exv4w1



 





Exhibit 4.1

EXECUTION COPY

 





RIGHTS AGREEMENT




PATRIOT COAL CORPORATION




and




AMERICAN STOCK TRANSFER & TRUST COMPANY,




as Rights Agent




Dated as of October 22, 2007




 





 









 





Table of Contents




	 	 	 	 	 
	 	 	Page
	SECTION 1.   Definitions
	 	 	1	 
	 
	SECTION 2.   Appointment of Rights Agent
	 	 	4	 
	 
	SECTION 3.   Issue of Rights Certificates
	 	 	4	 
	 
	SECTION 4.   Form of Rights Certificate
	 	 	6	 
	 
	SECTION 5.   Countersignature and Registration
	 	 	6	 
	 
	SECTION 6.   Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	6	 
	 
	SECTION 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	7	 
	 
	SECTION 8.   Cancellation and Destruction of Rights Certificates
	 	 	8	 
	 
	SECTION 9.   Availability of Preferred Shares
	 	 	8	 
	 
	SECTION 10.   Preferred Shares Record Date
	 	 	10	 
	 
	SECTION 11.   Adjustment of Purchase Price, Number of Shares or Number of Rights
	 	 	10	 
	 
	SECTION 12.   Certificate of Adjusted Purchase Price or Number of Shares
	 	 	16	 
	 
	SECTION 13.   Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	16	 
	 
	SECTION 14.   Fractional Rights and Fractional Shares
	 	 	17	 
	 
	SECTION 15.   Rights of Action
	 	 	18	 
	 
	SECTION 16.   Agreement of Right Holders
	 	 	18	 
	 
	SECTION 17.   Right Certification Holder Not Deemed a Stockholder
	 	 	19	 
	 
	SECTION 18.   Concerning the Rights Agent
	 	 	19	 
	 
	SECTION 19.   Merger or Consolidation or Change of Name of Rights Agent
	 	 	19	 
	 
	SECTION 20.   Duties of Rights Agent
	 	 	20	 
	 
	SECTION 21.   Change of Rights Agent
	 	 	21	 
	 
	SECTION 22.   Issuance of New Right Certificates
	 	 	22	 
	 
	SECTION 23.   Redemption
	 	 	22	 






 i 









 






	 	 	 	 	 
	 	 	Page
	SECTION 24.   Exchange
	 	 	23	 
	 
	SECTION 25.   Notice of Certain Events
	 	 	24	 
	 
	SECTION 26.   Notices
	 	 	25	 
	 
	SECTION 27.   Supplements and Amendments
	 	 	25	 
	 
	SECTION 28.   Successors
	 	 	26	 
	 
	SECTION 29.   Benefits of this Agreement
	 	 	26	 
	 
	SECTION 30.   Severability
	 	 	26	 
	 
	SECTION 31.   Governing Law
	 	 	26	 
	 
	SECTION 32.   Counterparts
	 	 	26	 
	 
	SECTION 33.   Descriptive Headings
	 	 	26	 





Exhibit A  —  Form of Certificate of Designations



Exhibit B  —  Form of Right Certificate




  ii 









 





          This RIGHTS AGREEMENT, dated as of October 22, 2007 (this “Agreement”), is entered into by and
between Patriot Coal Corporation, a Delaware corporation (the “Company”), and American Stock
Transfer & Trust Company, a New York chartered bank, as rights agent (the “Rights Agent”).




RECITALS




          WHEREAS, the Board of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share (as defined below) of the Company
outstanding on October 31, 2007 (the “Record Date”), each Right representing the right to purchase
one one-hundredth of a Preferred Share (as defined below), upon the terms and subject to the
conditions set forth in this Agreement, and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are defined below).




          NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth in this
Agreement, the parties hereby agree as follows:




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





     (a) “Acquiring Person” shall mean any Person (as such term is defined below) who or
which, together with all Affiliates and Associates (as such terms are defined below) of such
Person, shall be the Beneficial Owner (as such term is defined below) of 15% or more of the
Common Shares of the Company then outstanding, but shall not include (i) the Company; (ii)
any Subsidiary (as such term is defined below) of the Company; or (iii) any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person
shall become an “Acquiring Person” as the result of an acquisition of Common Shares by the
Company which, by reducing the number of Common Shares of the Company outstanding, increases
the proportionate number of Common Shares of the Company Beneficially Owned (as such term is
defined below) by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that, if a Person shall become the Beneficial Owner of 15%
or more of the Common Shares of the Company 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 Common Shares of the Company, then such Person shall be deemed to be
an “Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith 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 (as determined in good
faith by the Board of Directors) a sufficient number of Common Shares so that such Person
would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person shall not therefor be deemed to be an “Acquiring Person” for any
purposes of this Agreement.



 









 






     (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act (as such term is defined below) as in
effect on the date of this Agreement.




     (c) “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement.




     (d) A Person shall be deemed the “Beneficial Owner” of, shall be deemed to have
“Beneficial Ownership” of and shall be deemed to “Beneficially Own” any securities:




     (i) which such Person or any of such Person’s Affiliates or Associates is
deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act as in effect on the date
of this Agreement;




     (ii) which such Person or any of such Person’s Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only after
the passage of time or both) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters, initial purchasers
or selling group members with respect to a bona fide public offering of securities,
or a private placement of securities pursuant to an exemption under the Securities
Act), or upon the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to Beneficially Own, 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 (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) 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 promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or successor
report); 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
(other than customary agreements with and between underwriters, initial purchasers
or selling group members with respect to a bona fide public offering of securities,
or a private placement of securities pursuant to an
exemption under the Securities Act), whether or not in writing, for the purpose
of acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company.



2









 





          Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.





     (e) “Book Entry” shall mean an entry in the direct registration system of the Company’s
shares.




     (f) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on
which banking institutions in New York City, 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, 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, New York time, on the next succeeding Business Day.




     (h) “Common Shares” when used with reference to the Company shall mean the shares of
common stock, par value $0.01 per share, of the Company. “Common Shares” 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 or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such
first-mentioned Person.




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




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




     (k) “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.




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




     (m) “NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated
Quotation System.




     (n) “NYSE” shall mean the New York Stock Exchange.




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




     (p) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred
Stock, par value $0.01 per share, of the Company having the rights and preferences set forth
in the Form of Certificate of Designations attached to this Agreement as Exhibit A.



3









 






     (q) “Purchase Price” shall have the meaning set forth in Section 4 hereof.




     (r) “Record Date” shall have the meaning set forth in the second paragraph hereof.




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




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




     (u) “Right” shall have the meaning set forth in the second paragraph hereof.




     (v) “Right Certificate” shall have the meaning set forth in Section 3(a) hereof.




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




     (x) “Shares Acquisition Date” shall mean the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such.




     (y) “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.




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



          SECTION 2.   Appointment of Rights Agent. The Company hereby appoints the Rights Agent to
act as agent for the Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall, prior to the Distribution Date, also be the holders of the Common Shares of 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 upon ten (10) days’ prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and in no event be liable for, the acts or omissions of any
such co-Rights Agent.




          SECTION 3.   Issue of Rights Certificates. (a) Until the earlier of (i) the tenth day
after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the
commencement 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 entity holding Common Shares
of the Company for or pursuant to the terms of any such plan) of a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner of Common Shares of
the Company aggregating 15% or more of the then outstanding Common Shares of the Company (including
any such date which is after the date of this Agreement and prior to the issuance of the Rights;
the earlier of such dates being herein referred to as the “Distribution Date”), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by Book Entry or the certificates




4









 







for Common Shares of the Company registered in the names of the holders thereof (which certificates
and Book Entry shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares of the Company. 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, insured, postage-prepaid mail, to each record holder of Common Shares of the Company
as of the Close of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.




          (b) With respect to certificates of Book Entries for Common Shares of the Company outstanding
as of the Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates or Book Entries registered in the names of the holders thereof. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any Common Shares of the Company outstanding on the Record Date
represented by certificates or Book Entries shall also constitute the transfer of the Rights
associated with the Common Shares of the Company represented thereby.




          (c) Certificates for Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph (c)) 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:





     This certificate also evidences and entitles the holder hereof to certain rights as set
forth in a Rights Agreement between Patriot Coal Corporation and American Stock Transfer &
Trust Company, dated as of October 22, 2007, as it may be amended from time to time (the
“Agreement”), the terms of which are incorporated herein by reference and a copy of which is
on file at the principal executive offices of Patriot Coal Corporation. Under certain
circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will
be evidenced by separate certificates and will no longer be evidenced by this certificate.
Patriot Coal Corporation will mail to the holder of this certificate a copy of the Agreement
without charge after receipt of a written request therefor. Under certain circumstances, as
set forth in the Agreement, Rights Beneficially Owned by any Person (each as defined in the
Agreement) who becomes an Acquiring Person (as defined in the Agreement) become null and
void.



          With respect to such certificates containing the foregoing legend, until the Distribution
Date, the Rights associated with the Common Shares of the Company represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the Common Shares of
the Company represented thereby. In the event that the Company purchases or acquires any Common
Shares of the Company after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares of the Company shall be deemed



5









 






cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common Shares of the
Company which are no longer outstanding.




          Notwithstanding this paragraph (c), the omission of a legend shall not affect the
enforceability of any part of this Agreement or the rights of any holder of the Rights.




          SECTION 4.   Form of Rights Certificate. The Right Certificates (and the forms of election
to purchase Preferred Shares and 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 applicable rule or regulation made pursuant
thereto or with any applicable rule or regulation of any stock exchange or the National Association
of Securities Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as
provided in this Agreement.




          SECTION 5.   Countersignature and Registration. The Right Certificates shall be executed
on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President,
any of its Vice Presidents or its Treasurer, either manually or by facsimile signature, who shall
have affixed thereto the Company’s seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The
Right 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 Right Certificates shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right 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 individual who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the Company by any
individual who, at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of the execution of
this Agreement any such individual was not such an officer.




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




          SECTION 6.   Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof,
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,




6









 







any Right Certificate
or Right Certificates (other than Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates
entitling the registered holder to purchase a like number of one one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right Certificate or Right
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 Right Certificates.




          Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right 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 Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.




          SECTION 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The
registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement), in whole or in part, at any time after the Distribution
Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on October
22, 2017 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are exchanged
as provided in Section 24 hereof.




          (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right shall initially be $125, and shall be subject to adjustment from time to
time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.




          (c) Upon receipt of a Right 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 required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified check, cashier’s check
or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i)
(A) requisition from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby




7









 







irrevocably authorizes any such transfer
agent to comply with all such requests, or (B) requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased
(in which case certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent of the Preferred Shares with such depositary agent) and the Company
hereby directs such depositary agent to comply with such request; (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 hereof; (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be designated by such holder;
and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate.




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




          (e) 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 of
Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set forth on the reverse
side of the Right Certificate surrendered for such transfer or exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as
the Company shall reasonably request.




          SECTION 8.   Cancellation and Destruction of Rights Certificates. All Right 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 cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right 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
Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and, in such case, shall
deliver a certificate of destruction thereof to the Company.




          SECTION 9.   Availability of Preferred Shares.




          (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury the
number of Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof. The Company covenants and agrees that it
will take all such action as may be necessary to ensure that all Preferred Shares delivered





8









 







upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.




          (b) So long as Preferred Shares (and, following the time that a Person becomes an Acquiring
Person, Common Shares and other securities) issuable upon the exercise of Rights may be listed or
admitted to trading on the NYSE or listed on any other national securities exchange or quotation
system, 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 or admitted to trading on
the NYSE or listed on any other exchange or quotation system upon official notice of issuance upon
such exercise.




          (c) From and after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary to permit the issuance of Preferred Shares (and following the time that
a Person first becomes an Acquiring Person, Common Shares and other securities) upon the exercise
of Rights, to register and qualify such shares of Preferred Shares (and following the time that a
Person first becomes an Acquiring Person, Common Shares and other securities) under the Securities
Act and any applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are
not available), cause such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications effective until the
earlier of (x) the date as of which the Rights are no longer exercisable for such securities and
(y) the Final Expiration Date. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act 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 effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification or exemption in such jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been declared effective.




          (d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all Preferred Shares (and, following the time that a Person becomes an Acquiring
Person, Common Shares and other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (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 other governmental charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax or other governmental
charge which may be payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary
receipts for Preferred Shares upon the exercise of any Rights until any




9









 







such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s reasonable satisfaction that no such tax or other
governmental charge is due.




          SECTION 10.   Preferred Shares Record Date. Each Person in whose name any certificate for
Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right 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 Shares transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, 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 in this Agreement.




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





     (a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (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 Purchase
Price in effect at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of shares of
capital stock issuable on such date, 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 Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon exercise of
one Right.




     (ii) Subject to Section 24 hereof, in the event any Person becomes an Acquiring
Person, each holder of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then-current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for which a



10









 







Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of the
Common Shares of the Company (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.




     From and after the occurrence of such event, any Rights that are or were acquired or
Beneficially Owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void, and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 hereof that represents Rights Beneficially Owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be cancelled.




     (iii) In the event that there shall not be sufficient Common Shares issued but
not outstanding or authorized but unissued to permit the exercise in full of the
Rights in accordance with subparagraph (ii) above, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance upon
exercise of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exercise of a Right, a number of
Preferred Shares or fraction thereof such that the current per share market price of
one Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.




     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred Shares
(“Equivalent Preferred Shares”)) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase Price



11









 







in
effect immediately prior to such record date by a fraction, the numerator of which shall be
the number of Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one Right. 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 and shall be binding on the Rights Agent and holders
of the Rights. Preferred Shares 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; and, in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.




     (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (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 Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect 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 Shares on such record
date, 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 and shall be binding on the Rights Agent and holders of the Rights) of the portion of
the assets or evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator of which shall be such
then-current per share market price of the Preferred Shares on such record date; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. 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
Purchase Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.




     (d) (i) For the purpose of any computation hereunder, the “current per share market
price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of such



12









 







Security for
the 30 consecutive Trading Days immediately prior to such date; provided, however, that, in
the event that the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or Securities convertible
into such shares, or (B) any subdivision, combination or reclassification of such Security
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 reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, reported at or prior
to 4:00 P.M. New York time or, in case no such sale takes place on such day, the average of
the bid and asked prices, regular way, reported as of 4:00 P.M. New York time, in either
case, as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Security is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last quoted price
reported at or prior to 4:00 P.M. New York time or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported as of 4:00 P.M.
New York time by NASDAQ or such other system then in use, or, if on any such date the
Security 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 Security selected
by 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 Security is listed or admitted to
trading is open for the transaction of business, or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.




     (ii) For the purpose of any computation hereunder, the “current per share market price”
of the Preferred Shares shall be determined in accordance with the method set forth in
Section 11(d)(i). If the Preferred Shares are not publicly traded, the “current per share
market price” of the Preferred Shares shall be conclusively deemed to be the current per
share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof
(appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded, “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.




     (e) No adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; 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 one one-millionth
of a Preferred Share or one ten-thousandth of any other



13









 







share or security 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) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, 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 Shares contained in Section 11(a) through (c) hereof, inclusive, and the
provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares 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 hereunder shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as provided in this
Agreement.




     (h) Unless the Company shall have exercised its election as provided in Section 11(i)
hereof, upon each adjustment of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (B) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase Price.




     (i) The Company may elect, on or after the date of any adjustment of the Purchase
Price, to adjust the number of Rights in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the




14











 






Company shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject to Section
14 hereof, the additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for in this Agreement, and shall be registered in the
names of the holders of record of Right Certificates on the record date specified in the
public announcement.




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




     (k) Before taking any action that would cause an adjustment reducing the Purchase Price
below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon
exercise of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.




     (l) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price 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 issuing to the holder of any Right
exercised after such record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price 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.




     (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such adjustments in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it, in its sole discretion,
shall determine to be advisable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current
market price, issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants referred to in
Section 11(b) hereof, hereafter made by the Company to holders of the Preferred Shares shall
not be taxable to such stockholders.



15









 






     (n) In the event that, at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then, in any such case, (A) the
number of one one-hundredths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one one-hundredths
of a Preferred Share so purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding immediately after
such event, and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments provided for
in this Section 11(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.



          SECTION 12.   Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, 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 Common Shares or
the Preferred Shares and the United States Securities and Exchange Commission a copy of such
certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.




          SECTION 13.   Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the
event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the
Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such merger, all or part
of the Common Shares shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) 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% 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 or one
or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be
made so that (i) each holder of a Right (except as otherwise provided in this Agreement) shall
thereafter have the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of



16









 






consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares
shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term
“Company” shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such
steps (including, but not limited to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be,
in relation to the Common Shares of the Company thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such consolidation, merger, sale or transfer unless,
prior thereto, the Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not enter into any transaction of the kind
referred to 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. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.




          SECTION 14.   Fractional Rights and Fractional Shares. (a) The Company shall not be
required to issue fractions of Rights (except prior to the Distribution Date in accordance with
Section 11(n)) or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights 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 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, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices, regular way, in
either case, as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Rights are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ 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 Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred



17









 






Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it; provided that such
agreement shall provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as Beneficial Owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right 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 Preferred Share.
For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.




          (c) The holder of a Right, by the acceptance of the Right, expressly waives such holder’s
right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as
provided above).




          SECTION 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 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right 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 under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject to, this
Agreement.




          SECTION 16.   Agreement of Right 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 Shares;




     (b) after the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of transfer; and




     (c) the Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right



18









 







Certificate or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.



          SECTION 17.   Right Certification Holder Not Deemed a Stockholder. No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares 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 in this
Agreement or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.




          SECTION 18.   Concerning the Rights Agent. 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 gross 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 arising therefrom, directly or indirectly.




          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 Right Certificate or certificate for the Preferred Shares or Common Shares 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 hereof.




          SECTION 19.   Merger or Consolidation or Change of Name of Rights Agent. 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 stock
transfer or corporate trust powers 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 hereof. In
case at the time such successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the




19









 




countersignature of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right 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 Right Certificates shall have the full force provided in the Right Certificates and in
this Agreement.




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




          SECTION 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 Right 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 specifically prescribed in this Agreement) may be deemed to
be conclusively proved 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 gross 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 Right 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 Right



20









 







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
Right Certificate; nor shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24 hereof, 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 Right 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 Preferred Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and nonassessable.




     (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.




     (h) The Rights Agent and any stockholder, 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 in this Agreement 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 that reasonable care was exercised in the
selection and continued employment thereof.



          SECTION 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 Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by



21









 






first-class mail. In the event the Transfer Agency and Services Agreement terminates, the Rights
Agent will be deemed to resign automatically on the effective date of such termination; and any
required notice will be sent by the Company. 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 Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right 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 Right Certificate (which holder shall, with such notice, submit
such holder’s Right Certificate for inspection by the Company), then the registered holder of any
Right 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 corporation organized and doing business under the laws of the United States or any
other state of the United States, in good standing, which is authorized under such laws to exercise
corporate trust 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. 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 Shares or Preferred Shares,
and mail a notice thereof in writing to the registered holders of the Right 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.




          SECTION 22.   Issuance of New Right Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by the 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 Right Certificates made in
accordance with the provisions of this Agreement.




          SECTION 23.   Redemption. (a) The Board of Directors of the Company may, at its option, at
any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than
all the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being referred to as the “Redemption Price”). The redemption of the Rights
by the Board of Directors of the Company may be made effective at such time, on such basis and with
such conditions as the Board of Directors of the Company, in its sole discretion, may establish.




22









 








          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23, 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. The Company shall
promptly give public notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption. Within 10 days
after such action of the Board of Directors of the Company ordering the redemption of the Rights,
the Company shall mail a notice of redemption to all the holders of the then outstanding Rights 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 Common Shares. Any notice
which is mailed in the manner provided in this Agreement 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. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the Distribution Date. The Company may, at
its option, pay the Redemption Price in cash, shares of Common Stock (based on the current market
price of the Common Stock at the time of redemption as determined pursuant to Section 11(d)(i)
hereof) or any other form of consideration deemed appropriate by the Board of Directors.




          SECTION 24.   Exchange. (a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, 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 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to
Section 11(i) (such exchange ratio being referred to in this Agreement as the “Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding
Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.




          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (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 Common Shares equal to the number of
such Rights held by 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
provided in this Agreement 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 Common Shares 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



23









 






effected pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.




          (c) In the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable
upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by such number or fraction is equal to the
current per share market price of one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.




          (d) The Company shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this paragraph (d), the
current market value of a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.




          SECTION 25.   Notice of Certain Events. (a) In case the Company shall, at any time after
the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the holders
of the Preferred Shares or to make any other distribution to the holders of the Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preferred
Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares
of stock of any class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or
with, or 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 transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, 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, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of participation therein by
the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the Preferred Shares for purposes of such
action, and, in the case of any such other action, at least 10



24









 






days prior to the date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier.




          (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company
shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.




          SECTION 26.   Notices. Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the holder of any Right 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:



Patriot Coal Corporation

12312 Olive Boulevard

Suite 400

St. Louis, MO 63141

Attention: Corporate Secretary



Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Right 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:



American Stock Transfer & Trust Company

59 Maiden Lane

New York, NY 10038

Attention: Executive Vice President



Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right 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.




          SECTION 27.   Supplements and Amendments. The Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained in this Agreement which may be
defective or inconsistent with any other provisions in this Agreement, or to make any other
provisions with respect to the Rights which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that, from and after such time as any Person becomes an Acquiring Person, no
such supplement or amendment may (a) adversely affect the interests of the holders of Rights as
such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b)
cause this Agreement again to become amendable other than in accordance with this sentence or (c)
cause the Rights again to become redeemable. Without limiting the foregoing, the Company may at
any time prior to such time as



25









 






any Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in
Section 1(a) and 3(a) hereof to not less than 10% (the “Reduced Threshold”); provided, however,
that no Person who Beneficially Owns a number of Common Shares equal to or greater than the Reduced
Threshold shall become an Acquiring Person unless such Person shall, after the public announcement
of the Reduced Threshold, increase its Beneficial Ownership of the then outstanding Common Shares
(other than as a result of an acquisition of Common Shares by the Company) to an amount equal to or
greater than the greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest Beneficial
Ownership of such Person as a percentage of the outstanding Common Shares as of any date on or
after the date of the public announcement of such Reduced Threshold plus (ii) .001%.




          SECTION 28.   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 hereunder.




          SECTION 29.   Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any Person other than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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 Right Certificates (and,
prior to the Distribution Date, the Common Shares).




          SECTION 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.




          SECTION 31.   Governing Law. This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware 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.




          SECTION 32.   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.




          SECTION 33.   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.




          SECTION 34.   Determinations and Actions by the Board of Directors. The Board of Directors
of the Company shall have the exclusive power and authority to administer this Agreement and to
exercise the 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




26









 




advisable for the administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board of Directors of the Company in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.




          SECTION 35.   Force Majeure. Notwithstanding anything to the contrary contained herein,
the Rights Agent shall not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage
of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.




27









 








          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.




	 	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	PATRIOT COAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Joseph W. Bean
 

	 	 	 	By
	 	/s/ Richard M. Whiting
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Joseph W. Bean
	 	 	 	 	 	Name: Richard M. Whiting	 	 
	 

	 	Title: Senior Vice President, General
	 	 	 	 	 	Title: President & Chief
Executive Officer	 	 
	 

	 	          Counsel & Corporate Secretary
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	AMERICAN STOCK TRANSFER
& TRUST COMPANY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Susan Silber
	 	 	 	By
	 	 /s/ Herbert J. Lemmer	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Susan Silber
	 	 	 	 	 	Name: Herbert J. Lemmer	 	 
	 

	 	Title: Assistant Secretary
	 	 	 	 	 	Title: Vice President	 	 







28









 








EXHIBIT A




FORM




of




CERTIFICATE OF DESIGNATIONS




of




SERIES A JUNIOR PARTICIPATING PREFERRED STOCK




of




PATRIOT COAL CORPORATION




(Pursuant to Section 151 of the

Delaware General Corporation Law)




 






          Patriot Coal Corporation, a corporation organized and existing under the General Corporation
Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the
following resolution was adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called and held on October 12, 2007:




          RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
the Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with the
provisions of the Certificate of Incorporation, the Board of Directors hereby creates a series of
Preferred Stock, par value $0.01 per share, of the Corporation (the “Preferred Stock”), and hereby
states the designation and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:




          Series A Junior Participating Preferred Stock:




          SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of
shares constituting the Series A Preferred Stock shall be 1,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.




 









 








          SECTION 2. DIVIDENDS AND DISTRIBUTIONS.




          (A) Subject to the rights of the holders of any shares of any series of Preferred Stock
(or any similar stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $0.01 per share (the “Common Stock”), of the
Corporation, and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such
event.




          (B) The Corporation shall declare a dividend or distribution on the Series A Preferred
Stock as provided in paragraph (A) of this Section immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.




          (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the




A-2









 




determination of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the
            shares of Series A Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment thereof.




          SECTION 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall
have the following voting rights:





     (A) Subject to the provision for adjustment hereinafter set forth, each share of Series
A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.




     (B) Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.




     (C) Except as set forth herein, or as otherwise provided by law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.



          SECTION 4. CERTAIN RESTRICTIONS.





     (A) Whenever quarterly dividends or other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on



A-3









 







shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:




     (i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;




     (ii) declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;




     (iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or




     (iv) redeem or purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.




     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
            shares at such time and in such manner.



          SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.




          SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution
or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution



A-4









 






or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or
(2) to the holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.




          SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.




          SECTION 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be
redeemable.




          SECTION 9. RANK. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any other class of the
Corporation’s Preferred Stock and senior to the Common Stock.




A-5









 








          SECTION 10. AMENDMENT. The Certificate of Incorporation of the Corporation shall not
be amended in any manner which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least three-quarters of the outstanding shares of Series A Preferred Stock,
voting together as a single class.




          IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Chairman and Chief Executive Officer this 22nd day of October, 2007.




	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:  	Richard M. Whiting 	 
	 	Title:  	President and Chief Executive Officer 	 
	 




A-6









 








EXHIBIT B




Form of Right Certificate




			
	Certificate No. R-
	 	                     Rights





NOT EXERCISABLE AFTER OCTOBER 22, 2017 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.




Right Certificate




Patriot Coal Corporation




          This certifies that      , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of October 22, 2007 (the “Agreement”),
between Patriot Coal Corporation, a Delaware corporation (the “Company”), and American Stock
Transfer & Trust Company (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York, New
York time, on October 22, 2017 at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred
Shares”), at a purchase price of $125 per one one-hundredth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number
of one one-hundredths of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price as of
                    , 2007, based on the Preferred Shares as constituted at such date. As provided in the
Agreement, the Purchase Price and the number of one one-hundredths of a Preferred Share which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.




          This Right Certificate is subject to all of the terms, provisions and conditions of the
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Right Certificates. Copies of the Agreement are on file at the
principal executive offices of the Company and the offices of the Rights Agent.




          This Right Certificate, with or without other Right Certificates, upon surrender at the
principal office of the Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not exercised.




 









 








          Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i)
may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be exchanged
in whole or in part for Preferred Shares or shares of the Company’s Common Stock, par value $0.01
per share.




          No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts),
but, in lieu thereof, a cash payment will be made, as provided in the Agreement.




          No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting stockholders (except as
provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the
Agreement.




          This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.




          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of ______, 20__.




	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PATRIOT COAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

Name:

	 	 	 	 	 	 

Name:
	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	Countersigned:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 





	 	 	 	 	 
	AMERICAN STOCK TRANSFER
& TRUST COMPANY	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






Form of Reverse Side of Right Certificate




B-2









 





FORM OF ASSIGNMENT




(To be executed by the registered holder if such holder desires to transfer the Right Certificate.)




	 	 	 
	 

	 	FOR VALUE RECEIVED                      hereby sells, assigns and transfers






	 	 	 	 	 
	unto
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 




 



(Please print name and address of transferee)



 



 




this Right Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint            Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of substitution.




Dated:                     




	 	 	 	 	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




          All Guarantees must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock
Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.




          The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Agreement).




	 	 	 	 	 
	 

	 	 

Signature
	 	 






Form of Reverse Side of Right Certificate — continued




B-3









 





FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise Rights represented by the Right Certificate.)




To: PATRIOT COAL CORPORATION




          The undersigned hereby irrevocably elects to exercise                      Rights represented by this
Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:




Please insert social security

or other identifying number




 



 



(Please print name and address)



 



 



If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights shall be registered in the name of and
delivered to:




Please insert social security

or other identifying number




 



 



(Please print name and address)



 



 




Dated:                     




	 	 	 	 	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




          All Guarantees must be made by a financial institution (such as a bank or broker) which is a
participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock
Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.




          The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Agreement).




	 	 	 	 	 
	 

	 	 

Signature
	 	 






B-4









 






NOTICE




          The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.




          In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will
deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or
Election to Purchase will not be honored.





B-5