RESTATED CERTIFICATE OF INCORPORATION
OF
FLEMING COMPANIES, INC.
To The Secretary of State of Oklahoma:
Fleming Companies, Inc., an Oklahoma corporation, does
hereby certify:
FIRST: that the corporation was originally incorporated
on February 3, 1981, under the name "Fleming Merger, Inc."
SECOND: that the corporation's Board of Directors, by
resolutions adopted at a meeting held on May 1, 1991, did adopt the
following as the corporation's Restated Certificate of
Incorporation:
ARTICLE ONE
The name of the corporation is:
FLEMING COMPANIES, INC.
ARTICLE TWO
The address of its registered office in the State of
Oklahoma is 735 First National Building, Oklahoma City, Oklahoma
73102, and the name of its registered agent at such address is The
Corporation Company.
ARTICLE THREE
The period of existence of the corporation shall be of
perpetual duration.
ARTICLE FOUR
The purposes for which the corporation is formed are:
To engage in the business of procuring and distributing
food and related products, and to purchase, buy, sell, exchange,
produce, manufacture, process, export, import, handle, store,
distribute, and otherwise generally deal in any and all articles of
food, food products, and food supplies of all kinds, both at
wholesale and retail, and acquire, construct, maintain, operate,
buy, sell, and deal with stores selling such goods, wares, and
merchandise; to acquire, construct, establish, maintain, operate,
or sell or dispose of factories, plants, warehouses, machinery and
equipment, markets, stores, and gathering and delivery routes and
systems for such purposes.
To engage in any lawful act or activity and to pursue any
lawful purpose for which a corporation may be formed under the
Business Corporation Act of Oklahoma.
To act in and conduct any lawful business for profit at
such places and in such manner as its directors shall determine,
and in so doing enter into any general, special or limited
partnership as a general, special or limited partner; or into any
association or arrangement for sharing profits, union of interest,
reciprocal concessions or transactions capable of being conducted
so as to benefit, directly or indirectly, the corporation;
To raise or procure funds from other individuals, firms,
associations or corporations to be invested in any business in
which this corporation might engage, for and on behalf of the
parties investing such funds as individual owners or in one or more
joint ventures, general partnerships, limited partnerships,
syndicates or other associations or other corporations, whether the
corporation is or is not a co-owner, joint venturer, associate,
partner or shareholder in the business in which such funds are
levied;
To guarantee, co-sign and be surety for the debts, dues
and obligations of its subsidiaries, affiliates, parent
corporations, shareholders, partners, whether general, special or
limited, joint co-adventurers, co-tenants, and any other persons,
firms or corporations, to obtain a loan commitment or contract
which will beneficially affect this corporation or its
shareholders; provided, it shall not be the purpose of this
corporation to transact a business of insurance or to do any act
prohibited by law to a business corporation;
The objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in no wise
limited or restricted by reference to, or inference from the terms
of any other clause in this or any other article of this
Certificate of Incorporation, but the objects and purposes
specified in each of the foregoing clauses of this article shall be
regarded as independent powers as well as objects and purposes and-
the enumeration of specific powers, objects and purposes is in
addition to and not in limitation of the powers conferred by the
provisions of the Oklahoma General Corporation Act.
ARTICLE FIVE
The aggregate number of shares of all classes of stock
which the corporation shall have authority to issue is one hundred
two million shares (102,000,000) of which two million (2,000,000)
are to be Preferred Stock of a par value of $10.00 per share, and
one hundred million shares (100,000,000) are to be common stock
with a par value of $2.50 per share. The designation of each class,
the number of shares of each class, and the par value of each class
are as follows:
Number Par
Class of Shares Value
Preferred Stock 2,000,000 $10.00
Common Stock 100,000,000 $ 2.50
The preferences, qualifications, limitations,
restrictions and special or relative rights in respect of the
shares of each class are as follows:
Division A - Preferred Stock. Shares of the Preferred
Stock may be issued from time to time in one or more series, shares
of each series to have such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative,
participating, option or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and
expressed herein or in a resolution or resolutions providing for
the issue of such series adopted by the Board of Directors of the
Corporation. The Board of Directors of the Corporation is hereby
expressly authorized, subject to the limitations provided by law,
to establish and designate series of the Preferred Stock, to fix
the number of shares constituting each series, and to fix the
designations of the relative powers, rights, preferences and
limitations of the shares of each series and the variation and
variations in the relative powers, rights, preferences and
limitations as between series, and to increase and to decrease the
number of shares constituting each series. Subject to the
limitations imposed herein and by law, the authority of the Board
of Directors of the Corporation with respect to each series shall
include but not be limited to the authority to determine the
following: (i) the designation and number of shares constituting
each series; (ii) the dividend rate payable on each series and
whether such dividends are cumulative or noncumulative; (iii) the
voting rights, if any, with respect to each series; (iv) the
redemption rights, if any, with respect to each series; (v) the
creation, if any, of a sinking fund with respect to each series:
(vi) the conversion rights, if any, with respect to each series;
(vii) the preference rights upon liquidation or dissolution; (viii)
the relative priority of the shares of each series to shares of
other classes or series with respect to dividends or other
dissolution of or the distribution of the assets of the
corporation; and (ix) any other rights and qualifications,
preferences and limitations or restrictions of the shares of each
series.
Add Rider 1
Variable Term Preferred Stock, Series A and Series B
1. Designation; Amount and Series.
The two series of Preferred Stock established hereby
shall comprise (i) 50,000 shares designated as "Variable Term
Preferred Stock, Series A" (the "Series A VTP") and (ii) 50,000
shares designated as "Variable Term Preferred Stock, Series B" (the
"Series B VTP"). The Series A VTP and Series B VTP are sometimes
referred to herein collectively as the Variable Term Preferred
Stock ("VTP"). No fractional shares of VTP shall be issued.
2. Definitions.
Capitalized terms used herein but not defined in this
Section 2 shall have the meanings specified in Section 9(a) hereof.
Unless the context or use indicates another or different meaning,
the following terms shall have the following meanings (with terms
being defined in the singular having a corresponding meaning when
used in the plural and vice versa):
(a) "Act" shall mean the Securities Act of 1933, as
amended.
(b) "Applicable Rate" shall have the meaning specified
in Section 4(c)(i).
(c) "Business Day" shall mean a day on which the New
York Stock Exchange is open for trading and which is not a day on
which banks in New York City are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean The First
Boston Corporation and Merrill Lynch Money Markets Inc. or, in lieu
thereof, their respective affiliates or successors, provided that
such entity is then engaged in buying or selling commercial paper.
(e) "Commission" shall mean the Securities and Exchange
Commission.
(f) "Default Period" shall have the meaning specified in
Section 7(a)(i).
(g) "Dividend Payment Date" shall mean a date on which
dividends on a series of VTP are payable, as determined under
Section 4(b).
(h) "Holder" shall mean an individual or entity in whose
name an outstanding share of VTP is registered on the Stock Books.
(i) "Liquidation Preference" shall have the meaning
specified in Section 6(a).
(j) "Minimum Holding Period" shall have the meaning
specified in Section 3(g).
(k) "Moody's" shall mean Moody's Investors Service, Inc.
or any successor thereto.
(l) "Normal STAR Term Date" shall have the meaning
specified in Section 3(b).
(m) "Notice of Redemption" shall have the meaning
specified in Section 5(b)(i).
(n) "Original Issuance Date," with respect to each
series of VTP, shall mean the date on which the Corporation
originally issues the shares of such series.
(o) "Parity Preferred Stock" shall have the meaning
specified in Section 7(a).
(p) "Purchaser's Letter" shall mean a letter addressed
to the Corporation, the Auction Agent, a Broker-Dealer and an Agent
Member substantially in the form of Exhibit B to the Broker-Dealer
Agreement.
(q) "Rating Agencies," on any date of determination,
shall mean Moody's and S&P or if only one of such rating agencies
is then rating the shares of VTP, such rating, agency, of if
neither of such rating agencies is then rating the shares of VTP,
any nationally recognized statistical rating organization (as such
term is used in the rules and regulations of the Commission under
the Securities Exchange Act of 1934, as amended) selected by the
Corporation or its successor.
(r) "Securities Depository" shall mean The Depository
Trust Company and its successors and assigns or any other
securities depository selected by the Corporation which agrees to
follow the procedures required to be followed by such securities
depository in connection with shares of VTP.
(s) "S&P" shall mean Standard & Poor's Corporation or
any successor thereto.
(t) "STAR Term" shall have the meaning specified in
Section 3(b).
(u) "Stock Books" shall mean the stock transfer books of
the Corporation maintained by the Auction Agent with respect to the
shares of VTP.
(v) "Submission Deadline" shall mean 12:30 P.M., New
York City time, on each Auction Date, or such other time on the
Auction Date specified by the Auction Agent, by which Broker-
Dealers are required to submit Orders in writing to the Auction
Agent.
(w) "Substitute Commercial Paper Dealers" shall mean
Goldman, Sachs & Co. and Shearson Lehman Commercial Paper
Incorporated, or in lieu thereof, their respective affiliates or
successors, provided that such entity is then engaged in buying or
selling commercial paper.
(x) "Term" shall mean a Variable Term or a STAR Term.
(y) "Term Selection Agent" shall mean, collectively, The
First Boston Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and their respective successors and assigns, under
the Term Selection Agent Agreement.
(z) "Term Selection Agent Agreement" shall mean the
agreement dated as of February 8, 1989 among the Corporation, The
First Boston Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, pursuant to which The First Boston Corporation and
Merrill Lynch, Pierce, Fenner & Smith Incorporated have agreed to
act as Term Selection Agent.
(aa) "Variable Term" shall have the meaning specified in
Section 3(b).
(bb) "Voting Parity Preferred Stock" shall have the
meaning specified in Section 7(a).
3. Term Selection
(a) The initial Terms for the Series A VTP and the
Series B VTP shall commence on the Original Issuance Date and end
on April 4, 1989, in the case of Series A VTP, and April 15, 1990,
in the case of the Series B VTP.
(b) The Term Selection Agent shall, not less than 10 nor
more than 20 days prior to the last day of any Term for a series of
VTP, either (i) subject to the provisions of paragraph (f) below,
select a subsequent Variable Term which will begin on the last day
of the then current Term and end on a quarterly Dividend Payment
Date (as defined below) nearest to any of the first through the
tenth anniversaries of the last day of the then current Term, or
(ii) subject to the provisions of paragraph (f) below, select a
subsequent STAR Term which will begin on the last day of the then
current Term and subject to paragraph (g) below end on the date
(the Normal STAR Term Date") that is (x) if the Term preceding such
STAR Term is a Variable Term, the day specified by the Term
Selection Agent not earlier than the 46th day thereafter and (y) if
the Term preceding such STAR Term is a STAR Term, the 49th day
thereafter. Each such period commencing on the last day of the
then current Term and ending on the final Dividend Payment Date
specified by the Term Selection Agent is referred to herein as a
"Variable Term" or a "STAR Term," as the case may be.
(c) Subject to the provisions of paragraph (d) below,
the Term Selection Agent shall, not less than 10 days nor more than
20 days prior to the last day of the then current Term, give
written notice of its election pursuant to paragraph (b) above to
the Corporation, the Auction Agent and the Securities Depository.
(d) If the Term Selection Agent has, pursuant to
paragraph (c) above, duly given notice of its selection of (1) a
subsequent Variable Term pursuant to paragraph (b) above, the Term
Selection Agent may (i) subject to paragraph (f) below, upon not
less than five Business Days' written notice to the Corporation,
the Auction Agent and the Securities Depository prior to the
Auction Date scheduled to occur at the end of the then current Term
for such series of VTP, elect to change the length of such
subsequent Variable Term to any length of time permitted for a
Variable Term pursuant to paragraph (b) above, and (ii) subject to
paragraph (f) below upon not less than two Business Days' written
notice to the Corporation, the Auction Agent and the Securities
Depository prior to the Auction Date scheduled to occur at the end
of the then current Term for such series of VTP, elect to change
such subsequent Variable Term to a STAR Term or (2) a subsequent
STAR Term pursuant to paragraph (b) above (or shall have been
deemed to have selected a STAR Term in accordance with this
paragraph (d), the Term Selection Agent may, subject to paragraph
(f) below, upon not less than five Business Days' written notice to
the Corporation, the Auction Agent and the Securities Depository
prior to the Auction Date scheduled to occur at the end of the then
current Term for such series of VTP, elect to change such
subsequent STAR Term to a Variable Term. The Term Selection Agent
shall be under no duty to provide the notice to the parties set
forth in paragraph (c) above if the Term selected to succeed a STAR
Term is a STAR Term. Failure to send any notice by the tenth day
prior to the end of any STAR Term shall be deemed a selection of a
STAR Term as the next succeeding Term.
(e) In connection with the selection of any subsequent
Variable Term pursuant to paragraphs (b) and (d) above, or the
election to change the length of any Variable Term in accordance
with paragraph (d) above, the Term Selection Agent may provide for
redemption of such series in accordance with Section 5(a)(iii)
hereof.
(f) Notwithstanding the foregoing:
(w) the Term Selection Agent may select a STAR Term
with respect to a series of VTP at the end of a Variable Term only
if on the date of such notice dividend payments on all shares of
VTP are current; and
(x) a one-year Variable Term for a series of VTP
will automatically follow the expiration of the preceding Variable
Term for such series in the following circumstances:
(i) the Term Selection Agent does not select
a Variable Term or a STAR Term with respect to such
series by the tenth day prior to the last day of
the preceding Variable Term for such series; or
(ii) dividend payments on any shares of VTP
are in arrears on the Auction Date occurring at the
end of the preceding Variable Term for such series;
or
(iii) Sufficient Clearing Bids are not made
for any reason in an Auction occurring at the end
of the preceding Variable Term for such series; or
(iv) no Auction is held for any reason on the
Auction Date scheduled to occur at the end of the
preceding Variable Term for such series; or
(v) The Corporation fails to deposit by the
Business Day next preceding the Auction Date with
the Auction Agent funds sufficient to pay the
redemption price of shares of such series of VTP
called for redemption; and
(y) a STAR Term for a series of VTP will automatically
follow the expiration of the preceding STAR Term for such series in
the following circumstances:
(i) the Term Selection Agent does not select
a Variable Term or a STAR Term (including a deemed
selection as discussed in paragraph 3(d) with
respect to such series by the tenth day prior to
the last day of the preceding STAR Term for such
series; or
(ii) Sufficient Clearing Bids are not made
for any reason in an Auction occurring at the end
of the preceding STAR Term for such series; or
(iii) no Auction is held for any reason on
the Auction Date scheduled to occur at the end of
the preceding STAR Term for such series; or
(iv) the Corporation fails to deposit by the
Business Day next preceding the Auction Date with
the Auction Agent funds sufficient to pay the
redemption price of shares of such series of VTP
called for redemption.
(g) (i) Notwithstanding the provisions of paragraph (b)
above, if (1) the Securities Depository shall make available to its
participants and members, in next day funds in The City of New
York, New York on each Dividend Payment Date, the amount due as
dividends on each Dividend Payment Date and the calendar day next
succeeding the Normal STAR Term Date is not a Business Day, or (2)
any such Normal STAR Term Date is not a Business Day, then the STAR
Term shall end on the first Business Day that precedes such Normal
STAR Term Date that is next succeeded by a Business Day; provided
further, however, that if any date on which dividends shall be
payable as determined above is a day that would result in the
number of days in any STAR Term (determined by excluding the
preceding Auction Date and including the succeeding Auction Date)
is not at least equal to the then-current minimum holding period
(the "Minimum Holding Period") required for corporate taxpayers
generally to be entitled to the dividend-received deduction for
federal income tax purposes in respect of dividends (other than
extraordinary dividends) paid on preferred stock held by non-
affiliated corporations, then the STAR Term shall end on the first
Business Day following such date that is immediately followed by a
Business Day and that results in the number of days in the STAR
Term (determined as above) being at least equal to the then current
Minimum Holding Period (each such date on which dividends on VTP
shall be payable in accordance with this paragraph (g) being
referred to herein as a "Dividend Payment Date" for the applicable
STAR Term).
(ii) Notwithstanding the foregoing, in the event of
a change in law altering the Minimum Holding Period, the Board of
Directors shall uniformly adjust the number of days in STAR Terms
commencing after the effective date of such change in law to equal
or exceed the then-current Minimum Holding Period; provided that
the number of days in a STAR Term (without giving effect to the
exceptions described in paragraph (g)(i) above) shall not (A)
exceed by more than nine days the length of such then-current
Minimum Holding Period and will be evenly divisible by seven, and
(B) in any event exceed one year. Upon any change in the number of
days in a STAR Term as a result of such a change in law, the
Corporation shall cause to be mailed notice of such change by
first-class mail, postage prepaid, to the Term Selection Agent, the
Auction Agent and the Securities Depository.
(h) The Corporation shall use its best efforts to
maintain a Term Selection Agent to act in accordance with the
provisions described herein for each series of VTP.
4. Dividends.
(a) Holders of shares of each series of VTP shall be
entitled to receive, when, as and if declared by the Board of
Directors, out of funds of the Corporation legally available for
payment thereof, cumulative cash dividends per share at the
dividend rates determined as set forth in this Section 4, and no
more, payable on the dates as set forth below in this Section 4.
(b) Beginning on the Original Issuance Date, dividends
on the shares of each series of VTP shall accumulate (whether or
not declared) at the Applicable Rate and shall be payable as
follows:
(X) With respect to a STAR Term, dividends on the
shares of such series shall be payable on the last day of
the STAR Term.
(Y) With respect to a Variable Term, dividends on
the shares of such series shall be payable (following the
final Dividend Payment Date for a preceding Term for such
series) for the current Term on each January 15, April
15,, July 15, and October 15, to but not including the
last day of such Variable Term designated by the Term
Selection Agent pursuant to Section 3(a) hereof; provided
that no dividend payment shall be made on any such
Dividend Payment Date falling within 30 days of the final
Dividend Payment Date of the Preceding Term; and provided
further, that if any such Dividend Payment Date is not a
Business Day, dividends on the shares of such series
shall be payable on the next succeeding Business Day.
(c) (i) The dividend rate per share of each series of
VTP of for the period commencing on the Original Issuance
Date and ending on the final Dividend Date for the
initial Term for such series shall be 8.10% per annum for
the Series A VTP and 8.40% per annum for the Series B
VTP, respectively, and the dividend rate on the shares of
each series of VTP for each subsequent Term shall be the
rate per annum (the "Applicable Rate" for such Term)
determined pursuant to the Auction Procedures set forth
in Section 9 hereof. Notwithstanding the foregoing, in
the event that an Auction for a series of VTP is not held
on the Auction Date scheduled to occur at the end of the
preceding Term for such series for any reason (including,
without limitation, the failure of an Auction Agent to be
appointed), the Applicable Rate for such series of VTP
for such Term will be equal to the Maximum Applicable
Rate. In the event that Sufficient Clearing Bids do not
exist with respect to an Auction for a series of VTP, the
dividend rate for such series shall be determined in
accordance with the provisions of Section 9(d)(ii)(B)
hereof.
(ii) The amount of dividends per share of a series
of VTP payable on each Dividend Payment Date for any
Variable Term shall be computed on a basis of a 360-day
year consisting of twelve 30-day months and, in the case
of a Variable Term beginning on a date other than a
quarterly Dividend Payment Date, portions of any 30-day
month based upon the actual number of days elapsed. The
amount of dividends payable per share of a series of VTP
payable on each Dividend Payment Date in respect of any
STAR Term shall be computed by multiplying the Applicable
Rate for such STAR Term by a fraction, the numerator of
which will be the number of days in such STAR Term
(determined by including the first day thereof and
excluding the last day thereof) during which such share
was outstanding and the denominator of which will be 360,
and multiplying the result by $1,000.
(d) Except as provided below, no dividends shall be
declared or paid or set apart for payment on the shares of any
class of stock ranking, as to dividends, on a parity with or junior
to shares of VTP for any period unless full cumulative dividends
have been or contemporaneously are declared and paid on the shares
of VTP through the most recent Dividend Payment Date. When
dividends are not paid in full as aforesaid upon the shares of VTP
or any other class of stock ranking on a parity as to dividends
with shares of VTP, all dividends declared upon shares of VTP and
any other such class of stock ranking on a parity as to dividends
with shares of VTP shall be declared pro rata so that the amount of
dividends declared per share on shares of VTP and such other class
of stock shall in all cases bear to each other the same ratio that
accumulated but unpaid dividends per share on the shares of VTP and
such other class of stock bear to each other. Holders of shares of
VTP shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends, as
herein provided, on shares of VTP. To interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend
payment or payments on shares of VTP which may be in arrears.
(e) So long as any shares of VTP are outstanding, no
dividend (other than a dividend or distribution paid in shares of,
or options, warrants or rights to subscribe for or purchase shares
of, common stock or any other stock ranking junior to shares of VTP
as to dividends and distribution of assets upon dissolution,
liquidation or winding up and other than pro rata as provided
above) shall be declared or paid or set aside for payment or other
distribution declared or made upon the common stock or upon any
other stock of the Corporation ranking junior to or on a parity
with shares of VTP as to dividends or distribution of assets upon
dissolution, liquidation or winding up nor shall any common stock
nor any other stock of the Corporation ranking junior to or on a
parity with shares of VTP as to dividends or distribution of assets
upon dissolution, liquidation or winding up be redeemed, purchased
or otherwise acquired for any consideration (or any monies be paid
to or made available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior to
shares of VTP as to dividends and distribution of assets upon
dissolution, liquidation or winding up) unless, in each case, the
full cumulative dividends on all outstanding shares of VTP shall
have been paid for all past Terms.
(f) Not later than noon, New York City tim, on the
Business Day immediately preceding each Dividend Payment Date with
respect to which dividends on the shares of VTP have been declared,
the Corporation shall deposit with the Auction Agent funds
(available in The City of New York, New York on such Dividend
Payment Date) sufficient for the payment of such dividends and
shall give the Auction Agent irrevocable instructions and authority
to apply such funds and, if applicable, the income and proceeds
therefrom to the payment of such dividends. The Corporation may
direct the Auction Agent to invest any such available funds,
provided that the proceeds of any such investment shall be
available in The City of New York, New York, on such Dividend
Payment Date. All such funds (to the extent necessary to pay the
full amount of such dividends) shall be held in trust for the
benefit of the holders of record entitled thereto; provided, that
following each Dividend Payment Date the Corporation shall be
entitled to receive from the Auction Agent any funds remaining
after the payment in full of dividends on such Dividend Payment
Date.
(g) Each dividend declared by the Board of Directors
shall be paid to the Holders of shares of VTP as such Holders'
names appear on the Stock Books on the related record date. Such
record date shall be the Business Day next preceding the applicable
Dividend Payment Date. Dividends shall be paid by check except
that dividends paid to the Securities Depository shall be paid in
same-day funds on the Dividend Payment Date. Dividends in arrears
with respect to any past Dividend Payment Date with respect to
shares of a series of VTP may be declared by the Board of Directors
and paid on the outstanding shares of VTP of such series on any
date fixed by the Board of Directors, whether or not a regular
Dividend Payment Date, to the Holder of the shares of VTP of such
series on the related record date fixed by the Board of Directors,
which shall not be less than 10 nor more than 50 days before the
date fixed for the payment of such dividend. Any dividend payment
made on shares of a series of VTP shall first be credited against
the dividends accrued with respect to the earliest Dividend Payment
Date for which dividends have not been paid.
5. Redemption and Repurchase.
(a) Redemption at the Option of the Corporation
Shares of a series of VTP shall be redeemable by the
Corporation as provided below:
(i) At its option the Corporation may redeem the
shares of Series A VTP or Series B VTP out of funds
legally available therefor, upon not less than 30 days'
and not more than 45 days' prior written notice, in
whole, or from time to time in part, on the final
Dividend Payment Date with respect to any Term for such
series, at a redemption price equal to $1,000 per share,
plus an amount equal to accumulated and unpaid dividends
(whether or not earned) to the date fixed for redemption;
provided that dividends payable on any past Dividend
Payment Date for all series of VTP shall be current and
the dividend payable on such final Dividend Payment Date
shall have been declared by the Board of Directors prior
to the date any action is taken by the Corporation to
redeem shares of such series of VTP. The Corporation may
redeem shares of any series of VTP only in eleven
multiples of $100,000.
(ii) During any one-year Variable Term for a series
of VTP resulting from (a) an Auction for such series in
which Sufficient Clearing Bids have not been made, (b)
the failure to hold an Auction for such series for any
reason on the Auction Date scheduled to occur at the end
of the preceding Variable Term, or (c) a default by the
Corporation in the deposit of the redemption price for
shares of such series previously called for redemption by
the Business Day next preceding the Auction Date, shares
of such series may be redeemed, in whole or in part, on
any Dividend Payment Date during such one-year Variable
Term for such series, upon the giving of notice and at
the redemption price set forth in paragraph (i) above.
(iii) The shares of a series of VTP shall also be
redeemable at the option of the Corporation during any
Variable Term for such series upon the additional terms,
if any, specified by the Term Selection Agent in
connection with the selection of a Variable Term for such
series of VTP pursuant to Section 3(b) hereof, the
election by the Term Selection Agent to change the length
of a subsequent Variable Term pursuant to Section 3(d)
hereof or the election by the Term Selection Agent to
change a subsequent STAR Term to a Variable Term pursuant
to Section 3(d) hereof; provided that the redemption
price so specified shall not be less than $1,000 per
share, plus an amount equal to accumulated and unpaid
dividends (whether or not earned or declared). Any such
optional redemption terms shall be effective upon written
notice given by the Term Selection Agent to the
Corporation, the Auction Agent and the Securities
Depository in accordance with the provisions of Section
3 hereof. In the event that the Term Selection Agent
subsequently elects to change a Term for a series of VTP
from a previously announced Variable Term to a STAR Term,
any optional redemption provisions proposed with respect
to such previously announced Variable Term shall not
become effective during such STAR Term.
(b) General Provisions for Redemption
(i) Whenever shares of VTP are to be redeemed, the
Corporation shall cause to be mailed, within the time
period specified in paragraph (a)(i) of this Section 5,
a written notice of redemption (a "Notice of Redemption")
by first-class mail, postage prepaid, to the Securities
Depository and to the Auction Agent. Each Notice of
Redemption shall state (A) the redemption date, (B) the
number of shares of such series of VTP to be redeemed,
(c) the redemption price, (D) that dividends on the
shares to be redeemed will cease to accumulate on such
redemption date, (E) the provision hereof under which the
redemption is being made, (F) the place or places where
shares of VTP are to be surrendered for payment of the
redemption price, (G) that the Holders of shares of VTP
called for redemption will not be entitled to
participate, with respect to shares called for
redemption, in any Auction held subsequent to such Notice
of Redemption provided that funds sufficient to redeem
such shares shall have been deposited with the Auction
Agent by the Business Day next preceding the Auction Date
relating to such Auction, and (H) that, notwithstanding
such Notice of Redemption, if the Corporation fails to
deposit with the Auction Agent funds sufficient to pay
such redemption price by the specified day prior to the
redemption date, such Notice will have no effect and
there will be no redemption. The Notice of Redemption
shall also be published on or about the date thereof in
The Wall Street Journal (or, if such notice cannot be
published therein, then in a comparable newspaper printed
in the English language and in general circulation in The
City of New York). No defect in the Notice of Redemption
or in the mailing or publication thereof shall affect the
validity of the redemption proceedings, except as
required by applicable law. A Notice of Redemption shall
be deemed given on the day that it is mailed in
accordance with the first sentence of this clause (i).
(ii) If fewer than all of the outstanding shares of
a series of VTP are to be redeemed, the number of shares
to be redeemed shall be determined by the Corporation and
such shares shall be redeemed pro rata or by lot, with
adjustments to avoid redemption of fractional shares and
to comply with the requirement to hold shares only in
whole units of 100 shares during a STAR Term. So long as
all shares of a series of VTP are held of record by the
nominee of the Securities Depository, the Auction Agent
shall given notice to the Securities Depository of the
number of shares of VTP to be redeemed and the Securities
Depository shall determine by lot the number of shares of
VTP to be redeemed from the account of each Broker-Dealer
acting on behalf of an Existing Holder (or, if such
Broker-Dealer is not a member of the Securities
Depository, from the account of the Agent Member acting
for such Broker-Dealer). Thereafter, each Broker-Dealer
(or Agent Member, as appropriate) shall select the number
of shares of such series to be redeemed from each
Existing Holder for whom it acts (including the Broker-
Dealer to the extent it holds shares of VTP for its own
account), with appropriate adjustments, when necessary,
to comply with the requirement to hold shares of VTP only
in whole units of 100 shares during any STAR Term. A
Broker-Dealer (or Agent Member, as appropriate) may
determine to redeem shares of VTP from some Existing
Holders (including the Broker-Dealer itself) without
redeeming shares of VTP from the accounts of other
Existing Holders.
(iii) Not later than noon on the Business Day next
preceding the Auction Date (or, if earlier, by noon on
the Business Day next preceding the date fixed for
redemption) the Corporation shall deposit with the
Auction Agent sufficient funds (available in The City of
New York, New York on such redemption date) to redeem the
shares of VTP as to which a Notice of Redemption has been
given and shall give the Auction Agent irrevocable
instructions and authority to apply such funds and, if
applicable, the income and proceeds therefrom, to the
payment of the redemption price for such shares to the
Holder or Holders thereof upon surrender of the
certificate or certificates therefor. The Corporation
may direct the Auction Agent to invest any such available
funds, provided that the proceeds of any such investment
shall be available in The City of New York, New York at
the opening of business on such redemption date. All
funds held by the Auction Agent pursuant to this clause
(iii) (to the extent necessary to pay the full amount of
the redemption price for such shares) shall be held in
trust for the Holders of such shares; provided, that
following each such redemption date the Corporation shall
be entitled to receive from the Auction Agent any funds
remaining after the payment in full of the redemption
price on such redemption date.
(iv) If the Corporation shall have given or caused
to be given a Notice of Redemption, shall have
irrevocably deposited with the Auction Agent a sum
sufficient to redeem the shares of VTP as to which such
Notice of Redemption was given and shall have given the
Auction Agent irrevocable instructions and authority to
pay the redemption price to the Holders of such shares,
then on the date of such irrevocable deposit, all rights
of the Holders of such shares by reason of their
ownership of such shares (except their right to receive
the redemption price thereof, but without interest) shall
terminate, and such shares shall no longer be deemed
outstanding for any purpose, including, without
limitation, the right of the Holders of such shares to
vote on any matter or to participate in any subsequent
Auctions. In addition, subject to clause (vii) below,
any shares of VTP as to which a Notice of Redemption has
been given by the Corporation shall be deemed to be not
Outstanding (as defined in Section 9(a)(xxi)) for
purposes of any Auction held subsequent to the date of
such Notice of Redemption. The Corporation shall be
entitled to receive, from time to time, from the Auction
Agent the income, if any, derived from the investment of
monies deposited with the Auction Agent (to the extent
that such income is not required to pay the redemption
price of the shares to be redeemed), and the Holders of
shares to be redeemed shall have no claim to any such
income. In case the Holder of any shares called for
redemption shall not claim the redemption price for his
shares within six months after the redemption date, the
Auction Agent shall, to the extent permitted by
applicable law, upon demand of the Corporation, pay to
the Corporation such amount remaining on deposit and the
Auction Agent shall thereupon be relieved of all
responsibility to the Holder with respect to such shares,
and such Holder shall thereafter look only to the
Corporation for payment of the redemption price of such
shares.
(v) Except as set forth in this Section 5 with
respect to redemptions and subject to the provisions of
Section 5(a)(i), and as long as dividend payments on all
shares of VTP are current nothing contained herein shall
limit any legal right of the Corporation or any entity
controlled by the Corporation to purchase or otherwise
acquire any shares of VTP outside of an Auction at any
price, which price may be equal to or less than the price
at which such shares may then be redeemed, in privately
negotiated transactions or otherwise.
(vi) Solely for the purpose of determining the
number of shares of VTP to be stated in a Notice of
Redemption as subject to an optional redemption, the
amount of funds legally available for such redemption
shall be determined as of the date of such Notice of
Redemption.
(vii) Notwithstanding any Notice of Redemption, if
the Corporation does not within the times specified in
clause (iii) above deposit with the Auction Agent funds
sufficient to pay such redemption price, such notice
shall have no effect and there will be no redemption. In
addition, if the date fixed for redemption of shares of
a series of VTP, whether in whole or in part, is the
final Dividend Payment Date in respect of a Variable
term, the next succeeding Term for the shares of such
series will be a one year Variable Term and dividends
during such Variable Term shall accumulate at the Maximum
Applicable Rate for such one-year Variable Term, the next
succeeding Term for the shares of such series will be a
one-year Variable Term and dividends during such Variable
Term shall accumulate at the Maximum Applicable Rate for
such one-year Variable Term as in effect on the next
scheduled Auction Date with respect to shares of such
series of VTP and such shares may be redeemed during such
one-year Variable Term as described above. If the date
fixed for redemption of a series of VTP, whether in whole
or in part, is the last day of a STAR Term, the next
succeeding term for the shares of such series will be a
STAR Term and dividends during such STAR Term shall
accumulate at the Maximum Applicable Rate for such STAR
Terms as in effect on the next scheduled Auction Date
with respect to shares of such series of VTP.
(c) Repurchase of Shares in Certain Events
In the event that after the Original Issuance Date there
shall occur any Repurchase Event (as hereinafter defined) with
respect to the Corporation, then the Corporation shall offer to
repurchase all outstanding shares of VTP on the date (the
"Repurchase Date") that is forty-five days after the occurrence of
such Repurchase Event (or such later date as may be required by
applicable law), at their liquidation preference, plus accumulated
and unpaid dividends to the Repurchase Date, out of funds legally
available therefor. Holders shall have the option to accept or
reject such offer to repurchase in whole or in part.
Within 10 days after the occurrence of a Repurchase
Event, the Corporation is obligated to mail a notice of the
occurrence of such Repurchase Event to the Auction Agent and the
Securities Depository. The notice shall state that a Repurchase
Event has occurred, shall specify the date and nature thereof and
shall set forth the date before which a Holder must notify the
Corporation of such Holder's intention to exercise the repurchase
right, and the procedure which such Holder must follow to exercise
such right. The Corporation shall cause a copy of such notice to
be published in The Wall Street Journal (or, if such notice cannot
be published therein, then in a comparable newspaper of general
circulation printed in the English language in The City of New
York). To exercise the repurchase right, the Holder of the shares
of VTP must deliver on or before the thirtieth day after the date
of the Repurchase Event (or on or before such later date as may be
necessary to comply with any applicable law) written notice to the
Corporation (or an agent designated by the Corporation for such
purpose), with a copy to the Auction Agent, of the Holder's
exercise of such right, together with the shares of VTP with
respect to which the right is being exercised.
A "Repurchase Event" shall be deemed to have occurred at
each such time as (a) whether or not approved by the Board of
Directors of the Corporation, either (i) any person is or becomes
the beneficial owner, directly or indirectly, of securities having
20% or more of the voting power of the Voting Stock, (ii) the
Corporation declares, or announces its intention to declare, a
dividend or sets, or announces its intention to set, a record date
for determining holders of Voting Stock entitled to receive, a
distribution of cash, property or securities having, in either
case, after giving effect to all similar transactions during the
365-day period immediately preceding such event, an aggregate fair
market value in excess of 25% of the Net Worth of the Corporation
at the time of such announcement, declaration or setting of a
record date, (iii) the Corporation commences, or announces its
intention to commence, a tender or exchange offer for securities
have 20% or more of the voting power of the Voting Stock, after
giving effect to all similar transactions during the 365-day period
immediately preceding such event, (iv) the Corporation or any of
its Significant Subsidiaries or all or a substantial portion of the
assets of the Corporation or any of its Significant Subsidiaries is
acquired by a party which is not consolidated with the Corporation
for financial reporting purposes, or (v) the Corporation or any of
its affiliates acquires any entity or substantial assets which,
upon completion of such acquisition, constitute a Significant
Subsidiary of the Corporation and (b)(i) during the period (A)
commencing with (1) the first public announcement of an event
described above or (2) if the consummation of such distribution,
tender or exchange offer, or disposition or acquisition occurs
later than 120 days after such first public announcement, the day
which is 120 days prior to such consummation and (B) ending 60 days
after S&P or Moody's is reduced as follows: (1) in the event that
the then-current rating assigned to the shares of VTP by either of
such rating agencies is within one of the four highest rating
categories, such rating is reduced to a rating that is not within
such four highest rating categories, or (2) in the event the then-
current rating assigned to the shares of VTP by either of such
rating agencies is not within one of the four highest rating
categories, such rating is reduced by one full rating category or
(ii) at any time, the relevant rating agency publicly announces
that the then-current rating assigned to the shares of VTP is
reduced in the manner described in either (1) or (2) of the
foregoing clause (b)(i) and that such reduction was caused solely
by the occurrence or proposed occurrence of an event described in
clause (a)(i)-(v), inclusive, above and related transactions.
For purposes of this subsection, "Voting Stock" means
shares of stock of the Corporation entitling the holder thereof to
vote for the election of directors of the Corporation; "person"
means a person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934 (the "1934 Act")), together
with any affiliates or associates thereof; "beneficial ownership"
shall be determined pursuant to the provisions of Rule 13d-3 under
the 1934 Act; "Net Worth" of the Corporation refers to the excess
of its assets over its liabilities as reported on the balance sheet
contained in its more recent report under the 1934 Act;
"Significant Subsidiary" shall have the meaning assigned to such
term in Rule 1-02 of Regulation S-X promulgated by the Commission
and the determination of reduction by "one full rating category"
shall take into account subclassifications within a category (for
example, a reduction from "BB-" to "B" or "B+" shall not constitute
a reduction by one full rating category while a change from "BB-"
to "B-" or below shall constitute such a reduction).
(d) All shares of VTP acquired by the Corporation, by
redemption or otherwise, shall be retired and shall assume the
status of authorized and unissued shares.
6. Liquidation Rights.
(a) Upon the voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation,
Holders shall be entitled to receive, out of the assets of the
Corporation available for distribution to stockholders, after
satisfying claims of creditors but before any payment or
distribution of assets is made on the common stock or on any other
class of stock ranking junior to the shares of VTP upon
liquidation, a liquidation distribution in an amount (the
"Liquidation Preference") equal to $1,000 per share, plus in each
case an amount equal to accumulated and unpaid dividends on each
such share (whether or not earned or declared) to the date fixed
for payment of such distribution.
(b) If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets of the
Corporation are insufficient to pay the Holders of the shares of
VTP the full amount of the Liquidation Preference to which they are
entitled, Holders of VTP shall share ratably with the holders of
any other series of preferred stock ranking on a parity with the
VTP as to liquidation in any such distribution of assets of the
Corporation in proportion to the full respective preferential
amounts to which the holders of VTP and such other stock are
entitled.
(c) In the event of any such liquidation, dissolution or
winding up, unless and until payment in full has been made to the
Holders of the shares of VTP and the holders of any other stock
ranking on a parity with the shares of VTP as to liquidation of the
liquidation distribution to which they are entitled, no dividend or
other distribution shall be made to the holders of the common stock
or other capital stock ranking junior to the shares of VTP upon
liquidation, no purchase, redemption or other acquisition for any
consideration by the Corporation shall be made in respect of the
common stock or such capital stock and no payment, delivery or
commitment to make payment or delivery of any money or assets to
any Affiliate shall be made, other than any payments or deliveries
arising from pre-existing obligations entered into in the ordinary
course of business.
(d) After payment of the full amount of the liquidation
distribution to which they are entitled, the holders of the shares
of VTP shall not be entitled to any further participation in any
distribution of assets of the Corporation.
(e) A consolidation or merger of the Corporation with or
into any other corporation or corporations, or a sale, lease or
exchange of all or substantially all of the assets of the
Corporation in consideration for the issuance of equity securities
of another corporation, shall not be deemed to be a liquidation,
dissolution or winding up of the Corporation; provided that the
consolidation, merger, sale, lease or exchange would not adversely
affect the preferences, limitations or rights of the shares of VTP
(unless the holders of at least a majority of the Outstanding
shares of all series of VTP and any other series of preferred stock
ranking on a parity with the VTP as to liquidation, voting together
as a single class, have consented thereto).
7. Voting Rights.
(a) Rights to Elect Members of the Board of Directors
(i) During any period (referred to herein as a
"Default Period") when dividend payment on any series of
VTP or other series of preferred stock ranking on a
parity with the VTP as to distribution of dividends and
assets ("Parity Preferred Stock") shall not have been
paid or declared and a sum sufficient for the payment
thereof set aside for payment, for such number of Terms,
or portions thereof, which in the aggregate contain at
least 540 days, then in any such case the number of
directors of the Corporation shall automatically be
increased by two and the holders of the shares of all
series of VTP and Parity Preferred Stock possessing like
voting rights which have vested and are exercisable
("Voting Parity Preferred Stock") shall possess full
voting powers (to the exclusion of the holders of all
other series and classes of capital stock of the
Corporation), voting as a single class, to elect such
number of directors at a special meeting of the holders
of VTP and such series of Voting Parity Preferred Stock
called as hereinafter provided.
(ii) The Default Period and voting rights created by
the occurrence of the circumstances described above shall
continue unless and until all accumulated and unpaid
dividends on any series of the then outstanding shares of
VTP and Parity Preferred Stock, including in the case of
any series of VTP the accumulated and unpaid dividends
for the current Term, shall have been paid or sufficient
funds for the payment thereof shall have been deposited
with the Auction Agent, at which time the voting rights
described in clause (a)(i) shall cease, subject always,
however, to the revesting of such voting power in the
holders of all shares of VTP and Voting Parity Preferred
Stock upon the further occurrence of any of the
circumstances described in clause (a)(i) above.
(iii) The term of office of all persons who are
directors of the Corporation at the time of such meeting
shall continue, notwithstanding the election of directors
at such meeting by the holders of shares of VTP and
Voting Parity Preferred Stock of the number of directors
which such holders are entitled to elect. The persons
elected by the holders of shares of VTP and Voting Parity
Preferred Stock, together with the incumbent directors
otherwise duly elected, shall constitute the duly elected
directors of the Corporation.
(iv) Directors elected by holders of VTP and any
Voting Parity Preferred Stock shall continue in office
until the next annual meeting of the Corporation's
shareholders, unless their term shall expire, or they
shall be removed, at an earlier date as provided in this
Section 7. Upon election or re-election by holders of
VTP and any Voting Parity Preferred Stock, such directors
will be elected for staggered terms in accordance with
the Certificate of Incorporation of the Corporation.
(v) Simultaneously with the expiration of the
Default Period, the term of office of the directors
elected by the holders of shares of VTP and such Voting
Parity Preferred Stock shall terminate, the number of
directors of the Corporation shall automatically be
decreased by a number equal to the number of directors
whose terms are so terminated, only the incumbent
directors otherwise duly elected shall constitute the
duly elected directors of the Corporation, and the right
of the holders of VTP and such Voting Parity Preferred
Stock to elect directors during a Default Period as
provided above shall cease, subject always, however, to
the revesting of such voting power in the holders of all
shares of VTP and Voting Party Preferred Stock upon the
further occurrence of any of the circumstances described
in clause (a)(i) above.
(vi) Within fifteen days of the accrual of any right
of the holders of shares of VTP and Voting Parity
Preferred Stock to elect directors upon the occurrence of
a Default Period as described in clause (a)(i) above, the
Corporation shall mail or cause to be mailed to the
holders of VTP and such Voting Parity Preferred Stock,
notice of a special meeting of stockholders for a date
not less than 10 days nor more than 60 days after the
date of such notice. If the Corporation does not mail or
cause to be mailed notice of such meeting as provided in
the next preceding sentence, a meeting may be called by
any holder or holders of 10% or more of the outstanding
shares of VTP or such Voting Parity Preferred Stock. The
Corporation shall notify the Auction Agent of the date on
which such right accrued, and such date shall be the
record date for determining the holders of stock entitled
to notice of and to vote at the special meeting. Holders
of all such stock shall vote in such elections on the
basis of one vote per $1,000 liquidation preference and
not cumulatively and the holder or holders of one-half of
the shares of such stock then outstanding, present in
person or by proxy, shall constitute a quorum for the
election of directors by them. At any such meeting or
adjournment thereof in the absence of a quorum, a
majority of the holders of such stock present in person
or by proxy shall have the power to adjourn the meeting
for the election of directors without notice, other than
an announcement at the meeting, until a quorum is
present.
(vii) With respect to the certain restrictions
described above shares of VTP shall not be deemed to be
Outstanding and the provisions of this Section 7 shall
not apply if (i) funds sufficient for the redemption of
such shares are irrevocably depositing with the Auction
Agent and a Notice of Redemption has been duly given by
the Corporation or (ii) such shares are held beneficially
by the Corporation or beneficially or of record by any
Affiliate.
(b) Removal of Directors Elected by Existing Holders of
Voting Parity Preferred Stock
Except as provided in paragraph (a)(iv) of this Section
7 and other than removal for cause, the directors elected by the
holders of shares of VTP and such Voting Parity Preferred Stock
shall (subject to the provisions of any applicable law) be subject
to removal only by the vote of the holders of a majority of the
shares of all series of VTP and such Voting Parity Preferred Stock
voting together as a single class. Any vacancy in the Board of
Directors of the Corporation occurring by reason of such removal or
otherwise may be filled by vote of a majority of the shares of all
series of VTP and such Voting Parity Preferred Stock, voting
together as a single class, in person or by proxy at a special
meeting of stockholders called and held in accordance with the
provisions set forth above, and, if not so filled, such vacancy
shall (subject to the provisions of any applicable law) be filled
by the remaining director elected by the holders of the shares of
all series of VTP and such Voting Parity Preferred Stock. "Removal
for Cause," as used herein, shall mean removal for dishonesty, a
breach of a fiduciary obligation to the Corporation or for any act
deemed materially prejudicial to the rights of the Corporation or
its shareholders.
(c) Maintenance of Available Board Positions
So long as any shares of either series of VTP are
outstanding the Corporation shall maintain at least two available
positions on the Board of Directors within the limits established
by the Corporation's Certificate of Incorporation.
8. General Provisions.
Unless otherwise required by law, Holders of shares of
VTP shall not have any relative rights or preferences or other
special rights against the Corporation other than those
specifically set forth herein. Holders of shares of VTP shall have
no preemptive rights. In the event that dividends are not timely
declared on the shares of VTP, the exclusive remedy for Holders of
such shares against the Corporation shall be as set forth herein
and in no event shall Holders of such shares have any right to
maintain a suit or proceeding against the Corporation in respect of
such dividends or damages for the failure to receive the same or
resulting from such noncompliance.
9. Auction Procedures.
(a) Certain Definitions
Capitalized terms not defined in this Section 9 shall
have the meanings specified in Section 2 hereof. As used herein,
the following terms shall have the following meanings, unless the
context otherwise requires:
(i) "Affiliate" shall mean any person controlled
by, in control of, or under common control with the
Corporation.
(ii) "Agent Member" shall mean the member of the
Securities Depository that will act on behalf of a Bidder
and is identified as such in such Bidder's Purchaser's
Letter.
(iii) "Auction" shall mean each periodic operation
of the procedures set forth in this Section 9.
(iv) "Auction Agent" shall mean Bankers Trust
Company or in lieu thereof, any of its successors,
pursuant to the Auction Agent Agreement, dated as of
February 8, 1989, between the Corporation and Bankers
Trust Company.
(v) "Auction Date" shall mean (i) in the case of an
Auction held at the end of a STAR Term, on the Business
Day next preceding the last day of such STAR Term, and
(ii) in the case of an Auction held at the end of a
Variable Term, on the fifth Business Day next preceding
the last day of such Variable Term.
(vi) "Auctioned VTP" shall mean all shares of a
series of VTP subject to an Auction on any Auction Date.
(vii) "Auction Procedures" shall mean the procedures
set forth in this Section 9.
(viii) "Available VTP" shall have the meaning
specified in clause (A) of Section 9(d)(i) below.
(ix) "Bid" shall have the meaning specified in
Section 9(b)(ii) below.
(x) "Bidder" shall have the meaning specified in
Section 9(b)(ii) below.
(xi) "Broker-Dealer" shall mean The First Boston
corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and any other broker-dealer, or other entity
permitted by law to perform the functions required of a
Broker-Dealer in this Section 9 that has been selected by
the Corporation and has entered into a Broker-Dealer
Agreement with the Auction Agent that remains effective.
(xii) "Broker-Dealer Agreement" shall mean an
agreement between the Auction Agent and a Broker-Dealer
pursuant to which such Broker-Dealer agrees to follow the
procedures specified in this Section 9.
(xiii) "Business Day" shall mean a day on which the
New York Stock Exchange is open for trading and which is
not a day on which banks in New York City are authorized
or required by law to close.
(xiv) "Commercial Paper Rate", on any date, shall
mean (i) the interest equivalent of the 60-day rate on
commercial paper placed on behalf of issuers whose
corporate bonds are rated "AA" by S&P or "Aa" by Moody's
or the equivalent of such rating by another rating
agency, as such 60-day rate is made available on a
discount basis or otherwise by the Federal Reserve Bank
of New York for the Business Day immediately preceding
such date, or (ii) in the event that the Federal Reserve
Bank of New York does not make available such a rate,
then the arithmetic average of the interest equivalent of
the 60-day rate on commercial paper placed on behalf of
such issuers, as quoted on a discount basis or otherwise
by the Commercial Paper Dealers to the Auction Agent as
of the close of business on the Business Day immediately
preceding such date. In the event that the Federal
Reserve Bank of New York does not make available such a
rate and if any Commercial Paper Dealer does not quote a
rate required to determine the Commercial Paper Rate, the
Commercial Paper Rate shall be determined on the basis of
the quotation or quotations furnished by the remaining
Commercial Paper Dealer or Commercial Paper Dealers and
any Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers selected by the Corporation to
provide such rate or rates not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as
the case may be, or, if the Corporation does not select
any such Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers, by the remaining Commercial
Paper Dealer of Commercial Paper Dealers. If the
Corporation shall adjust the number of days in a STAR
Term pursuant to Section 3(g)(ii), then (i) if the number
of days in a STAR Term after such adjustment shall be
fewer than 70 days, such rate shall be the interest
equivalent of the 60-day rate on such commercial paper,
(ii) if the number of days in a STAR Term after such
adjustment shall be 70 or more but fewer than 85, such
rate shall be the arithmetic average of the interest
equivalent of the 60-day and 90-day rates on such
commercial paper, (iii) if the number of days in a STAR
Term after such adjustment shall be 85 or more days but
fewer than 99, such rate shall be the interest equivalent
of the 90-day rate on such commercial paper and (iv) if
the number of days in a STAR Term shall be greater than
99, such rate will equal the interest equivalent of the
rate for commercial paper having a designated maturity
nearest the last day of such STAR Term, as published by
the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates"
or any successor publication, within five Business Days
of such date, under the heading "Commercial Paper," or,
if such statistical release is not published or is
otherwise not available, then the arithmetic average of
the interest equivalent of the rate on commercial paper
placed on behalf of issuers whose corporate bonds are
rated "AA" by S&P or "Aa" by Moody's (or the equivalent),
having a designated maturity nearest the last day of such
STAR Term, as quoted on a discount basis or otherwise by
the Commercial Paper Dealers (and/or one or more
Substitute Commercial Paper Dealers) for the close of
business on the Business Day immediately preceding such
date. For purposes of this definition, "interest
equivalent" means the equivalent yield on a 360-day basis
of a discount-basis security to an interest-bearing
security.
(xv) "Existing Holder", when used with respect to
shares of VTP, shall mean a person who has signed and
delivered a Purchaser's Letter and is listed as the
beneficial owner of such shares in the records of the
Auction Agent.
(xvi) "Hold Order" shall have the meaning specified
in Section 9(b)(ii) below.
(xvii) Maximum Applicable Rate", when used with
respect to any date, shall mean (i) with respect to an
Auction relating to a STAR Term for sa series of VTP, the
percentage of the Commercial Paper Rate and (ii) with
respect to an Auction relating to a Variable Term for a
series of VTP, the percentage of the Treasury Index Rate,
in each case at the close of business on the Business Day
next preceding such date, determined as set forth below,
based on the Prevailing Rating of the shares of VTP in
effect at the close of business on such Business Day:
STAR Term: Variable Term:
Percentage of Percentage of
Prevailing the Commercial the Treasury
Rating Paper Rate Index Rate
---------- -------------- ---------------
"aa3"/AA- or above 110% 130%
"a3"/A- 125% 140%
"Baa3"/BB- 150% 150%
"ba3"/BB- 200% 200%
Below "ba3"/BB- 250% 250%
In the case of ratings from the rating agencies that do not fall in
comparable categories, the applicable percentage shall be
determined on the basis of the lower rating.
(xviii) "Minimum Applicable Rate", when used with
respect to any date, shall mean (A) with respect to an
Auction relating to a Variable Term for a series of VTP,
50% of the Treasury Index Rate at the close of business
on the Business Day next preceding the Auction Date, and
(B) with respect to an Auction relating to a STAR Term
for a series of VTP, 58% of the Commercial Paper Rate at
the close of business on the Business Day next preceding
the Auction Date.
(xix) "Notice of Failed Transaction Auction" shall
have the meaning specified in Section 9(f)(i).
(xx) "Order" shall have the meaning specified in
Section 9(b)(ii) below.
(xxi) "Outstanding" shall mean for purposes of
these procedures, as of any date, any issued shares of
VTP with respect to each series except any such shares
acquired by the Corporation through redemption or
otherwise, or as to which the Corporation has given a
notice of redemption if the Corporation shall also have
irrevocably deposited the redemption price (including
accumulated and unpaid dividends) therefor with the
Auction Agent and given the Auction Agent irrevocable
instructions and authority to pay the redemption price
therefor or as to which the Corporation or any Affiliate
shall be an Existing Holder.
(xxii) "Potential Holder" shall mean a prospective
purchaser of shares of Auctioned VTP who shall have
executed and delivered a Purchaser's Letter.
(xxiii) "Prevailing Rating", when used to determine
the Maximum Applicable Rate, shall be:
(i) "aa3"/AA- or above if such shares of VTP
have a rating of "aa3" or better by Moody's and AA- or
better by S&P or the equivalent of both of such ratings
by a substitute rating agency or substitute rating
agencies selected by the Corporation as provided below;
(ii) if not "aa3"/AA- or above, then "a3"/A-
if such shares of VTP have a rating of "a3" or better by
Moody's and A- or better by S&P;
(iii) if not "aa3"/AA- or above or "a3"/A-,
then "baa3"/BB- if such shares of VTP have a rating of
"baa3" or better by Moody's and BBB- or better by S&P;
(iv) if not "aa3"/AA- or above, "a3"/A-, or
"baa3"/BBB-, then "ba3"/BB-, if such shares of VTP have
a rating of "ba3" or better by Moody's and BB- or better
by S&P; and
(v) if not "aa3"/AA- or above, "a3"/A-,
"baa3"/BBB-, or "ba3"/BB-, then below "ba3"/BB-;
provided that if either Moody's or S&P or both shall not
make any of such ratings available, the Corporation or
its successor shall select one or two nationally
recognized statistical rating organizations (as the term
is used in the rules and regulations of the Commission
under the Securities Exchange Act of 1934, as amended),
as the case may be, to act as a substitute rating agency
or substitute rating agencies, and the Corporation will
take all reasonable action to enable such rating agency
or rating agencies to make available the equivalent
rating or ratings for shares of each series. The
corporation will take all reasonable action necessary to
enable Moody's sand S&P to provide a rating for each
series of VTP.
(xxiv) "Purchaser's Letter" shall mean a letter
addressed to the Corporation, the Auction Agent, a
Broker-Dealer, and/or an Agent Member in the form of
Exhibit B to the Broker-Dealer Agreement.
(xxv) "Remaining Shares" shall have the meaning
specified in Section 9(e)(i).
(xxvi) "Securities Depository" shall mean The
Depository Trust Company and its successors and assigns
or any other securities depository selected by the
Corporation which agrees to follow the procedures
required to be followed by such securities depository in
connection with shares of VTP.
(xxvii) "Sell Order" shall have the meaning
specified in Section 9(b) below.
(xxviii) "Submission Deadline" shall mean 12:30
P.M., New York City time, ion each Auction date, or such
other time on the Auction Date specified by the Auction
Agent, by which Broker-Dealers are required to submit
Orders in writing to the Auction Agent.
(xxix) "Submitted Bid" shall have the meaning
specified in Section 9(d)(i) below.
(xxx) "Submitted Hold Order" shall have the meaning
specified in Section 9(d)(i) below.
(xxxi) "Submitted Order" shall have the meaning
specified in Section 9(d)(i) below.
(xxxii) "Submitted Sell Order: shall have the
meaning specified in Section 9(d)(i) below.
(xxxiii) "Sufficient Clearing Bids" shall have the
meaning specified in clause (B) of Section 9(d)(i) below.
(xxxiv) "Treasury Index Rate", on any date, shall
mean the interest equivalent of the sum of (i) the rate
for direct obligations of the United States ("Treasury
Notes") having a maturity of 1 year, 2 years, 3 years, 5
years, 7 years or 10 years (each being referred to herein
as a "Designated Maturity") which is equal to, or next
shorted than, the length of such Variable term (such
maturity being referred to herein as the "Base
Maturity"), as published by the Board of Governors of the
federal Reserve System in "Statistical Release
H.125(519), Selected Interest Rates" or any successor
publication within five Business Days preceding such
date, under the heading, "Treasury Constant Maturities"
or, if such statistical release is not yet published or
is otherwise not available, the arithmetic mean of the
secondary market bid rates as of approximately 3:300
P.M., New York City time, on the Business Day next
preceding such date, of three primary United States
government securities dealers obtained by the corporation
for the issue of Treasury Notes with a remaining maturity
equal to such Base Maturity, plus (ii) the product of (x)
the difference between the rate for the next longer
Designated Maturity and the rate for the Base maturity
and (y) a fraction the numerator of which is the
difference (expressed as a number of years or a fraction
of a year) between (1) the length of the Variable Term
and (2) the Base Maturity, and the denominator of which
is the difference (expressed as a number of years or a
fraction of a year) between (1) the Designated Maturity
next greater than the Base Maturity and (2) the Base
Maturity.
(xxxv) "Winning Bid Rate" shall have the meaning
specified in clause (C) of Section 9(d)(i) below.
(b) Orders by Existing Holders and Potential Holders
(i) Prior to the Submission Deadline on each
Auction Date, each Broker-Dealer, using a list of
Potential Holders that shall be maintained by such
Broker-Dealer in good faith for the purpose of conducting
a competitive Auction, shall contact by telephone or
otherwise Potential Holders on such list to notify such
Potential Holders whether the next Term is a STAR Term or
a Variable Term and, if applicable, of the length of the
next Term and any optional redemption terms applicable to
a designated Variable Term and to determine the number of
shares, if any, of Auctioned VTP that each such Potential
Holder offers to purchase if the Applicable Rate for the
next succeeding Term is not less than the rate or rates
per annum specified by such Potential Holder.
(ii) Prior to the Submission Deadline on each
Auction Date, each Existing Holder may submit to a
Broker-Dealer by telephone or otherwise information as
to:
(A) The number of Outstanding shares, if any,
of Auctioned VTP held by such Existing Holder that
such Existing Holder desires to continue to hold
without regard to the Applicable Rate for the next
succeeding Term;
(B) The number of Outstanding shares, if any,
of Auctioned VTP that such Existing Holder desires
to continue to hold if the Applicable Rate for the
next Term is not less than the rate per annum
specified by such Existing Holder; and/or
(C) The number of Outstanding shares, if any,
of Auctioned VTP held by such Existing Holder that
such Existing Holder offers to sell without regard
to the Applicable Rate for the next succeeding
Term.
For purposes hereof, the communication to a Broker-Dealer
of the information referred to in this Section 9(b)(ii)
is hereinafter referred to as an "Order" and each
Existing Holder and each Potential Holder placing an
Order is hereinafter referred to as a "Bidder"; an Order
containing the information referred to in clause (A) of
this Section 9(b)(ii) is hereinafter referred to as a
"Hold Order"; an Order containing the information
referred to in clause (B) of this Section 9(b)(ii) is
hereinafter referred to as a "Bid"; and an Order
containing the information referred to in clause (c) of
this Section 9(b)(ii) is hereinafter referred to as a
"Sell Order". In addition, for purposes of these Auction
Procedures, unless the context otherwise requires; all
references to Terms and dividend rates shall be deemed to
refer to such periods and rates for the shares of
Auctioned VTP.
(iii) As a condition to participating in any
Auction, each prospective purchaser of shares of
Auctioned VTP shall be required to sign and deliver one
copy of a Purchaser's Letter to a Broker-Dealer, in which
such prospective purchaser will agree, among other
things, that:
(A) It agrees to be bound by the Auction
Procedures and understands that it has the right to
obtain a copy of the Certificate of Designation
from the Auction Agent or a Broker-Dealer upon
request;
(B) Any Bid or Sell Order placed by it shall
constitute an irrevocable offer by it to purchase
or sell the shares of VTP subject to such Bid or
Sell Order, respectively, or such lesser or greater
number of shares of VTP as it shall be required to
purchase or sell, as a result of such Auction in
accordance with the Auction Procedures, and that if
it fails to place a Bid or Sell Order with respect
to shares of VTP owned by it with a Broker-Dealer
on any Auction Date for such shares or a Broker-
Dealer to which it communicates a Bid or Sell Order
fails to submit such Bid or Sell Order to the
Auction Agent it shall be deemed to have placed a
Hold Order with respect to such shares of VTP as
described in the Auction Procedures. It authorizes
any Broker-Dealer that submits a Bid or Sell Order
as its agent in Auctions to execute contracts for
the purchase or sale of shares of VTP covered by
such Bid or Sell Order. It recognizes that the
payment by such Broker-Dealer for shares of VTP
purchased on its behalf shall not relieve it of any
liability to such Broker-Dealer for payment of such
shares.
(C) Ownership of shares of Auctioned VTP may
be represented by a global certificate registered
in the name of the Securities Depository or its
nominee; that it will not be entitled to receive
any certificate representing shares of Auctioned
VTP; that its ownership of any shares of Auctioned
VTP will be maintained in book-entry form by the
Securities Depository for the account of its Agent
Member, which in turn will maintain records of its
beneficial ownership; that during a STAR Term in
effect for any series of VTP, shares of such series
may only be held or transferred in whole units of
100 shares and it authorizes the Auction Agent to
modify any Order submitted by it so as to give full
effect to such restriction. It will authorize and
instruct its Agent Member to disclose to the
Auction Agent such information concerning its
beneficial ownership of shares of VTP as the
Auction Agent shall request. It understands that a
restrictive legend will be placed on certificates
representing the shares of VTP and stop transfer
instructions will be issued to the transfer agent
and/or registrar, and it will comply with any other
transfer restrictions or other related procedures.
(D) It will sell, transfer or otherwise
dispose of any shares of VTP held by it from time
to time only (1) pursuant to a Bid or Sell Order
placed in an Auction, (2) to or through a Broker-
Dealer or (3) to a person that has signed and
delivered, or caused to be delivered on its behalf,
to the Auction Agent a Purchaser's Letter; provided
that in the case of all transfers (other than
pursuant to Auctions) such purchaser or its Broker-
Dealer or its Agent Member shall advise the Auction
Agent of such transfer.
(iv) During any period for which a STAR Term has
been selected with respect to any series of VTP, Holders
of such series must hold or transfer shares of such
series only in whole units of 100 shares. In any Auction
relating to a STAR Term, the Auction Agent shall be
authorized to conduct the Auction in accordance with the
following procedures: (i) any Hold Order which would
result in an Existing Holder holding a number of shares
not evenly divisible by 100 will be deemed to be a Sell
Order to the extent necessary to reduce such Existing
Holder's shares to whole units of 100 shares, (ii) any
Sell Order which, if accepted, would result in an
Existing Holder holding a number of shares not evenly
divisible by 100 will be deemed to be a Sell Order for
that greater number of shares necessary to result in such
Existing Holder holding shares in whole units of 100
shares and (iii) any Bid Order which, if accepted, would
result in an Existing Holder or a Potential Holder
holding a number of shares not evenly divisible by 100
will be deemed to be a Bid for that lesser number of
shares necessary to result in such Bidder holding shares
in whole units of 100 shares.
(c) Submission of Orders by Broker-Dealers to the
Auction Agent
(i) Each Broker-Dealer shall submit in writing to
the Auction Agent prior to the Submission Deadline on
each Auction Date all Orders obtained by such Broker-
Dealer for the Auction to be conducted on such Auction
Date and specifying with respect to each Order:
(A) the name of the Bidder placing such
Order;
(B) the aggregate number of shares of
Auctioned VTP that are subject to such Order;
(C) to the extent that such Bidder is an
Existing Holder, the number of shares, if any, of
Auctioned VTP subject to any:
(1) Hold Order placed by such Existing
Holder;
(2) Bid placed by such Existing Holder
and the rate specified in such Bid; and
(3) Sell Order placed by such Existing
Holder; and
(D) to the extent that such Bidder is a
Potential Holder, the rate specified in such
Potential Holder's Bid.
(ii) The Auction Agent shall, if necessary, round
any rate specified in any Bid up to the next highest one-
thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the
Outstanding shares of Auctioned VTP held by an Existing
Holder is not submitted to the Auction Agent for any
reason prior to the Submission Deadline, the Auction
Agent shall deem a Hold Order to have been submitted on
behalf of such Existing Holder covering the number of
Outstanding shares of Auctioned VTP held by such Existing
Holder and not subject to any Order submitted to the
Auction Agent.
(iv) If one or more Orders covering in the aggregate
more than the number of Outstanding shares of Auctioned
VTP held by an Existing Holder are submitted to the
Auction Agent, such Orders shall be considered valid as
follows and in the following order of priority:
(A) any Hold Order submitted on behalf of
such Existing Holder shall be considered valid up
to and including the number of Outstanding shares
of Auctioned VTP held by such Existing Holder,
provided that if more than one Hold Order is
submitted on behalf of such Existing Holder and the
number of shares of Auctioned VTP subject to such
Hold Orders exceeds the number of Outstanding
shares of Auctioned VTP held by such Existing
Holder, the number of Outstanding shares of
Auctioned VTP subject to each such Hold Order shall
be reduced pro rata so that such Hold Orders shall
cover the number of Outstanding shares of Auctioned
VTP held by such Existing Holder;
(B) (1) any Bid shall be considered valid up
to and including the excess of the number of
Outstanding shares of Auctioned VTP held by
such Existing Holder over the number of shares
of Auctioned VTP subject to Hold Orders
referred to in clause (A) above;
(2) subject to subclause (1) above, if
more than one Bid with the same rate is
submitted on behalf of such Existing Holder
and the number of Outstanding shares of
Auctioned VTP subject to such Bids is greater
than such excess, the number of shares of
Auctioned VTP subject to each such Bid shall
be reduced pro rata so that such Bids shall
cover the number of shares of Auctioned VTP
equal to such excess;
(3) subject to subclause (1) above, if
more than one Bid with different rates is
submitted on behalf of such Existing Holder,
such Bids shall be considered valid in the
ascending order of their respective rates; and
(4) in any such event, the number, if
any, of such Outstanding shares of Auctioned
VTP subject to Bids not valid under this
clause (B) shall be treated as the subject of
a Bid by a Potential Holder at the rate
therein specified; and
(C) any Sell Order shall be considered valid
up to and including the excess of the number of
Outstanding shares of Auctioned VTP held by such
Existing Holder over the number of shares of
Auctioned VTP subject to Hold Orders referred to in
clause (A) above and valid Bids referred to in
clause (B) above; provided that if more than one
Sell Order is submitted on behalf of any Existing
Holder and the number of shares of Auctioned VTP
subject to such Sell Orders is greater than such
excess, the number of shares of Auctioned VTP
subject to such Sell Orders shall be reduced pro
rata so that such Sell Orders shall cover the
number of shares of Auctioned VTP equal to such
excess. Notwithstanding the foregoing, the Auction
Agent is authorized to conduct any Auction
preceding a STAR Term so as to result in all shares
of any series to which a STAR Term relates being
held only in whole units of 100 shares.
(v) If more than one Bid is submitted on behalf of
any Potential Holder, each Bid submitted shall be deemed
a separate Bid with the rate and number of shares of
Auctioned VTP specified therein.
(d) Determination of Sufficient Clearing Bids, Winning
Bid Rate and Applicable Rate
(i) Not earlier than the Submission Deadline on
each Auction Date, the Auction Agent shall assemble all
Orders submitted or deemed submitted to it by the Broker-
Dealers (each such Order as submitted or deemed submitted
by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order," a "Submitted
Bid," or a "Submitted Sell Order," as the case may be, or
as a "Submitted Order") and shall determine:
(A) the excess of the total number of
Outstanding shares of Auctioned VTP over the number
of shares of Auctioned VTP that are the subject of
Submitted Holder Orders (such excess being
hereinafter referred to as the "Available VTP");
(B) from the Submitted Orders whether the
number of Outstanding shares of Auctioned VTP that
are the subject of Submitted Bids by Potential
Holders specifying one or more rate not higher than
the Maximum Applicable Rate is equal to or exceeds
the number of Outstanding shares of Auctioned VTP,
that are the subject of Submitted Sell Orders
(including the number of shares subject to Bids by
Existing Holders specifying one or more rates
higher than the Maximum Applicable Rate), and if
such excess or such equality exists, such Submitted
Bids are hereinafter referred to collectively as
"Sufficient Clearing Bids"; and
(C) if Sufficient Clearing Bids exist, the
lowest rate specified in the Submitted Bids (the
"Winning Bid Rate") which if:
(1) each Submitted Bid from Existing
Holders specifying such Winning Bid Rate and
all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus
entitling such Existing Holders to continue to
hold the Outstanding shares of Auctioned VTP
that are the subject of such Submitted Bids;
and
(2) each Submitted Bid from Potential
Holders specifying such Winning Bid Rate and
all other Submitted Bids from Potential
Holders specifying lower rates were accepted,
thus entitling such Potential Holders to
purchase the shares of Auctioned VTP that are
the subject of such Submitted Bids;
would result in Existing Holders described in
subclause (1) above continuing to hold an aggregate
number of Outstanding shares of Auctioned VTP that,
when added to the number of shares of Auctioned VTP
of such series to be purchased by such Potential
Holders described in subclause (2) above, would
equal not less than the Available VTP of such
series.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to Section 9(d)(i), the Auction
Agent shall advise the Corporation of the Minimum
Applicable Rate for the next succeeding Term as follows:
(A) if Sufficient Clearing Bids exist, the
Applicable Rate for the next succeeding Term shall
be equal to the Winning Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist,
the Applicable Rate for the next succeeding Term
shall be equal to:
(1) the Maximum Applicable Rate for a
one-year Variable Term in the case of an
Auction occurring subsequent to a Variable
Term; and
(2) the Maximum Applicable Rate for a
STAR Term in the case of Auction occurring
subsequent to a STAR Term; and
(C) if all of the shares of Auctioned VTP are
the subject of Submitted Hold Orders, the
Applicable Rate for the next succeeding Term shall
be equal to the Minimum Applicable Rate on such
Auction Date.
(e) Acceptance and Rejection of Orders and Allocation
of Shares
Based on the determinations made pursuant to Section
9(d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Auction Agent shall take such other
action as set forth below:
(i) If Sufficient Clearing Bids have been made,
subject to the provisions of Section 9(e)(iv), Submitted
Bids and Submitted Sell Orders shall be accepted or
rejected in the following order of priority and all other
Submitted Bids shall be rejected:
(A) the Submitted Sell Orders of each
Existing Holder shall be accepted and the Submitted
Bid of each Existing Holder specifying any rate
that is higher than the Winning Bid Rate shall be
rejected, thus requiring each such Existing Holder
to sell the shares of Auctioned VTP subject to such
Submitted Sell Orders or Submitted Bids;
(B) the Submitted Bids of each Existing
Holder specifying any rate that is lower than the
Winning Bid Rate shall be accepted, thus entitling
each such Existing Holder to continue to hold the
shares of Auctioned vtp subject to such Submitted
Bids;
(C) the Submitted Bids of each Potential
Holder specifying any rate that is lower than the
Winning Bid Rate shall be accepted and such
Potential Holder shall purchase the shares of
Auctioned VTP subject to such Submitted Bids;
(D) the Submitted Bids of each Existing
Holder specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus entitling
such Existing Holder to continue to hold the
Outstanding shares of Auctioned VTP subject to such
Submitted Bids, unless the number of Outstanding
shares of Auction VTP subject to all such Submitted
Bids shall be greater than the number of shares of
Auctioned VTP equal to the excess of the Available
VTP over the number of shares of Auctioned VTP
subject to Submitted Bids described in clauses (B)
and (C) of this Section 9(e)(i) (the "Remaining
Shares"). In such event such Existing Holder shall
be required to sell shares of Auctioned VTP subject
to such Submitted Bids, but only in an amount equal
to the difference between (1) the number of
Outstanding shares of Auctioned VTP then held by
such Existing Holder subject to such Submitted Bids
and (2) the product of (x) the number of Remaining
Shares and (y) a fraction, the numerator of which
shall be the number of Outstanding shares of
Auctioned VTP held by such Existing Holder subject
to such Submitted Bids and the denominator of which
shall be the number of Outstanding shares of
Auctioned VTP subject to such Submitted Bids made
by all such Existing Holders that specified a rate
equal to the Winning Bid Rate; and
(E) the Submitted Bids of each Potential
Holder specifying a rate that is equal to the
Winning Bid Rate shall be accepted, but only in an
amount equal to the product of (i) the difference
between the Available VTP and the number of
Outstanding shares of Auctioned VTP subject to
Submitted Bids described in clauses (B), (C) and
(D) of this Section 9(e)(i) and (ii) a fraction,
the numerator of which shall be the number of
Outstanding shares of Auctioned VTP subject to such
Submitted Bids of such Potential Holder and the
denominator of which shall be the number of
Outstanding shares of Auctioned VTP subject to such
Submitted Bids made by all such Potential Holders
that specified a rate equal to the Winning Bid
Rate.
(ii) Except as described in clause (iii) below, and
subject to the provisions of Section 9(e)(iv), if
Sufficient Clearing Bids have not been made in any
Auction, Submitted Bids and Submitted Sell Orders shall
be accepted or rejected in the following order of
priority and all other Submitted Bids shall be rejected:
(A) the Submitted Bids of each Existing
Holder specifying any rate that is equal to or
lower than the Maximum Applicable Rate shall be
accepted, thus entitling such Existing Holder to
continue to hold the Outstanding shares of
Auctioned VTP subject to such Submitted Bids;
(B) the Submitted Bids of each Potential
Holder specifying any rate that is equal to or
lower than the Maximum applicable rate shall be
accepted and such Potential Holder shall purchase
the number of shares of Auctioned VTP subject to
such Submitted Bids; and
(C) the Submitted Bids of each Existing
Holder specifying any rate that is higher than the
Maximum Applicable Rate shall be rejected, thus
requiring each such Existing Holder to sell the
Outstanding shares of Auctioned VTP subject to such
Submitted Bids, and the Submitted Sell Orders of
each Existing Holder shall be accepted, in both
cases only in an amount equal to the difference
between (1) the number of Outstanding shares of
Auctioned VTP then held by such Existing Holder
subject to such Submitted Bids or Submitted Sell
Orders and (2) the product of (x) the difference
between the Available VTP and the aggregate number
of Outstanding shares of Auctioned VTP subject to
Submitted Bids described in clauses (A) and (B) or
this Section 9(e)(ii) and (y) a fraction, the
numerator of which shall be the number of
Outstanding shares of Auctioned VTP held by such
Existing Holder subject to such Submitted Bids or
Submitted Sell Orders and the denominator of which
shall be the number of Outstanding shares of
Auctioned VTP subject to all such Submitted Bids
and Submitted Sell Orders.
(iii) If Sufficient Clearing Bids do not exist in an
Auction for a series of VTP (i) for a subsequent STAR
Term immediately following a Variable Term or (ii) for a
subsequent Variable Term immediately following a STAR
Term, the Holders of such series will continue to hold
their shares of Auctioned VTP of such series on such
Auction Date with respect to such series irrespective of
any Orders made by Existing Holders or by Potential
Holders.
(iv) If, as a result of the procedures described in
Section 9(b)(iv), 9(c), 9(e)(i) or 9(e)(ii), any Existing
Holder would be entitled or required to sell, or any
Potential Holder would be entitled or required to
purchase, a fraction of a share of Auctioned VTP on any
Auction Date, the Auction Agent shall, in such manner as,
in its sole discretion, it shall determine, round up or
down the number of shares of Auctioned VTP to be sold or
purchased by any Existing Holder or Potential Holder on
such Auction Date so that the number of shares of
Auctioned VTP sold or purchased by each Existing Holder
or Potential Holder on such Auction Date shall be whole
shares of Auctioned VTP, even if such allocation results
in one or more of such Potential Holders not purchasing
shares of Auctioned VTP on such Auction Date or one or
more Existing Holders selling all shares of VTP
previously held by him.
(v) Based on the results of each Auction, the
Auction Agent shall determine the aggregate number of
Outstanding shares of Auctioned VTP to be sold by
Potential Holders and Existing Holders on whose behalf
each Broker-Dealer submitted Bids or Sell Orders, and,
with respect to each Broker-Dealer, to the extent that
such aggregate number of Outstanding shares to be
purchased and such aggregate number of Outstanding shares
to be sold differ, determine to which of the Broker-
Dealer or Broker-Dealers acting for one or more
purchasers such Broker-Dealer shall deliver by book
entry, or from which other Broker-Dealer or Broker-Dealer
acting for one or more sellers such Broker-Dealer shall
receive by book entry, as the case may be, Outstanding
shares of Auctioned VTP.
(f) Failed Transition Auction Procedure
(i) In connection with (A) an Auction relating to
a STAR Term for a series of VTP at the end of a Variable
Term or (B) an Auction relating to a Variable Term for a
series of VTP at the end of a STAR Term, for which
Sufficient Clearing Bids do not exist, the Auction Agent
shall mail, within two Business Days of such Auction, a
written notice of such failed Auction by first-class
mail, postage prepaid, to each Holder with respect to
such series (a "Notice of Failed Transition Auction").
The Corporation shall provide the Auction Agent with
written notice of the information to be contained in the
Notice of Failed Transition Auction at least one day
prior to the date the Notice of Failed Transition Auction
is mailed to such Holders. For the purposes of the
calculation of the date on which notice is given pursuant
to this Section 9(f)(i), a Notice of Failed Transition
Auction shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage
prepaid, to such Holders. Each Notice of Failed
Transition Auction shall include a statement setting
forth (1) the date of such failed Auction, (2) that
Sufficient Clearing Bids did not exist, (3) that all
Submitted Bids were rejected, (4) that all Outstanding
shares deemed to have been the subject of Sell Orders
pursuant to Section 9(b)(ii) hereof were not sold and
shall continue to be held by such Holders of such shares
and (5) that the Applicable Rate for the succeeding Term
with respect to such shares shall be the Maximum
Applicable Rate.
(ii) The Corporation shall be entitled to receive,
from time to time, from the Auction Agent the interest,
if any earned on any monies deposited with the Auction
Agent by Bidders who have submitted successful Bids at
any Auctions, and neither the Holders of such shares nor
the Bidders shall have any claim to any such interest.
With regard to any such funds which are unclaimed by
Holders of such shares at the end of six months from such
deemed sales date, the Auction Agent shall, to the extent
permitted by law and upon demand of the Corporation, pay
over to the relieved of all responsibility to the Holders
of such shares and the Holders of such shares so sold
shall thereafter be entitled to look only to the
Corporation for payment thereof.
(g) Participation in Auctions
Neither the Corporation nor any Affiliate may submit an
Order in any Auction.
(h) Maintenance of Auction Agent
The Corporation shall use its best efforts to maintain an
Auction Agent with respect to each series of VTP pursuant to an
agreement containing terms and conditions no less favorable to the
Holders of the shares of VTP than the terms of the Auction Agent
Agreement.
(i) Miscellaneous
The Board of Directors of the Corporation may interpret
or adjust the provisions of this Section 9 to resolve any
inconsistency or ambiguity, remedy any formal defect or make any
other change or modification which does not adversely affect the
rights of Existing Holders of Auctioned VTP which may be revealed
or arise in connection with the Auction Procedures, and if any
inconsistency, ambiguity or formal defect reflects an incorrect
provision hereof, the Corporation may amend the terms of the VTP
set forth herein, in any manner consistent with the Oklahoma
General Corporation Act.
An Existing Holder (A) may sell, transfer or otherwise
dispose of such shares of Auctioned VTP only pursuant to a Bid or
Sell Order in accordance with the procedures and restrictions
described in this Section 9 or to or through a Broker-Dealer or to
a person that has delivered a signed copy of a Purchaser's Letter
to the Auction Agent, provided that in the case of all dispositions
other than pursuant to Auctions such purchaser or its Broker-Dealer
or its Agent Member advises the Auction Agent of such disposition,
and (B) shall have the ownership of the shares of Auctioned VTP
held by it maintained in book-entry form by the Securities
Depository in the account of its Agent Member, which in turn will
maintain records of such Existing Holder's beneficial ownership.
(j) Headings of Subdivisions
The headings of the various subdivisions of this Section
9 are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
Division B - Common Stock. Each share of Common Stock of
the Corporation shall be equal in all respects to each other share.
The holders of Common Stock shall be entitled to one vote for each
share of Common Stock held with respect to all matters as to which
the Common Stock is entitled to be voted. Except as otherwise
required by law, the holders of Common Stock shall vote together
with the holders of shares of Preferred Stock, if any have been
issued, and all series thereof who are entitled to vote, and not
separately by class.
Subject to the preferential and other dividend rights, if
any, applicable to the shares of Preferred Stock, the holders of
the Common Stock shall be entitled to receive such dividends
(payable in cash, stock or otherwise) as may be declared on the
Common Stock by the Board of Directors at any time or from time to
time out of any funds legally available therefor.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, after distribution in
full of the preferential and/or other amounts to be distributed to
the holders of the shares of Preferred Stock, if any shall have
been issued, the holders of Common Stock shall be entitled to
receive all of the remaining assets of the Corporation available
for distribution to its shareholders, ratably in proportion to the
number of shares of Common Stock held by them. A liquidation,
dissolution or winding up of the Corporation, as such terms are
used in this subparagraph, shall not be deemed to be occasioned by
or to include any consolidation or merger of the Corporation with
or into any other corporation or corporations or a sale, lease, or
conveyance of all or a part of the assets of the Corporation or any
liquidation, dissolution and/or winding up of the Corporation in
connection therewith.
ARTICLE SIX
The amount of stated capital with which the corporation
will begin business is $500.00, which has been fully paid in.
ARTICLE SEVEN
The number and class of shares to be allotted by the
corporation before it shall begin business and the consideration to
be received by the corporation therefor, are:
Consideration to be
Class of Shares Number of Shares Received Therefor
Common 200 $500.00
ARTICLE EIGHT
The number of Directors which shall constitute the whole
Board shall be not more than twenty (20) and not less than three
(3). The Board of Directors shall from time to time by a vote of
a majority of the Directors then in office fix within the maximum
and minimum the number of directors which all constitute the Board.
The Board of Directors shall be divided into three classes as
nearly equal in number as possible with the term of office of one
class expiring each year, and that at each Annual Meeting of
Shareholders, the successors to the class of Directors whose terms
shall then expire shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Directors shall
be chosen by a plurality of votes cast in an election for
Directors.
ARTICLE NINE
For the regulation of the internal affairs of the
corporation, it is provided as follows:
Authority to adopt, amend, alter, repeal or readopt
bylaws for the government of the corporation is, subject to the
right of the shareholders to alter or repeal such bylaws, hereby
vested in the board of directors.
No right to dissent shall exist in behalf of any
shareholders as to all or any corporate action if such action be
approved by the vote or written consent of the holders of at least
ninety percent (90%) of all outstanding shares of the corporation,
or in behalf of the holders of the shares of any class or classes
if such corporation action be approved by the written consent of
the holders of at least ninety percent (90%) of all outstanding
shares and of at least three-fourths (3/4) of the shares of such
class or classes.
ARTICLE TEN
Section 1. Vote Required for Certain Business
Combinations.
A. Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law, this Certificate
of Incorporation or otherwise, and except as otherwise expressly
provided in Section 2 of this Article Ten:
(i) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with (a) any
Interested Shareholder (as hereinafter defined) or (b)
any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger or
consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested
Shareholder or any Affiliate of any Interested
Shareholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as
hereinafter defined) of $1,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or any
Subsidiary (other than pursuant to any stock option or
similar plans now in effect or hereafter adopted by the
Corporation and approved by vote of the shareholders of
the Corporation solicited substantially in accordance
with the rules and regulations then in effect under
Section 14 of the Securities Exchange Act of 1934) to any
Interested Shareholder or any Affiliate of any Interested
Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate
Fair Market Value of $2,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by
or on behalf of any Interested Shareholder or any
Affiliate of any Interested Shareholder; or
(v) any reclassification of securities (including
any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other
transaction with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise
involving an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Shareholder or any
Affiliate of any Interested Shareholder;
shall require the affirmative vote of the holders of at least 80%
of the voting power of the then outstanding shares of capital stock
of the Corporation entitled to vote generally in the election of
directors (the "Voting Stock"), including the holders of at least
80% of the outstanding Common Stock not held by Interested
Shareholders, voting together as a single class. Such affirmative
vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or
in any agreement with any national securities exchange or
otherwise.
B. Definition of "Business Combination". The term
"Business Combination" as used in this Article Ten shall mean any
transaction that is referred to in any one or more of clauses (i)
through (v) of paragraph A of this Section 1.
Section 2. When Higher Vote is Not Required. The
provisions of Section 1 of this Article Ten shall not be applicable
to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required
by law and any other provision of this Certificate of
Incorporation, if all of the conditions specified in either of the
following paragraphs A and B are met:
A. Approval by Continuing Directors. The Business
Combination shall have been approved by three-fourths (3/4) of the
Continuing Directors (as hereinafter defined).
B. Price and Procedure Requirements. All of the
following conditions shall have been met:
(i) The aggregate amount of cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be
received per share by holders of Common Stock in such
Business Combination shall be at least equal to the
highest of the following:
(a) (if applicable) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid
by the Interested Shareholder for any shares of
Common Stock acquired by it (1) within the two-year
period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested
Shareholder (the date of such transaction being
referred to herein as the "Determination Date"),
whichever is higher; or
(b) the Fair Market Value per share of Common
Stock on the Announcement Date or the Determination
Date, whichever is higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to
be received per share by holders of shares of any other
class of outstanding Voting Stock shall be at least equal
to the highest of the following (it being intended that
the requirements of this paragraph B(ii) shall be
required to be met with respect to every class of
outstanding Voting Stock, whether or not the Interested
Shareholder has previously acquired any shares of a
particular class of Voting Stock):
(a) (if applicable) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid
by the Interested Shareholder for any shares of
such class of Voting Stock acquired by it (1)
within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in
which it became an Interested Shareholder,
whichever is higher;
(b) (if applicable) the highest preferential
amount per share to which the holders of shares of
such class of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; or
(c) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or
on the Determination Date, whichever is higher.
(iii) The consideration to be received by holders of
a particular class of outstanding Voting Stock (including
Common Stock) shall be in cash or in the same form as the
Interested Shareholder has previously paid for the
largest number of shares of such class of Voting Stock.
(iv) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation of
such Business Combination: (a) except as approved by
three-fourths (3/4) of the Continuing Directors, there
shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding Preferred
Stock; (b) there shall have been (1) no reduction in the
annual rate of dividends, if any, paid on the Common
Stock (except as necessary to reflect any subdivision of
the Common Stock), except as approved by three-fourths
(3/4) of the Continuing Directors, and (2) no failure to
increase the annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number
of outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by
three-fourths (3/4) of the Continuing Directors; and (c)
such Interested Shareholder shall have not become the
beneficial owner of any additional shares of Voting Stock
except as part of the transaction which results in such
Interested Shareholder becoming an Interested
Shareholder.
(v) After such Interested Shareholder has become an
Interested Shareholder, such Interested Shareholder shall
not have received the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of
or in connection with such Business Combination or
otherwise.
(vi) A proxy or information statement, describing
the proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and
the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations)
shall be prepared and mailed by the Corporation, at the
expense of the Interested Shareholder, to public
shareholders of the Corporation at least 30 days prior to
the meeting at which such Business Combination will be
voted upon (whether or not such proxy or information
statement is required to be mailed pursuant to such Act
or subsequent provisions).
If the conditions of paragraph B(i)-(v) of this Section
have been met, then the provisions of Section 1 of this Article Ten
shall not be applicable as to the approval of such Business
Combination. If any of such conditions have not been met, then
Section 1 of this Article Ten shall be applicable.
Section 3. Certain Definitions. For the purposes of
this Article Ten:
A. A "person" shall mean any individual, firm,
corporation or other entity.
B. "Interested Shareholder" shall mean any person (other
than the Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding
Voting Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the
date in question was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the
then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock that were at any time
within the two-year period immediately prior to the date
in question owned beneficially by any Interested
Shareholder, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting
Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) owns beneficially,
directly or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are owned beneficially, directly or
indirectly, by any other person with which such person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of
Voting Stock.
D. For the purposes of determining whether a person is
an Interested Shareholder pursuant to paragraph B of this Section
3, the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of paragraph
C of this Section 3 but shall not include any other shares of
Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1984.
F. "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Interested Shareholder set forth in
paragraph B of this Section 3, the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
G. "Continuing Director" means any member of the Board
of Directors of the Corporation (the "Board") who is unaffiliated
with the Interested Shareholder and was a member of the Board prior
to the time that the Interested Shareholder became an Interested
Shareholder, and any successor of a Continuing Director who is
unaffiliated with the Interested Shareholder and is recommended to
succeed a Continuing Director by a majority of Continuing Directors
then on the Board.
H. "Fair Market Value" means: (i) in the case of stock,
the highest closing sale price during the 30-day period ending on
the date in question of a share of such stock on the Composite Tape
for New York Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or,
if such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day
period ending on the date in question on the National Association
of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the
fair market value on the date in question of a share of such stock
as determined by the Board in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of such
property on the date in question as determined by the Board in good
faith.
I. In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be
received" as used in paragraphs B(i) and (ii) of Section 2 of this
Article Ten shall include the shares of Common Stock and/or the
shares of any other class of outstanding Voting Stock retained by
the holders of such shares.
Section 4. Powers of Continuing Directors. The
Continuing Directors of the Corporation shall have the power and
duty to determine for the purposes of this Article Ten, on the
basis of information known to them after reasonable inquiry, (A)
whether a person is an Interested Shareholder, (B) the number of
shares of Voting Stock owned beneficially by any person, (C)
whether a person is an Affiliate or Associate of another and (D)
whether the assets that are the subject of any Business Combination
have an aggregate Fair Market Value of $1,000,000 or more, or the
consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business
Combination has an aggregate Fair Market Value of $2,000,000 or
more.
ARTICLE ELEVEN
Section 1. Prevention of "Greenmail". Any direct or
indirect purchase or other acquisition by the Corporation of any
Equity Security (as hereinafter defined) of any class from any
Interested Securityholder (as hereinafter defined) who has
beneficially owned such securities for less than two years prior to
the date of such purchase or any agreement in respect thereof
shall, except as hereinafter expressly provided, require the
affirmative vote of the holders of at least a majority of the
voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(the "Voting Stock"), voting together as a single class (it being
understood that for the purposes of this Article Eleven, each share
of the Voting Stock shall have the number of votes granted to it
pursuant to Article Five of this Certificate of Incorporation).
Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be
specified, by law or any agreement of any national securities
exchange, or otherwise, but no such affirmative vote shall be
required with respect to any purchase or other acquisition of
securities made as part of a tender or exchange offer by the
Corporation to purchase securities of the same class made on the
same terms to all holders of such securities and complying with the
applicable requirements of the Securities Exchange Act of 1934 and
the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations).
Section 2. Certain Definitions. For the purposes of
this Article Eleven:
A. A "person" shall mean any individual, firm,
corporation or other entity.
B. "Interested Securityholder" shall mean any person
(other than the corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of 5% or more of the class of securities to be acquired;
or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the
date in question was the beneficial owner, directly or
indirectly, of 5% or more of the class of securities to
be acquired; or
(iii) is an assignee of or has otherwise succeeded
to any shares of the class of securities to be acquired
which were at any time within the two-year period
immediately prior to the date in question beneficially
owned by an Interested Security-holder, if such
assignment or succession shall have occurred in the
course of a transaction or transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
C. A person shall be a "beneficial owner" of any
security of any class of the Corporation:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns,
directly or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (b) any right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any security
of any class of the Corporation.
D. For the purposes of determining whether a person is
an "Interested Securityholder" pursuant to paragraph B of this
Section 2, the relevant class of securities outstanding shall be
deemed to comprise all such securities deemed owned through
application of paragraph C of this Section 2, but shall not include
other securities of such class which may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in
effect on January 1, 1985.
F. "Equity Security" shall have the meaning ascribed to
such term in Section 3(a)(11) of the Securities Exchange Act of
1934, as in effect on January 1, 1985.
ARTICLE TWELVE
Notwithstanding any other provision of this Certificate
of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified
by law, this Certificate of Incorporation or the By-Laws of the
Corporation), the affirmative vote of the holders of 80% or more of
the voting power of the shares of the then outstanding Voting Stock
(as defined in Article Ten of this Certificate of Incorporation),
voting together as a single class, shall be required to amend or
repeal, or adopt any provisions inconsistent with, Article Ten and
Article Eleven of this Certificate of Incorporation; provided,
however, that if not less than three-fourths (3/4) of the entire
Board of Directors shall adopt a resolution setting forth a
proposed amendment hereto and directing that it be submitted to a
vote at a meeting of shareholders, then such amendment shall be
approved upon receiving the affirmative vote of a majority of all
of the votes entitled to be cast by the outstanding capital stock
of the Corporation.
ARTICLE THIRTEEN
No director of the Corporation shall be liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or which he knows to be a violation
of law, (iii) under Section 1053 of the Oklahoma General
Corporation Act, or (iv) for any transaction from which the
director derived an improper personal benefit.
THIRD: that such restatement was duly adopted in
accordance with the provisions of Section 1080 of the Oklahoma
General Corporation act and merely restates and integrates, but
does not further amend, the corporation's certificate of
incorporation as heretofore amended and supplemented, and there is
no discrepancy between those provisions and the provisions of this
restated certificate of incorporation.
IN WITNESS WHEREOF, the corporation has caused this
Restated Certificate of Incorporation to be signed by its President
and Secretary this 1st day of May, 1991.
E. DEAN WERRIES
E. Dean Werries, President
ATTEST:
JAMES W. CLARK
James W. Clark, Secretary