S-1/A: General form of registration statement for all companies including face-amount certificate companies

Published on November 13, 2001


Exhibit 3.2b

CERTIFICATE OF
DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF THE
SERIES A, SERIES B, SERIES C AND SERIES D
PREFERRED STOCK
of
CENTENE CORPORATION

Centene Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), acting pursuant to ss.151(g)
of the General Corporation Law of the State of Delaware, does hereby submit the
following Certificate of Designations setting forth a copy of resolutions duly
adopted by the Board of Directors of the Corporation, which resolutions remain
in full force and effect as of the date hereof, to establish, pursuant to
authority expressly vested in the Board of Directors by Article Fourth of the
Certificate of Incorporation of the Corporation, the voting powers, the
designations, preferences and rights of (i) 2,400,000 shares of authorized
Preferred Stock of the Corporation to be designated as Series A Preferred Stock,
(ii) 1,050,000 shares of authorized Preferred Stock of the Corporation to be
designated as Series B Preferred Stock, (iii) 850,000 shares of authorized
Preferred Stock of the Corporation to be designated as Series C Preferred Stock,
and (iv) 4,000, 000 shares of authorized Preferred Stock of the Corporation to
be designated as Series D Preferred Stock.

FIRST: That the Certificate of Incorporation provides that the total
number of shares which the Corporation may issue is as follows:

"The total number of shares of capital stock which the Corporation
shall have authority to issue is 50,000,000 shares, consisting of (i)
40,000,000 shares of common stock, par value of one-tenth of one cent
($0.001) per share (the "Common Stock") and (ii) 10,000,000 shares of
preferred stock, par value of one-tenth of one cent ($0.001) per share
(the "Preferred Stock")."

SECOND: That the Certificate of Incorporation provides that the Board
of Directors of the Corporation is authorized to provide for the issuance of all
or any shares of Preferred Stock in one or more classes or series, and to fix
for each such class or series such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights and such qualifications, limitations or restrictions
thereof, as shall be stated and expressed in the resolution or resolutions
adopted by the Board of Directors providing for the issuance of such class or
series.

There were no shares of Preferred Stock authorized and issued through
the day preceding the date hereof. It is the desire of the Board of Directors,
pursuant to its authority as aforesaid, to authorize and fix the terms of four
new series of Preferred Stock and the number constituting such series.

THIRD: That the Board of Directors of the Corporation has duly adopted
the following resolutions:


Certificate of Designations


"RESOLVED, that the Board of Directors does create, authorize and
provide for the issuance of four new series of Preferred Stock designated as
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock that shall have the following voting powers,
preferences and relative, optional, participating and other special rights and
qualifications, limitations, restrictions and other distinguishing
characteristics:

1. Number of Shares. A total of 2,400,000 shares of Preferred Stock
shall be known and designated as Series A Preferred Stock ("Series A Preferred
Stock"). A total of 1,050,000 shares of Preferred Stock shall be known and
designated as Series B Preferred Stock ("Series B Preferred Stock"). A total of
850,000 shares of Preferred Stock shall be known and designated as Series C
Preferred Stock ("Series C Preferred Stock"). A total of 4,000,000 shares of
Preferred Stock shall be known and designated as Series D Preferred Stock
("Series D Preferred Stock"). The remaining number of authorized shares of
Preferred Stock which are not Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, or Series D Preferred Stock shall remain
available for future designation and issuance in accordance with the General
Corporation Law of Delaware. The Board of Directors from time to time may
increase or decrease the number of shares of any series, but not, in the case of
a decrease, to a number less than the number of shares of such series then
outstanding. The Common Stock, Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock shall have the
following relative rights, preferences and limitations, but except as so set
forth shall be identical in every respect.

2. Dividends. The holders of Preferred Stock, including the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock, shall be entitled to participate with the holders of Common
Stock in any dividends paid or set aside for payment (other than dividends
payable solely in shares of Common Stock) so that holders of Preferred Stock
shall receive with respect to each share of Preferred Stock an amount equal to
(i) the dividend payable with respect to each share of Common Stock multiplied
by (ii) the number of shares (and fraction of a share, if any) of Common Stock
into which such share of Preferred Stock is convertible as of the record date
for such dividend; provided, however, that the holders of the Series D Preferred
Stock shall be entitled to receive such dividends in preference to any other
class or series of stock.

3. Liquidation Preference. The following provisions shall apply in the
event of any liquidation, dissolution or winding up of the Corporation either
voluntarily or involuntarily (a "Liquidation Event"). The following events also
shall be considered a Liquidation Event: (i) a consolidation or merger of the
Corporation with or into another corporation or other entity or person, or any
other corporate reorganization (other than a consolidation, merger or
reorganization following which the holders of fifty percent (50%) or more of the
capital stock of the resulting or surviving entity, determined on a common
equivalent basis, are persons or entities who were stockholders of the
Corporation or affiliates of stockholders immediately prior to such
consolidation, merger or reorganization) or (ii) a sale, lease or other
disposition of all or substantially all of the assets of the Corporation (other
than to an entity which is at least 50% owned by persons or entities who were
stockholders or affiliates of stockholders of the Corporation immediately prior
to such sale, lease or other disposition), unless in the case of either
subsections (i) or (ii) the holders of more than 50% of the then outstanding
shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock

2

Certificate of Designations


and any of one or more additional series of the Corporation's Preferred Stock
(each such series being referred to herein as an "Additional Series"), acting
together, consent in writing, within 20 days of receiving notice from the
Corporation of the imminence of such consolidation, merger, or sale, that such
consolidation, merger or sale, for purposes of this Section 3, shall not be
deemed a Liquidation Event:

(a) Preference Amount. Upon any Liquidation Event, before any
distribution or payment shall be made to the holders of Series A Common Stock,
Series B Common Stock, Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Additional Series, the holders of Series D
Preferred Stock shall be entitled to receive prior to and in preference of any
distribution of the assets or surplus funds of the Corporation to such holders
of Series A Common Stock, Series B Common Stock, Series A Preferred Stock,
Series B Preferred Stock, and Series C Preferred Stock, (i) the greater of (x)
an amount equal to five dollars ($5.00) per share (such amount to be adjusted
proportionately in the event of any stock splits, stock combinations, stock
dividends or recapitalizations) or (y) the amount per share that would be
received if the Series D Preferred Stock was converted into Series A Common
Stock prior to the Liquidation Event plus (ii) a further amount equal to any
dividends declared or accrued but unpaid on such shares (the sum of clauses (i)
and (ii), the "Series D Preferred Stock Preference Amount"). After the payment
of the Series D Preferred Stock Preference Amount, the holders of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock shall be
entitled to receive out of the remaining assets of the Corporation legally
available for distribution if any, prior to and in preference of any
distribution of the assets or surplus funds of the Corporation to the holders of
Series A Common Stock or Series B Common Stock, an amount equal to forty-four
and one-third cents ($0.44333) per share (such amount to be adjusted
proportionately in the event of any stock splits, stock combinations, stock
dividends or recapitalizations) plus a further amount equal to any dividends
declared or accrued but unpaid on such shares, based upon the relative
liquidation preferences of the Series A Preferred Stock, the Series B Preferred
Stock and the Series C Preferred Stock (the "Second Preference Amount"). The
aggregate sum payable to all holders of Preferred Stock hereunder is herein
referred to as the "Preference Amount." If, upon such Liquidation Event, the
assets of the Corporation available for distribution to the stockholders of the
Corporation are insufficient to pay the entire Second Preference Amount, such
assets as are so available shall be distributed on a common equivalent basis
among the holders of Series A Preferred Stock, Series B Preferred Stock and the
Series C Preferred Stock in relation to their respective liquidation
preferences.

(b) Remainder. After the payment or the setting aside for payment of
the Preference Amount, the assets of the Corporation remaining available for
distribution shall be distributed among all the holders of Series A Common
Stock, Series B Common Stock, Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock on a common equivalent basis.

(c) Noncash Distributions Common Equivalency. If any of the assets of
the Corporation are to be distributed other than in cash under this Section 3 or
for any purpose, then the Board of Directors shall promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the stockholders of the Corporation. The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice of the appraiser's valuation
to each stockholder. As used herein, the "common equivalence" of any share of

3

Certificate of Designations


Preferred Stock is the number of shares of Common Stock into which such share of
Preferred Stock is at the time convertible and the phrase "on a common
equivalent basis" refers to a calculation done on the basis of common
equivalence.

4. Voting Rights.

(a) Series A Preferred Stock and Series D Preferred Stock. The holders
of Series A Preferred Stock and Series D Preferred Stock shall be entitled, for
each share of Series A Preferred Stock or Series D Preferred Stock,
respectively, held to the number of votes equal to the number of shares of
Series A Common Stock into which each share of Series A Preferred Stock or
Series D Preferred Stock could be converted on the record date, with respect to
all matters submitted for a vote or written consent of stockholders and, except
as otherwise required by law, shall have voting rights and powers equal to the
voting rights and powers of the Series A Common Stock. The holder of each share
of Series A Preferred Stock or Series D Preferred Stock shall be entitled to
notice of any stockholders' meeting in accordance with the Bylaws of the
Corporation and shall vote together as a single voting group with holders of
Series A Common Stock upon all other matters submitted for a vote or written
consent of stockholders, except those matters required to be submitted to a
class or series vote pursuant to Section 7 herein or by law. Fractional votes
shall not, however, be permitted and any fractional voting rights resulting from
the above formula (after aggregating all shares of Series A Common Stock into
which shares of Series A Preferred Stock or Series D Preferred Stock held by
each holder could be converted) shall be rounded to the nearest whole number
(with one-half rounded upward to one).

(b) Series B Preferred Stock and Series C Preferred Stock. The holders
of Series B Preferred Stock and Series C Preferred Stock shall not be entitled
to vote (except as otherwise required by law) but shall be entitled to notice of
all meetings of stockholders.

(c) Board Seats. So long as at least 930,000 shares of the Series D
Preferred Stock issued remains outstanding, the holders of Series D Preferred
Stock, voting as a separate class, shall be entitled to designate two (2)
persons to the Board of Directors, one of whom shall be Edward Cahill and the
second designee shall be an individual who is acceptable to the Corporation's
President and Chief Executive Officer. The Series D Directors can only be
removed by the holders of a majority of the Series D Preferred Stock.

5. Conversion.

(a) Rights to Convert. Each share of Series A Preferred Stock, Series
B Preferred Stock and Series D Preferred Stock shall be convertible at the
option of the holder thereof and at any time after the date of issuance of such
share, into Series A Common Stock, subject to the conditions set forth below.
Each share of Series A Preferred Stock, Series B Preferred Stock or Series D
Preferred Stock shall be convertible into the number of shares of Series A
Common Stock which results from dividing the "Conversion Price" per share in
effect for such class at the time of conversion into the "Conversion Value" per
share for such class. The number of shares of Common Stock into which a share of
Preferred Stock is convertible is hereinafter referred to as the "Conversion
Rate." The Conversion Price per share of Series A Preferred Stock initially in
effect shall be forty-four and one-third cents ($0.44333...); the Conversion
Price per share of

4

Certificate of Designations


Series B Preferred Stock initially in effect shall be forty-four and one-third
cents ($0.44333...); and the Conversion Price per share of Series D Preferred
Stock initially in effect shall be five dollars ($5.00). The Conversion Value
per share of Series A Preferred Stock and Series B Preferred Stock shall be
forty-four and one-third cents ($0.44333...); and the Conversion Value per share
of Series D Preferred Stock shall be five dollars ($5.00). The initial
Conversion Price for each such series of Preferred Stock shall be subject to
adjustment as hereinafter provided. In addition, each share of Series B
Preferred Stock shall be convertible, at the option of the holder thereof and at
any time after the date of issuance of such share, into one share of Series A
Preferred Stock; provided, that such a conversion into Series A Preferred Stock
may not occur to the extent that the holder of Series B Preferred Stock would
immediately following such conversion, hold capital stock of the Corporation
with voting power in the election of directors equaling or exceeding 50% of the
total voting power in such election. Such conversion of shares of stock shall be
at the office of the Corporation.

(b) Automatic Conversion.

(i) Each share of Series A Preferred Stock and Series B Preferred
Stock shall automatically be converted into shares of Series A Common Stock at
its then effective Conversion Rate immediately upon the closing of a public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering the Corporation's
Series A Common Stock in a firm-commitment, underwritten public offering by a
nationally recognized investment banking firm with aggregate net cash proceeds
to the Corporation (after deducting underwriters' discounts and expenses), at
the public offering price, of at least $10,000,000 and an equivalent public
offering price per share of Series A Common Stock (as such shares of stock are
presently constituted) of at least $1.33. Additionally, upon such an event, each
share of Series C Preferred Stock shall automatically be converted into shares
of Series B Common Stock at its then effective Conversion Rate; the Conversion
Price per share of Series C Preferred Stock initially in effect shall be
forty-four and one-third cents ($0.44333...) (subject to adjustment as
hereinafter provided) and the Conversion Value per share of Series C Preferred
Stock shall be forty-four and one-third cents ($0.44333...).

(ii) Each share of Series D Preferred Stock shall automatically
be converted into shares of Series A Common Stock at the then effective
Conversion Rate immediately upon the closing of a public offering pursuant to an
effective registration statement under the Securities Act, covering the
Corporation's Series A Common Stock in a firm-commitment, underwritten public
offering by a nationally recognized investment banking firm with net cash
proceeds to the Corporation (after deducting underwriters' discounts,
commissions and expenses) of at least $20 million and an equivalent public
offering price per share of Series A Common Stock of at least $10 (as adjusted
for stock splits, dividends and recapitalizations and the like).

(c) Mechanics of Conversion. Before any stockholder shall be entitled to
convert shares of stock as provided in Section 5(a) above, he shall surrender
the certificate or certificates therefor, duly endorsed, at the office of the
Corporation and shall give written notice to the Corporation at such office that
he elects to convert the same. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder a certificate or
certificates for the number and type of shares of stock to which he shall be
entitled as aforesaid. Such

5

Certificate of Designations


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 stock to be converted,
and the person or persons entitled to receive the shares of stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of stock on such date.

In the event of an automatic conversion pursuant to Section 5(b) above,
the outstanding shares of Preferred Stock shall be converted automatically
without any further action by the holders of such shares of Preferred Stock and
whether or not the certificates representing such shares are surrendered to the
Corporation; provided, however, that the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
automatic conversion unless the certificates evidencing such shares of Preferred
Stock are either delivered to the Corporation as provided above, or the holder
notifies the Corporation that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection with such
certificates. The Corporation shall, as soon as practicable after such delivery,
or such agreement and indemnification in the case of a lost certificate, issue
and deliver at such office to such holder, a certificate or certificates for the
number of shares of Common Stock to which he shall be entitled as aforesaid and
a check payable to the holder in the amount of any cash amounts payable as the
result of a conversion into fractional shares of Common Stock. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of closing of the offering, and the person and persons entitled to
receive the shares issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares on such date.

(d) Fractional Shares. No fractional shares shall be issued upon any
conversion described in this Section 5. 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 Conversion Price.

(e) Adjustment of Conversion Price. The Conversion Price of each class or
series of Preferred Stock shall be subject to adjustment from time to time after
the date of filing of this Certificate of Designations (the "Filing Date") as
follows:

(i) Except for Series D Preferred Stock (which shall be subject to the
adjustments set forth in Section 5(e)(iii)), if the Corporation after the Filing
Date shall issue (i) any Common Stock or other securities of the Corporation
convertible into or exchangeable for Common Stock (other than "Excluded Stock"
(as defined below) or stock dividends, subdivisions, split-ups, combinations or
dividends, which are events covered by Sections 5(e)(iv), (v) and (vi) herein)
for a consideration per share less than the Conversion Price applicable to such
class or series of Preferred Stock in effect immediately prior to the issuance
of such Common Stock (or other securities convertible into or exchangeable for
such Common Stock), then the Conversion Price for such class or series of
Preferred Stock shall forthwith be decreased immediately after such issuance to
a price equal to the quotient obtained by dividing:

(1) an amount equal to the sum of




6

Certificate of Designations


(x) the total number of shares of Common Stock outstanding
(including any shares deemed to have been issued pursuant to
subsection (C) of this Section 5(e)(i)) immediately prior to
such issuance multiplied by the Conversion Price in effect
for such class or series of Preferred Stock immediately
prior to such instance, plus

(y) the consideration received by the Corporation upon such
issuance, by

(2) the total number of shares of Common Stock outstanding (including
any shares deemed to have been issued pursuant to subsection (C) of
this Section 5(e)(i)) immediately after such issuance of Common Stock
(or other securities convertible into or exchangeable for such Common
Stock).

(ii) "Excluded Stock" shall mean:

(1) shares of Common Stock issued or issuable on or after the Filing
Date upon exercise of options or other purchase rights granted to
employees, officers, directors or consultants of the Corporation and
approved by the Board of Directors of the Corporation (and any
reissuance of such shares after repurchase thereof); and

(2) all shares of Common Stock or other securities issued or to be
issued to employees, officers, directors or consultants of the
Corporation after receipt of written consent to such issuance from the
holders of 50% of the then outstanding shares of Preferred Stock and
approval of such issuance by the Board of Directors of the
Corporation; and

(3) all shares of Common Stock or other securities issued to an
investment firm or similar person as a fee in connection with capital
finance activities of the Corporation.

Shares of Excluded Stock shall not be deemed to be outstanding for purposes
of the computations of Section 5(e)(i) above prior to their actual issuance.

(iii) Adjustment of Series D Preferred Stock Conversion Price. If the
Corporation shall issue, after the Filing Date, (i) any Common Stock, warrants,
rights, options or other securities of the Corporation convertible into or
exchangeable for Common Stock (excluding shares of Common Stock issued or
issuable to employees, officers, directors or consultants pursuant to the
Corporation's now or hereafter existing benefit plans as approved by the Board
of Directors; or warrants, options or stock not to exceed a value of $50,000 per
employee issued in connection with employment agreements with new members of
executive management, or shares of Common Stock or securities issued to an
investment banking firm or similar person as a fee in connection with capital
finance activities of the Corporation) that have

7

Certificate of Designations


an exercise or conversion price at issuance lower than the Conversion Price of
the Series D Preferred Stock in effect immediately prior to such issuance (the
"Trigger Stock") or (ii) stock dividends, subdivisions, split-ups, combinations
or dividends, which are events covered by Sections 5(e)(iv), (v) and (vi)
herein), then the Conversion Price for the Series D Preferred Stock shall
forthwith be adjusted to a price equal to the lowest consideration received per
share for any share of such Trigger Stock.

(iv) For purposes of making any such calculation pursuant to Sections
5(e)(i) and (iii) herein, the shares of Common Stock issuable upon conversion of
the outstanding shares of Preferred Stock, together with any other shares of the
same class of capital stock deemed issued and outstanding pursuant to subsection
(C) of this Section 5(e)(iv), shall be deemed issued and outstanding at all
times. For purposes of any adjustment of the Conversion Price pursuant to this
subsection (i) and (iii) of this Section 5(e), the following provisions shall be
applicable:

(1) In the case of the issuance of Common Stock for cash,
the consideration received therefor shall be deemed to be
the amount of cash paid therefor without deducting any
discounts or commissions paid or incurred by the Corporation
in connection with the issuance and sale thereof.

(2) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
value thereof as determined in good faith by the Board of
Directors of the Corporation, in accordance with generally
accepted accounting treatment.

(3) In the case of the issuance of (i) options to purchase
or rights to subscribe for Common Stock (other than Excluded
Stock), (ii) securities by their terms convertible or
exchangeable for such Common Stock (other than Excluded
Stock), or (iii) options to purchase or rights to subscribe
for such convertible or exchangeable securities:

(A) the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to be issuable for a consideration
equal to the consideration (determined in the manner provided in subsections (1)
and (2) above), if any, received by the Corporation upon the issuance of such
options or rights plus the minimum purchase price provided in such options or
rights for the Common Stock covered thereby;

(B) the aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange for any such convertible or
exchangeable securities, or upon the exercise of options to purchase or rights
to subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof, shall be deemed to be issuable for a
consideration equal to the consideration received by the Corporation for any
such

8

Certificate of Designations


securities and related options or rights (including any cash received on account
of accrued interest or accrued dividends), plus the additional consideration, if
any, to be received by the Corporation upon the conversion or exchange of such
securities or the exercise of any related options or rights (the consideration
in each case to be determined in the manner provided in subsections (1) and (2)
above);

(C) the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options or rights or upon conversion of
or in exchange for such convertible or exchangeable securities upon the exercise
of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof, shall be
deemed to have been issued at the time such options or rights or securities were
issued, provided that the consideration for which such Common Stock is deemed to
be issuable does not exceed the issuance price of securities issued in the
latest bona fide round of financing by the Corporation;

(D) on any change in the number of shares of Common
Stock deliverable upon exercise of any such options or rights or conversion of
or exchange for such convertible or exchangeable securities, or on any change in
the minimum purchase price of such options, rights or securities, other than a
change resulting from the antidilution provisions of such options, rights or
securities, the Conversion Price shall forthwith be readjusted to such
Conversion Price as would have obtained had the adjustment (and any subsequent
adjustments) made upon (x) the basis of the issuance of such options, rights or
securities not exercised, converted or exchanged prior to such change, as the
case may be, been made upon the basis of such change, or (y) the basis of the
issuance of the options or rights related to such securities not converted or
exchanged prior to such change, as the case may be, been made upon the basis of
such change; and

(E) on the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
the Conversion Price shall forthwith be readjusted to such Conversion Price as
would have obtained had the adjustment (and any subsequent adjustments) made
upon the basis of the issuance of such options, rights, convertible or
exchangeable securities or options or rights related to such convertible or
exchangeable securities, as the case may be, been made upon the issuance of only
the number of shares of Common Stock actually issued upon the exercise of such
options or rights, upon the conversion or exchange of such convertible or
exchangeable securities or upon the exercise of the options or rights related to
such convertible or exchangeable securities, as the case may be.

(v) If the number of shares of Common Stock outstanding at any
time after the date hereof is increased by a stock dividend payable in shares of
such Common Stock or by a subdivision or split-up of shares of such Common
Stock, then, on the date such payment is made or such change is effective, the
Conversion Price for each class or series of Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of such class or series of Preferred Stock shall be increased in
proportion to such increase of outstanding shares.

9

Certificate of Designations


(vi) If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the outstanding
shares of such Common Stock, then, on the effective date of such combination,
the Conversion Price for each class or series of Preferred Stock shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of such class or series of Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.

(vii) If the Corporation shall declare a cash dividend upon
Common Stock payable otherwise than out of retained earnings or shall distribute
to holders of such Common Stock shares of another class or series of capital
stock, stock or other securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets (excluding cash dividends) or
options or rights (excluding options to purchase and rights to subscribe for
such Common Stock or other securities of the Corporation convertible into or
exchangeable for such Common Stock), then, in such case, the holders of shares
of Preferred Stock shall, concurrent with the distribution to holders of such
Common Stock, receive a like distribution based upon the number of shares of
such Common Stock into which the shares of Preferred Stock are then convertible.

(viii) In the event, at any time after the date hereof, of (i) a
capital reorganization or any reclassification of the stock of the Corporation
(other than a change in par value or as a result of a stock dividend or
subdivision, split-up or combination of shares) or (ii) the consolidation or
merger of the Corporation with or into another person (other than a
consolidation or merger in which the Corporation is the continuing entity and
which does not result in any change in Common Stock), or (iii) the sale or other
disposition of all or substantially all the properties and assets of the
Corporation as an entirety to any other person, the shares of Preferred Stock
shall, if such event is not deemed a Liquidation Event (as defined in Section
3), after such reorganization, reclassification, consolidation, merger, sale or
other disposition, be convertible into the kind and number of shares of stock or
other securities or property of the Corporation or of the entity resulting from
such consolidation or surviving such merger or to which such properties and
assets shall have been sold or otherwise disposed to which such holder would
have been entitled if immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other disposition he had
converted his shares of Preferred Stock into such Common Stock. The provisions
of this subsection (viii) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other dispositions.

(ix) All calculations under this Section 5 shall be made to the
nearest cent or to the nearest one hundredth (1/100) of a share, as the case may
be.

(f) Minimal Adjustments. No adjustment in a Conversion Price need be
made if such adjustment would result in a change in a Conversion Price of less
than $0.01. Any adjustment of less than $0.01 which is not made shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or
more in a Conversion Price.

(g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of a 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

10

Certificate of Designations


prepare and furnish to each stockholder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation upon written request at any
time by any stockholder, shall furnish or cause to be furnished to such
stockholder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price and Conversion Rate at the time in
effect, and (iii) the number of shares and the amount, if any, of other property
which at the time would be received upon the conversion.

(h) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive a
dividend (other than a cash dividend) or other distribution, the Corporation
shall mail to each stockholder at least twenty (20) days prior to the date
specified herein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend or distribution.

(i) 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 solely for the purpose of effecting the
conversion of shares of Preferred Stock such number of its shares as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
Preferred Stock; 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 of 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 purpose.

(j) Notices. Any notice required by the provisions of this Section 5
to be given to a stockholder shall be deemed given if deposited in the United
States mail, postage prepaid, and addressed to each holder of record at his
latest address appearing on the books of the Corporation.

6. Redemption.

(a) Optional Redemption. At the individual option of each holder
of shares of Series D Preferred Stock, the Corporation shall redeem for cash up
to fifty percent (50%) of that holder's Series D Preferred Stock outstanding on
each of September 1, 2003 and September 1, 2004 (each, a "Redemption Date") at a
price equal to the sum of (i) 110% of five dollars ($5.00) per share (such
amount to be adjusted proportionately in the event of any stock splits, stock
combinations, stock dividends or recapitalizations) plus (ii) a further amount
equal to any dividends declared or accrued but unpaid in such shares (the
"Redemption Amount"). The number of shares of Series D Preferred Stock to be
redeemed from each holder on a Redemption Date shall be equal to fifty percent
(50%) of the total number of shares initially held by such holder less the
number of shares of Series D Preferred Stock for which the holder has exercised
its conversion right under Section 5.

(b) Mandatory Redemption. Notwithstanding any provision to the
contrary, in the event of a Change of Control (as defined below) and upon the
request of a holder of Series D Preferred Stock, the Corporation shall be
obligated to repurchase the Series D Preferred Stock


11

Certificate of Designations


held by such holder for an amount equal to the Redemption Amount. For purposes
of this Section 6(b), "Change of Control" shall mean any event or series of
events by which (i) any person or group, who are not stockholders or affiliates
of stockholders of the Corporation immediately prior to such event, obtains a
majority of the securities of the Corporation ordinarily having the right to
vote in the election of directors; (ii) 50% or less of the Common Stock
equivalents are held after a merger, consolidation, reorganization,
recapitalization, dissolution or liquidation of the Corporation by persons who
immediately prior to such event were stockholders or affiliates of stockholders
of the Corporation; (iii) any sale, lease, exchange, or other transfer of all,
or substantially all of the assets of the Corporation; or (iv) the adoption of a
plan leading to the liquidation, dissolution or winding up of the Corporation.

7. Protective Provisions. So long as any of the Series A Preferred Stock,
Series D Preferred Stock or any Additional Series is outstanding, the
Corporation shall not without obtaining the approval (by vote or written consent
as provided by law) of the holders of at least a majority of the outstanding
shares of Series A Preferred Stock, Series D Preferred Stock and such Additional
Series, acting as a single class:

(a) Change of Rights. Materially and adversely alter or change the
rights, preferences or privileges of any series of Preferred Stock.

(b) Create a New Class. Create any new class or series of shares
having a preference over or being on a parity with any outstanding shares of
Preferred Stock as to dividends or assets, or authorize or issue shares of stock
of any class or series or any bonds, debentures, notes or other obligations
convertible into or exchangeable for, or having options or rights to purchase,
any shares of stock of this Corporation having any preference over or being on a
parity with any outstanding shares of Preferred Stock as to dividends or assets.

(c) Reclassification. Reclassify any class or series of Common Stock
into shares having any preference as to dividends or assets superior to or on a
parity with any outstanding shares of Preferred Stock.

FURTHER RESOLVED, that the statements contained in the foregoing resolution
creating and designating the Series A, the Series B, the Series C and the Series
D Preferred Stock and fixing the numbers, powers, preferences and relative,
optional, participating and other special rights and qualifications,
limitations, restrictions and other distinguishing characteristics thereof shall
be deemed to be included in and a part of the Certificate of Incorporation
pursuant to the provisions of Sections 104 and 151 of the General Corporation
Law of the State of Delaware."

FOURTH: That the said resolutions of the Board of Directors, and the
creation and authorization of issuance thereby of the Series A, the Series B,
the Series C and the Series D Preferred Stock, and the determination thereby of
the provisions applicable to such series as described in the resolution
contained in the THIRD article hereof, were duly adopted by the Board of
Directors in accordance with Section 151 of the General Corporation Law of the
State of Delaware.

12

Certificate of Designations


IN WITNESS WHEREOF, said Centene Corporation has caused this Certificate to
be signed by Michael F. Neidorff, its President and Chief Executive Officer, as
of this 25th day of October, 2001.

By: /s/ Michael F. Neidorff
-----------------------------
Michael F. Neidorff
President and Chief Executive
Officer

ATTEST:
/s/ K.L. Witty
- --------------------------------
Secretary

13

Certificate of Designations