Exhibit 10.2

STANCORP FINANCIAL GROUP, INC.

and

MELLON INVESTOR SERVICES LLC

Amended and Restated Rights Agreement

Dated as of [April 20, 2009]

 

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TABLE OF CONTENTS

 

          Page 1.    Certain Definitions    1 2.    Appointment of Rights Agent
   7 3.    Issue of Rights Certificates    7 4.    Form of Rights Certificates
   9 5.    Countersignature and Registration    10 6.    Transfer, Split-Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Certificates    10 7.    Exercise of Rights; Purchase Price; Expiration
Date of Rights    11 8.    Cancellation and Destruction of Rights Certificates
   13 9.    Reservation and Availability of Capital Stock    13 10.    Preferred
Stock Record Date    14 11.    Adjustment of Purchase Price, Number of Shares or
Number of Rights    14 12.    Certificate of Adjusted Purchase Price or Number
of Shares    21 13.    Consolidation, Merger or Sale or Transfer of Assets or
Earning Power    22 14.    Fractional Rights and Fractional Shares    24 15.   
Rights of Action    25 16.    Agreement of Rights Holders    26 17.    Rights
Certificate Holder Not Deemed a Shareholder    26 18.    Concerning the Rights
Agent    27 19.    Merger or Consolidation or Change of Name of Rights Agent   
27 20.    Duties of Rights Agent    28 21.    Change of Rights Agent    30 22.
   Issuance of New Rights Certificates    30 23.    Redemption    31 24.   
Exchange    33 25.    Notices    34 26.    Supplements and Amendments    35 27.
   Successors    35 28.    Periodic Review    35 29.    Benefits of this
Agreement    36 30.    Severability    36

 

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TABLE OF CONTENTS

 

          Page 31.    Determinations and Actions by the Board of Directors, Etc
   36 32.    Governing Law    36 33.    Counterparts    36 34.    Descriptive
Headings    37

 

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AMENDED AND RESTATED RIGHTS AGREEMENT

This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of [April 20, 2009] (the
“Agreement”), between StanCorp Financial Group, Inc., an Oregon corporation (the
“Company”), and Mellon Investor Services LLC (the “Rights Agent”).

WITNESSETH

WHEREAS, the Rights Agreements (the “Existing Rights Agreement”), dated as of
April 21, 1999, between the Company and the Rights Agent, is scheduled to expire
on the Close of Business of April 20, 2009;

WHEREAS, the Company desires to enter into the Agreement to become effective
upon the expiration of the Existing Rights Agreement;

WHEREAS, effective as of [April 20, 2009], the Board of Directors of the Company
authorized and declared a dividend of one Right for each share of Common Stock
(as such terms are hereinafter defined) of the Company outstanding on [April 20,
2009] (the “Record Date”), and has authorized the issuance of one Right with
respect to each share of Common Stock issued by the Company between the Record
Date and the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined), with each Right
initially representing the right to purchase one one-hundredth of a share of
Preferred Stock (as hereinafter defined) having the rights, powers and
preferences set forth in the form of Amendment to the Company’s Articles of
Incorporation attached hereto as Exhibit A, upon the terms and subject to the
conditions herein set forth (the “Rights”);

NOW THEREFORE, in consideration of the mutual agreements set forth herein, the
parties hereby agree as follows:

1. Certain Definitions. For purposes of this Agreement, the following terms have
the meanings indicated:

(a) “Acquiring Person” shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter, defined) of such Person, shall become the Beneficial
Owner (as such term is hereinafter defined) of 20 percent or more of the shares
of Common Stock then outstanding; provided, however, that an Acquiring Person
shall not include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity holding shares of Common Stock for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person
shall be deemed to be an “Acquiring Person” either (i) as the result of an
acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares Beneficially
Owned by such Person to 20 percent or more of the Common Stock of the Company
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 20 percent or more of the Common Stock then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional shares of Common
Stock, then such Person shall be deemed to be an “Acquiring Person,” or (ii) if
the Board of Directors of the Company determines in good faith

 

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that a Person who would otherwise be an “Acquiring Person,” as defined pursuant
to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a).

(b) “Act” shall mean the Securities Act of 1933, as amended.

(c) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act (as such term is hereinafter defined), as in effect on the date of this
Agreement.

(d) “Agreement” shall mean this Rights Agreement.

(e) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
beneficially own any securities:

(i) which such Person or any of such Person’s Affiliates or Associates, directly
or indirectly, has the power to vote or dispose of, including pursuant to any
agreement, arrangement or understanding, whether or not in writing;

(ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to acquire voting or dispositive power
over (whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; or

(iii) which are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person’s Affiliates or Associates) has any agreement, arrangement or
understanding, whether or not in writing, for the purpose of acquiring, holding,
voting or disposing of any securities of the Company;

provided, however, that nothing in this paragraph (e) shall cause a person to be
the “Beneficial Owner” of, or to “beneficially own,” (A) any securities that may
be issued on the exercise of Rights, (B) any security if the agreement,
arrangement or understanding to vote such security arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act, (C) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (D) any securities acquired by a Person engaged in
business as an underwriter of securities through such Person’s participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act.

 

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(f) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

(g) “Close of Business” on any given date shall mean 5:00 p.m., New York time,
on such date; provided, however, that if such date is not a Business Day, it
shall mean 5:00 p.m., New York time, on the next succeeding Business Day.

(h) “Common Stock” shall mean the Common Stock of the Company. The term “common
stock” when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person together with all rights and benefits (however denominated or
constituted) relating to such common stock (including, without limitation any
rights or warrants to acquire additional shares of such common stock or other
securities or assets, or to participate in any trust for the benefit of holders
of such shares, or to share in the benefits of any agreements or other
arrangements for the benefit of such holders), whether or not such rights are
yet exercisable, and together with any other securities which are represented by
the certificates for such common stock or are transferred in connection with
transfers of such common stock.

(i) “Common Stock Equivalents” shall have the meaning set forth in
Section 11(a)(iii).

(j) “Current Per Share Market Price” shall have the meaning set forth in
Section 11(d).

(k) “Current Value” shall have the meaning set forth in Section 11(a)(iii).

(l) “Definitive Acquisition Agreement” shall mean an agreement, conditioned on
the approval by the holders of not less than a majority of the outstanding
shares of Common Stock, with respect to a merger, recapitalization, share
exchange, or a similar transaction involving the Company or the direct or
indirect acquisition of more than 50 percent of the Company’s consolidated total
assets.

(m) “Distribution Date” shall have the meaning set forth in Section 3(a).

(n) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(o) “Final Expiration Date” shall have the meaning set forth in Section 7(a).

(p) “Person” shall mean any individual, firm, corporation, partnership or other
entity and shall include any successor (by merger or otherwise) of such entity.

(q) “Preferred Stock” means Series A Preferred Shares of the Company and, to the
extent that there is not a sufficient number of Series A Preferred Shares
authorized to permit the full exercise of the Rights, any other series of
Preferred Shares of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Preferred Shares.

 

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(r) “Preferred Stock Equivalents” shall have the meaning set forth in
Section 11(b).

(s) “Principal Party” shall have the meaning set forth in Section 13(b).

(t) “Proposed Acquiror” shall mean any Person who has proposed or publicly
announced an intention to propose a transaction that, if consummated, would
cause a Stock Acquisition Date or any Section 13 Event to occur.

(u) “Purchase Price” shall mean the dollar amount payable upon exercise of one
Right to acquire the number of one one-hundredths of a share of Preferred Stock
or other securities or assets for which the Right is then exercisable and shall
initially be the price set forth in Section 7(b).

(v) “Qualifying Offer” shall mean an offer determined by a majority of
independent directors of the Company to have, to the extent required for the
type of offer specified, each of the following characteristics:

(i) a fully financed all-cash tender offer or an exchange offer offering shares
of common stock of the offeror, or a combination thereof, in each such case for
any and all of the outstanding shares of Common Stock at the same per share
consideration; provided, however, that such per share price and consideration
represent a reasonable premium over the highest reported market price of the
Common Stock in the immediately preceding 24 months, with, in the case of an
offer that includes shares of common stock of the offeror, such per share offer
price being determined using the lowest reported market price for common stock
of the offeror during the five Trading Days immediately preceding and the five
Trading Days immediately following the date on which the Qualifying Offer is
commenced;

(ii) an offer that has commenced within the meaning of Rule 14d-2(a) under the
Exchange Act and is made by an offeror (including Affiliates and/or Associates
of such offeror) that Beneficially Owns no more than 1 percent of the
outstanding Common Stock as of the date of such commencement;

(iii) an offer that, within 20 Business days after the commencement date of the
offer (or within 10 Business Days after any increase in the offer
consideration), does not result in a nationally recognized investment banking
firm retained by the Board of Directors of the Company rendering an opinion to
the Board of Directors of the Company that the consideration being offered to
the shareholders of the Company is either unfair or inadequate;

(iv) if the offer includes shares of common stock of the offeror, an offer
pursuant to which (i) the offeror shall permit representatives of the Company,
including, without limitation, a nationally recognized investment banking firm
retained by the Board of Directors of the Company, legal counsel and an
accounting firm designated by the Company to have access to such offeror’s
books, records, management, accountants and other appropriate outside advisers
for the purposes of permitting such representatives to conduct a due diligence
review of the offeror in order to permit such investment banking firm (relying
as appropriate on the advice of such legal counsel) to be able to render an
opinion to the Board of Directors of the Company with respect to whether the
consideration being offered to the Company’s shareholders

 

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is fair, and (ii) within 10 Business Days after such investment banking firm
shall have notified the Company and the offeror that it had completed the due
diligence review to its satisfaction (or following completion of such due
diligence review within 10 Business Days after any increase in the consideration
being offered), such investment banking firm does not render an opinion to the
Board of Directors of the Company that the consideration being offered to the
shareholders of the Company is either unfair or inadequate and such investment
banking firm does not after the expiration of such 10 Business Day period render
an opinion to the Board of Directors of the Company that the consideration being
offered to the shareholders of the Company has become either unfair or
inadequate based on a subsequent disclosure or discovery of a development or
developments that have had or are reasonably likely to have a material adverse
affect on the value of the common stock of the offeror;

(v) an offer that is subject only to the minimum tender condition described
below in item (viii) of this definition and other customary terms and
conditions, which conditions shall not include any financing, funding or similar
conditions or any requirements with respect to the offeror or its agents being
permitted any due diligence with respect to the books, records, management,
accountants or any other outside advisers of the Company;

(vi) an offer pursuant to which the Company and its shareholders have received
an irrevocable written commitment of the offeror that the offer will remain open
for not less than 120 Business Days and, if a Special Meeting Demand is duly
delivered to the Board of Directors of the Company in accordance with
Section 23(b), for at least 10 Business Days after the date of the Special
Meeting or, if no Special Meeting is held within the Special Meeting Period (as
defined in Section 23(b)), for at least 10 Business Days following the last day
of such Special Meeting Period (the “Qualifying Offer Period”);

(vii) an offer pursuant to which the Company has received an irrevocable written
commitment by the offeror that, in addition to the minimum time periods
specified in item (vi) of this definition, the offer, if it is otherwise to
expire prior thereto, will be extended for at least 15 Business Days after
(i) any increase in the price offered, or (ii) any bona fide alternative offer
is commenced by another Person within the meaning of Rule 14d-2(a) of the
Exchange Act; provided, however, that such offer need not remain open, as a
result of clauses (vi) and (vii) of this definition, beyond (1) the time which
any other offer satisfying the criteria for a Qualifying Offer is then required
to be kept open under such clauses (vi) and (vii), or (2) the expiration date,
as such date may be extended by public announcement (with prompt written notice
to the Rights Agent) in compliance with Rule 14e-1 of the Exchange Act, of any
other tender offer for the Common Stock with respect to which the Board of
Directors of the Company has agreed to redeem the Rights immediately prior to
acceptance for payment of Common Stock thereunder (unless such other offer is
terminated prior to its expiration without any Common Stock having been
purchased thereunder) or (3) one Business Day after the shareholder vote with
respect to approval of any Definitive Acquisition Agreement has been officially
determined and certified by the inspectors of elections;

(viii) an offer that is conditioned on a minimum of at least a majority of the
outstanding shares of the Common Stock being tendered and not withdrawn as of
the offer’s expiration date, which condition shall not be waivable;

 

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(ix) an offer pursuant to which the Company and its shareholders have received
an irrevocable written commitment by the offeror to consummate as promptly as
practicable upon successful completion of the offer a second step transaction
whereby all shares of the Common Stock not tendered into the offer will be
acquired at the same consideration per share actually paid pursuant to the
offer, subject to shareholders’ statutory appraisal rights, if any;

(x) an offer pursuant to which the Company and its shareholders have received an
irrevocable written commitment of the offeror that no amendments will be made to
the offer to reduce the offer consideration, or otherwise change the terms of
the offer in a way that is materially adverse to a tendering shareholder (other
than extensions of the offer consistent with the terms thereof);

(xi) an offer (other than an offer consisting solely of cash consideration)
pursuant to which the Company has received the written representation and
certification of the offeror and, in their individual capacities, the written
representations and certifications of the offeror’s Chief Executive Officer and
Chief Financial Officer, that (i) all facts about the offeror that would be
material to making an investor’s decision to accept the offer have been fully
and accurately disclosed as of the date of the commencement of the offer within
the meaning of Rule 14d-2(a) of the Exchange Act, (ii) all such new facts will
be fully and accurately disclosed on a prompt basis during the entire period
during which the offer remains open, and (iii) all required Exchange Act reports
will be filed by the offeror in a timely manner during such period; and

(xii) if the offer includes shares of stock of the offeror, (i) the stock
portion of the consideration must consist solely of common stock of an offeror
that is a publicly owned corporation, and whose common stock is freely tradable
and is listed on either the NYSE Euronext or the NASDAQ National Market System,
(ii) no shareholder approval of the offeror is required to issue such common
stock, or, if required, has already been obtained, (iii) no Person (including
such Person’s Affiliates and Associates) beneficially owns more than 20 percent
of the voting stock of the offeror at the time of commencement of the offer or
at any time during the term of the offer, and (iv) no other class of voting
stock of the offeror is outstanding, and the offeror meets the registrant
eligibility requirements for use of Form S-3 for registering securities under
the Securities Act (as hereinafter defined); including, without limitation, the
filing of all required Exchange Act reports in a timely manner during the 12
calendar months prior to the date of commencement of the offer.

For the purposes of the definition of Qualifying Offer, “fully financed” shall
mean that the offeror has sufficient funds for the offer and related expenses
which shall be evidenced by (i) firm, unqualified, written commitments from
responsible financial institutions having the necessary financial capacity,
accepted by the offeror, to provide funds for such offer subject only to
customary terms and conditions, (ii) cash or cash equivalents then available to
the offeror, set apart and maintained solely for the purpose of funding the
offer with an irrevocable written commitment being provided by the offeror to
the Board of Directors of the Company to maintain such availability until the
offer is consummated or withdrawn, or (iii) a combination of the foregoing;
which evidence has been provided to the Company prior to, or upon, commencement
of the offer. If an offer becomes a Qualifying Offer in accordance with this
definition but

 

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subsequently ceases to be a Qualifying Offer as a result of the failure at a
later date to continue to satisfy any of the requirements of this definition,
such offer shall cease to be a Qualifying Offer and the provisions of
Section 23(b) shall no longer be applicable to such offer.

(w) “Qualifying Offer Period” shall have the meaning set forth in the definition
of Qualifying Offer.

(x) “Qualifying Offer Resolution” shall have the meaning set forth in
Section 23(b).

(y) “Record Date” shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.

(z) “Redemption Date” shall have the meaning set forth in Section 7(a).

(aa) “Redemption Price” shall have the meaning set forth in Section 23(a).

(bb) “Rights” shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.

(cc) “Rights Certificate” shall have the meaning set forth in Section 3(a).

(dd) “Section 13 Event” shall mean any event described in Section 13(a).

(ee) “Spread” shall have the meaning set forth in Section 11(a)(iii).

(ff) “Stock Acquisition Date” shall mean the first date of public announcement
(including, without limitation, the date a report is filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become an Acquiring Person.

(gg) “Subsidiary” of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.

(hh) “Substitution Period” shall have the meaning set forth in
Section 11(a)(iii).

(ii) “Trading Day” shall have the meaning set forth in Section 11(d).

2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent for
the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable.

3. Issue of Rights Certificates.

(a) Until the earlier of (i) the Close of Business on the tenth day after the
Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date is
prior to the Record Date, the Record Date) or (ii) the Close of Business on the
tenth day after the date that a

 

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tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 20 percent or more of the shares of Common
Stock then outstanding (the earlier of (i) and (ii) being herein referred to as
the “Distribution Date”), (w) the Rights will be evidenced by the certificates
for the Common Stock registered in the names of the holders of the Common Stock
(which certificates shall also be deemed to be certificates for Rights) and not
by separate Rights Certificates, (x) the Rights and the right to receive Rights
Certificates will be transferable only in connection with the transfer of the
underlying Common Stock and any transfer of Common Stock shall also constitute
the transfer of the associated Rights represented by the same certificate,
(y) in the event the Company purchases or acquires any Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
acquired Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with shares of Common
Stock that are no longer outstanding, and (z) in the event the Company issues
any Common Stock after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date, the Company
shall issue one Right for each such newly issued share of Common Stock (subject
to adjustment as provided in Section 11(h)) which Right shall be evidenced by
the certificate for the associated share of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to
each record holder of shares of Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Rights Certificate, in substantially the form of Exhibit B hereto (a
“Rights Certificate”), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant to
Section 11(h), at the time the Rights Certificates are distributed the Company
shall make the necessary and appropriate rounding adjustments pursuant to
Section 14(a) so that Rights Certificates are distributed representing only
whole numbers of Rights and cash is paid in lieu of fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.

(b) As soon as practicable following the Record Date, the Company will send a
copy of a Summary of Rights to Purchase Preferred Stock, in substantially the
form of Exhibit C (the “Summary of Rights”), by first-class, postage-prepaid
mail, to each record holder of shares of Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company.

(c) All Common Stock certificates which are issued, either upon an original
issuance by the Company or upon a transfer by a holder, after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:

 

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This certificate also evidences and entitles the holder hereof to certain rights
set forth in an Amended and Restated Rights Agreement between StanCorp Financial
Group, Inc. (the “Company”) and Mellon Investor Services LLC dated as of
[April 20, 2009] (the “Rights Agreement”), the terms of which are incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, Rights beneficially
owned by Acquiring Persons or their Affiliates or Associates (as such terms are
defined in the Rights Agreement), and Rights previously owned by such Persons,
may become null and void.

4. Form of Rights Certificates.

(a) The Rights Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse thereof) shall be substantially the same
as Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22, the Rights
Certificates, whenever distributed, shall entitle the holders thereof to
purchase for the Purchase Price such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein, but the amount and type of
securities purchasable upon exercise and the Purchase Price shall be subject to
adjustment as provided herein.

(b) Any Rights Certificate issued pursuant to Section 3 hereof that represents
Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) any other Person if such Rights formerly
were beneficially owned by an Acquiring Person (or by an Associate or Affiliate
of such Acquiring Person) at a time after the Acquiring Person became an
Acquiring Person, or (iii) a transferee of Rights from an Acquiring Person (or
from any Associate or Affiliate thereof) who became a transferee prior to or
concurrently with the Acquiring Person becoming an Acquiring Person and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or its Affiliate or Associate) to holders of equity
interests in such Acquiring Person (or its Affiliate or Associate) or to any
Person with whom such Acquiring Person (or its Affiliate or Associate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that has as a primary
purpose or effect the avoidance of Section 7(e), and any Rights Certificate
issued pursuant to Section 6, 7(d) or 22 upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain the following legend:

The Rights represented by this Rights Certificate are or were beneficially owned
by a Person who was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section 7(e) of the
Rights Agreement;

 

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provided, however, that the Rights Agent shall not have any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Rights Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

5. Countersignature and Registration. The Rights Certificates shall be executed
on behalf of the Company by its Chairman of the Board, Chief Executive Officer,
President or any Vice President, either manually or by facsimile signature, and
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.

Following the Distribution Date, the Rights Agent will keep or cause to be kept,
at its principal offices, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of
the Rights Certificates.

 

  6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Certificates.

(a) Subject to the provisions of Sections 4(b), 7(e) and 14, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Preferred Stock or
other securities or property as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to

 

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the Rights Agent and shall surrender the Rights Certificate or Certificates to
be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split-up, combination or
exchange of Rights Certificates.

(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.

7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

(a) At any time after the Distribution Date and at or prior to the earlier of
(i) the Close of Business on [April 19, 2012] (the “Final Expiration Date”) or
(ii) the time at which the Rights are redeemed as provided in Section 23 (the
“Redemption Date”), subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a)) in whole or in
part upon surrender of the Rights Certificate, with the form of election to
purchase and certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each Right that is exercised.

(b) The Purchase Price to be paid on exercise of each Right shall initially be
$289.95 and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below. Each Right shall initially entitle the
holder to acquire one one-hundredth of a share of Preferred Stock upon exercise
of the Right. The Purchase Price and the number of shares of Preferred Stock or
other securities or assets for which a Right is exercisable shall be subject to
adjustment as provided in Sections 11 and 13.

(c) Upon receipt of a Rights Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of the
Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or cashier’s check
payable to the order of the Company, the Rights Agent shall, subject to
Section 20(k), thereupon promptly (i) requisition from any transfer agent of the
Preferred Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the

 

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number of shares of Preferred Stock to be purchased and the Company hereby
authorizes its transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14, (iii) after
receipt of the certificates for Preferred Stock cause the same to be delivered
to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt, deliver such cash to or upon the order of
the registered holder of such Rights Certificate. In the event that the Company
is obligated to issue other securities (including, but not limited to, debt
securities) of the Company, and/or distribute other property pursuant to
Section 11, the Company covenants that it will make all arrangements necessary
so that such other securities and/or property are available for distribution by
the Rights Agent, if and when appropriate.

(d) In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 14.

(e) Notwithstanding any other provision of this Agreement, from and after the
occurrence of a Stock Acquisition Date, any Rights beneficially owned by (i) an
Acquiring Person, or any Associate or Affiliate of an Acquiring Person, (ii) any
other Person if such Rights formerly were beneficially owned by an Acquiring
Person (or by an Associate or Affiliate of such Acquiring Person) at a time
after such Acquiring Person became an Acquiring Person, or (iii) a transferee of
Rights from an Acquiring Person (or from any Associate or Affiliate thereof) who
became a transferee prior to or concurrently with the Acquiring Person becoming
an Acquiring Person and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or its Affiliate
or Associate) to holders of equity interests in such Acquiring Person (or its
Affiliate or Associate) or to any Person with whom the Acquiring Person (or its
Affiliate or Associate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights, or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and of Section 4(b) are complied with, but shall
have no liability to any holder of Rights Certificates or any other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person, or any of its Affiliates, Associates or transferees hereunder.

(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the surrendered Right Certificate and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.

 

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8. Cancellation and Destruction of Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer, split-up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.

9. Reservation and Availability of Capital Stock.

(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Stock (and, following the
occurrence of a Stock Acquisition Date or a Section 13 Event, out of its
authorized and unissued shares of Common Stock and/or other securities), the
number of shares of Preferred Stock (and, following the occurrence of a Stock
Acquisition Date or a Section 13 Event, Common Stock and/or other securities)
that, as provided in this Agreement, will be sufficient to permit the exercise
in full of all outstanding Rights; provided, however, that shares issuable
pursuant to Section 11(a)(ii) shall be reserved only following the occurrence of
an event described in that section.

(b) If any shares of Preferred Stock are listed on a national securities
exchange, and so long as the shares of Preferred Stock (and, following the
occurrence of a Stock Acquisition Date or a Section 13 Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on that exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on the exchange upon official notice of
issuance upon exercise.

(c) The Company shall use its best efforts (i) to file, as soon as practicable
following a Stock Acquisition Date and the determination by the Company in
accordance with Section 11(a)(iii) of the consideration to be delivered by the
Company upon exercise of the Rights, or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under the
Act with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) to cause such registration statement to become effective
as soon as practicable after such filing, and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend the exercisability of the Rights, for a
period of time not to exceed 90 days after the date the Company first becomes
obligated to use its best efforts to file a registration statement as set forth
in clause (i) of the first sentence of this Section 9(c), in order to prepare
and file such registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in

 

13

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effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement has been declared effective.

(d) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Preferred Stock (and, following the
occurrence of a Stock Acquisition Date or Section 13 Event, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares of such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.

(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any shares of Preferred Stock or other securities upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer, split-up, combination or exchange of Rights
Certificates, or any issuance or delivery of certificates for shares in a name
other than that of the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise, and shall not be required to issue or deliver
any certificates for shares upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company’s satisfaction that no such tax is due.

10. Preferred Stock Record Date. Each person in whose name any certificate for a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number and kind of securities covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

 

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(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in Preferred
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the number and
kind of shares of capital stock issuable at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, he or she would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. The adjustments provided for in this
Section 11(a)(i) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or reclassification is effected. If
an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).

(ii) In the event that a Stock Acquisition Date occurs, proper provision shall
be made so that each holder of a Right, except as provided below and in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof
and payment of the Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share of Preferred
Stock, such number of shares of Common Stock as shall equal the result obtained
by dividing the then current Purchase Price by 50 percent of the Current Per
Share Market Price of the Common Stock (determined pursuant to Section 11(d)) on
the Stock Acquisition Date (such number of shares being the “Adjustment
Shares”).

(iii) In the event the number of shares of Common Stock which are authorized by
the Company’s articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the “Current Value”) over (2) the then current Purchase Price (such
excess, the “Spread”), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the applicable Purchase
Price, (3) shares of Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
that the Board of Directors of the Company has deemed to have the same value as
shares of Common Stock (“Common Stock Equivalents”)), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the Stock Acquisition Date, then the Company shall be obligated to deliver,

 

15

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upon the surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the 30-day period
set forth above may be extended to the extent necessary, but not more than
90 days after the Stock Acquisition Date, in order that the Company may seek
shareholders approval for the authorization of such additional shares (such
period, as it may be extended as so permitted, the “Substitution Period”). To
the extent the Company determines that some action must be taken pursuant to the
first or second sentences of this Section 11(a)(iii), the Company (x) shall
provide that such action shall apply uniformly to all outstanding Rights other
than those that are void as provided in Section 7(e), and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of the Common Stock on the date of
the Stock Acquisition Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Stock on such date.

(b) In case the Company shall at any time after the date of this Agreement fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the Preferred Stock
(“Preferred Stock Equivalents”)) or securities convertible into Preferred Stock
or Preferred Stock Equivalents at a price per share of Preferred Stock or
Preferred Stock Equivalent (or having a conversion price per share, if a
security convertible into Preferred Stock or Preferred Stock Equivalents) less
than the then Current Per Share Market Price of the Preferred Stock (as defined
in Section 11(d)) on such record date, the number of shares of Preferred Stock
for which each Right shall be exercisable after such record date shall
determined by multiplying the number of shares of Preferred Stock for which each
Right was exercisable immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of Preferred Stock
and/or Preferred Stock Equivalents to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible) and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or Preferred Stock Equivalents so to be offered (and/or
the aggregate initial conversion price of convertible securities so to be
offered) would purchase at such Current Per Share Market Price. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a

 

16

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record date is fixed; and in the event that such rights, options or warrants are
not so issued, the number of shares of Preferred Stock for which each Right
shall be exercisable shall be readjusted to be the number of shares of Preferred
Stock for which each Right would then be exercisable if such record date had not
been fixed; and to the extent such rights, options or warrants are issued but
not exercised prior to their expiration, the number of shares for which each
Right shall be exercisable shall be readjusted to be the number which would have
resulted from the adjustment provided for in this Section 11(b) if only the
rights or warrants that were exercised had been issued.

(c) (i) In case the Company shall at any time after the date of this Agreement
fix a record date for the making of a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in shares of Preferred Stock but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)), the number of shares of
Preferred Stock for which each Right shall be exercisable after such record date
shall be determined by multiplying the number of shares of Preferred Stock for
which each Right was exercisable immediately prior to such record date by a
fraction, the numerator of which shall be the then Current Per Share Market
Price of the Preferred Stock (as defined in Section 11(d)) on such record date,
and the denominator of which shall be such Current Per Share Market Price of the
Preferred Stock, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the number of shares of Preferred Stock for which
each Right shall be exercisable shall be readjusted to be the number of shares
of Preferred Stock for which each Right would then be exercisable if such record
date had not been fixed.

(ii) In case the Company shall at any time after the date of this Agreement fix
a record date for the making of a distribution to all holders of Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in shares of Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(h)(ii)), the number of
shares of Preferred Stock for which each Right shall be exercisable after such
record date shall be determined by multiplying the number of shares of Preferred
Stock for which each Right was exercisable immediately prior to such record date
by a fraction, the numerator of which shall be the then Current Per Share Market
Price of the Common Stock (as defined in Section 11(d)) on such record date, and
the denominator of which shall be such Current Per Share Market Price of the
Common Stock, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the number of shares of Preferred Stock for which
each Right shall be exercisable shall be readjusted to be the number of shares
of Preferred Stock for which each Right would then be exercisable if such record
date had not been fixed.

 

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(d) (i) For the purpose of any computation hereunder, the “Current Per Share
Market Price” of common stock (including Common Stock) on any date shall be
deemed to be the average of the daily closing prices per share of the common
stock for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event the Current
Per Share Market Price of common stock is determined during a period following
the announcement by the issuer of such common stock of (A) a dividend or
distribution on such common stock payable in such common stock or securities
convertible into such common stock, or (B) any subdivision, combination or
reclassification of such common stock, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the Current Per Share Market Price shall be appropriately adjusted to
take into account such event. The closing price for each day shall be the last
sale price as reported by the New York Stock Exchange (the “NYSE”) or such other
system then in use, or, if on any such date the common stock is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the common stock
selected by a majority of the Board of Directors of the Company. The term
“Trading Day” shall mean a day on which the principal national securities
exchange on which the common stock is listed or admitted to trading is open for
the transaction of business or, if the common stock is not listed or admitted to
trading on any national securities exchange, a Business Day. If the common stock
is not publicly held or so listed or traded for the 30-day period, “Current Per
Share Market Price” shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.

(ii) For the purpose of any computation hereunder, the “Current Per Share Market
Price” of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(d) (other than the
last sentence thereof). If the Current Per Share Market Price of Preferred Stock
cannot be determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the “Current Per Share Market Price” of Preferred Stock
shall be conclusively deemed to be an amount equal to the Current Per Share
Market Price of the Common Stock multiplied by the Adjustment Number as that
term is defined in Section 2 of the Amendment to the Company’s Articles of
Incorporation, as amended, designating the Preferred Stock (initially 100). If
neither the Common Stock nor the Preferred Stock is publicly held or so listed
or traded, “Current Per Share Market Price” of Preferred Stock shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the current market price of one one-hundredth of a share of
Preferred Stock shall be equal to the Current Per Share Market Price of one
share of Preferred Stock divided by 100.

(e) No adjustment in the Purchase Price or the number of shares for which a
Right is exercisable shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price or the number
of shares for which a Right

 

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is exercisable; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a share of Common Stock or one-millionth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.

(f) If as a result of an adjustment made pursuant to Section 11(a), the holder
of any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Stock, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11 and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.

(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price or the number of shares of Preferred Stock for which
a Right is exercisable hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of a share of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

(h) (i) In the event the Company shall, after the date of this Agreement and
prior to the Distribution Date, (A) declare a dividend on the Common Stock
payable in Common Stock, (B) subdivide the outstanding Common Stock, (C) combine
the outstanding Common Stock into a smaller number of shares of Common Stock, or
(D) issue any shares of Common Stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Common Stock then outstanding,
and the number of Rights to be associated with each share of Common Stock which
may thereafter become outstanding prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights associated with each share
of Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to such event
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event.

(ii) In the event the Company shall, after the date of this Agreement and prior
to the Distribution Date, fix a record date for the issuance of rights, options
or warrants to all holders of Common Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Common Stock or securities convertible into Common Stock at a price per share of
Common Stock (or having a conversion price per share, if a security convertible
into Common Stock) less than the then Current Per Share Market Price of the
Common Stock (as defined in Section 11(d)) on such record date, the number of
Rights associated with each share of Common Stock then outstanding, and the
number of Rights to be

 

19

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associated with each share of Common Stock which may thereafter become
outstanding prior to the Distribution Date, shall be proportionately adjusted so
that the number of Rights associated with each share of Common Stock after such
record date shall be determined by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Per Share Market
Price and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed. In the event that such
rights, options or warrants are not so issued, the number of Rights associated
with each share of Common Stock shall be readjusted to be the number of Rights
that would have been associated with each share of Common Stock if such record
date had not been fixed; and to the extent such rights, options or warrants are
issued but not exercised prior to their expiration, the number of Rights
associated with each share shall be readjusted to be the number which would have
resulted from the adjustment provided for in this Section 11(h)(ii) if only the
rights, options or warrants that were exercised had been issued.

(iii) Notwithstanding the foregoing, the adjustments provided for in this
Section 11(h) shall not be made if the Company exercises its election provided
for in Section 11(i).

(i) The Company may elect on or after the date of any event described in clauses
(A) through (D) of Section 11(h)(i) or described in Section 11(h)(ii), if such
event occurs before the Distribution Date (a “Section 11(h) Event”), to adjust
the Purchase Price and the number of shares of Preferred Stock purchasable upon
the exercise of a Right in substitution for any adjustment under Section 11(h)
in the number of Rights associated with each share of Common Stock. If such
election is made, (i) the number of Rights associated with each share of Common
Stock prior to the Section 11(h) Event shall be maintained after the
Section 11(h) Event, (ii) any new shares of Common Stock issued in the
Section 11(h) Event shall, as provided in Section 3(a), have issued with it the
number of Rights associated with each share of Common Stock outstanding, and
(iii) any combination of shares of Common Stock into a smaller number of shares
in the Section 11(h) Event shall result in a similar combination of the
associated Rights. The Purchase Price and the number of Shares of Preferred
Stock purchasable upon exercise of a Right after such adjustment shall be
determined by multiplying the Purchase Price and the number of Shares of
Preferred Stock purchasable upon exercise of a Right, respectively, in effect
immediately prior to such adjustment by a fraction, the numerator of which shall
be the number of Rights that would have been associated with each share of
Common Stock after the Section 11(h) Event if the Company had not exercised its
election provided for in this

 

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Section 11(i) and the denominator of which shall be the number of Rights
associated with each share of Common Stock immediately prior to the
Section 11(h) Event. To the extent the number of Rights that would have been
associated with each share of Common Stock if the Company had not exercised its
election provided for in this Section 11(i) may be readjusted as provided in the
last sentence of Section 11(h)(ii), the Purchase Price and number of shares of
Preferred Stock purchasable upon exercise of a Right shall be similarly
readjusted.

(j) Irrespective of any adjustment or change in the Purchase Price or the number
of one one-hundredths of a share of Preferred Stock issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a share and the
number of one one-hundredths of a share of Preferred Stock which were expressed
in the initial Rights Certificates issued hereunder.

(k) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price and the number of one one-hundredths of a
share of Preferred Stock for which a Right is exercisable in effect prior to
such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.

(l) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in their good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any Preferred Stock at less than
the current market price, issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable for shares
of Preferred Stock, dividends on Preferred Stock payable in Preferred Stock or
issuance of rights, options or warrants referred to in Section 11(b), hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to
such shareholders or shall reduce the taxes payable by such shareholders.

(m) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Section 23 or Section 26, take (or permit any
Subsidiary to take) any action, including any merger, consolidation or sale of
assets if at the time such action is taken or immediately thereafter it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 and 13, the Company shall promptly
(a) prepare a certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Preferred Stock and the Common Stock a copy of
such certificate and (c) mail a brief summary thereof to each holder of Rights
in accordance with Section 25.

 

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13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.

(a) In the event that, following the Distribution Date, directly or indirectly,

(i) the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(m)) and the Company shall not be the continuing or surviving
corporation of such consolidation or merger,

(ii) any Person shall acquire shares of Common Stock of the Company in a share
exchange,

(iii) any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m)) shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding Common Stock shall be
changed into or exchanged for stock or other securities of any other Person or
cash or any other property, or

(iv) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50 percent or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person other
than the Company or one or more of its wholly owned Subsidiaries in a
transaction that complies with Section 11(m),

then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided in Section 7(e)) shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Purchase Price in accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of common stock of the Principal Party (as hereinafter defined) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing the then current
Purchase Price by 50 percent of the Current Per Share Market Price of the common
stock of the Principal Party (determined pursuant to Section 11(d)) on the date
of consummation of the Section 13 Event, (B) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement,
(C) the term “Company” shall thereafter be deemed to refer to the Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply to the Principal Party only following the first occurrence of a Section 13
Event, and (D) the Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common stock
in accordance with Section 9) in connection with such consummation as may be
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable, as nearly as reasonably may be, in relation to the common stock
thereafter deliverable upon the exercise of the Rights. The provisions of
Section 11(a)(ii) shall be of no effect following the first occurrence of an
event described in Section 13.

 

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(b) The term “Principal Party” shall mean

(i) in the case of any transaction described in clause (i), (ii) or (iii) of
Section 13(a), the Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or consolidation, or
for which shares of Common Stock are exchanged in such share exchange, and if no
securities are so issued, the Person that is the other party to such merger,
consolidation or share exchange or, if there is more than one such Person, the
Person the common stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d)); and

(ii) in the case of any transaction described in clause (iv) of Section 13(a),
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions; or, if
each Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power transferred pursuant to such
transaction or transactions or if the Person receiving the largest portion of
the assets or earning power cannot be determined, whichever Person the common
stock of which has the highest aggregate current market price (determined
pursuant to Section 11(d));

provided, however, that, if the common stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act or such Person is not a corporation, then
(A) if such Person is a direct or indirect Subsidiary of one other Person which
has common stock so registered, “Principal Party” shall refer to such other
Person, (B) if such Person is a direct or indirect Subsidiary of another Person
but is not a direct or indirect Subsidiary of another Person which has common
stock so registered, “Principal Party” shall refer to the ultimate parent entity
of such first-mentioned Person, (C) if such Person is directly or indirectly
controlled by more than one Person, and one or more of such other Persons has
common stock so registered, “Principal Party” shall refer to whichever of such
Persons that is the issuer of common stock so registered having the highest
aggregate current market price (determined pursuant to Section 11(d)), and
(D) if such Person is directly or indirectly controlled by more than one Person,
and none of such other Persons has common stock so registered, “Principal Party”
shall refer to whichever ultimate parent entity is the corporation having the
greatest shareholders’ equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.

(c) The Company shall not enter into any transaction described in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. In
addition, the Company shall not consummate any such transaction unless the
Principal Party shall have a sufficient number of authorized shares of common
stock which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in this Section 13 and further providing that, as soon as practicable after
execution of such agreement, the Principal Party will

 

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(i) prepare and file a registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing, (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date and, as soon as practicable following the execution of such
agreement, take such action as may be required to ensure that any acquisition of
such shares of common stock upon the exercise of the Rights complies with any
applicable state security or “blue sky” laws; and

(ii) will deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.

(d) In case the Principal Party which is to be a party to a transaction referred
to in this Section 13 has a provision in any of its authorized securities or in
its Articles or Certificate of Incorporation or Bylaws or other instrument
governing its corporate affairs, which provision would have the effect of
(i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this
Section 13, shares of common stock of such Principal Party at less than the then
Current Per Share Market Price (determined pursuant to Section 11(d)) or
securities exercisable for, or convertible into, shares of common stock of such
Principal Party at less than the then Current Per Share Market Price (other than
to holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
the shares of common stock of such Principal Party pursuant to the provisions of
Section 13; then, in such event, the Company shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.

(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the Stock Acquisition Date, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13. The provisions of
Section 11(a)(ii) shall be of no effect following the first occurrence of a
Section 13 Event.

14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Right would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market

 

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value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day shall be the last sale
price, or, in case no such sale takes place on such day, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the NYSE
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.

(b) The Company shall not be required to issue fractions of shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-hundredths of a share of Preferred Stock the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.

(c) Following the occurrence of a Stock Acquisition Date or Section 13 Event,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of current market value of one share of Common Stock. For purposes of
this Section 14(c), the current market value of one share of Common Stock shall
be the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.

(d) The holder of a Right by the acceptance of the Right expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise of
a Right (except as provided above).

15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18, are
vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights

 

25

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Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.

16. Agreement of Rights Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other
holder of a Right that:

(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Stock;

(b) after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the office of the
Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
fully executed;

(c) subject to Sections 6 and 7(f), the Company and the Rights Agent may deem
and treat the Person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e), shall be affected by any
notice to the contrary; and

(d) Notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.

17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of the number of one one-hundredths of a share of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 23(c)), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.

 

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18. Concerning the Rights Agent.

(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense incurred without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability.

(b) The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for shares of Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20.

19. Merger or Consolidation or Change of Name of Rights Agent.

(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business or stock transfer business of the Rights Agent or any successor
rights agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.

 

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20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:

(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.

(b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively provided and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.

(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 7(e) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in this
Agreement or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or Common Stock to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Preferred Stock or Common
Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable.

 

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(f) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any such officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

(h) The Rights Agent and any shareholder, director, officer, or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.

(j) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.

(k) If, with respect to any Rights Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
or transfer without first consulting with the Company.

 

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21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon 30 days
notice in writing mailed to the Company and to each transfer agent of the Common
Stock and Preferred Stock by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of any State of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust powers or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50 million or (b) an affiliate or subsidiary of a corporation described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

22. Issuance of New Rights Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors of the Company to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock of the Company following the
Distribution Date and prior to the Final Expiration Date, the Company (a) shall,
with respect to Common Stock of the Company so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities issued by the Company prior to
the Distribution Date, and (b) may, in any other case, if deemed necessary or

 

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appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

23. Redemption.

(a) The Board of Directors of the Company may at its option, at any time prior
to the earliest of (i) the Close of Business on the tenth day following a Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the Close of Business on the tenth day following the Record
Date) or (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable as provided
in Section 11(a)(ii) until such time as the Company’s right of redemption
hereunder has expired.

(b) In the event the Company receives a Qualifying Offer and the Board of
Directors of the Company has not redeemed the outstanding Rights or exempted
such offer from the terms of this Agreement or called a special meeting of
shareholders by the end of the 90 Business Days following the commencement (or,
if later, the first existence) of a Qualifying Offer, for the purpose of voting
on whether or not to exempt such Qualifying Offer from the terms of this
Agreement, holders of record (or their duly authorized proxy) of at least 10
percent of the shares of Common Stock then outstanding may submit to the Board
of Directors of the Company, not earlier than 90 Business Days nor later than
120 Business Days following the commencement (or, if later, the first existence)
of such Qualifying Offer, a written demand complying with the terms of this
Section 23(b) (the “Special Meeting Demand”) directing the Board of Directors of
the Company to submit to a vote of shareholders at a special meeting of the
shareholders of the Company (a “Special Meeting”) a resolution exempting such
Qualifying Offer from the provisions of this Agreement (the “Qualifying Offer
Resolution”). For purposes of a Special Meeting Demand, the record date for
determining holders of record eligible to make a Special Meeting Demand shall be
the 90th Business Day following commencement (or, if later, the first existence)
of a Qualifying Offer. The Board of Directors of the Company shall take such
actions as are necessary or desirable to cause the Qualifying Offer Resolution
to be so submitted to a vote of shareholders at a Special Meeting to be convened
within 90 Business Days following the Special Meeting Demand (the “Special
Meeting Period”); provided, however, that if the Company at any time during the
Special Meeting Period and prior to a vote on the Qualifying Offer Resolution
enters into a Definitive Acquisition Agreement, the Special Meeting Period may
be extended (and any special meeting called in connection therewith may be
cancelled) if the Qualifying Offer Resolution will be separately submitted to a
vote at the same meeting as the Definitive Acquisition Agreement. A Special
Meeting Demand must be delivered to the Secretary of the Company at the
principal executive offices of the Company and must set forth as to the
shareholders of record making the request (x) the names and addresses of such

 

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shareholders, as they appear on the Company’s books and records, (y) the class
and number of shares of Common Stock which are owned of record by each of such
shareholders, and (z) in the case of Common Stock that is owned beneficially by
another Person, an executed certification by the holder of record that such
holder has executed such Special Meeting Demand only after obtaining
instructions to do so from such beneficial owner and attaching evidence thereof.
Subject to the requirements of applicable law, the Board of Directors of the
Company may take a position in favor of or opposed to the adoption of the
Qualifying Offer Resolution, or no position with respect to the Qualifying Offer
Resolution, as it determines to be appropriate in the exercise of its duties. In
the event that no Person has become an Acquiring Person prior to the redemption
date referred to in this Section 23(b), and the Qualifying Offer continues to be
a Qualifying Offer and either (i) the Special Meeting is not convened on or
prior to the last day of the Special Meeting Period (the “Outside Meeting
Date”), or (ii) if, at the Special Meeting at which a quorum is present, a
majority of the shares of Common Stock present or represented by proxy at the
Special Meeting and entitled to vote thereon as of the record date for the
Special Meeting selected by the Board of Directors of the Company shall vote in
favor of the Qualifying Offer Resolution, then the Qualifying Offer shall be
deemed exempt from the application of this Agreement to such Qualifying Offer so
long as it remains a Qualifying Offer, such exemption to be effective on the
Close of Business on the tenth Business Day after (i) the Outside Meeting Date
or (ii) the date on which the results of the vote on the Qualifying Offer
Resolution at the Special Meeting are certified as official by the appointed
inspectors of election for the Special Meeting, as the case may be (the
“Exemption Date”). Notwithstanding anything herein to the contrary, no action or
vote, including action by written consent, by shareholders not in compliance
with the provisions of this Section 23(b) shall serve to exempt any offer from
the terms of this Agreement.

(c) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights (or at such later time as shall be
specified in the resolution taking such action), and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of the Board of Directors of the
Company ordering the redemption of the Rights, the Company shall give notice of
such redemption to the holders of the then outstanding Rights and the Rights
Agent by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the shares of Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price, as defined
in Section 11(d), of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors of the
Company.

(d) Immediately upon the Close of Business on the Exemption Date, without any
further action and without any notice, the right to exercise the Rights with
respect to the Qualifying Offer will terminate.

 

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(e) In case the Company shall propose (a) to pay any dividend payable in stock
of any class to the holders of its Preferred Stock or Common Stock or to make
any other distribution to the holders of its Preferred Stock or Common Stock
(other than a regular quarterly cash dividend), (b) to offer to the holders of
its Preferred Stock or Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or Common Stock or shares of
stock of any class or any other securities, (c) to effect any reclassification
of its Preferred Stock or Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock or Common Stock),
(d) to effect any consolidation, merger or share exchange into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(m)), (e) to effect any sale or other transfer or to permit one
or more of its Subsidiaries to effect any sale or other transfer, in one or more
related transactions, of 50 percent or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(m)), or (f) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders
of the Preferred Stock or Common Stock if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (a) or
(b) above at least 20 days prior to the record date for determining holders of
the Preferred Stock or Common Stock for purposes of such action, and in the case
of any such other action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
Preferred Stock or Common Stock whichever shall be the earlier. In case a Stock
Acquisition Date shall occur, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 25, a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights under
Section 11(a)(ii).

24. Exchange.

(a) The Board of Directors of the Company may, at its option, at any time and
from time to time after a Stock Acquisition Date, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e)) for shares of
Common Stock or Common Stock Equivalents, or any combination thereof, at an
exchange ratio of one share of Common Stock, or such number of Common Stock
Equivalents or units representing fractions thereof as would be deemed to have
the same value as one share of Common Stock, per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”).

(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock and/or
Common Stock Equivalents equal to the number of such Rights held by

 

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such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock and/or Common Stock Equivalents for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e)) held by each holder of Rights.

(c) In the event that the number of shares of Common Stock which are authorized
by the Company’s Articles of Incorporation as amended but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit an exchange of Rights as contemplated in accordance
with this Section 24, the Company may, at its option, take all such action as
may be necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights.

(d) The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the company shall pay
to the registered holders of Rights with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the value of a whole share of Common Stock. For purposes of this
Section 24, the value of a whole share of Common Stock shall be the closing
price (as determined pursuant to the second sentence of Section 11(d)(i) for the
Trading Day immediately prior to the date of exchange pursuant to this
Section 24, and the value of any Common Stock Equivalent shall be deemed to have
the same value as the Common Stock on such date.

25. Notices. Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:

 

  

StanCorp Financial Group, Inc.

1100 SW Sixth Avenue

Portland, Oregon 97204

Attention: Corporate Secretary

Copy to:

  

Ruth A. Beyer

Stoel Rives LLP

900 SW Fifth Ave., Suite 2600

Portland, OR 97204

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:

 

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Mellon Investor Services LLC

520 Pike Street, Suite 1220

Seattle, WA 08101

Attention: Relationship Manager

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

26. Supplements and Amendments. Prior to the Distribution Date, the Company and
the Rights Agent shall, if the Board of Directors of the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend this Agreement without
the approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interest of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of any such Person); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of or the benefits to, the holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment. Prior to Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of shares of Common Stock.

27. Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns.

28. Periodic Review. The Nominating and Corporate Governance Committee of the
Company (the “Committee”), composed entirely of independent directors of the
Board of Directors of the Company, shall review and evaluate this Agreement in
order to consider whether the maintenance of this Agreement continues to be in
the interests of the Company and its shareholders. The Committee shall conduct
such review periodically when, as and in such manner as the Committee deems
appropriate, after giving due regard to all relevant circumstances; provided,
however, that the Committee shall take such action at least annually. Following
each such review, the Committee will report its conclusions to the full Board of
Directors of the Company, including any recommendation in light thereof as to
whether this

 

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Agreement should be modified or the Rights should be redeemed. The Committee
shall have the power to set its own agenda and to retain, at the expense of the
Company, legal counsel, investment bankers or other advisors, in each case as
chosen by the Committee. The Committee shall have the authority to review all
information of the Company and to consider any and all factors it deems relevant
to an evaluation of whether to maintain or modify this Agreement.

29. Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any person or corporation other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common Stock).

30. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23(a) shall be reinstated and shall
not expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors of the Company.

31. Determinations and Actions by the Board of Directors, Etc. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (b) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company in good faith, shall (a) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (b) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.

32. Governing Law. This Agreement and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Oregon and
for all purposes shall be governed by and construed in accordance with the laws
of such State applicable to contracts to be made and performed entirely within
such State.

33. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

 

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34. Descriptive Headings. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested, all as of the day and year first above written.

 

STANCORP FINANCIAL GROUP, INC. By     Its     MELLON INVESTOR SERVICES LLC By  
  Its    

 

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