-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3LPckjJ62gea46RtVRfae/pvTKzN9PRc/YbaMaX9cOvshElGb3xqCvP8QuQoXU0 AWX5x9agqcGUyKA5Vl07RQ== 0000909334-96-000136.txt : 19960904 0000909334-96-000136.hdr.sgml : 19960904 ACCESSION NUMBER: 0000909334-96-000136 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960903 EFFECTIVENESS DATE: 19960922 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEMING COMPANIES INC /OK/ CENTRAL INDEX KEY: 0000352949 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 480222760 STATE OF INCORPORATION: OK FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-11317 FILM NUMBER: 96625219 BUSINESS ADDRESS: STREET 1: 6301 WATERFORD BLVD STREET 2: P O BOX 26647 CITY: OKLAHOMA CITY STATE: OK ZIP: 73126 BUSINESS PHONE: 4058407200 S-8 1 As filed with the Securities and Registration No. _____ Exchange Commission on September 3, 1996 FORM S-8 Registration Statement under the Securities Act of 1933 FLEMING COMPANIES, INC. (Exact name of registrant as specified in its charter) Oklahoma 48-0222760 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 6301 Waterford Boulevard P. O. Box 26647 Oklahoma City, Oklahoma 73126-0647 (Address of Principal Executive Office) (Zip Code) FLEMING COMPANIES, INC. 1996 STOCK INCENTIVE PLAN (Full title of the plan) Copies to: David R. Almond Lenore T. Graham, Esq. Senior Vice President, General McAfee & Taft Counsel and Secretary A Professional Corporation Fleming Companies, Inc. Tenth Floor 6301 Waterford Boulevard Two Leadership Square P. O. Box 26647 Oklahoma City, Oklahoma 73102 Oklahoma City, Oklahoma 73126-0647 (405) 235-9621 (Name and address of agent for service) 405/840-7200 (Telephone number, including area code, of agent for service) Calculation of Registration Fee - ------------------------------------------------------------------ Proposed Proposed Title of maximum maximum securities Amount offering aggregate Amount of to be to be price offering registra- registered registered per unit(1) price(1) tion fee - ------------------------------------------------------------------ Common Stock, 1,200,000 (3) $15.57 $18,675,000 $6,440 $2.50 par value (2) - ------------------------------------------------------------------ (1) Estimated pursuant to Rules 457(c) and (h) of the Securities Act of 1933, as amended, solely for the purpose of calculating the registration fee and based upon the average of the high and low prices of Fleming Companies, Inc. Common Stock as reported by the New York Stock Exchange on August 27, 1996. (2) Each share of Common Stock also includes the associated Common Stock purchase rights (the "Rights"). Prior to the occurrence of certain events, the Rights will not be exercisable or evidenced separately from the Common Stock. No additional consideration will be received for the Rights. (3) The number of shares of Common Stock stated above is the aggregate number of such shares which may be issued on the exercise of options or the award of restricted stock under the Fleming Companies, Inc. 1996 Stock Incentive Plan (the "Plan") registered under this Registration Statement. The maximum number of shares which may be issued under the Plan cannot presently be determined since adjustments in the number of shares may be made in the event of stock splits, stock dividends, or other changes in the corporate structure or shares as specified in the Plan. Accordingly, this Registration Statement covers, in addition to the number of shares of Common Stock stated above, an indeterminate number of shares, which by reason of any of such event may become subject to issuance under the Plan. PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The registrant incorporates herein by reference the fol- lowing documents filed with the Securities and Exchange Commission (the "Commission"): (a) The registrant's Annual Report on Form 10-K for the fiscal year ended December 30, 1995 filed with the Commission on March 29, 1996, and as amended on Form 10-K/A on April 15, 1996. (b) The registrant's Quarterly Reports on Form 10-Q for the period ended April 20, 1996 filed with the Commission on May 31, 1996, and the period ended July 13, 1996, filed with the Commission on August 27, 1996. (c) The Registrant's current reports on Form 8-K dated January 16, 1996, March 20, 1996, March 21, 1996, March 28, 1996 and June 24, 1996, respectively. (d) The description of Common Stock contained in the Registrant's Registration Statement on Form 8-A, as amended, filed under the Exchange Act (File No. 1-8140). All reports hereafter filed by the registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all of the shares of the registrant's Common Stock covered by this registration statement have been sold or which de-registers all such shares then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. None. Item 6. Indemnification of Directors and Officers. Section 1031 of the Oklahoma General Corporation Act, under which act the registrant is incorporated, authorizes the indemnification of officers and directors in certain circum- stances. Article Thirteenth of the registrant's Certificate of Incorporation, as well as Article 8 of the registrant's Bylaws, provide indemnification of directors, officers and agents to the extent permitted by Oklahoma General Corporation Act. These provisions may be sufficiently broad to indemnify such persons for liabilities under the Securities Act of 1933. In addition, Article Thirteenth of the registrant's Certificate of Incorpora- tion permits the exculpation of a director for monetary damages for breach of fiduciary duty as a director. In addition, the registrant maintains insurance policies which insure its officers and directors against certain liabilities. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. 4.1 Certificate of Incorporation 4.2 Bylaws 4.3 Rights Agreement dated as of February 27, 1996 between Fleming Companies, Inc. and Liberty Bank and Trust Company of Oklahoma City, N.A. effective as of the close of business on July 6, 1996 which includes as Exhibit A the Certificate of Designations and Exhibit B to form of Right Certificate (incorporated by reference to Exhibit 4.0 to Form 8-K dated February 27, 1996). 23.1 Consent of Deloitte & Touche LLP 23.2 Consent of McAfee & Taft A Professional Corporation. 99 1996 Fleming Companies, Inc. Stock Option Plan dated February 27, 1996 (incorporated by reference to Exhibit A to Proxy Statement for year ended December 30, 1995). Item 9. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration state- ment (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the high or low end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registra- tion statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amend- ment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the fore- going provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefor, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the require- ments for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City, State of Oklahoma on September 3, 1996. FLEMING COMPANIES, INC. By ROBERT E. STAUTH Robert E. Stauth, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date ROBERT E. STAUTH Chairman, Chief Executive ] Robert E. Stauth Officer and Director ] ] HARRY L. WINN, JR. Executive Vice President ] Harry L. Winn, Jr. and Chief Financial Officer ] ] KEVIN J. TWOMEY Vice President and ] Kevin J. Twomey Controller ] ] ARCHIE R. DYKES Director ] Archie R. Dykes ] ] CAROL B. HALLETT Director ] Carol B. Hallett ] ] LAURENCE M. JONES Director ] September 3, 1996 Laurence M. Jones ] ] EDWARD C. JOULLIAN III Director ] Edward C. Joullian III ] ] HOWARD H. LEACH Director ] Howard H. Leach ] ] ] John A. McMillan Director ] ] GUY A. OSBORN Director ] Guy A. Osborn ] ] ] Jack W. Baker Director ] INDEX TO EXHIBITS
Exhibit No. - ------- 4.1 Certificate of Incorporation Filed herewith electronically 4.2 Bylaws Filed herewith electronically 23.1 Consent of Deloitte & Touche LLP Filed herewith electronically 23.2 Consent of McAfee & Taft A Filed herewith Professional Corporation electronically
EX-4.1 2 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 EX-4.2 3 BYLAWS OF FLEMING COMPANIES, INC. ARTICLE I Offices Section 1.1. Principal Office. The principal office of Fleming Companies, Inc. (the "Corporation") shall be located at 6301 Waterford Boulevard, Oklahoma City, Oklahoma. Section 1.2. Other Offices. The Corporation may also have offices at such other places both within or without the State of Oklahoma as the Board of Directors may from time to time determine. ARTICLE II Meetings of Shareholders Section 2.1. Annual Meeting. The annual meeting of the shareholders shall be held on a date designated by the Board of Directors, which shall be within six months next following the end of the fiscal year of the Corporation, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. Section 2.2. Special Meetings. Except as otherwise prescribed by statute, special meetings of the shareholders for any purpose, may be called by the Chairman and shall be called by the Secretary at the request in writing of a majority of the Board of Directors. Business transactions at any special meeting shall be limited to the general objects stated in the call. Section 2.3. Place of Meeting. Each annual meeting of the shareholders for the election of directors shall be held at the principal office of the Corporation in Oklahoma City, Oklahoma unless the Board of Directors shall by resolution, adopted at least 60 days prior to the date of such meeting, designate any other place, within or without the State of Oklahoma, at the place of such meeting. Meetings of shareholders for any other purpose may be held at such place, within or without the State of Oklahoma, and at such time as shall be determined by the Board of Directors or the Chairman, such time to be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2.4. Notice of Meeting. Written or printed notice stating the place and time of each annual or special meeting of the shareholders entitled to vote and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 days nor more than 60 days before the date of the meeting. (See also Article IV). Section 2.5. Shareholder List. A share ledger in which the names of the shareholders are arranged alphabetically by classes of shares, if any, shall be maintained and open for inspection at the office of the Corporation in Oklahoma City if the meeting is to be held in Oklahoma City, or at the place of the meeting if the meeting is to be held outside of Oklahoma City, during ordinary business hours, for a period of at least 10 days prior to the meeting. The list shall also be available at the time and place of the meeting, during the whole time of the meeting, and may be inspected by any shareholder who is present. Such access to the shareholder list shall be restricted to those shareholders whose purpose in viewing the list is germane to the meeting. Section 2.6. Quorum. The holders of voting stock of the Corporation having a majority of the voting power thereat, present in person or represented by proxy, shall be requisite for, and shall constitute, a quorum at all meetings of the shareholders of the Corporation for the transaction of business, except as otherwise provided by statute or the Corporation's Certificate of Incorporation or these Bylaws. Section 2.7. Proxies. At every meeting of the shareholders, each shareholder having the right to vote thereat shall be entitled to vote in person or by proxy. Such proxy shall be appointed by an instrument in writing subscribed by such shareholder and bearing a date not more than three years prior to such meeting, unless such proxy provides for a longer period; and it shall be filed with the Secretary of the Corporation before, or at the time of, the meeting. Section 2.8. Voting. At every meeting of shareholders, except as otherwise provided by law, each shareholder shall be entitled to one vote for each share of stock of the Corporation entitled to vote thereat and registered in the name of such shareholder on the books of the Corporation on the pertinent record date. When a quorum is present at any meeting of the shareholders, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which, due to a provision of the statutes or the Corporation's Certificate of Incorporation or these Bylaws, a different vote is required, in which case such provision shall govern and control the decision at such question. Section 2.9. Record Date. (a) In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment or any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action other than shareholder action by written consent, the Board of Directors may fix a record date, which shall not precede the date such record date is fixed and shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any such other action. If no record date is fixed, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given. The record date for any other purpose other than shareholder action by written consent shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the shareholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any shareholder of record seeking to have the shareholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Oklahoma, its principal place of business, or any officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Section 2.10. Nominations of Directors. Only persons who are nominated in accordance with the procedures set forth in the Bylaws shall be eligible to serve as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of shareholders (a) by or at the direction of the Board of Directors or (b) by any shareholder of the Corporation who is a shareholder of record at the time of giving of notice provided for in this Section 2.10, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section 2.10. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting or such public disclosure was made. Such shareholder's notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Corporation's books, of such shareholder and (ii) the class and number of shares of the Corporation which are beneficially owned by such shareholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a shareholder's notice of nomination which pertains to the nominee. No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.10. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.10, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section. Section 2.11. Business. At any meeting of the shareholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any shareholder of the Corporation who is a shareholder of record at the time of giving of the notice provided for in this Section 2.11, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this section 2.11. For business to be properly brought before a shareholder meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be received no later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the shareholder and (d) any material interest of the shareholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at a shareholder meeting except in accordance with the procedures set forth in this Section 2.11. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of the Bylaws, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.11, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section. ARTICLE III Directors Section 3.1. Number and Election. The property and business of the Corporation shall be managed by its Board of Directors. The number of directors which shall constitute the whole Board shall be not more than 20 and not less than three. 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 to constitute the Board. Except as provided in Section 3.2 of these Bylaws, the directors shall be elected at the annual meeting of shareholders, or at any adjournment thereof, and each director shall be elected and shall hold office in the manner described in Section 3.12 hereof. Directors need not be shareholders of the Corporation. Section 3.2. Resignations and Vacancies. Any director may resign at any time by giving written notice to the Chairman or Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If, at any time other than the annual meeting of shareholders, any vacancy occurs in the Board of Directors caused by resignation, death, retirement, disqualification or removal from office of any director or otherwise, or any new directorship is created by an increase in the number of directors pursuant to Section 3.1 of the Bylaws, a majority of the directors then in office, though less than a quorum, may choose a successor, or fill the newly created directorship, and the director so chosen shall hold office until the expiration of the term of office of the class of directors to which such director is appointed and until a successor shall be duly elected and qualified, unless sooner displaced. Section 3.3. Place of Meetings. Meetings of the Board of Directors may be held at such place or places, within or without the State of Oklahoma, as may be designated by the person or persons calling such meetings. Section 3.4. Annual Meeting. A meeting of the Board of Directors, to be known as the annual meeting, shall be held following and on the same day as the meeting of shareholders at which such Board of Directors is elected. This meeting shall be held for the purpose of electing the officers of the Corporation and for transacting any other business that may properly come before the meeting. No notice of this annual meeting other than these Bylaws shall be necessary in order to legally constitute the meeting, provided a quorum shall be present. Section 3.5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times as the Chairman or the Board of Directors may from time to time determine. Section 3.6. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman and shall be called by the Secretary at the request of any two directors, to be held at such time and place, either within or without the State of Oklahoma, as shall be designated by the call and specified in the notice of such meeting; and notice thereof shall be given as provided in Section 3.7 of these Bylaws. Section 3.7. Notice. Except as otherwise prescribed by statute, written notice of the time and place of each regular or special meeting of the Board of Directors shall be given at least two days prior to the time of holding the meeting. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director expressly objects to the transaction of any business because the meeting is not lawfully called or convened and such objection is made prior to the transaction of such business. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in any notice, or waiver of notice, of such special meeting except that notice shall be given of any proposed amendment by these Bylaws or with respect to any other matter where notice is required by statute. (See also Article IV). Section 3.8. Quorum. At each meeting of the Board of Directors, the presence of not less than a majority of the whole board shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or the Corporation's Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.9. Committees of Directors. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of two or more directors of the Corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business or affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any such committee, who may replace any absent or disqualified member thereof. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required by the Board. Section 3.10. Fees and Compensation of Directors. Directors may receive stated salary for their services as such; or, by resolution of the Board of Directors, a fixed fee, with or without expenses of attendance, may be allowed for attendance at each regular or special meeting of the Board. Members of the board shall be allowed their reasonable traveling expenses when actually engaged in the business of the Corporation, to be audited and allowed as in other cases of demands against the Corporation. Members of standing or special committees may be allowed like fees and expenses for attending committee meetings. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 3.11. Action Without a Meeting. Any action which might be taken at a meeting of the Board of Directors may be taken without a meeting if a record or memorandum thereof be made in writing and signed by all the members of the board, and such writing is filed with the minutes of the proceedings of the board. Section 3.12. Classes of Directors, and Terms of Office. The Board of Directors shall be divided into three classes as nearly as equal in number as possible with the term of office of one class expiring each year. Directors shall be chosen by a plurality of votes cast in an election for directors. The class of directors elected at the annual meeting of shareholders shall be elected for three-year terms. When the number of directors is changed, any newly created directorship or any decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as possible. When the number of directors is increased by the Board of Directors, there shall be no classification of the additional directors until the next annual meeting of shareholders. Subject to the foregoing, 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. ARTICLE IV Notices Section 4.1. Manner of Notice. Whenever under the provisions of the statutes or the Corporation's Certificate of Incorporation or these Bylaws notice is required to be given to any director, member of any committee designated by the Board of Directors pursuant to authority conferred by Section 3.9 of these Bylaws, or shareholder, it shall be given in writing by depositing it, in a sealed envelope, in the mails, postage prepaid, addressed (or by delivering it to a telegraph company, charges prepaid, for transmission) to such director, member or shareholder either at the address of such director, member or shareholder as it appears on the books of the Corporation or, in the case of such a director or member, at his business address; and such notice shall be deemed to be given at the time when it is thus deposited in the mails (or delivered to the telegraph company). Section 4.2. Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or the Corporation's Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Any shareholder or director who attends any meeting, annual, regular or special, shall be conclusively presumed to have waived notice thereof, except where such shareholder or director expressly objects to the transaction of any business because the meeting is not lawfully called or convened and such objection is made prior to the transaction of such business. ARTICLE V Officers Section 5.1. Officers and Official Positions. The Board of Directors may elect a Chairman of the Board. The office of Chairman of the Board may be named Chairman if so designated by the Board of Directors. The Board may elect a President, one or more Vice Presidents, a Secretary, a Treasurer, a Controller, such Assistant Secretaries, Assistant Treasurers, and Assistant Controllers and such other officers as the Board of Directors shall determine. Any two or more offices may be held by the same person. None of the officers need be a director or a shareholder of the Corporation or a resident of the State of Oklahoma. Section 5.2. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors at the annual meeting of the Board. If the election of officers shall not be held at such meeting of the board, such election shall be held at a regular or special meeting of the Board of Directors as soon thereafter as may be convenient. Each officer shall hold office until a successor is chosen and qualified or until death, or until such officer shall resign, or shall have been removed in the manner hereinafter provided. Section 5.3. Removal and Resignation. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office at any regular or special meeting of the Board; but such removal shall be without prejudice to the contract rights, if any, of such person so removed. Any officer may resign at any time by giving written notice to the Chairman or Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5.4. Vacancies. A vacancy in any office because of death, resignation, removal, or any other cause may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting of the Board. Section 5.5. Chief Executive Officer. If the Board of Directors has elected a Chairman, it may designate the Chairman as the Chief Executive Officer of the Corporation. If no Chairman has been elected, or in the Chairman's absence or inability to act or if no such designation has been made by the Board of Directors, the President or such other designee as the Board of Directors shall determine shall act as the Chief Executive Officer of the Corporation. The Chief Executive Officer shall (i) have the overall supervision of the business of the Corporation and shall direct the affairs and policies of the Corporation, subject to any directions which may be given by the Board of Directors, (ii) shall have authority to delegate special powers and duties to specified officers, so long as such designations shall not be inconsistent with the statutes or the Corporation's Certificate of Incorporation or these Bylaws or action of the Board of Directors and (iii) shall in general have all other powers and shall perform all other duties incident to the chief executive officer of a corporation and such other powers and duties as may be prescribed by the Board of Directors from time to time. The Chairman, if one has been elected, shall preside at all meetings of the shareholders, and of the Board of Directors. The Chairman may sign with the Secretary or an Assistant Secretary, certificates for shares of stock of the Corporation, the issuance of which shall have been duly authorized by the Board of Directors. Section 5.6. President. (a) If the Board of Directors has elected a Chairman and designated such officer as the Chief Executive Officer of the Corporation, the President shall be subject to the control of the Board of Directors and the Chairman, and shall have such powers and perform such duties as from time to time may be assigned by the Board of Directors or the Chairman. (b) If the Board of Directors has not elected a Chairman, or, if one has been elected and has not been designated the Chief Executive Officer of the Corporation, then the President or such other person as may be designated by the Board of Directors shall be the Chief Executive Officer of the Corporation with the powers and duties provided in Section 5.5 of these Bylaws. (c) In any event, the President shall have power to execute, and shall execute, deeds, mortgages, bonds, contracts or other instruments of the corporation except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. The President may sign with the Secretary or an Assistant Secretary, certificates for shares of stock of the Corporation, the issuance of which shall have been duly authorized by the Board of Directors, and shall vote, or give a proxy to any other person to vote, all shares of stock of any other corporation standing in the name of the Corporation. Section 5.7. Vice Presidents. In the absence of the President, or in the event of his inability or refusal to act, the Vice President designated by the Board of Directors or the Chief Executive Officer, shall perform all duties of the President and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties, not inconsistent with the statutes or the Corporation's Certificate of Incorporation or these Bylaws or action of the Board of Directors, as from time to time may be prescribed for them, respectively, by the Chief Executive Officer. The Board of Directors may, from time to time, designate certain of the Vice Presidents as Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents or such other designation as the Board of Directors deems appropriate. The duties and areas of responsibility of the various Vice Presidents shall be determined by the Chairman and the Board of Directors, to the extent not inconsistent with applicable statutes or these Bylaws. Section 5.8. Secretary. The Secretary shall: (a) keep the minutes of the meetings of the shareholders, the Board of Directors and committees of directors, in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) have charge of the corporate records and of the seal of the Corporation; (d) affix the seal of the Corporation or a facsimile thereof, or cause it to be affixed, to all certificates for shares prior to the issuance thereof and to all documents the execution of which on behalf of the Corporation under its seal is duly authorized by the Board of Directors or otherwise in accordance with the provisions of these Bylaws; (e) keep a register of the post office address of each shareholder, director and committee member, which shall from time to time be furnished to the Secretary by such shareholder, director or member; (f) sign with the Chairman or President certificates for shares of stock of the Corporation, the issuance of which shall have been duly authorized by resolution of the Board of Directors; (g) have general charge of the stock transfer books of the Corporation; and (h) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned by the Chairman, the President or by the Board of Directors. The Secretary may delegate such details of the performance of duties of the office of Secretary as may be appropriate in the exercise of reasonable care to one or more persons, but shall not thereby be relieved of responsibility for the performance of such duties. Section 5.9. Chief Financial Officer. The Chief Financial Officer shall be a Vice President, elected and designated as Chief Financial Officer, who shall: (a) be responsible to the Board of Directors for the receipt, custody and disbursement of all funds and securities of the Corporation; (b) receive and give receipts for moneys due and payable to the Corporation from any source whatsoever and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositories as shall from time to time be selected in accordance with the provisions of Section 6.4 of these Bylaws; (c) disburse the funds of the Corporation as ordered by the Board of Directors or the Chief Executive Officer or as required in the ordinary conduct of the business of the Corporation; (d) render to the Chief Executive Officer or the Board of Directors, upon request, an account of all transactions as Chief Financial Officer and on the financial condition of the Corporation; and (e) in general, perform all the duties incident to the office of Chief Financial Officer and such other duties as from time to time may be assigned by the Chairman, the President, the Board of Directors or these Bylaws. In the event there be no Chief Financial Officer, the Board of Directors may designate any officer to perform the duties of the Chief Financial Officer. Section 5.10. Treasurer. The Treasurer shall have such duties and responsibilities as may, from time to time, be designated by the Board of Directors, the Chairman and the Chief Financial Officer. Section 5.11. Controller. The Controller shall be the chief accounting officer of the Corporation, and shall be responsible to the Board of Directors and the Chief Financial Officer for internal accounting and control of the books and records of the Corporation. Such responsibility includes preparation of all financial reports, tax returns and such other duties as may be assigned by the Board of Directors or the Chief Financial officer. ARTICLE VI Contracts, Borrowings, Checks and Deposits Section 6.1. Contracts and Other Instruments. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 6.2. Borrowings. No borrowings shall be contracted on behalf of the corporation, or any division thereof, and no evidence of indebtedness shall be issued in the name of the Corporation, unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 6.3. Checks, Drafts, etc. All checks, demands, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall from time to time be determined by the Board of Directors. Section 6.4. Deposits. All funds of the Corporation, not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Chief Financial Officer or Treasurer may select. Section 6.5. Investments. The Board of Directors may authorize any officer or officers, agent or agents of the Corporation, to invest the funds of the Corporation in obligations of the Federal government or any agency thereof or of any state government or any agency thereof, commercial paper, real estate, equity securities or debt obligations of any other corporation and such other investments as the Board of Directors may approve, and such authority may be general or confined to specific instances. ARTICLE VII Certificates of Stock and Their Transfer Section 7.1. Certificates of Stock. The certificates of stock of the Corporation shall be in such form as may be determined by the Board of Directors, shall be numbered and shall be entered in the books of the Corporation as they are issued. They shall exhibit the name of the Corporation, the state of incorporation, the name of the registered holder, the number of shares and the par value thereof and shall be signed by the Chairman or President and by the Secretary or an Assistant Secretary. The signature of any such officer may be facsimile. In case any such officer who shall have signed or whose facsimile signature has thus been used on any such certificate shall cease to be such officer, whether because of death, resignation or otherwise, before such certificate has been delivered by the Corporation, such certificate may nevertheless be delivered by the Corporation, as though the person whose facsimile signature has been used thereon had not ceased to be such officer. All certificates properly surrendered to the Corporation for transfer shall be cancelled and no new certificate shall be issued to evidence transferred shares until the former certificate for at least a like number of shares shall have been surrendered and cancelled and the Corporation reimbursed for any applicable taxes on the transfer, except that in the case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms, and with such indemnity (if any) to the Corporation, as the Board of Directors may prescribe specifically or in general terms or by delegation to a transfer agent for the Corporation. (See Section 7.2.) Section 7.2. Lost or Destroyed Certificates. The Board of Directors in individual cases, or by delegation to a transfer agent, may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed. Section 7.3. Transfers of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and upon payment of applicable taxes with respect to such transfer, it shall be the duty of the Corporation, subject to such rules and regulations as the Board of Directors may from time to time deem advisable concerning the transfer and registration of certificates for shares of stock of the Corporation, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Transfers of shares shall be made only on the books of the Corporation on behalf of the registered holder thereof or by his attorney or successor duly authorized as evidenced by documents filed with the Secretary or transfer agent of the Corporation. Section 7.4. Stockholders of Record. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares notwithstanding any express or other notice thereof, except as otherwise provided by the laws of Oklahoma. ARTICLE VIII General Provisions Section 8.1. Fiscal Year. The fiscal year of the Corporation shall be the 52 or 53 week period ending on the last Saturday in December in each year and beginning on the following Sunday. Section 8.2. Seal. The corporate seal shall have inscribed thereon the name of the Corporation, and the words "Corporate Seal" and "Oklahoma" or an abbreviation thereof; and it shall otherwise be in the form approved by the Board of Directors. Such seal may be used by causing it, or a facsimile thereof, to be impressed or affixed or otherwise reproduced. Section 8.3. Indemnification. (a) The Corporation shall indemnify any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture or other enterprise against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Corporation and with respect to any criminal action or proceeding have reasonable cause to believe that such conduct was unlawful. (b) The Corporation shall indemnify any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if the director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in performance of duty to the Corporation unless and only to the extent that the court in which action or suit was brought shall determine, upon application, that despite the adjudication of liability, but in the view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. (c) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized herein. (d) The Corporation may purchase (upon resolution duly adopted by the Board of Directors) and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity, or arising out of the status as such, whether or not the Corporation would have the power to indemnify the director or officer against such liability. (e) To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to herein or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred in connection therewith. (f) Every director or officer shall be entitled, without demand upon the Corporation or any action by the Corporation, to enforce such person's right to such indemnity in an action at law against the Corporation. The right of indemnification hereinabove provided shall not be deemed exclusive of any rights to which any such person may now or hereafter be otherwise entitled and specifically, without limiting the generality of the foregoing, shall not be deemed exclusive of any rights pursuant to statute or otherwise, of any such person in any such action, suit or proceeding to have assessed or allowed against the Corporation or otherwise, costs and expenses incurred therein or in connection therewith or any part thereof. (g) Any indemnification hereinabove provided, unless ordered by a court, shall be made by the Corporation only as authorized in a specific case because the Corporation has determined that the indemnitee has met the requisite standards of conduct as set forth in sub-sections (a) and (b) above. Such determination is to be made by the Board of Directors by majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding; or if such a quorum is not obtainable, or even if obtainable should a quorum of disinterested directors so direct, by independent legal counsel in a written opinion; or by the shareholders. ARTICLE IX Amendments Section 9.1. In General. Any provision of these Bylaws may be altered, amended or repealed from time to time by the affirmative vote of a majority of the stock having voting power present in person or by proxy at any annual or special meeting of shareholders at which a quorum is present, if notice of the proposed alteration, amendment or repeal is contained in the notice of such meeting, or by the affirmative vote of a majority of the directors then qualified and acting at any meeting of the Board at which a quorum is present, if notice of the proposed alteration, amendment or repeal has been given to each director. EX-23.1 4 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by referenced in this Registration Statement of Fleming Companies, Inc. on Form S-8 of our report dated February 22, 1996 (April 12, 1996 as to effects of a jury verdict, other resulting legal proceedings and related matters discussed in Subsequent Events note), appearing in the Annual Reports on Form 10-K and on Form 10-K/A of Fleming Companies, Inc. and subsidiaries for the year ended December 30, 1995. DELOITTE & TOUCHE LLP Deloitte & Touche LLP Oklahoma City, Oklahoma September 3, 1996 EX-23.2 5 CONSENT OF McAFEE & TAFT A PROFESSIONAL CORPORATION September 3, 1996 We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 to the opinions expressed in and the reference to our firm as legal counsel appearing in the Annual Report on Form 10-K of Fleming Companies, Inc. and subsidiaries for the year ended December 30, 1995, as amended. MCAFEE & TAFT A PROFESSIONAL CORPORATION McAfee & Taft A Professional Corporation -----END PRIVACY-ENHANCED MESSAGE-----