<PAGE>

                                                                   EXHIBIT 3.1.1

                          CERTIFICATE OF DESIGNATION

                                      OF

          DESIGNATIONS, LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS
                                    OF THE

                  THE SERIES A CONVERTIBLE PREFERRED STOCK OF

                                 AUDIBLE, INC.

                    ______________________________________

                        Pursuant to Section 151 of the
               General Corporation Law of the State of Delaware

                    _______________________________________


     Audible, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), by its Chairman,
does hereby certify that pursuant to the authority expressly vested in the Board
of Directors of the Corporation (the "Board of Directors") by the provisions of
the Corporation's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Board of Directors, at a
meeting held on February 6, 2001, duly approved and adopted the following
resolution which resolution remains in full force and effect on the date hereof:

     RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Certificate of Incorporation, the Board of Directors does hereby
designate, create, authorize and provide for the issue of a series of preferred
stock having a par value of $0.01 per share, which shall be designated as Series
A Convertible Preferred Stock, consisting of 4,500,000 shares and having voting
powers, designations, preferences, limitations, restrictions and relative rights
as follows:


     1.  Designation of the Series; Rank.  4,500,000 shares of Preferred Stock,
         -------------------------------
par value $0.01 per share, shall be designated as "Series A Convertible
Preferred Stock" (the "Series A Preferred Stock").  The issuance price of the
Series A Preferred Stock shall be $3.75 per share (the "Original Purchase
Price"). The Series A Preferred Stock shall rank senior to the Common Stock and
any other capital stock of the Corporation ranking junior to the Series A
Preferred Stock as to dividends and upon liquidation, dissolution or winding up.
The date on which the first share of Series A Preferred Stock was issued shall
hereinafter be referred to as the "Original Issue Date".

     2.  Dividends.
         ---------

     (a) The holders of shares of Series A Preferred Stock shall be entitled to
receive dividends ("Preferred Dividends"), which shall accrue at the rate of
twelve percent (12%) per annum (the "Dividend Rate").  The Preferred Dividends
on each share of Series A Preferred Stock
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                                      -2-



shall begin to accrue from the Original Issue Date (or, in the case of shares of
Series A Preferred Stock issued after the Original Issue Date, from the date of
issuance of such shares) (the "Accrual Date"). Preferred Dividends will accrue
regardless of whether there are profits, surplus or other funds of the
Corporation's legally available for payment of dividends. Preferred Dividends
shall be payable pro rata for partial year periods. Such Preferred Dividends
shall be payable semi-annually on June 1 and December 1 of each year (each such
date hereinafter referred to as a "Dividend Payment Date"), except that if such
date is not a business day, then such dividend shall be payable on the next
succeeding business day, to the holders of record as they appear on the register
of the Corporation for the shares of Series A Preferred Stock five (5) business
days prior to such Dividend Payment Date.

     (b) Preferred Dividends shall be cumulative and shall accrue from the
Accrual Date.  Preferred Dividends shall be payable in cash or, at the
discretion of the Corporation, in shares of Series A Preferred Stock (provided
that the Corporation shall not pay any cash dividend if such payment would
contravene the provisions of the General Corporation Law of the State of
Delaware); provided, however, that upon Liquidation (as defined below) or upon
           --------- -------
Redemption pursuant to Section 6 below, declared and unpaid Preferred Dividends
shall be payable in cash or other immediately available funds.  In the event
that the Corporation elects to pay any Preferred Dividend in shares of Series A
Preferred Stock, the Corporation shall give holders of Series A Preferred Stock
ten (10) days notice prior to a Dividend Payment Date as to the form of the
semi-annual dividend. The per share value of the Series A Preferred Stock for
such purpose shall be deemed to be the Original Purchase Price.  All payments of
dividends shall be deemed to have been made on the respective Dividend Payment
Date.  Such dividends shall be delivered to all holders or record of Series A
Preferred Stock on or prior to the 15th business day following such Dividend
Payment Date.  Any cash dividends shall be made by wire transfer to an account
specified by the holder of the Series A Preferred Stock.

     (c)  No cash dividends shall be declared or paid upon the Common Stock, any
other preferred stock or other securities of the Corporation unless equivalent
dividends, on an as-converted basis, are declared and paid concurrently on the
Series A Preferred Stock and all accrued and unpaid dividends, including the
Preferred Dividends, have been paid on the Series A Preferred Stock.

    3.   Liquidation, Dissolution or Winding Up.
         --------------------------------------

         (a) In the event of any voluntary or involuntary bankruptcy,
liquidation, dissolution or winding up of the Corporation (a "Liquidation"),
before any distribution of assets shall be made to the holders of Common Stock,
the holder of each share of Series A Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders (the "Available Assets") an amount equal to the
Original Purchase Price (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares (an "Adjustment")) plus all dividends, including the
Preferred Dividends set forth in Section 2 above, declared and unpaid on such
share up to the date of distribution to the holders of Series A Preferred Stock
of the Corporation assets to which they are entitled.

          (b) Nothing set forth in Section 3(a) above is intended to restrict
the distribution that would be received by a holder of Preferred Stock if, prior
to a Liquidation, such holder elected to convert its shares of Preferred Stock
into Common Stock pursuant to Section 5 below.
<PAGE>

                                      -3-

         (c) If upon any such Liquidation the Available Assets shall be
insufficient to pay the holders of shares of Series A Preferred Stock the full
amount to which they shall be entitled, the holders of shares of Series A
Preferred Stock and any class or series of stock ranking on liquidation on a
parity with the Series A Preferred Stock shall share ratably in the distribution
of the Available Assets in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.

         (d) The preferences described in Sections 3(a), 3(b) and 3(c) shall
collectively be known as the "Liquidation Preference."

          (e) The merger, reorganization, consolidation, sale of all or
substantially all the assets of the Corporation or recapitalization of the
Corporation into, by or with another corporation (as applicable) or other
similar transaction or series of related transactions in which 50% or more of
the voting power of the Corporation is disposed or in which the stockholders of
the Corporation immediately prior to such merger, reorganization, consolidation,
sale of all or substantially all the assets of the Corporation or
recapitalization own less than 50% of the Corporation's voting power immediately
after such merger, reorganization, consolidation or recapitalization, or the
sale of all or substantially all the assets of the Corporation (any such event
an "Acquisition Event"), shall be deemed to be a Liquidation for purposes of
this Certificate of Incorporation, unless the holders in interest of at least
50% of the then outstanding shares of Series A Preferred Stock, acting together
as a single class, elect otherwise by giving written notice thereof to the
Corporation at least three (3) days before the effective date of such event.
The amount deemed distributed for purposes of determining the Liquidation
Preference for the holders of shares of Series A Preferred Stock upon any
Acquisition Event shall be the cash or the value of the property, rights or
securities distributed to such holders by the acquiring person, firm or other
entity.  The value of such property, rights or other securities shall be
determined in good faith by the Board of Directors of the Corporation.

         (f) Written notice of such Liquidation, stating a payment date, the
Liquidation Preference and the place where said Liquidation Preference shall be
payable, shall be delivered in person, mailed by certified or registered mail,
return receipt requested, or sent by facsimile or electronic mail, not less than
twenty (20) days prior to the payment date stated therein, to the holders of
record of the Series A Preferred Stock, such notice to be addressed to each such
holder at its address as shown by the records of the Corporation.

    4.   Voting.
         ------

         (a) Except as otherwise expressly provided herein or as required by
applicable law, the holder of each share of Series A Preferred Stock will be
entitled to vote on all matters submitted to a vote or consent of stockholders.
Each share of Series A Preferred Stock will entitle the holder thereof to such a
number of votes per share equal to the number of shares of Common Stock into
which such share of Series A Convertible Preferred Stock is then convertible
pursuant to Section 5 hereof as of the record date for the determination of
stockholders entitled to vote on such matter, or if no record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited.  Except as otherwise provided herein or required by
applicable law, the holders of shares of Series A Preferred Stock and Common
Stock will vote together as a single class on all matters submitted to a vote or
consent of stockholders.

         (b) The Corporation shall not, without first obtaining the written
consent or affirmative vote of the holders of at least 50% of the then
outstanding shares of Series A Preferred
<PAGE>

                                      -4-

Stock, given in writing or by vote at a meeting, consenting or voting, as the
case may be, separately as a class:

              (i)    amend the Corporation's Certificate of Incorporation if
such action would alter the preferences, rights, privileges or powers of the
Series A Preferred Stock or decrease the total number of authorized shares of
Series A Preferred Stock;

              (ii)   authorize or issue any new or existing class or series of
capital stock senior to the Series A Preferred Stock; or

              (iii)  reclassify any Common Stock into shares having any
preference over the Series A Preferred Stock.

         (c)  Prior to the first anniversary of the Original Issue Date, the
Corporation shall not, without first obtaining the written consent or
affirmative vote of the holders of at least 50% of the then outstanding shares
of Series A Preferred Stock, giving in writing or by vote at a meeting,
consenting or voting, as the case may be, separately as a class, issue to any
"Strategic Investor" any shares of the Series A Preferred Stock, any other class
or series of Corporation preferred stock or any other security convertible into
Series A Preferred Stock or any other class or series of Corporation preferred
stock.  For purposes of the foregoing sentence, "Strategic Investor" shall be
deemed to mean any entity (or any subsidiary or affiliate of such entity which
makes equity investments on behalf of such entity) whose investment in the
Corporation is designed to promote or further a strategic business relationship
between the Corporation and such entity.

    5.   Optional Conversion.  The holders of shares of Series A Preferred Stock
         -------------------
shall have conversion rights as follows (the "Conversion Rights"):

         (a)  Right to Convert.  Subject to Section 5(h) below, each share of
              ----------------
Series A Preferred Stock shall be convertible, at the option of the holder
thereof, at any time and from time to time, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (i) the
Original Purchase Price by (ii) the Conversion Price (as defined below) in
effect at the time of conversion.  The conversion price at which shares of
Common Stock shall be deliverable upon conversion of Series A Preferred Stock
without payment of additional consideration by the holder thereof (the
"Conversion Price") shall initially be $.9375.  Such initial Conversion Price,
and the rate at which shares of Series A Preferred Stock may be converted into
shares of Common Stock, shall be subject to adjustment as provided in Section
5(d) below.

              In the event of a Liquidation, the Conversion Rights shall
terminate at the close of business on the first full day preceding the date
fixed for the payment of any amounts distributable on Liquidation to the holders
of shares of Series A Preferred Stock.

         (b)  Fractional Shares.  No fractional shares of Common Stock shall be
              -----------------
issued upon conversion of the shares of Series A Preferred Stock.  In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.  Whether or not a holder would otherwise be entitled
to a fractional share shall be determined on the basis of the total number of
shares of Preferred Stock the holder is at the time converting into Common Stock
and the number of shares of Common Stock issuable upon such aggregate
conversion.
<PAGE>

                                      -5-

         (c)     Mechanics of Conversion.
                 -----------------------

          (i)    In order for a holder of shares of Series A Preferred Stock to
convert shares of Series A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of Series
A Preferred Stock at the office of the stock transfer agent for the shares of
Series A Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own stock transfer agent), together with written
notice that such holder elects to convert all or any number of the shares of the
Series A Preferred Stock represented by such certificate or certificates.  Such
notice shall state such holder's name or the names of the nominees in which such
holder wishes the certificate or certificates for shares of Common Stock to be
issued.  If required by the Corporation, certificates surrendered for conversion
shall be endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or his or its attorney-in-fact duly authorized in writing.
The date of receipt of such certificates and notice by the stock transfer agent
(or by the Corporation if the Corporation serves as its own stock transfer
agent) shall be the conversion date (the "Conversion Date").  The Corporation
shall, as soon as practicable after the Conversion Date, issue and deliver at
such office to such holder of shares of Series A Preferred Stock, or to his or
its nominees, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled, together with cash in lieu of any
fraction of a share.  Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date.

          (ii)   The Corporation shall, at all times when the Series A Preferred
Stock shall be outstanding, reserve and keep available out of its authorized but
unissued stock, for the purpose of effecting the conversion of the shares of
Series A Preferred Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock.  Before taking any action that
would cause an adjustment reducing the Conversion Price below the then par value
of the shares of Common Stock issuable upon conversion of the shares of Series A
Preferred Stock, the Corporation will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Conversion Price.  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 of Series A Preferred Stock, in addition to such
other remedies as shall be available to the holder of such shares of Series A
Preferred Stock, 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
purposes.

          (iii)  All shares of Series A Preferred Stock that shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease and terminate on
the Conversion Date, except only the right of the holders thereof to receive
shares of Common Stock in exchange therefor.  Any shares of Series A Preferred
Stock so converted shall be retired and canceled and shall not be reissued, and
the Corporation may from time to time take such appropriate action as may be
necessary to eliminate the authorized Series A Preferred Stock or reduce the
authorized number thereof as may be appropriate accordingly.
<PAGE>

                                      -6-


         (d) Adjustments to Conversion Price:
             -------------------------------

             (i) Special Definitions.  For purposes of this Subsection 5(d),
                 -------------------
the following definitions shall apply:

                      (A) "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities (as defined below) or restricted stock of the Corporation, excluding
(I) options granted to or shares of Common Stock acquired by employees,
directors or consultants of the Corporation pursuant to an option plan or other
compensation arrangement approved by the Board of Directors and any shares
issued upon exercise of such options (such excluded options and shares, the
"Reserved Option Shares") and (II) warrants issued in connection with strategic
acquisitions as approved by the Board of Directors and any shares issued upon
exercise of such warrants (such excluded warrants and shares, the "Reserved
Warrant Shares").

                      (B) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock or Preferred Stock.

                      (C) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Subsection 5(d)(iii) below,
deemed to be issued) by the Corporation after the Original Issue Date, other
than:

         (I)   shares of Common Stock issued or issuable upon conversion of
shares of Series A Preferred Stock;

         (II)  shares of Common Stock issued or issuable as a dividend or
distribution on Series A Preferred Stock;

         (III) the Reserved Option Shares and the Reserved Warrant Shares;

         (IV)  shares of Common Stock or Convertible Securities issued or
issuable to financial institutions or lenders in connection with credit
financing arrangements;

         (V)   shares of Common Stock or Convertible Securities issued or
issuable to vendors, partners or other parties in connection with strategic
partnerships, relationship or other similar business arrangements; and

         (VI)  shares of Common Stock issued or issuable by reason of a
dividend, stock split, split-up or other distribution on shares of Common Stock
excluded from the definition of Additional Shares of Common Stock by the
foregoing clauses (I), (II), (III), (IV) and (V) or this clause (VI).

             (ii) No Adjustment of Conversion Price.  Any provision herein to
                  ---------------------------------
the contrary notwithstanding but subject to the provisions of Subsection
5(d)(vii), no adjustment in the number of shares of Common Stock into which the
shares of Series A Preferred Stock are convertible shall be made, by adjustment
in the applicable Conversion Price thereof, unless the consideration per share
(determined pursuant to Subsection 5(d)(v)) for an Additional Share of Common
Stock issued or deemed to be issued by the Corporation is less than the
applicable
<PAGE>

                                      -7-

Conversion Price in effect on the date of, and immediately prior to, the issue
of such Additional Shares.

          (iii)    Issue of Options and Convertible Securities Deemed Issue of
                   -----------------------------------------------------------
Additional Shares of Common Stock.  If the Corporation at any time or from time
---------------------------------
to time after the Original Issue Date shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of any
class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of Common Stock (as set forth in
the instrument relating thereto without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that in any such case in which Additional Shares of
Common Stock are deemed to be issued:

                   (A) no further adjustment in the Conversion Price shall be
made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities and, upon the expiration of any such Option or the
termination of any such right to convert or exchange such Convertible
Securities, the Conversion Price then in effect hereunder shall forthwith be
increased to the Conversion Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, and the Common Stock issuable thereunder shall no longer be deemed
to be outstanding; and

                   (B) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities, provided that no readjustment pursuant to this clause
(B) shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.

          (iv)     Adjustment of Conversion Price Upon Issuance of Additional
                   ----------------------------------------------------------
Shares of Common Stock.  In the event the Corporation shall issue Additional
-----------------------
Shares of Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to Subsection 5(d)(iii)), without consideration or for a
consideration per share less than the Conversion Price in effect on the date of
and immediately prior to such issue, then and in such event, the Conversion
Price shall be reduced, concurrently with such issue, to a price (calculated to
the nearest tenth of a cent) determined by multiplying the Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue (including all shares issued or
issuable upon the conversion of shares of such series of Preferred Stock) plus
the number of shares of Common Stock which the aggregate consideration received
by the Corporation for the total number of Additional Shares of Common Stock so
issued would purchase at the Conversion Price in effect immediately prior to
conversion; and the denominator of which shall be
<PAGE>

                                      -8-

the number of shares of Common Stock outstanding immediately prior to such issue
(including all shares issued or issuable upon the conversion of shares of such
series of Preferred Stock) plus the number of such Additional Shares of Common
Stock so issued; provided, that, for the purpose of this Subsection 5(d)(iv),
                 --------  ----
(i) all shares of Common Stock issuable upon conversion of shares of Series A
Preferred Stock outstanding immediately prior to such issue shall be deemed to
be outstanding, and (ii) immediately after any Additional Shares of Common Stock
are deemed issued pursuant to Subsection 5(d)(iii) (whether or not excluded from
the definition of "Additional Shares of Common Stock" by virtue of clauses (II),
(III), (IV) or (V) of Subsection 5(d)(i)(D)), such Additional Shares of Common
Stock shall be deemed to be outstanding. Notwithstanding anything herein to the
contrary but subject to the provisions of Section 5(i) below, in no event shall
the Conversion Price be adjusted under this Section 5(d)(iv) to below $.625.

          (v)  Determination of Consideration.  For purposes of this Subsection
               ------------------------------
5(d), the "Net Consideration Per Share" shall mean the per share consideration
received by the Corporation for the issue of any Additional Shares of Common
Stock and shall be computed as follows:

               (A)  Cash and Property.  Such consideration shall:
                    -----------------
    (I)   insofar as it consists of cash, be computed at the aggregate of cash
received by the Corporation, excluding amounts paid or payable for accrued
interest or accrued dividends;

    (II)  insofar as it consists of property other than cash, be computed at the
fair market value thereof at the time of such issue, as determined in good faith
by the Board of Directors; and

    (III) in the event Additional Shares of Common Stock are issued together
with other shares or securities or other assets of the Corporation for
consideration which covers both, be the proportion of such consideration so
received, computed as provided in clauses (I) and (II) above, as determined in
good faith by the Board of Directors.

               (B) Options and Convertible Securities.  The consideration per
                   ----------------------------------
share received by the Corporation for Additional Shares of Common Stock deemed
to have been issued pursuant to Subsection 5(d)(iii), relating to Options and
Convertible Securities, shall be determined by dividing

    (I)   the total amount, if any, received or receivable by the Corporation as
consideration for the issue of such Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Corporation
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by

    (II)  the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.

          (vi) Adjustment for Combinations or Consolidation of Common Stock.
               ------------------------------------------------------------
If, at any time after the Original Issue Date, the number of shares of Common
Stock outstanding are decreased by a combination or consolidation of the
outstanding shares of Common Stock, by reclassification or otherwise, then
following the record date fixed for such combination (or the date
<PAGE>

                                      -9-

of such combination, if no record date is fixed), the applicable Conversion
Price in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
increased so that the number of shares of Common Stock issuable on conversion of
each share of Series A Preferred Stock shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.

             (vii)   Adjustment for Stock Dividends, Splits, Etc.  If the
                     --------------------------------------------
Corporation shall at any time after the applicable Original Issue Date fix a
record date for the subdivision, split-up or stock dividend of shares of Common
Stock, then, following the record date fixed for the determination of holders of
shares of Common Stock entitled to receive such subdivision, split-up or
dividend (or the date of such subdivision, split-up or dividend, if no record
date is fixed), the Conversion Price in effect immediately prior to such
subdivision, split-up or dividend shall, concurrently with the effectiveness of
such subdivision, split-up or dividend, be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of each share of Series
A Preferred Stock shall be increased in proportion to such increase in
outstanding shares; provided, however, that the Conversion Price shall not be
                    --------  -------
decreased at such time if the amount of such reduction would be an amount less
than $0.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $0.01 or more.

             (viii)  Adjustment for Merger or Reorganization, etc.  In case of
                     --------------------------------------------
any consolidation, recapitalization or merger of the Corporation with or into
another entity or the sale of all or substantially all of the assets of the
Corporation to another entity (other than a subdivision or combination provided
for elsewhere in this Section 5 and other than a consolidation, merger or sale
which is treated as a Liquidation pursuant to Section 3), each share of Series A
Preferred Stock shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock of the Corporation deliverable upon conversion of such
shares of Series A Preferred Stock would have been entitled upon such
consolidation, merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board of Directors ) shall be made in the
application of the provisions in this Section 5 with respect to the rights and
interest thereafter of the holders of the shares of Series A Preferred Stock, to
the end that the provisions set forth in this Section 5 (including provisions
with respect to changes in and other adjustments of the Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the conversion of
the shares of Series A Preferred Stock.

         (e) No Impairment.  The Corporation will not, by amendment of its
             -------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
shares of Series A Preferred Stock against impairment.

         (f) Certificate as to Adjustments.  Upon the occurrence of each
             -----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
shares of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based.  The Corporation shall, upon the written request at any
time of any holder of Series A Preferred
<PAGE>

                                      -10-

Stock, furnish or cause to be furnished to such holder a similar certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion Price
then in effect, and (iii) the number of shares of Common Stock and the amount,
if any, of other property which then would be received upon the conversion of
the shares of Series A Preferred Stock.

         (g) Notice of Record Date.  In the event:
             ---------------------

             (i)    that the Corporation takes a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or any other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right;

              (ii)   that the Corporation subdivides or combines its outstanding
shares of Common Stock;

              (iii)  of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding shares
of Common Stock or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or with another corporation, or
of the sale of all or substantially all of the assets of the Corporation; or

              (iv)   of the involuntary or voluntary dissolution, liquidation or
winding up of the Corporation;

then the Corporation shall cause to be filed at its principal office or at the
office of the stock transfer agent of the Series A Preferred Stock, and shall
cause to be mailed to the holders of the Series A Preferred Stock at their last
addresses as shown on the records of the Corporation or such stock transfer
agent, at least ten days prior to the record date specified in (A) below or
twenty days before the date specified in (B) below, a notice stating

                     (A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or

                     (B) the date on which such reclassification, consolidation,
merger, sale, 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 shares of Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution or winding up.

         (h) The following special conversion provisions shall apply only to the
2,666,666 shares of Series A Preferred Stock issued on the Original Issue Date.
In the event that the Board of Directors approves an Acquisition Event which
indicates a per share value of the Common Stock of less than $4.00 (as
appropriately adjusted for stock splits, subdivisions, combinations and the
like) (a "Designated Acquisition Event"), each share of Series A Preferred Stock
shall then be convertible, at the option of the holder thereof, at any time and
from time to time, into such number of fully paid and nonassessable shares of
Common Stock as is determined by multiplying 1.5 by a fraction, the numerator of
which shall be the Original Purchase Price and the denominator of which shall be
the Conversion Price then in effect (the "Special Conversion Formula").  The
Special Conversion Formula shall become effective at the time the Board of
Directors approves a
<PAGE>

                                      -11-

Designated Acquisition Event. In the event (i) the Board of Directors withdraws
its approval of a Designated Acquisition Event or otherwise determines not to
proceed with a Designated Acquisition Event, (ii) the Corporation stockholders
fail to ratify or approve a Designated Acquisition Event or (iii) the Designated
Acquisition Event is otherwise terminated, the Special Conversion Formula shall
no longer apply and the provisions of Section 5(a) above shall govern the terms
of conversion of the Series A Preferred Stock; provided, however, that if,
within twelve months of the Original Issue Date, there is a stockholder vote
with respect to a Designated Acquisition Event and the holders of a majority of
the Series A Preferred Stock vote against such Designated Acquisition Event, the
Special Conversion Formula shall remain in effect even if the Designated
Acquisition Event is terminated. Further, if at any time after the Original
Issue Date the Corporation completes a round of equity financing in which the
Corporation receives proceeds of $10 million or more, the provisions of this
Section 5(h) shall lapse and be of no further force and effect to the extent a
Designated Acquisition Event has not occurred.

          (i) To the extent that the Corporation either (i) is permitted (or not
prohibited) by the applicable rules and regulations of the principal securities
market on which the Common Stock is listed or traded to issue shares of Common
Stock upon conversion of the Series A Preferred Stock in excess of the Maximum
Share Amount (as defined below) or (ii) has obtained stockholder approval of the
issuance of shares of Common Stock upon conversion of the Series A Preferred
Stock in excess of the Maximum Share Amount in accordance with applicable law
and the rules and regulations of any stock exchange, interdealer quotation
system or other self-regulatory organization with jurisdiction over the
Corporation or any of its securities, then the floor on the Conversion Price set
forth in the last sentence of Section 5(d)(iv) above shall no longer apply.  The
"Maximum Share Amount" shall be equal to the total number of shares of Common
Stock issued upon conversion of the Series A Preferred Stock (including any
shares of capital stock or rights to acquire shares of capital stock issued by
the Corporation which are aggregated or integrated with the Common Stock issued
or issuable upon conversion of the Series A Preferred Stock) in excess of
3,633,502.

    6.   Redemption.
         ----------

          (a) On the fifth anniversary of the Original Issue Date (the
"Redemption Date"), the Corporation shall redeem all the then outstanding shares
of Series A Preferred Stock at a price per share equal to the Original Purchase
Price plus any accrued and unpaid dividends (the "Redemption Price"); provided,
                                                                      --------
however, that the Corporation shall not be required to make a redemption not in
-------
accordance with the General Corporation Law of the State of Delaware.

         (b) On the Redemption Date, the Corporation shall purchase, and all
holders of shares of Series A Preferred Stock shall sell, all of such shares at
a time and place mutually agreeable to the Corporation and the holders of a
majority in interest of the Series A Preferred  Stock (the "Redemption
Closing").

         (c) At the Redemption Closing, the holders of shares of Series A
Preferred Stock shall deliver to the Corporation certificates representing the
shares of Series A Preferred Stock being sold to the Corporation (the
"Redemption Shares"), and the Corporation shall deliver to each such holder the
Redemption Price for each Redemption Share in cash (by cashier's or certified
check or by wire transfer of immediately available funds to an account
designated by such holder).

         (d) For the purpose of determining whether funds are legally available
for redemption of shares of Series A Preferred Stock as provided herein, the
Corporation shall value its assets at the highest amount permissible under
applicable law.  From and after the Redemption Date, unless there shall have
been a default in payment of the applicable Redemption Price, all rights of the
holders of
<PAGE>

                                      -12-

the Redemption Shares (except the right to receive the Redemption Price without
interest) shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. If on any date on which shares of Series
A Preferred Stock are to be redeemed, funds of the Corporation legally available
therefor shall be insufficient to redeem all the shares of Series A Preferred
Stock required to be redeemed as provided herein on such date or within 45 days
thereafter, funds to the extent legally available shall be used for such purpose
and the Corporation shall effect such redemption pro rata according to the
number of shares of Series A Preferred Stock held by each holder of Series A
Preferred Stock. The shares of Series A Preferred Stock not redeemed shall
remain outstanding and entitled to all the rights and preferences provided
therein. The redemption requirements provided herein shall be continuous, so
that if on any date such requirement shall not be fully discharged, without
further action by any holder of Series A Preferred Stock, funds legally
available shall be applied therefor in the order in which such redemption
requirements arise until such requirements are fully discharged.


                         {Signature on following page}
<PAGE>

                                      -13-

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
     Designation to be duly executed by its Chairman, Donald Katz, this 16th day
     of February, 2001.


                                    AUDIBLE, INC.


                                    By:    /s/ Donald Katz
                                           ---------------
                                    Name:  Donald Katz
                                    Title: Chairman