B Preferred Stock and ending on the payment date of that dividend, dividends with respect to such shares shall be cumulative from that dividend payment date. -2- 3 SECTION 3. REDEMPTION. (a) GENERAL. The Series B Preferred Stock may not be redeemed prior to June 24, 1999. Subject to the provisions of Section 5(b)(iii) of this Part, on and after June 24, 1999, the shares of Series B Preferred Stock may be redeemed, in whole or in part, at the election of the Corporation, upon notice as provided in this Section 3, by resolution of its Board of Directors, at any time or from time to time, at a redemption price of $25.00 per share, plus, in each case, an amount equal to all accumulated, accrued, and unpaid dividends through the date fixed for redemption. (b) NOTICE. Notice of every redemption shall be mailed, postage prepaid, to the holders of record of the Series B Preferred Stock to be redeemed at their respective addresses then appearing on the books of the Corporation, not less than 30 days nor more than 60 days prior to the date fixed for such redemption. At any time after notice as provided above has been deposited in the mail, the Corporation may deposit the aggregate redemption price for the Series B Preferred Stock to be redeemed, together with accrued and unpaid dividends thereon to the redemption date, with any bank or trust company having capital and surplus of not less than $100,000,000 named in such notice and direct that there be paid to the respective holders of the Series B Preferred Stock so to be redeemed amounts equal to the redemption price of the Series B Preferred Stock so to be redeemed, together with such accrued and unpaid dividends thereon, on surrender of the share certificate or certificates held by such holders; and upon the deposit of such notice in the mail and the making of such deposit of money with such bank or trust company, such holders shall cease to be shareholders with respect to such shares; and from and after the time such notice shall have been so deposited and such deposit of money shall have been so made, such holders shall have no rights or claim against the Corporation with respect to such shares, except only the right to receive such money from such bank or trust company without interest or to exercise before the redemption date any unexpired privileges of conversion. In the event less than all of the outstanding shares of Series B Preferred Stock are to be redeemed, the Corporation shall select by lot the shares so to be redeemed in such manner as shall be prescribed by the Board of Directors. (c) UNCLAIMED FUNDS. If the holders of the Series B Preferred Stock which have been called for redemption shall not within six years after such deposit claim the amount deposited for the redemption thereof, any such bank or trust company shall, upon demand, pay over to the Corporation such unclaimed amounts and thereupon such bank or trust company and the Corporation shall be relieved of all responsibility in respect thereof and to such holders. (d) STATUS OF REDEEMED STOCK. Any Series B Preferred Stock which is (a) redeemed by the Corporation pursuant to the provisions of this Section, (b) converted in accordance with Section 4 hereof, or (c) otherwise acquired by the Corporation, shall resume the status of authorized but unissued Series B Preferred Stock. SECTION 4. CONVERSION. Shares of the Series B Preferred Stock shall be convertible into Common Stock on the following terms and conditions: -3- 4 (a) CONVERSION RIGHT. Subject to and upon compliance with the provisions of this Section, the holder of any shares of Series B Preferred Stock may at such holder's option, at any time or from time to time, convert any such shares into the number of fully paid and non-assessable shares of Common Stock determined by dividing (i) the product of $25.00 and the number of shares of Series B Preferred Stock to be converted by (ii) the conversion price (the "Conversion Price") in effect on the conversion date. The initial Conversion Price shall be $9.0123, subject to adjustment as set forth in paragraph (d) of this Section 4. If any shares of Series B Preferred Stock shall be called for redemption, the right to convert such shares shall terminate and expire at the close of business on the redemption date. (b) DIVIDEND UPON CONVERSION OR REDEMPTION. No payment or adjustment shall be made by the Corporation to any holder of shares of Series B Preferred Stock surrendered for conversion or redemption in respect of dividends accrued since the last preceding dividend payment date on the shares of Series B Preferred Stock surrendered for conversion; provided, however, that if shares of Series B Preferred Stock shall be converted or redeemed subsequent to any record date with respect to any dividend payment date and prior to the next such succeeding dividend payment date, the dividend falling due on such dividend payment date shall be payable on such dividend payment date notwithstanding such conversion or redemption, and such dividend (whether or not punctually paid or duly provided for) shall be paid to the person in whose name such shares are registered at the close of business on such record date. (c) METHOD OF CONVERSION. (i) The surrender of any shares of Series B Preferred Stock for conversion shall be made by the holder thereof by delivering the certificate or certificates evidencing ownership of such shares with proper endorsement or instruments of transfer to the Corporation at the office or agency to be maintained by the Corporation for that purpose, and such holder shall give written notice to the Corporation at said office or agency that he elects to convert such shares of Series B Preferred Stock in accordance with the provisions thereof and of this Section. Such notice shall also state the number of whole shares of Series B Preferred Stock and the name or names (with addresses) in which the certificate or certificates evidencing ownership of Common Stock which shall be issuable on such conversion shall be issued. In the case of lost or destroyed certificates evidencing ownership of shares of Series B Preferred Stock to be surrendered for conversion, the holder shall submit proof of loss or destruction and such indemnity as shall be required by the Corporation. (ii) Subject to the provisions hereof, every such notice of election to convert shall constitute a contract between the holder of such shares of Series B Preferred Stock and the Corporation, whereby such holder shall be deemed to subscribe for the amount of -4- 5 the Common Stock which he will be entitled to receive upon such conversion and, in payment and satisfaction of such subscription, to surrender such shares of Series B Preferred Stock and to release the Corporation from all obligations thereon (subject to the payment of accrued dividends in accordance herewith), and whereby the Corporation shall be deemed to agree that the surrender of such shares of Series B Preferred Stock and the extinguishment of its obligation thereon (except as aforesaid), shall constitute full payment for the Common Stock so subscribed for and to be issued upon such conversion. (iii) As soon as practicable after its receipt of such notice and the certificate or certificates evidencing ownership of such shares of Series B Preferred Stock, the Corporation shall issue and shall deliver at said office or agency to the person for whose account such shares of Series B Preferred Stock were so surrendered, or on his or her written order, a certificate or certificates for the number of such shares of common stock into which the Series B Preferred Stock surrendered is to be converted and a check or cash payment (if any) to which such holder is entitled with respect to fractional shares as determined by the Corporation, in accordance with Section 4(e) hereof, at the close of business on the date of conversion. (iv) Such conversion shall be deemed to have been effected on the date on which the Corporation shall have received such notice and the certificate or certificates for such shares of Series B Preferred Stock; and the person or persons in whose name or names any certificate or certificates for Common Stock shall be issuable upon such conversion shall be deemed to have become on said date the holder or holders of record of the shares represented thereby; provided that any such surrender on any date when the stock transfer books of the Corporation shall be closed shall become effective for all purposes on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date upon which such surrender occurs. (d) ADJUSTMENTS TO CONVERSION PRICE. The Conversion Price shall be subject to adjustments from time to time as follows: (i) In case the corporation shall at any time (A) declare a dividend on the Common Stock in shares of its capital stock, (B) subdivide its outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock by reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the surviving corporation), the Conversion Price in effect on the record date for such dividend or on the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Series B Preferred Stock converted after such time shall be entitled to receive -5- 6 the aggregate number and kind of shares which, if such Series B Preferred Stock had been converted immediately prior to such time, the holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (ii) In case the Corporation shall issue rights or warrants to all holders of its Common Stock (which rights or warrants are not available on an equivalent basis to holders of the Series B Preferred Stock on conversion) entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share (as defined in subparagraph (iv) of this paragraph (d), at the record date for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price shall be adjusted (subject to the limitations contained in subparagraph (vii) of this paragraph (d)) by multiplying the Conversion Price in effect immediately prior to such record date by a fraction, the denominator of which shall be the number of shares of Common Stock outstanding on such date of issue plus the number of additional shares of Common Stock to be offered for subscription or purchase pursuant to the rights or warrants and the numerator of which shall be the number of shares of Common Stock outstanding on the date of issue plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered would purchase at such current market price. Such adjustment shall become effective at the close of business on such record date; however, to the extent that Common Stock is not delivered after the expiration of such rights or warrants, the Conversion Price shall be readjusted (but only with respect to Series B Preferred Stock converted after such expiration) to the Conversion Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made upon the basis of delivery of only the number of shares of Common Stock actually issued. (iii) In case the Corporation shall distribute to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Corporation is the surviving corporation) evidences of its indebtedness or assets (including securities but excluding cash dividends or distributions paid out of retained earnings and dividends payable in Common Stock) or subscription rights or warrants (excluding those referred to in subparagraph (ii) of this paragraph (d), the Conversion Price shall be adjusted (subject to the limitations contained in subparagraph (vii) of this paragraph (d)) by multiplying the Conversion Price in effect immediately prior to the record date for determination of stockholders entitled to receive such distribution by a fraction, the denominator of which shall be the current market price per share of Common Stock (as defined in subparagraph (iv) of this paragraph (d)) on such record date and the numerator of which shall be such current market price per share of Common Stock, less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive) of the portion of the evidences of indebtedness or assets or subscription rights or warrants so to be distributed which are applicable to one share of Common Stock. Such adjustment shall become effective at the close of business on such record date. -6- 7 (iv) For the purpose of any computation under subparagraphs (ii) and (iii) of this paragraph (d), the current market price per share of Common Stock on any record date shall be deemed to be the average of the daily closing prices for the five consecutive business days selected by the Board of Directors commencing not more than 20 trading days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. For this purpose, the term "'ex' date," when used with respect to any issuance or distribution, shall mean the first date on which the Common Stock trades on the applicable exchange or in the applicable market without the right to receive such issuance or distribution. The closing price for each date shall be the reported last sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices on the Nasdaq National Market System, or, if the Common Stock is not listed or admitted to trading on any national securities exchange or quoted on such National Market System, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Board for that purpose. (v) In the case of any consolidation of the Corporation with, or merger of the Corporation into, any other entity, any merger of another entity into the Corporation (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Corporation) or any sale or transfer of all or substantially all of the assets of the Corporation, each holder of a share of Series B Preferred Stock then outstanding shall have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock of the Corporation into which such shares of Series B Preferred Stock might have been converted immediately prior to such consolidation, merger, sale or transfer, assuming such holder of Common Stock of the Corporation is not an entity with which the Corporation consolidated or into which the corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be ("constituent entity"), or an affiliate of a constituent entity, and assuming such holder failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable be upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock of the Corporation held immediately prior to such consolidation, merger, sale or transfer by other than a constituent entity or an affiliate thereof in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this subsection (v) the kind and amount of -7- 8 securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). If necessary, appropriate adjustment shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the holders of shares of Series B Preferred Stock, to the end that the provisions set forth herein shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares. The above provisions shall similarly apply to successive consolidations, mergers, sales or transfers. The Corporation shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Corporation) resulting from such consolidation or merger or the corporation purchasing such assets or other appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to the holder of each share of Series B Preferred Stock such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to receive under this Section 4(d). (vi) The corporation may make such adjustments in the Conversion Price, in addition to those required by subparagraphs (i) through (v) of this Section 4(d), as it considers to be advisable in order that any event treated for federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients. (vii) No adjustment in the Conversion Price will be made for the issuance of shares of capital stock to employees pursuant to the Corporation or any of its subsidiaries' stock option, stock ownership or other benefit plans. No adjustment will be required to be made in the Conversion Price until cumulative adjustments require an adjustment of at least 1% of such Conversion Price. (e) FRACTIONAL SHARES. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of any shares of Series B Preferred Stock, but the holder thereof will receive in cash an amount equal to the value of such fractional share of Common Stock based on the current market price (as defined in subparagraph (iv) of Section 4(d)). If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares issuable upon conversion thereof shall be computed on the basis of the aggregate number of such shares so surrendered. (f) PAYMENT OF TAXES. The Corporation shall pay any tax in respect of the issue of stock certificates on conversion of shares of Series B Preferred Stock. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the holder of the shares converted, and the Corporation shall not be required to issue or deliver any such stock certificate unless and until the -8- 9 person or persons requesting the issuance hereof shall have paid the Corporation the amount of any such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. (g) COMMON STOCK RESERVED FOR CONVERSION. The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock or have available in its treasury the full number of shares of Common Stock deliverable upon the conversion of all outstanding shares of Series B Preferred Stock and shall take all such action as may be required from time to time in order that it may validly and legally issue fully paid and non-assessable shares of Common Stock upon conversion of the Series B Preferred Stock. (h) NOTICE. In the event: (i) the Corporation shall declare a dividend (or any other distribution) on its Common Stock (other than a cash dividend payable out of retained earnings); or (ii) the Corporation shall authorize the issuance to holders of its Common Stock of rights or warrants to subscribe for or purchase Common Stock; or (iii) of a reclassification of the Common Stock of the Corporation (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value) or of any consolidation or merger to which the Corporation is a party or of the sale or transfer of all or substantially all of the assets of the Corporation and for which approval of any stockholders of the Corporation is required; or (iv) of the voluntary or involuntary dissolution, liquidation or winding up of the Corporation: then, and in each event, the Corporation shall cause to be mailed to each holder of Series B Preferred Stock, at his address as the same shall appear on the books of the Corporation, as promptly as possible but in any event at least fifteen days prior to the applicable date hereinafter specified, (A) the record date for the purpose of such dividend, distribution, rights or warrants, and the nature and amount of such dividend, distribution, rights or warrants; or (B) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. (h) "COMMON STOCK." For the purposes of Section 4, "Common Stock" shall mean stock of the Corporation of any class, whether now or hereafter authorized, which has the right to participate in the distribution of either earnings or assets of the Corporation without limit as to the amount of percentage, including, without limitation, the Common Stock. In case by reason of the operation of Section 4 the shares of Series B Preferred Stock shall be convertible into any other shares of stock or other securities or property of the Corporation -9- 10 or of any other corporation, any reference herein to the conversion of shares of Series B Preferred Stock shall be deemed to refer to and include the conversion of shares of Series B Preferred Stock into such other shares of stock or other securities or property. SECTION 5. VOTING RIGHTS. (a) GENERAL. Except as expressly provided in this Section, or as otherwise from time to time required by applicable law, the Series B Preferred Stock shall have no voting rights. (i) If, and so often as, the Corporation shall be in default in the payment of the equivalent of the full dividends on the Series B Preferred Stock, whether or not earned or declared, for six dividend payment periods (whether or not consecutive), which in the aggregate contain at least 540 days, the holders of the Series B Preferred Stock, voting separately as a class, shall be entitled to elect, as herein provided, two additional members of the Board of Directors of the Corporation; provided however, that the holders of the Series B Preferred Stock shall not have or exercise such special class voting rights except at meetings of such shareholders for the election of directors at which the holders of not less than one-third of the outstanding Series B Preferred Stock then outstanding are present in person or by proxy; and provided further that the special class voting rights provided for in this paragraph when the same shall have become vested shall remain so vested until all accrued and unpaid dividends on the Series B Preferred Stock shall have been paid, whereupon the holders of the Series B Preferred Stock shall be divested of their special class voting rights in respect of subsequent elections of directors, subject to the revesting of such special class voting rights in the event above specified in this paragraph. (ii) In the event of default entitling the holders of Series B Preferred Stock to elect two additional directors as specified in paragraph (i) of this Section, a special meeting of such holders for the purpose of electing such directors shall be called by the Secretary of the Corporation upon written request of, or may be called by, the holders of record of at least 25% of the shares of the Series B Preferred Stock, and notice thereof shall be given in the same manner as that required for the annual meeting of shareholders; provided, however, that the Corporation shall not be required to call such special meeting if the annual meeting of shareholders shall be called to be held within 90 days after the date of receipt of the foregoing written request from the holders of the Series B Preferred Stock. At any meeting at which the holders of the Series B Preferred Stock shall be entitled to elect directors, the holders of one-third of the shares of the Series B Preferred Stock, present in person or by proxy, shall be sufficient to constitute a quorum, and the vote of the holders of a plurality of such shares so present at any such meeting at which there shall be such a quorum shall be sufficient to elect the members of the Board of Directors which the holders of Series B Preferred Stock are entitled to elect as herein provided. Notwithstanding any provision of these Articles of Incorporation or the Code of Regulations of the Corporation or any action taken by the holders of any class of shares fixing the number of directors of the Corporation, the two directors who may be elected by the holders of the Series B Preferred Stock pursuant to this Section shall serve in addition to any other directors then in office or proposed to be elected otherwise than pursuant to this Section. Nothing in this Section shall prevent any -10- 11 change otherwise permitted in the total number of directors of the Corporation or require the resignation of any director elected otherwise than pursuant to this Section. Notwithstanding any classification of the other directors of the Corporation, the two directors elected by the holders of the Series B Preferred Stock shall be elected annually for terms expiring at the next succeeding annual meeting of shareholders, subject to subsection (a) (iii) hereof. (iii) Immediately upon any divesting of the special class voting rights of the holders of the Series B Preferred Stock in respect of elections of directors as provided in this Section, the terms of office of all directors then in office elected by such holders shall terminate. If the office of any director elected by such holders voting as a class becomes vacant by reason of death, resignation, removal from office or otherwise, the remaining director elected by such holders voting as a class may elect a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. (b) VOTING RIGHTS ON EXTRAORDINARY MATTERS. The affirmative vote or consent of the holders of at least two-thirds of the shares of the Series B Preferred Stock then outstanding, voting or consenting separately as a class, given in person or by proxy either in writing or at a meeting called for such purpose, shall be necessary to effect any one or more of the following (but so far as the holders of Series B Preferred Stock are concerned, such action may be effected with such vote or consent): (i) Any amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the Articles of Incorporation or of the Code of Regulations of the Corporation which affects materially and adversely the preferences or voting or other rights of the holders of the Series B Preferred Stock; provided, however, neither the amendment of the Articles of Incorporation so as to authorize, create or change the authorized or outstanding number of Series B Preferred Stock or of any shares ranking on a parity with or junior to the Series B Preferred Stock, nor the amendment of the provisions of the Code of Regulations so as to change the number of directors of the Corporation, shall be deemed to materially and adversely affect the preferences or voting or other rights of the holders of Series B Preferred Stock; (ii) The authorization, creation or the increase in the authorized number of any shares, or any security convertible into shares, in either case ranking senior to the Series B Preferred Stock; or (iii) The purchase or redemption (for sinking fund purposes or otherwise) of less than all of the shares of the Series B Preferred Stock then outstanding except in accordance with a stock purchase offer made to all holders of record of Series B Preferred Stock, unless all dividends on all Series B Preferred Stock then outstanding for all previous dividend periods shall have been declared and paid or funds therefor set apart. Notwithstanding anything to the contrary herein, an amendment which increases the number of authorized shares of any class or series of Preferred Stock or the creation or issuance of other classes or series of Preferred Stock, in each case ranking on a parity with or junior to the Series B Preferred Stock with respect to the payment of dividends and distribution of assets upon liquidation, -11- 12 dissolution or winding up, or substitutes the surviving entity in a merger or consolidation for the Corporation, shall not be considered to be such an adverse change. SECTION 6. DEFINITIONS. For the purposes of this Part: (a) Whenever reference is made to shares "RANKING PRIOR (OR SENIOR) TO THE SERIES B PREFERRED STOCK," such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation are given preference over the rights of the holders of Series B Preferred Stock; (b) Whenever reference is made to shares "ON A PARITY WITH THE SERIES B PREFERRED SHARES", such reference shall mean and include all other shares of the Corporation in respect of which the rights of the holders thereof as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation rank equally (except as to the amounts fixed therefor) with the rights of the holders of Series B Preferred Stock; and (c) Whenever reference is made to shares "RANKING JUNIOR TO THE SERIES B PREFERRED STOCK," such reference shall mean and include all shares of the Corporation other than those defined under Subsections (a) and (b) of this Section. PART 7. LIQUIDATION RIGHTS: PRIORITY. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the holders of Series B Preferred Stock shall be entitled to receive in full out of the assets of the Corporation, including its capital, before any amount shall be paid or distributed among the holders of the Common Stock or any other shares ranking junior to the Series B Preferred Stock, $25.00, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment of the amount due pursuant to such liquidation, dissolution or winding up of the affairs of the Corporation. In the event the net assets of the Corporation legally available therefor are insufficient to permit the payment upon all outstanding shares of Series B Preferred Stock of the full preferential amount to which they are respectively entitled, then such net assets shall be distributed ratably upon all outstanding shares of Series B Preferred Stock in proportion to the full preferential amount to which each such share is entitled. After payment to the holders of Series B Preferred Stock of the full preferential amounts as aforesaid, the holders of Series B Preferred Stock, as such, shall have no right or claim to any of the remaining assets of the Corporation. No payment on account of such liquidation, dissolution or winding up of the affairs of the Corporation shall be made to the holders of any class or series of stock ranking on a parity with the Series B Preferred Stock in respect of the distribution of assets, unless there shall likewise be paid at the same time to the holders of the Series B Preferred Stock like proportionate distributive -12- 13 amounts, ratably, in proportion to the full distributive amounts to which they and the holders of such parity stock are respectively entitled with respect to such preferential distribution. /S/ John R. Cochran ------------------------------------ John R. Cochran, President and Chief Executive Officer /S/ Terry E. Patton ------------------------------------ Terry E. Patton, Secretary -13-