EXHIBIT
4.1

    
      


      ARTICLES
SUPPLEMENTARY

      SHORE
BANCSHARES, INC.

      


      SHORE
BANCSHARES, INC., a corporation organized and existing under the laws of the
State of Maryland (the “Corporation”), in accordance with the provisions of
Section 2-208 of the Maryland General Corporation Law thereof, does hereby
certify to the State Department of Assessments and Taxation of Maryland
that:

      


      FIRST:        
Pursuant to its power and authority under the Amended and Restated Articles of
Incorporation of the Corporation and Section 2-208 of the Maryland General
Corporation Law, the Board of Directors has classified 25,000 authorized but
unissued shares of Common Stock of the Corporation, par value $.01 per share
(such that the total number of shares of Common Stock that the Corporation has
authority to issue is 34,975,000), as 25,000 shares of preferred stock, par
value $.01 per share, and that the designation and number of shares of such
series, and the voting and other powers, preferences and relative,
participating, optional or other rights, and the qualifications, limitations and
restrictions thereof, of the shares of such series are as follows:

       

      Part 1.  Designation and Number of
Shares. There is hereby created out of the authorized and unissued shares
of Common Stock of the Corporation a series of preferred stock designated as the
“Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated Preferred
Stock”).  The authorized number of shares of Designated
Preferred Stock shall be 25,000.

      


       

      Part 2.  Standard
Provisions.  The Standard Provisions contained in Annex A attached
hereto are incorporated herein by reference in their entirety and shall be
deemed to be a part of these Articles Supplementary to the same extent as if
such provisions had been set forth in full herein.

       

      Part 3.  Definitions.  The
following terms are used in these Articles Supplementary (including the Standard
Provisions in Annex A hereto) as defined below:

       

      a. “Common Stock” means
the common stock, par value $.01 per share, of the Corporation.

       

      b. “Dividend Payment
Date” means February 15, May 15, August 15 and November 15 of each
year.

       

      c. “Junior Stock” means
the Common Stock and any other class or series of stock of the Corporation the
terms of which expressly provide that it ranks junior to Designated Preferred
Stock as to dividend rights and/or as to  rights on liquidation,
dissolution or winding up of the Corporation.

       

      d. “Liquidation Amount”
means $1,000 per share of Designated Preferred Stock.

       

      e. “Minimum Amount” means
$6,250,000.

       

      f. “Parity Stock” means
any class or series of stock of the Corporation (other than Designated Preferred
Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of the Corporation
(in each case without regard to whether dividends accrue cumulatively or
non-cumulatively).

       

      g. “Signing Date” means
Original Issue Date.

       

      Part 4.  Certain Voting
Matters.  Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of
Designated Preferred Stock are entitled to vote, including any action by written
consent.

       

      SECOND:   
The
Designated Preferred Stock has been classified by the Board of Directors under
the authority contained in the Maryland General Corporation Law and the
Corporation’s Charter.

       

      THIRD:        These
Articles Supplementary were approved by the Board of Directors at a meeting duly
held on October 31, 2008, in the manner and by the vote required by
law.

       

      FOURTH:    These
Articles Supplementary shall be effective at the time the State Department of
Assessments and Taxation of Maryland accepts them for record.

       

      IN WITNESS WHEREOF, SHORE BANCSHARES,
INC., has caused these Articles Supplementary to be signed and acknowledged in
its name and on its behalf by its President and witnessed and attested by its
Secretary on this 7th day of
January, 2009, and they acknowledged the same to be the act of said Corporation,
and that to the best of their knowledge, information and belief, all matters and
facts stated herein are true in all material respects and that this statement is
made under the penalties of perjury.

       

      
        	ATTEST:	 	SHORE
      BANCSHARES, INC.
	 	 	 
	/s/ W. David
      Morse                        	 	By: 
      /s/ W. Moorhead
      Vermilye  (SEAL)
	W.
      David Morse, Secretary	 	
                W.
      Moorhead Vermilye, President

              


      

       

      
 

      
        
          
          

        

        
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      SHORE
BANCSHARES, INC.

      


      ANNEX
A

      TO

      ARTICLES
SUPPLEMENTARY

      


      STANDARD
PROVISIONS

      


      FIXED
RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A

      


      Section
1. General Matters. Each
share of Designated Preferred Stock shall be identical in all respects to every
other share of Designated Preferred Stock. The Designated Preferred Stock shall
be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Designations. The Designated
Preferred Stock shall rank equally with Parity Stock and shall rank senior to
Junior Stock with respect to the payment of dividends and the distribution of
assets in the event of any dissolution, liquidation or winding up of the
Corporation.

       

      Section
2. Standard Definitions.
As used herein with respect to Designated Preferred Stock:

       

      a. “Applicable Dividend
Rate” means (i) during the period from the Original Issue Date to, but
excluding, the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and
after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.

       

      b. “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency” with respect to
the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.

       

      c. “Business Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Corporation’s stockholders.

       

      d. “Business Day” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.

       

      e. “Bylaws” means the
bylaws of the Corporation, as they may be amended from time to
time.

       

      f. “Certificate of
Designations” means the Articles Supplementary relating to the Designated
Preferred Stock, of which these Standard Provisions form a part, as it may be
amended from time to time.

       

      g. “Charter” means the
Corporation’s certificate or articles of incorporation, articles of association,
or similar organizational document.

       

      h. “Dividend Period” has
the meaning set forth in Section 3(a).

       

       

      
        
          
          

        

        
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      i. “Dividend Record Date”
has the meaning set forth in Section 3(a).

       

      j. “Liquidation
Preference” has the meaning set forth in Section 4(a).

       

      k. “Original Issue Date”
means the date on which shares of Designated Preferred Stock are first
issued.

       

      l. “Preferred Director”
has the meaning set forth in Section 7(b).

       

      m. “Preferred Stock”
means any and all series of preferred stock of the Corporation, including the
Designated Preferred Stock.

       

      n. “Qualified Equity
Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the Original
Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in
Tier 1 capital of the Corporation at the time of issuance under the applicable
risk-based capital guidelines of the Corporation’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008).

       

      o. “Share Dilution
Amount” has the meaning set forth in Section 3(b).

       

      p. “Standard Provisions”
mean these Standard Provisions that form a part of the Certificate of
Designations relating to the Designated Preferred Stock.

       

      q. “Successor Preferred
Stock” has the meaning set forth in Section 5(a).

       

      r. “Voting Parity Stock”
means, with regard to any matter as to which the holders of Designated Preferred
Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Designations, any and
all series of Parity Stock upon which like voting rights have been conferred and
are exercisable with respect to such matter.

       

      Section
3. Dividends.

       

      a. Rate. Holders of
Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a rate per annum equal to the Applicable
Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred
Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend
Period on such share of Designated Preferred Stock, if any. Such dividends shall
begin to accrue and be cumulative from the Original Issue Date, shall compound
on each subsequent Dividend Payment Date (i.e., no dividends shall accrue on
other dividends unless and until the first Dividend Payment Date for such other
dividends has passed without such other dividends having been paid on such date)
and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date. In the event that any Dividend
Payment Date would otherwise fall on a day that is not a Business Day, the
dividend payment due on that date will be postponed to the next day that is a
Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date to, but
excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.

       

      
        
          
          

        

        
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      Dividends that are payable on
Designated Preferred Stock in respect of any Dividend Period shall be computed
on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of
a Dividend Period, and for the initial Dividend Period, shall be computed on the
basis of a 360-day year consisting of twelve 30-day months, and actual days
elapsed over a 30-day month.

       

      Dividends that are payable on
Designated Preferred Stock on any Dividend Payment Date will be payable to
holders of record of Designated Preferred Stock as they appear on the stock
register of the Corporation on the applicable record date, which shall be the
15th
calendar day immediately preceding such Dividend Payment Date or such other
record date fixed by the Board of Directors or any duly authorized committee of
the Board of Directors that is not more than 60 nor less than 10 days prior to
such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a Dividend
Record Date whether or not such day is a Business Day.

       

      Holders of Designated Preferred Stock
shall not be entitled to any dividends, whether payable in cash, securities or
other property, other than dividends (if any) declared and payable on Designated
Preferred Stock as specified in this Section 3 (subject to the other provisions
of the Certificate of Designations).

       

      b. Priority of
Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than dividends payable solely
in shares of Common Stock) or Parity Stock, subject to the immediately following
paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or
Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise
acquired for consideration by the Corporation or any of its subsidiaries unless
all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been or are contemporaneously declared and paid
in full (or have been declared and a sum sufficient for the payment thereof has
been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date). The foregoing limitation shall not apply
to (i) redemptions, purchases or other acquisitions of shares of Common Stock or
other Junior Stock in connection with the administration of any employee benefit
plan in the ordinary course of business (including purchases to offset the Share
Dilution Amount (as defined below) pursuant to a publicly announced repurchase
plan) and consistent with past practice, provided that any purchases
to offset the Share Dilution Amount shall in no event exceed the Share Dilution
Amount; (ii) purchases or other acquisitions by a broker-dealer subsidiary of
the Corporation solely for the purpose of market-making, stabilization or
customer facilitation transactions in Junior Stock or Parity Stock in the
ordinary course of its business; (iii) purchases by a broker-dealer subsidiary
of the Corporation of capital stock of the Corporation for resale pursuant to an
offering by the Corporation of such capital stock underwritten by such
broker-dealer subsidiary; (iv) any dividends or distributions of rights or
Junior Stock in connection with a stockholders’ rights plan or any redemption or
repurchase of rights pursuant to any stockholders’ rights plan; (v) the
acquisition by the Corporation or any of its subsidiaries of record ownership in
Junior Stock or Parity Stock for the beneficial ownership of any other persons
(other than the Corporation or any of its subsidiaries), including as trustees
or custodians; and (vi) the exchange or conversion of Junior Stock for or into
other Junior Stock or of Parity Stock for or into other Parity Stock (with the
same or lesser aggregate liquidation amount) or Junior Stock, in each case,
solely to the extent required pursuant to binding contractual agreements entered
into prior to the Signing Date or any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for Common Stock. “Share Dilution
Amount” means the increase in the number of diluted shares outstanding
(determined in accordance with generally accepted accounting principles in the
United States, and as measured from the date of the Corporation’s consolidated
financial statements most recently filed with the Securities and Exchange
Commission prior to the Original Issue Date) resulting from the grant, vesting
or exercise of equity-based compensation to employees and equitably adjusted for
any stock split, stock dividend, reverse stock split, reclassification or
similar transaction.

       

      
        
          
          

        

        
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      When dividends are not paid (or
declared and a sum sufficient for payment thereof set aside for the benefit of
the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from
the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period related to such Dividend Payment Date) in full upon Designated Preferred
Stock and any shares of Parity Stock, all dividends declared on Designated
Preferred Stock and all such Parity Stock and payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) shall be declared pro
rata so that the respective amounts of such dividends declared shall bear the
same ratio to each other as all accrued and unpaid dividends per share on the
shares of Designated Preferred Stock (including, if applicable as provided in
Section 3(a) above, dividends on such amount) and all Parity Stock payable on
such Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within the Dividend Period related to such Dividend Payment Date)
(subject to their having been declared by the Board of Directors or a duly
authorized committee of the Board of Directors out of legally available funds
and including, in the case of Parity Stock that bears cumulative dividends, all
accrued but unpaid dividends) bear to each other. If the Board of Directors or a
duly authorized committee of the Board of Directors determines not to pay any
dividend or a full dividend on a Dividend Payment Date, the Corporation will
provide written notice to the holders of Designated Preferred Stock prior to
such Dividend Payment Date.

       

      Subject to the foregoing, and not
otherwise, such dividends (payable in cash, securities or other property) as may
be determined by the Board of Directors or any duly authorized committee of the
Board of Directors may be declared and paid on any securities, including Common
Stock and other Junior Stock, from time to time out of any funds legally
available for such payment, and holders of Designated Preferred Stock shall not
be entitled to participate in any such dividends.

       

      Section
4. Liquidation
Rights.

       

      a. Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary, holders of
Designated Preferred Stock shall be entitled to receive for each share of
Designated Preferred Stock, out of the assets of the Corporation or proceeds
thereof (whether capital or surplus) available for distribution to stockholders
of the Corporation, subject to the rights of any creditors of the Corporation,
before any distribution of such assets or proceeds is made to or set aside for
the holders of Common Stock and any other stock of the Corporation ranking
junior to Designated Preferred Stock as to such distribution, payment in full in
an amount equal to the sum of (i) the Liquidation Amount per share and (ii) the
amount of any accrued and unpaid dividends (including, if applicable as provided
in Section 3(a) above, dividends on such amount), whether or not declared, to
the date of payment (such amounts collectively, the “Liquidation
Preference”).

       

      
        
          
          

        

        
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      b. Partial Payment. If
in, any distribution described in Section 4(a) above the assets of the
Corporation or proceeds thereof are not sufficient to pay in full the amounts
payable with respect to all outstanding shares of Designated Preferred Stock and
the corresponding amounts payable with respect of any other stock of the
Corporation ranking equally with Designated Preferred Stock as to such
distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.

       

      c. Residual
Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with
respect of any other stock of the Corporation ranking equally with Designated
Preferred Stock as to such distribution has been paid in full, the holders of
other stock of the Corporation shall be entitled to receive all remaining assets
of the Corporation (or proceeds thereof) according to their respective rights
and preferences.

       

      d. Merger, Consolidation and
Sale of Assets Not Liquidation. For purposes of this Section 4, the
merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Designated
Preferred Stock receive cash, securities or other property for their shares, or
the sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.

       

      Section
5. Redemption.

       

      a. Optional Redemption.
Except as provided below, the Designated Preferred Stock may not be redeemed
prior to the first Dividend Payment Date falling on or after the third
anniversary of the Original Issue Date. On or after the first Dividend Payment
Date falling on or after the third anniversary of the Original Issue Date, the
Corporation, at its option, subject to the approval of the Appropriate Federal
Banking Agency, may redeem, in whole or in part, at any time and from time to
time, out of funds legally available therefor, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for
redemption.

       

       

      
        
          
          

        

        
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      Notwithstanding the foregoing, prior to
the first Dividend Payment Date falling on or after the third anniversary of the
Original Issue Date, the Corporation, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any
time and from time to time, the shares of Designated Preferred Stock at the time
outstanding, upon notice given as provided in Section 5(c) below, at a
redemption price equal to the sum of (i) the Liquidation Amount per share and
(ii) except as otherwise provided below, any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above, dividends on such
amount) (regardless of whether any dividends are actually declared) to, but
excluding, the date fixed for redemption; provided that (x) the Corporation (or
any successor by Business Combination) has received aggregate gross proceeds of
not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of
preferred stock of such successor that was originally issued to the United
States Department of the Treasury (the “Successor Preferred
Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including
Qualified Equity Offerings of such successor), and (y) the aggregate redemption
price of the Designated Preferred Stock (and any Successor Preferred Stock)
redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Corporation (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of
such successor).

       

      The redemption price for any shares of
Designated Preferred Stock shall be payable on the redemption date to the holder
of such shares against surrender of the certificate(s) evidencing such shares to
the Corporation or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend Record Date for a
Dividend Period shall not be paid to the holder entitled to receive the
redemption price on the redemption date, but rather shall be paid to the holder
of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.

       

      b. No Sinking Fund. The
Designated Preferred Stock will not be subject to any mandatory redemption,
sinking fund or other similar provisions. Holders of Designated Preferred Stock
will have no right to require redemption or repurchase of any shares of
Designated Preferred Stock.

       

      c. Notice of Redemption.
Notice of every redemption of shares of Designated Preferred Stock shall be
given by first class mail, postage prepaid, addressed to the holders of record
of the shares to be redeemed at their respective last addresses appearing on the
books of the Corporation. Such mailing shall be at least 30 days and not more
than 60 days before the date fixed for redemption. Any notice mailed as provided
in this Subsection shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the mailing thereof, to any
holder of shares of Designated Preferred Stock designated for redemption shall
not affect the validity of the proceedings for the redemption of any other
shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares
of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Corporation or any other similar facility, notice of redemption
may be given to the holders of Designated Preferred Stock at such time and in
any manner permitted by such facility. Each notice of redemption given to a
holder shall state: (1) the redemption date; (2) the number of shares of
Designated Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (3) the redemption price; and (4) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price.

       

       

      
        
          
          

        

        
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      d. Partial Redemption.
In case of any redemption of part of the shares of Designated Preferred Stock at
the time outstanding, the shares to be redeemed shall be selected either pro
rata or in such other manner as the Board of Directors or a duly authorized
committee thereof may determine to be fair and equitable. Subject to the
provisions hereof, the Board of Directors or a duly authorized committee thereof
shall have full power and authority to prescribe the terms and conditions upon
which shares of Designated Preferred Stock shall be redeemed from time to time.
If fewer than all the shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without charge to
the holder thereof.

       

      e. Effectiveness of
Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the
redemption have been deposited by the Corporation, in trust for the pro rata benefit of the
holders of the shares called for redemption, with a bank or trust company doing
business in the Borough of Manhattan, The City of New York, and having a capital
and surplus of at least $500 million and selected by the Board of Directors, so
as to be and continue to be available solely therefor, then, notwithstanding
that any certificate for any share so called for redemption has not been
surrendered for cancellation, on and after the redemption date dividends shall
cease to accrue on all shares so called for redemption, all shares so called for
redemption shall no longer be deemed outstanding and all rights with respect to
such shares shall forthwith on such redemption date cease and terminate, except
only the right of the holders thereof to receive the amount payable on such
redemption from such bank or trust company, without interest. Any funds
unclaimed at the end of three years from the redemption date shall, to the
extent permitted by law, be released to the Corporation, after which time the
holders of the shares so called for redemption shall look only to the
Corporation for payment of the redemption price of such shares.

       

      f. Status of Redeemed
Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Corporation shall revert to authorized
but unissued shares of Preferred Stock (provided that any such cancelled shares
of Designated Preferred Stock may be reissued only as shares of any series of
Preferred Stock other than Designated Preferred Stock).

       

      Section
6. Conversion. Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.

       

      Section
7. Voting
Rights.

       

      a. General. The holders
of Designated Preferred Stock shall not have any voting rights except as set
forth below or as otherwise from time to time required by law.

       

      b. Preferred Stock
Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred Directors”
and each a “Preferred
Director”) to fill such newly created directorships at the Corporation’s
next annual meeting of stockholders (or at a special meeting called for that
purpose prior to such next annual meeting) and at each subsequent annual meeting
of stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been declared and paid in
full at which time such right shall terminate with respect to the Designated
Preferred Stock, except as herein or by law expressly provided, subject to
revesting in the event of each and every subsequent default of the character
above mentioned; provided that it shall be a qualification for election for any
Preferred Director that the election of such Preferred Director shall not cause
the Corporation to violate any corporate governance requirements of any
securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded that listed or traded companies must
have a majority of independent directors. Upon any termination of the right of
the holders of shares of Designated Preferred Stock and Voting Parity Stock as a
class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred
Directors then in office shall terminate immediately and the authorized number
of directors shall be reduced by the number of Preferred Directors elected
pursuant hereto. Any Preferred Director may be removed at any time, with or
without cause, and any vacancy created thereby may be filled, only by the
affirmative vote of the holders a majority of the shares of Designated Preferred
Stock at the time outstanding voting separately as a class together with the
holders of shares of Voting Parity Stock, to the extent the voting rights of
such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office
as aforesaid, the remaining Preferred Director may choose a successor who shall
hold office for the unexpired term in respect of which such vacancy
occurred.

       

      
        
          
          

        

        
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      c. Class Voting Rights as to
Particular Matters. So long as any shares of Designated Preferred Stock
are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Charter, the vote or consent of the holders of at
least 66 2/3% of the shares of Designated Preferred Stock at the time
outstanding, voting as a separate class, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:

       

      (i) Authorization of Senior
Stock. Any amendment or alteration of the Certificate of Designations for
the Designated Preferred Stock or the Charter to authorize or create or increase
the authorized amount of, or any issuance of, any shares of, or any securities
convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Corporation ranking senior to Designated
Preferred Stock with respect to either or both the payment of dividends and/or
the distribution of assets on any liquidation, dissolution or winding up of the
Corporation;

       

      (ii) Amendment of Designated
Preferred Stock. Any amendment, alteration or repeal of any provision of
the Certificate of Designations for the Designated Preferred Stock or the
Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a
merger, consolidation or otherwise) so as to adversely affect the rights,
preferences, privileges or voting powers of the Designated Preferred Stock;
or

       

      (iii) Share Exchanges,
Reclassifications, Mergers and Consolidations. Any consummation of a
binding share exchange or reclassification involving the Designated Preferred
Stock, or of a merger or consolidation of the Corporation with another
corporation or other entity, unless in each case (x) the shares of Designated
Preferred Stock remain outstanding or, in the case of any such merger or
consolidation with respect to which the Corporation is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole;

       

      provided, however, that for
all purposes of this Section 7(c), any increase in the amount of the authorized
Preferred Stock, including any increase in the authorized amount of Designated
Preferred Stock necessary to satisfy preemptive or similar rights granted by the
Corporation to other persons prior to the Signing Date, or the creation and
issuance, or an increase in the authorized or issued amount, whether pursuant to
preemptive or similar rights or otherwise, of any other series of Preferred
Stock, or any securities convertible into or exchangeable or exercisable for any
other series of Preferred Stock, ranking equally with and/or junior to
Designated Preferred Stock with respect to the payment of dividends (whether
such dividends are cumulative or non-cumulative) and the distribution of assets
upon liquidation, dissolution or winding up of the Corporation will not be
deemed to adversely affect the rights, preferences, privileges or voting powers,
and shall not require the affirmative vote or consent of, the holders of
outstanding shares of the Designated Preferred Stock.

       

      
        
          
          

        

        
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      d. Changes after Provision for
Redemption. No vote or consent of the holders of Designated Preferred
Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such
Section, all outstanding shares of the Designated Preferred Stock shall have
been redeemed, or shall have been called for redemption upon proper notice and
sufficient funds shall have been deposited in trust for such redemption, in each
case pursuant to Section 5 above.

       

      e. Procedures for Voting and
Consents. The rules and procedures for calling and conducting any meeting
of the holders of Designated Preferred Stock (including, without limitation, the
fixing of a record date in connection therewith), the solicitation and use of
proxies at such a meeting, the obtaining of written consents and any other
aspect or matter with regard to such a meeting or such consents shall be
governed by any rules of the Board of Directors or any duly authorized committee
of the Board of Directors, in its discretion, may adopt from time to time, which
rules and procedures shall conform to the requirements of the Charter, the
Bylaws, and applicable law and the rules of any national securities exchange or
other trading facility on which Designated Preferred Stock is listed or traded
at the time.

       

      Section
8. Record Holders. To
the fullest extent permitted by applicable law, the Corporation and the transfer
agent for Designated Preferred Stock may deem and treat the record holder of any
share of Designated Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation nor such transfer agent shall be affected
by any notice to the contrary.

       

      Section
9. Notices. All notices
or communications in respect of Designated Preferred Stock shall be sufficiently
given if given in writing and delivered in person or by first class mail,
postage prepaid, or if given in such other manner as may be permitted in this
Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any
similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.

       

      Section
10. No Preemptive Rights.
No share of Designated Preferred Stock shall have any rights of preemption
whatsoever as to any securities of the Corporation, or any warrants, rights or
options issued or granted with respect thereto, regardless of how such
securities, or such warrants, rights or options, may be designated, issued or
granted.

       

      Section
11. Replacement
Certificates. The Corporation shall replace any mutilated certificate at
the holder’s expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at
the holder’s expense upon delivery to the Corporation of reasonably satisfactory
evidence that the certificate has been destroyed, stolen or lost, together with
any indemnity that may be reasonably required by the Corporation.

       

      Section
12. Other Rights. The
shares of Designated Preferred Stock shall not have any rights, preferences,
privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other
than as set forth herein or in the Charter or as provided by applicable
law.

       

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