Exhibit
4.1


 


CERTIFICATE OF DESIGNATION OF THE


POWERS, PREFERENCES AND RIGHTS


OF


SERIES A CONVERTIBLE


PREFERRED STOCK


OF


PELICAN FINANCIAL, INC.


 


 


TO
THE SECRETARY OF STATE


OF
THE STATE OF DELAWARE:


 


Pursuant to Section 151 of the Delaware General Corporation Law, the
undersigned officer hereby certifies that the resolutions attached hereto as
Exhibit A designating the Series A Convertible Preferred Stock of the
Corporation were duly adopted by the Board of Directors of Pelican Financial,
Inc.


 


 


 


IN WITNESS WHEREOF, this Corporation has caused this
certificate to be signed by its President and Chief Executive Officer this 14th
day of December, 2005.


 


 


	
   

  	
  PELICAN
  FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Charles C. Huffman

  	
   

  
	
   

  	
   

  	
  Charles
  C. Huffman

  
	
   

  	
   

  	
  President
  and CEO

  



 





















 


Exhibit A


RESOLVED, that the Board of Directors has determined that it is
advisable and for the benefit of the Corporation to establish a series of
shares of preferred stock pursuant to the authority granted to the Board of
Directors in the Certificate of Incorporation, as amended, (the “Certificate of
Incorporation”) of the Corporation.


 


RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation (the “Board of Directors”)
by the provisions of the Certificate of Incorporation, there is hereby
established and authorized, out of the 200,000 shares of preferred stock, par
value $0.10 per share, of the Corporation authorized in Article VII of the
Certificate of Incorporation (“Preferred Stock”), a series of the Preferred
Stock consisting of 40,000 shares to be known and designated as the Series A
Convertible Preferred Stock, the preferences, limitations, relative rights and
other terms of which are as follows:


 


SERIES A CONVERTIBLE PREFERRED STOCK


 


                1.             Amount Authorized.  There is hereby authorized 40,000 shares of
Series A Convertible Preferred Stock (individually, a “Share,” and collectively
the “Shares”) and shall be issued at the price of $100.00 per share (the
“Issuance Price”).


 


                2.             Voting Rights.


 


(a)           The Series A
Convertible Preferred Stock (the “Shares”) shall not have voting rights, except
where otherwise expressly provided by law or the Certificate of
Incorporation.  The entire voting power
of the Corporation shall be vested in the Common Stock of the Corporation.


 


(b)           The Corporation
shall not authorize, take or otherwise engage in or permit the occurrence of
any of the following acts, matters or circumstances without the vote of the
holders of the Shares, voting as a separate class and voting group and by the
vote of at least a majority of the Shares at the time issued and outstanding:


 


(1)           Authorize
or issue any new class of stock or any new series of stock having preferences,
privileges or other rights ranking greater than the Shares with respect to the
payment of dividends or the distribution of assets upon the liquidation,
dissolution, or winding up of the Corporation, except where the proceeds of the
sale of such stock are used to immediately redeem all of the outstanding
Shares;


 


(2)           Alter
or amend any of the preferences, limitations, relative rights or other terms of
the Shares as set forth herein,


 


(3)           Authorize
or permit to exist any transfer, Lien, or encumbrance whatsoever on the shares
of its wholly owned subsidiary Pelican National Bank.


 


(4)           The
Corporation has not and shall not incur any indebtedness under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to 


 


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which Corporation is a party or by which the Corporation is otherwise
bound, other than trade payables incurred in the ordinary course of business
and operation of the Corporation the aggregate amount of such obligations shall
not exceed $25,000 plus professional fees. 
Notwithstanding the provisions of subsections (3) and (4) hereof, the
Company may incur indebtedness and impose a Lien on the shares of Pelican
National Bank where the proceeds of the loan are used to immediately redeem all
of the outstanding Shares.


 


The term Lien shall mean any mortgage, deed of
trust, lien, pledge, hypothecation, assignment, security interest, or any other
encumbrance, charge or transfer of, on or affecting the stock of Pelican
National Bank or any portion thereof, or any interest of the Corporation therein,
including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s or
materialmen’s liens and other similar liens and encumbrances.


 


 


3.             No-Pre-emptive
Rights.  The holders of the Shares
shall not have any pre-emptive right or any other right whatsoever to subscribe
for, purchase, or otherwise acquire any other Shares, any Common Stock, or any
shares of any other series of preferred stock (“Other Preferred Stock”) as may
be issued from time to time, including, without limitation, with respect to any
warrants, rights or options that the Corporation proposes to issue or grant for
the purchase of any Shares, any Common Stock, or any shares of any Other
Preferred Stock, or any stock or other securities convertible into or
exchangeable for, or that carry any rights to subscribe for or purchase or
otherwise acquire, any Shares, any Common Stock, or any shares of any Other
Preferred Stock.


 


4.             Dividends.  The holders of the Shares shall be entitled to
receive, out of funds legally available therefor, and when declared by the
Board of Directors of the Corporation, cash dividends (“Preferred Dividends”)
as follows:


 


(a)           The annual dividend
rate on each Share shall be eight percent (8%) of the Issuance Price of such
Share from the date of issuance through the Termination Date; from the
Termination Date through the Maturity Date the annual divided rate on each
Share shall be ten percent (10%).  If for
any reason the Shares are not redeemed on or prior to the Maturity Date), the
annual divided rate on each Share after the Maturity Date shall be eighteen
percent (18%); provided however, the annual dividend rate shall be 10%
throughout any Conversion Period initiated prior to Maturity Date. Each of the
forgoing Dividends shall be hereinafter referred to as a “Preferred
Dividend”.  Preferred Dividends will
accumulate and accrue on each outstanding Share from the date of issuance of
the Share, and shall thereafter accumulate and accrue from day to day, whether
or not earned or declared.


 


(b)           Preferred Dividends
will, subject to subparagraph (d) immediately below, be payable at Maturity or
upon Redemption.  The amount of each Preferred
Dividend shall be equal to the aggregate amount of the annual Preferred
Dividend, which is payable until Maturity or Redemption.


 


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(c)           Preferred Dividends
shall be cumulative.  Accrued Preferred
Dividends shall be payable in full before any dividends are declared or paid
upon, or set apart for, Common Stock or any other series of preferred stock
ranking junior to the Shares, and before any other distribution of any kind
shall be declared or paid on, or set apart for, Common Stock or any other
series of preferred stock ranking junior to the Shares.


 


(d)           The Board of
Directors shall declare Preferred Dividends when they are payable as provided
in subparagraph (b) immediately above, so long as funds are legally,
contractually and otherwise available therefore at that time, or if not fully
available, to the extent available, and subject to subparagraph (e) immediately
below.


 


(e)           For
purposes of this designation, the term “Termination Date” shall have the meaning
ascribed to it under the Agreement and Plan of Reorganization among Stark Bank
Group, Ltd, SBG II, Ltd., and Pelican Financial, Inc. dated November 30, 2005
(the “Meger Agreement”).   The term
“Maturity Date” shall mean the later of 6 months following the termination of
the Merger Agreement or October 1, 2006. 
The term “Acquisition Proposal” shall mean a proposed tender offer,
written agreement, understanding or other proposal of any nature pursuant to
which any person or group, other than Stark Bank Group, Ltd. or SBG Ltd, II or
any affiliate thereof, would directly or indirectly (i) participate in a
merger, share exchange, consolidation or any other business combination
involving PFI or any PFI Subsidiary the result of which such person or group would
hold the right to vote 51% or more of the outstanding voting securities of the
corporation surviving such merger, exchange, consolidation or combination; (ii)
acquire the right to vote 51% or more of the outstanding voting securities of
PFI or any PFI Subsidiary; (iii) acquire 51% or more of the assets or earning
power of PFI or of any PFI Subsidiary; or (iv) acquire in excess of 51% of any
class of capital stock of PFI or any PFI Subsidiary.


 


5.             Information
Rights.  The holders of the Shares
shall have the right to obtain information from the Corporation in the same
manner and to the same extent as the holders of shares of Common Stock are
entitled under the Certificate of Incorporation of the Corporation (as the same
may be amended or restated from time to time) the Bylaws or applicable law.
Without limiting the generality of the foregoing, and in addition thereto to
the extent necessary, the holders of the Shares shall also receive from the
Corporation quarterly unaudited financial statements and audited annual
financial statements. The quarterly financial statements shall be provided
within forty five (45) days of the close of each fiscal quarter, and the annual
financial statements shall be provided within ninety (90) days of the close of
each fiscal year of the Corporation.


 


6.             Liquidation
Rights and Preferences.  In the event
of the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, each holder of the Shares shall be entitled to
receive in cash, out of the assets of the Corporation, an amount (the
“Liquidation Amount”) equal to (i) the issuance price per share for each
outstanding Share (as set forth herein) held by the holder, plus (ii) all
accumulated but unpaid Preferred Dividends. The Liquidation Amount shall be
paid before any payment shall be made or any assets distributed to the holders
of Common Stock or any other series of preferred stock of the Corporation
ranking junior to the 


 


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Shares.
If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation are insufficient to pay the Liquidation Amount per
Share, the holders of the Shares shall share pro rata in any such distribution
in proportion to the full amounts to which they would otherwise be respectively
entitled.  After payment in full of the
Liquidation Amount of the Shares, the holder of such Shares shall not
participate further in the proceeds of the liquidation of the Corporation.


 


The Shares shall be senior to the shares of the Common and any Other
Preferred Shares (as defined above) for all purposes of this Section 6
(including but not limited to the Liquidation Amount), except as provided in
Section 2(b)(1).


 


The (i) consolidation, merger or other association of the Corporation
into or with any other entity or entities in which the shareholders of the
Corporation receive any distributions of cash, securities or other property as
a result of or in connection with such consolidation, merger or other association,
or (ii) sale or transfer by the Corporation of all or substantially all its
assets, in either case by a single transaction or series of transactions and
whether voluntarily or involuntarily, shall, at the election of the holder of
any Shares, be deemed to be a liquidation, dissolution or winding up within the
meaning of and for purposes of this Section 6.


 


7.             Conversion
Rights.


 


(a)                                 Optional
Conversion.  During the following periods
of time:


 


a.              The thirty day (30) period
beginning on the day after the termination of the Merger Agreement. for any
reason;


 


b.              During the Conversion Period
as such term is defined in Section 12 hereof; or


 


c.               at any time on or after the
Maturity Date;


 


the
Shares shall be convertible, at any time and from time to time during such
periods, at the option of the holder thereof, into shares of Common Stock in
accordance with the provisions and subject to the adjustments provided for in
Section 7(d) below. In order to exercise this conversion privilege, a holder of
Shares shall surrender the certificate for the Shares to be converted to the
Corporation at its principal office, duly endorsed in blank for transfer and
accompanied by written notice to the Corporation that the holder elects to
convert a specified portion or all of such Shares. Shares converted pursuant to
this Section 7(a) shall be deemed to have been converted as of the opening of
business on the day of surrender of the certificate representing such Shares
for conversion in accordance with the foregoing provisions, and at such time
all of the rights of the holder of such Shares, as such holder, shall cease and
such holder shall be treated for all purposes with respect to the Corporation
as the record holder of the number of shares of Common Stock issuable to such
holder upon conversion pursuant to this Section 7.


 


(b)           Conversion Price and
Adjustments. Subject to adjustment as set forth in this Section 7(b), each
Share shall be convertible (upon optional, automatic or mandatory conversion) 


 


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into
such number of fully paid and nonassessable shares of Common Stock, computed
and rounded to the nearest full share held for each holder, as is determined by
dividing (i) the issuance price of such Share (as defined herein), plus all
accumulated but unpaid Preferred Dividends on such Share and any other declared
but unpaid dividends on such Share, by (ii) the Conversion Price (as defined
below) then in effect for such Share.


 


“Conversion Price” shall mean Five Dollars and
25/100 ($5.25); provided, however, that the Conversion Price shall be subject
to adjustment from time to time if the Corporation shall at any time subdivide
or split its outstanding Common Stock into a greater number of shares or
declare any dividend payable in Common Stock, the Conversion Price in effect
immediately prior to such subdivision, split or dividend shall be
proportionately decreased, and conversely, in case the outstanding Common Stock
of the Corporation shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.


 


 


(c)           Notice of
Conversion Price Adjustment. Upon any adjustment of the Conversion Price,
then and in each such case the Corporation shall give written notice thereof to
the registered holders of Shares, which notice shall state the Conversion Price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares of Common Stock receivable at such price upon the conversion
of Shares, and setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. The notice shall be sent by
first class mail, postage prepaid, to the addresses of the respective holders
as shown on the books of the Corporation.


 


The Corporation also shall, upon the written request at any time and
from time to time of any holder of Shares, furnish or cause to be furnished to
such holder a certificate setting forth all adjustments to the Conversion Price,
the Conversion Price at the time then in effect, and the number of shares of
Common Stock which at the time would be received upon the conversion of such
holder’s Shares.


 


(d)           Status of
Converted Shares. In case any Shares shall be converted pursuant to this
Section 7, the Shares so converted shall be cancelled and unavailable for
reissue.


 


(e)           Issuance of
Certificates. As promptly as practicable after any conversion date (whether
by optional, automatic or mandatory conversion) and after receipt of the
certificate or certificates for the Shares which have been converted, the
Corporation shall issue and deliver to the holder whose Shares have been
converted a certificate or certificates for the number of shares of Common
Stock issuable upon such conversion pursuant to this Section 7, computed and
rounded to the nearest full share, and, in the case of an optional conversion,
a certificate or certificates for the balance of the Shares surrendered to the
Corporation, if any, which the holder did not elect to convert into Common
Stock.


 


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8.             Registration
Rights Agreement.  Each holder of
Shares and the Corporation shall enter into a Registration Rights Agreement in
the form attached hereto as Schedule I and incorporated herein by this
reference as if set forth in full.


 


9.             Reservation of
Common Stock Issuable Upon Conversion.  The Corporation shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, such
number of its shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding Shares; and if at any time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding Shares, in addition
to such other remedies as shall be available to the holders of such Shares, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.


 


                10.          Notice
of Certain Events.  In case at any
time:


 


(a)           The Corporation shall pay any dividend payable in stock
upon the Common Stock, or make any distributions (including cash dividends) to
the holders of Common Stock; or


 


(b)           The Corporation
shall offer for subscription or sale to all of the holders of Common Stock as a
class (i) any shares of Common Stock or any stock of any other class, (ii) any
options, warrants or other rights to purchase or subscribe for shares of Common
Stock or any stock of any other class, or (iii) any other rights regarding any
of the Corporation’s stock; or


 


(c)           Except in the case
of the merger contemplated in the Merger Agreement, there shall be any (i)
capital reorganization or reclassification of the capital stock of the
Corporation, or (ii) consolidation, merger or other association of the
Corporation with or into, or sale of all or substantially all of its assets to,
another person or persons; or


 


(d)           There shall be a
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation;


 


Then, in any one or more of the above cases, the Corporation shall give
written notice thereof to the holders of Shares at least thirty (30) days prior
to the date on which (i) the books of the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription or sale rights,
or (ii) such reorganization, reclassification, consolidation, merger,
association, sale, dissolution, liquidation, or winding up shall take place, as
the case may be. Such notice shall also specify the date as of which the
holders of Common Stock of record shall participate in such dividend,
distribution or subscription or sale rights, or shall be entitled, if
applicable, to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
association, sale, dissolution, liquidation or winding up, as the case may be.
The notice shall be sent by first class mail, postage prepaid, to the addresses
of the respective holders as shown on the books of the Corporation.


 


11.          No Impairment.
 The Corporation will not breach or seek
to breach the observance or performance of any of the terms hereof, but nothing
shall prohibit, limit or otherwise restrict 


 


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the
Corporation’s right to authorize, designate and issue other series of preferred
stock from time to time.


 


12.  Redemption of Series A
Convertible Preferred Stock.  At any time
on or after April 1, 2006, the Corporation may redeem all or a portion of
the outstanding Shares by fixing the date upon which such redemption shall be
made (the Redemption Date). Notwithstanding the foregoing, the Corporation may
not redeem the Shares during a Conversion Period. The Corporation shall provide
written notice (the “Acquisition Proposal Notice”) to the Holder describing the
terms of the Acquisition Proposal within 10 days of the receipt of an
Acquisition Proposal.   The Holder, by
its acceptance of the Acquisition Proposal Notice, agrees to hold the
information contained therein as confidential and agrees not to disclose or use
such information other than for the purpose of determining whether to convert
the Shares.    Notwithstanding the
forgoing, the Corporation shall redeem all of the Shares outstanding on the
later of the Maturity Date or expiration of the Conversion Period.  The amount paid for each Share shall be equal
to the Issuance Price plus accrued and unpaid Preferred Dividends accrued
through the Redemption Date (the “Redemption Price”).  The Conversion Period shall mean the period
of time beginning on the date the Corporation receives an Acquisition Proposal
and ending on the earlier of 30 days after a definitive agreement is signed or
10 days after termination of negotiations with respect to any Acquisition
Proposal.


 


 


Notice
of Redemption.  At least 30 days but not
more than 60 days before a Redemption Date, the Corporation shall mail a notice
of redemption by first class mail, postage prepaid, to each Series A
Convertible Preferred Stock Holder whose Shares are to be redeemed at the
Holders registered address.  Each notice
of redemption shall identify the Shares to be redeemed and shall state:


 


(i)            the Redemption Date;


(ii)           the Redemption Price including the amount of any accrued
and unpaid Preferred Dividends, if any, to be paid;


(iii)          Time and Place that the Redemption
shall take place;


(iv)          that Series A Convertible Preferred Stock called for
redemption must be surrendered to the Corporation to collect the Redemption
Price plus accrued and unpaid Preferred Dividends, if any;


(v)           that, unless the Corporation defaults in making the
redemption payment, all rights as a Series A Convertible Preferred Share Holder
shall cease to accrue on and after the Redemption Date, and the only remaining
right of the Series A Convertible Preferred Share Holder is to receive payment
of the Redemption Price including any accrued and unpaid Preferred
Distributions, if any, upon surrender to the Corporation of the Shares
redeemed;


(vi)          if any Share being redeemed is a
partial redemption, after the Redemption Date, and upon surrender of such Share
Certificate being redeemed, a 


 


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new Share Certificate in an aggregate number equal to the unredeemed
portion thereof will be issued;


The
notice, if mailed in a manner herein provided, shall be conclusively presumed
to have been given, whether or not the Holder receives such notice.  In any case, failure to give such notice by
mail or any defect in the notice to the Holder of any security designated for
redemption in whole or in part shall not affect the validity of the proceedings
for the redemption of any other security.


 


Notwithstanding
anything contained herein to the contrary, if the Shares are not redeemed in
accordance with the provisions of this Section 12 hereof on or prior to
Maturity Date, in addition to the rights of the Shares as set forth in this Amendment,
the holders of the Shares shall have the right to initiate proceedings against
the Corporation for the redemption of the Shares.


 


 


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