EX-4.1






Exhibit 4.1




NATIONAL FUEL GAS COMPANY




and




THE BANK OF NEW YORK, Rights Agent




RIGHTS AGREEMENT




Amended and Restated as of July 11, 2008




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 1. Certain Definitions
	 	 	2	 
	 
	 	 	 	 
	Section 2. Appointment of Rights Agent
	 	 	7	 
	 
	 	 	 	 
	Section 3. Issue of Right Certificates
	 	 	7	 
	 
	 	 	 	 
	Section 4. Form of Right Certificates
	 	 	9	 
	 
	 	 	 	 
	Section 5. Countersignature and Registration
	 	 	10	 
	 
	 	 	 	 
	Section 6.
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	10	 
	 
	 	 	 	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	11	 
	 
	 	 	 	 
	Section 8. Cancellation and Destruction of Right Certificates
	 	 	13	 
	 
	 	 	 	 
	Section 9. Reservation and Availability of Shares of Common Stock
	 	 	13	 
	 
	 	 	 	 
	Section 10. Common Stock Record Date
	 	 	15	 
	 
	 	 	 	 
	Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights
	 	 	15	 
	 
	 	 	 	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	21	 
	 
	 	 	 	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	22	 
	 
	 	 	 	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	24	 
	 
	 	 	 	 
	Section 15. Rights of Action
	 	 	25	 
	 
	 	 	 	 
	Section 16. Agreement of Right Holders
	 	 	25	 
	 
	 	 	 	 
	Section 17. Right Certificate Holder Not Deemed a Stockholder
	 	 	26	 
	 
	 	 	 	 
	Section 18. Concerning the Rights Agent
	 	 	26	 
	 
	 	 	 	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	27	 
	 
	 	 	 	 
	Section 20. Duties of Rights Agent
	 	 	27	 
	 
	 	 	 	 
	Section 21. Change of Rights Agent
	 	 	30	 
	 
	 	 	 	 
	Section 22. Issuance of New Right Certificates
	 	 	31	 
	 
	 	 	 	 
	Section 23. Redemption and Termination
	 	 	31	 
	 
	 	 	 	 





-i-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 24. Exchange
	 	 	32	 
	 
	 	 	 	 
	Section 25. Notice of Certain Events
	 	 	33	 
	 
	 	 	 	 
	Section 26. Notices
	 	 	34	 
	 
	 	 	 	 
	Section 27. Supplements and Amendments
	 	 	34	 
	 
	 	 	 	 
	Section 28. Successors; Assignment
	 	 	35	 
	 
	 	 	 	 
	Section 29. Determinations and Actions by the Board of Directors
	 	 	35	 
	 
	 	 	 	 
	Section 30. Benefits of This Agreement
	 	 	35	 
	 
	 	 	 	 
	Section 31. Severability
	 	 	36	 
	 
	 	 	 	 
	Section 32. Governing Law
	 	 	36	 
	 
	 	 	 	 
	Section 33. Counterparts
	 	 	36	 
	 
	 	 	 	 
	Section 34. Descriptive Headings
	 	 	36	 
	 
	 	 	 	 
	Exhibit A — Form of Right Certificate
	 	 	A-1	 
	 
	 	 	 	 
	Form of Assignment
	 	 	A-4	 
	 
	 	 	 	 
	Certificate
	 	 	A-5	 
	 
	 	 	 	 
	Notice
	 	 	A-5	 
	 
	 	 	 	 
	Form of Election to Purchase
	 	 	A-6	 
	 
	 	 	 	 
	Exhibit B — Summary of Rights to Purchase Common Stock
	 	 	B-1	 







-ii-











 





AMENDED AND RESTATED RIGHTS AGREEMENT




     This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of July 11, 2008 (the “Agreement”),
between NATIONAL FUEL GAS COMPANY, a New Jersey corporation (the “Company”), and THE BANK OF NEW
YORK, a banking corporation organized under the laws of the State of New York (the “Rights Agent”).



WITNESSETH




     WHEREAS, the Company and HSBC Bank USA, National Association, as successor in interest to
Marine Midland Bank (the “Original Rights Agent”), have heretofore entered into that certain Rights
Agreement, dated as of June 12, 1996 (the “Original Agreement”); and



     WHEREAS, the Board of Directors of the Company on March 19, 1996 (the “Rights Dividend
Declaration Date”) authorized and declared a dividend distribution (the “Distribution”) of one
Right (as such term is hereinafter defined) for each share of Common Stock, $1.00 par value, of the
Company (the “Common Stock”) outstanding at the Close of Business on July 31, 1996 (the “Record
Date”), the record date established by the Board of Directors on June 13, 1996; and



     WHEREAS, on the Rights Dividend Declaration Date, the Board of Directors further authorized
and directed the issuance of one Right (as such number may be adjusted pursuant to the provisions
of Section 11(i) hereof) for each share of Common Stock issued (whether originally issued or
delivered from the Company’s treasury stock) between the Record Date and the earlier of the
Distribution Date or the Expiration Date (as such terms are hereinafter defined), each Right
initially representing the right to purchase one-half of one share of Common Stock, upon the terms
and subject to the conditions hereinafter set forth (the “Rights”); and



     WHEREAS, the Company and the Original Rights Agent entered into that certain Amended and
Restated Rights Agreement, dated as of April 30, 1999, as amended on September 7, 2001 and as
further amended and restated on June 8, 2007 and on September 1, 2007 (the “Amended and Restated
Agreement”); and



     WHEREAS, pursuant to Section 27 of the Amended and Restated Agreement, the Company is
authorized to amend the Amended and Restated Agreement from time to time and, so long as its
interests are not adversely affected thereby, the Rights Agent has undertaken to execute any such
amendment; and



     WHEREAS, the Board of Directors of the Company has determined that it is necessary and
desirable that the Amended and Restated Agreement be amended in certain respects; and



     WHEREAS, the Rights Agent has determined that the amendments to the Amended and Restated
Agreement proposed by the Company and reflected in this Agreement (i) are in compliance with the
terms of Section 27 of the Amended and Restated Agreement and (ii) will not adversely affect its
interests thereunder;



 









 





     WHEREAS, effective September 1, 2007, the Original Rights Agent resigned as Rights Agent
hereunder and, pursuant to Section 21 of the Amended and Restated Agreement, the Company
substituted The Bank of New York as successor Rights Agent; and



     WHEREAS, the Company and the Rights Agent have agreed that, for ease and convenience of
reference, it is desirable to incorporate such amendments into an instrument which restates in its
entirety the Amended and Restated Agreement, as so amended;



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



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



     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of securities of the
Company constituting a Substantial Block (as such term is hereinafter defined), but shall not
include (i) the Company, any Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the Company for or pursuant to the
terms of any such plan, (ii) any Person who becomes the Beneficial Owner of a Substantial Block of
the shares of Voting Stock then outstanding as a result of a reduction in the number of shares of
Voting Stock outstanding due to the repurchase of shares of Voting Stock by the Company unless and
until such Person, after becoming aware that such Person has become the Beneficial Owner of a
Substantial Block of the then outstanding shares of Voting Stock, acquires beneficial ownership of
any additional shares of Voting Stock, (iii) an Existing Holder, unless and until such time as such
Existing Holder acquires beneficial ownership of any additional shares of Voting Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the outstanding Voting Stock
in Voting Stock or pursuant to a split or subdivision of the outstanding Voting Stock), unless,
upon acquiring beneficial ownership of any additional shares of Voting Stock, such Existing Holder
is not then the Beneficial Owner of securities of the Company constituting a Substantial Block; or
(iv) any Person who otherwise would be an Acquiring Person but whom the Board of Directors
determines, in good faith, to have become such inadvertently (including, without limitation,
because (A) such person was unaware that he or it was the Beneficial Owner of a percentage of
Voting Stock that otherwise would cause such person to be an Acquiring Person, or (B) such Person
was aware of the extent to which he or it is the Beneficial Owner of Voting Stock but had no actual
knowledge of the consequences of being such a Beneficial Owner under this Agreement) and without
any intention of changing or influencing control of the Company, and if such Person, after being
advised of such determination and within a period of time set by the Board of Directors, divests
himself or itself of a sufficient number of shares of Voting Stock so that such Person would no
longer be the Beneficial Owner of a Substantial Block of the Voting Stock of the Company then
outstanding, then such Person shall not be deemed to be or to have become an Acquiring Person for
any purposes of this Agreement; and during any period of time (x) prior to the time the Board of
Directors shall have become aware that such Person would have become an Acquiring Person but for
the provisions of this clause (iii), (y) during which the



-2-









 







Board of Directors is making the determination called for under this clause (iii), and (z)
during which such Person is divesting himself or itself of a sufficient number of shares of Voting
Stock so that such Person no longer would be the Beneficial Owner of a Substantial Block of the
Voting Stock of the Company then outstanding, such Person shall not be deemed to be or to have
become an Acquiring Person for any purpose under this Agreement.



     (b) “Act” shall have the meaning set forth in Section 9(c) hereof.



     (c) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.



     (d) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as in effect on the date hereof.



     (e) “Agreement” shall have the meaning set forth in the introduction hereto.



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



     (i) which such Person or any of such Person’s Affiliates or Associates has, directly or
indirectly, the right to acquire (whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of an event) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the “Beneficial Owner” of, or to “beneficially own,” (1) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, (2) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering Event (as such term is
hereinafter defined), or (3) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event, which Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) hereof
(“Original Rights”) or pursuant to Section 11(i) or Section 22 hereof in connection with an
adjustment made with respect to Original Rights; or



     (ii) which such Person or any of such Person’s Affiliates or Associates has, directly or
indirectly, the right to vote or dispose of or has “beneficial ownership” of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any
security under this subparagraph (ii) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not 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 with which
such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,



-3-









 







voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii)
of this paragraph (f)) or disposing of any securities of the Company; or



     (iv) in respect of which such Person or any of such Person’s Affiliates or Associates has a
Synthetic Long Position.


Notwithstanding the foregoing, nothing contained in this definition shall cause a Person ordinarily
engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired in a bona fide firm commitment underwriting pursuant to
an underwriting agreement with the Company.



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 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.




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



     (h) “Certification” shall have the meaning set forth in Section 18 hereof.



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



     (j) “Common Stock,” when used with reference to the Company, shall mean the shares of common
stock, $1.00 par value, of the Company. “Common Stock,” when used with reference to any Person
other than the Company, shall mean either the capital stock with the greatest voting power of such
other Person or, if such Person is a Subsidiary of another Person, the equity securities or other
equity interest having power to control or direct the management of such Person.



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



     (l) “Company” shall have the meaning set forth in the introduction hereto.



     (m) “Current Market Price” shall have the meaning set forth in Section 11(d) hereof.



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



     (o) “Distribution” shall have the meaning set forth in the recitals hereto.



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



-4-









 





     (q) “Equivalent Common Stock” shall have the meaning set forth in Section 11(b) hereof.



     (r) “Exchange Act” shall have the meaning set forth in the definitions of “Affiliate” and
“Associate” above.



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



     (t) “Existing Holder” shall mean any Person who is the Beneficial Holder of securities of the
Company constituting a Substantial Block as of the date hereof as a direct and sole result of the
inclusion of clause (iv) to paragraph (f) of this Section 1.



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



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



     (w) [Intentionally omitted]



     (x) “Original Rights” shall have the meaning set forth in the definition of “Beneficial Owner”
above.



     (y) “Person” shall mean any individual, firm, corporation, limited liability company,
partnership (general, limited or limited liability), trust or other entity, and shall include any
successor (by merger or otherwise) of such entity.



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



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



     (bb) “Record Date” shall have the meaning set forth in the recitals hereto.



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



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



     (ee) “Rights” shall have the meaning set forth in the recitals hereto.



     (ff) “Rights Agent” shall have the meaning set forth in the introduction hereto.



     (gg) “Rights Dividend Declaration Date” shall have the meaning set forth in the recitals
hereto.



     (hh) “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii).



     (ii) “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii).



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



-5-









 





     (kk) “Shares Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, includes a report filed pursuant to Section 13(d) of the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become such.



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



     (mm) “Subsidiary” shall mean, with reference to any Person, any corporation (or other entity)
of which an amount of voting securities (or comparable ownership interests) sufficient to elect at
least a majority of the directors (or comparable individuals) of such corporation (or other entity)
is beneficially owned or otherwise controlled, directly or indirectly, by such Person.



     (nn) “Substantial Block” shall mean a number of shares of Voting Stock which have 10% or more
of the aggregate voting power of all outstanding shares of Voting Stock.



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



     (pp) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.



     (qq) “Synthetic Long Position” shall mean any option, warrant, convertible security, stock
appreciation right or other contractual right, whether or not presently exercisable, which has an
exercise or conversion privilege or a settlement payment or mechanism at a price related to Voting
Stock or a value determined in whole or part with reference to, or derived in whole or in part
from, the market price or value of Voting Stock (regardless of whether such right is subject to
settlement in whole or in part in Voting Stock, whether such right conveys any voting rights in
such securities to its holder or whether such holder may have entered into other transactions that
hedge the economic effect of such right), and which increases in value as the value of Voting Stock
increases or which provides to the holder of such right an opportunity, directly or indirectly, to
profit or share in any profit derived from any increase in the value of Voting Stock, but shall not
include:



     (i) rights of a pledgee under a bona fide pledge of Voting Stock;



     (ii) rights of all holders of Voting Stock to receive Voting Stock pro rata, or obligations
to dispose of Voting Stock, as a result of a merger, exchange offer or consolidation involving the
Company;



     (iii) rights or obligations to surrender Voting Stock, or have Voting Stock withheld, upon
the receipt or exercise of a derivative security or the receipt or vesting of equity securities, in
order to satisfy the exercise price or the tax withholding consequences of receipt, exercise or
vesting;



     (iv) interests in broad-based index options, broad-based index futures and broad-based
publicly traded market baskets of stocks approved for trading by the appropriate federal
governmental authority;



     (v) interests or rights to participate in employee benefit plans of the Company held by
employees or former employees of the Company; or



-6-









 





     (vi) options granted to an underwriter in a registered public offering for the purpose of
satisfying over-allotments in such offering.



     The number of shares of Voting Stock in respect of which a person has a Synthetic Long
Position shall be the notional or other number of shares of Voting Stock specified in the
documentation evidencing the Synthetic Long Position as being subject to be acquired upon the
exercise or settlement of the applicable right or as the basis upon which the value or settlement
amount of such right, or the opportunity of the holder of such right to profit or share in any
profit, is to be calculated in whole or in part or, if no such number of shares of Voting Stock is
specified in such documentation, as determined by the Board of Directors of the Company in good
faith to be the number of shares of Voting Stock to which the Synthetic Long Position relates.



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



     (ss) “Triggering Event” shall mean any Section 11(a)(ii) Event or Section 13 Event.



     (tt) “Voting Stock,” as of the date of any determination, shall mean the shares of Common
Stock, $1.00 par value, then outstanding and any other shares of capital stock of the Company which
are entitled to vote generally in the election of directors.



     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company shall act as Co-Rights Agent and may from time
to time appoint such other Co-Rights Agents as it may deem necessary or desirable upon ten calendar
days’ written notice to the Rights Agent. In no event shall the Rights Agent have any duty to
supervise or in any way be liable for the acts or omissions of any such Co-Rights Agents.



     Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the Close of
Business on the tenth calendar day after the Shares Acquisition Date or (ii) the Close of Business
on the tenth business day (or such later date as the Board shall determine) after the date of the
commencement of, or of the first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer if, upon consummation thereof, such Person would become an Acquiring Person (the
earlier of the dates in subsection (i) and (ii) hereof being herein referred to as the
“Distribution Date”) (x) the Rights will be evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for the Common Stock of the Company registered in the names
of the holders of such Common Stock (which certificates for Common Stock shall be deemed also 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 Stock of the
Company. As soon as practicable after receipt by the Rights Agent of written notice from the
Company of 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
and provided with all necessary information, send at the



-7-









 







Company’s expense) by first-class, insured, postage prepaid mail, to each record holder of
Common Stock 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 A hereto (a “Right Certificate”), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates. The Company shall promptly notify the Rights Agent in
writing upon the occurrence of the Distribution Date and, if such notification is given orally, the
Company shall confirm same in writing on or prior to the Business Day next following. Until such
notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.



     (b) As soon as practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Common Stock, in substantially the form attached hereto as Exhibit B
(the “Summary of Rights”), by first-class, postage prepaid mail, to each record holder of Common
Stock as of the Close of Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for Common Stock of the Company outstanding
as of the Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for Common Stock, and the registered holders of Common Stock of the Company shall also
be the registered holders of the associated Rights. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of the certificates for
Common Stock of the Company outstanding on the Record Date shall also constitute the transfer of
the Rights associated with the shares of Common Stock represented by such certificate.



     (c) Rights shall be issued in respect of all shares of Common Stock of the Company issued
after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date, or,
in certain circumstances provided in Section 22 hereof, after the Distribution Date. Certificates
representing such shares of Common Stock shall have impressed on, printed on, written on or
otherwise affixed to them a legend in substantially the following form:



     This certificate also evidences and entitles the holder hereof to certain Rights as set forth
in a Rights Agreement between National Fuel Gas Company and Marine Midland Bank (subsequently known
as HSBC Bank USA), dated as of June 12, 1996, as amended or restated from time to time (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of National Fuel Gas Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. National Fuel Gas Company will
mail to the holder of this certificate a copy of the Rights Agreement as in effect on the date of
mailing without charge within five Business Days after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights beneficially owned by an
Acquiring Person may become null and void.



     After the due execution of any supplement or amendment to this Agreement in accordance with
the terms hereof, the reference to this Agreement in the foregoing legend shall mean the Agreement
as so supplemented or amended. Until the Distribution Date, the Rights associated with the Common
Stock of the Company represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of



-8-









 







any of such certificates shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates. In the event that the Company purchases or acquires
any shares of Common Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common Stock certificate
or any other defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.



     Section 4. Form of Right Certificates. (a) The Right Certificates (and the forms of
election to purchase shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may deem appropriate
(but which do not affect the rights, duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to conform to usage.
The Right Certificates shall be in machine-printable format and in a form reasonably satisfactory
to the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date (or, with respect to
Rights appurtenant to shares of Common Stock of the Company issued or, in the case of Company
treasury stock, delivered thereafter, dated as of the date of issuance or delivery of such shares),
shall show the date of countersignature, and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock of the Company (or following a Triggering Event,
other securities, cash or other assets, as the case may be) as shall be set forth therein at the
price set forth therein (such exercise price per share of Common Stock, the “Purchase Price”), but
the number of such shares and the Purchase Price shall be subject to adjustment as provided herein.



     (b) Any Right Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding (whether or not in writing)
which has as a primary purpose or effect the avoidance of Section 7(e) hereof; and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof, upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall contain (to the
extent the Rights Agent has notice thereof and to the extent feasible) the following legend,
modified as applicable to apply to such Person:



-9-









 






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



     Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by one of its authorized officers either manually or by facsimile
signature. The Right Certificates shall be countersigned by an authorized signatory of the Rights
Agent either manually or by facsimile signature and shall not be valid for any purpose unless so
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, issued and delivered with the same force and effect as though
the person 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 person 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 Rights Agreement any such person
was not such an officer.



     In case any authorized signatory of the Rights Agent who shall have countersigned any of the
Right Certificates shall cease to be such signatory before delivery by the Company, such Right
Certificates, nevertheless, may be issued and delivered by the Company with the same force and
effect as though the person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificates may be countersigned on behalf of the Rights Agent by any
person who, at the actual date of the countersignature of such Right Certificate, shall be a proper
signatory of the Rights Agent to countersign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such a signatory.



     Following the Distribution Date, receipt by the Rights Agent of notice to that effect and all
other relevant information referred to in Section 3(a), the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, 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 issued hereunder, the number of Rights evidenced on its face by
each of the Right Certificates, the date of each of the Right Certificates and the date of
countersignature 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 Expiration Date, any Right Certificate or Right Certificates (other than any Right
Certificate or Rights Certificates representing Rights that have become null and void pursuant to
Section 7(e) hereof or 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 shares of Common Stock (or following a Triggering
Event, other securities, cash or other assets, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder (or, in the case of a



-10-









 







transfer, such former 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 office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have properly completed and signed
the certificate contained in the form of assignment on the reverse side of such Right Certificate
and shall have provided such additional evidence, as the Company or the Rights Agent shall
reasonably request, of the identity of the Beneficial Owner, Affiliates or Associates of such
Beneficial Owner or holder, or of any other Person with which such holder or any of such holder’s
Affiliates or Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of securities of the Company.
Thereupon the Rights Agent shall, subject to Section 14 and Section 20(k) hereof, 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 from a Right Certificates holder 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. The Rights Agent shall have no
duty or obligation under any Section of this Agreement requiring payment of fees or charges unless
and until it is satisfied that holders have paid such sum sufficient, as necessary.



     Upon receipt by the Company and the Rights Agent of evidence 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 satisfactory to them, along with a signature guarantee and
such other and further documentation as the Rights Agent may request, and if requested by the
Company, 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 owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.



     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Subject
to Section 7(e) hereof, the registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 9(c), 11(a) (iii), 23(a) and 24(b) hereof) 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 properly completed and duly
executed, to the Rights Agent at the designated office of the Rights Agent, together with payment
of the aggregate Purchase Price for the total number of shares of Common Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are exercised, and an
amount equal to any tax or charge required to be paid under Section 9(e) hereof, by certified
check, cashier’s check, bank draft or money order payable to the order of the Company, at or prior
to the earliest of (i) the Close of Business on July 31, 2018 (the “Final Expiration Date”), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof or (iii) the time at
which all exercisable Rights are exchanged as provided in Section 24 hereof (such



-11-









 







earliest date being herein referred to as the “Expiration Date”). Except for those provisions
herein which expressly survive the termination of this Agreement, this Agreement shall terminate at
such time as the Rights are no longer exercisable hereunder.



     (b) The Purchase Price for each full share of Common Stock pursuant to the exercise of a Right
shall be $75.00 per half share of Common Stock (being $150.00 per each full share of Common Stock),
and shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in accordance with paragraph (c) below.



     (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed and properly completed, accompanied by
payment of the Purchase Price for the number of shares of Common Stock (or other securities, cash
or other assets, as the case may be) to be purchased and an amount equal to any applicable transfer
tax or charge required to be paid under Section 9(e) hereof by certified check, cashier’s check,
bank draft or money order payable to the order of the Company, subject to Section 20(h) hereof, the
Rights Agent shall thereupon, subject to Section 20(k), promptly (i) (A) requisition from any
transfer agent of the Common Stock of the Company certificates for the number of shares of Common
Stock of the Company to be purchased and the Company hereby 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 shares of Common Stock of the Company as are to be
purchased (in which case certificates for the shares of Common Stock represented by such receipts
shall be deposited by the transfer agent of the Common Stock 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, (iii) promptly after receipt of such certificates, 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 payment to or upon the order of the registered holder of such Right
Certificate. The payment of the Purchase Price must be made by certified bank check or bank draft
or money order payable to the order of the Company or the Rights Agent. In the event that the
Company is obligated to issue securities, distribute property or make payment pursuant to section
11(a)(iii) hereof, the Company will make all arrangements necessary so that check, property or
securities are available for issuance, distribution or payment by the Rights Agent, if and when
necessary to comply with this Agreement.



     (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 his duly authorized assigns, subject to the provisions of Section 14 hereof.



     (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming



-12-









 







such and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person which whom the Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred Rights or (B) a transfer which
the Board of Directors of the Company has determined is part of a plan, arrangement or
understanding (whether or not in writing) which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person, or any of its Affiliates, Associates or
transferees hereunder.



     (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner, Affiliates or
Associates of such Beneficial Owner or holder, or of any other Person with which such holder or any
of such holder’s Affiliates or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of
the Company as the Company shall reasonably request.



     Section 8. Cancellation and Destruction of Right 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 canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Rights 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 canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.



     Section 9. Reservation and Availability of Shares of Common Stock. (a) The Company
covenants and agrees that it will use every reasonable effort to reserve and make available out of
its authorized and unissued shares of Common Stock (and following the occurrence of a Triggering
Event, out of its authorized and unissued other securities), or out of its authorized and issued
shares of Common Stock (and, following the occurrence of a Triggering Event, out of its authorized
and issued other securities) held in its treasury, the number of shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) that will be sufficient to permit
the exercise in full of all outstanding Rights (it being understood that any of the foregoing
shares or securities may also be reserved for other purposes) or will take such other steps as are
appropriate to assure that the number of such shares or



-13-









 







securities (or their equivalents) sufficient to permit the exercise in full of all outstanding
Rights will be available upon such exercise. The Company shall use every reasonable effort to
obtain, as soon as practicable following the occurrence of a Triggering Event (to the extent not
theretofore obtained), such regulatory approvals and take such other action as may be necessary for
it to issue and/or sell securities purchasable upon the exercise of the Rights.



     (b) So long as the shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable (but only to the extent that it is reasonably likely that the Rights
will be exercised), all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.



     (c) The Company shall use its best efforts to (i) file, as soon as practicable following the
first occurrence of a Section 11(a)(ii) Event, or as soon as required by law, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the “Act”), with respect to
the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will also take such
action as may be appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement and shall give simultaneous written
notice to the Rights Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at such time as the
suspension is no longer in effect. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction unless the requisite qualifications in such jurisdiction shall
have been obtained.



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



     (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Common Stock (or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however, be required (a) to pay
any transfer tax which may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates or the issuance or delivery of certificates for



-14-









 







Common Stock (or other securities, as the case may be) in a name other than that of the
registered holder of the Right Certificate evidencing Rights surrendered for exercise or (b) to
issue or deliver any certificates for a number of shares of Common Stock (or other securities, as
the case may be) upon the exercise of any Rights until any 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 satisfaction that no such tax is due.



     Section 10. Common Stock Record Date. Each Person in whose name any certificate for
any number of shares of Common Stock (or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock (or other securities, as the case may be) 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 and
shall show the date of countersignature; provided, however, that if the date of such surrender and
payment is a date upon which Common Stock (or other securities, as the case may be) transfer books
of the Company are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the
Common Stock (or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a stockholder of the Company with respect to 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 herein.



     Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number of 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 Common Stock of the Company payable in shares of Common Stock of the
Company, (B) subdivide the outstanding Common Stock of the Company, (C) combine the outstanding
Common Stock of the Company into a smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Common Stock of the Company (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) and Section 7(e) hereof, 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 Common
Stock or capital stock, as the case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to, but not including, such
date and at a time when Common Stock (or other securities) transfer books of the Company were open,
he or she would have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs which would require an
adjustment under both this Section



-15-









 







11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).



     (ii) Subject to Section 24 of this Agreement, in the event any Person, alone or together with
its Affiliates and Associates, becomes at any time after the Rights Dividend Declaration Date, an
Acquiring Person except as the result of a transaction set forth in Section 13(a) hereof, then
proper provision shall be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price for a full share of Common Stock by the number of shares of Common Stock for which a
Right is then exercisable and dividing that product by (y) 50% of the Current Market Price per
share of Common Stock of the Company (determined pursuant to Section 11(d)) on the date of the
occurrence of the event described above in this subparagraph (ii) (such number of shares is
hereinafter referred to as the “Adjustment Shares”), provided that the Purchase Price and the
number of Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any
events occurring after the date of such first occurrence.



     (iii) If (x) the number of shares of Common Stock which are authorized by the Company’s
certificate of incorporation but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), or (y) any regulatory approvals necessary for the
issuance of such Common Stock have not been obtained by the Company, or (z) the issuance of Common
Stock of the Company shall not then be permitted under the Company’s certificate of incorporation
or any applicable law or administrative or judicial regulation or order, the Company shall (A)
determine the excess of (1) the product obtained by multiplying the then Current Market Price by
the number of Adjustment Shares issuable upon the exercise of a Right the “Current Value”) over (2)
the Purchase Price (such excess, the “Spread”), and (B) with respect to each Right, but subject to
Section 9 hereof and, if and to the extent required, to the receipt by the Company of any necessary
regulatory approvals, make adequate provision to substitute for the Adjustment Shares, upon
exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company (including, without limitation,
shares of preferred stock which the Board of Directors of the Company has deemed to have the same
value as shares of Common Stock (such shares of preferred stock, “Common Stock Equivalents”)), (4)
debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has been determined by
the Board of Directors of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company’s rights of redemption pursuant to Section 23(a) expire (the
later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the
Company shall be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent available and
subject to receipt by the Company of any necessary regulatory approvals) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the



-16-









 







Company shall determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the Rights and that any
necessary regulatory approvals for such issuance could be obtained, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares and/or regulatory approvals for the issuance of such
additional shares (such period, as it may be extended, the “Substitution Period”). To the extent
that the Company determines that some action need be taken and/or additional regulatory approvals
obtained pursuant to the first and/or second sentences of this subparagraph (iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek any authorization of additional shares, to obtain any
required regulatory approvals and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement and shall give concurrent written notice
to the Rights Agent stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement and notice to the Rights Agent at such time as the suspension is
no longer in effect. For purposes of this subparagraph (iii), the value of the Common Stock shall
be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to be the same as the value of Common Stock on such date. The Company shall give the Rights
Agent notice of the selection of any Common Stock Equivalent under this subparagraph (iii).



     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock of the Company entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase Common Stock of the Company
(or securities having substantially the same rights, privileges and preferences as the shares of
Common Stock (“Equivalent Common Stock”) or securities convertible into Common Stock or Equivalent
Common Stock) at a price per share of Common Stock or Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or Equivalent Common Stock)
less than the Current Market Price (as defined in Section 11(d) per share of Common Stock or
Equivalent Common Stock, as the case may be) on such record date, 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, of which the numerator shall be the number of
shares of Common Stock outstanding on such record date plus the number of shares of Common Stock or
Equivalent Common Stock which the aggregate offering price of the total number of shares of Common
Stock or Equivalent Common Stock so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such Current Market Price and of
which the denominator shall be the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock and/or Equivalent Common Stock 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 by
delivery of consideration part or all of which shall be in a form other than cash, the value of
such



-17-









 







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
conclusive for all purposes. Shares of Common Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; 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 Common Stock of the Company (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 periodic cash dividend or a dividend
payable in Common Stock) or subscription rights or warrants (excluding those referred to in Section
11(b)), 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, of
which the numerator shall be the Current Market Price per share of Common Stock (as defined in
Section 11(d)) 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 conclusive for all purposes) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Common Stock and of which the denominator shall be such Current Market
Price per share of Common Stock; 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. 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) For the purpose of any computation hereunder, other than computations made pursuant to
Section 11(a)(iii), the “Current Market Price” per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined in this paragraph (d))
immediately prior to, but not including, such date and, for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of such Common Stock for the five
(5) consecutive Trading Days immediately following, but not including, such date; provided,
however, that in the event that the Current Market Price per share of Common Stock is determined
during the period following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights) or (B) any subdivision,
combination or reclassification of such Common Stock, and prior to the expiration of the requisite
thirty (30) Trading Day or five (5) Trading Day period, as set forth above, 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 Market Price shall be appropriately
adjusted to take into account ex-dividend trading. The closing price for each 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



-18-









 







case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock 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 the National Association of
Securities Dealers, Inc. Automated Quotation System (“NASDAQ”) or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by such organization, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in
Common Stock selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such shares on such date shall be
as determined by the Board of Directors of the Company upon the advice of a nationally-recognized,
independent investment banking firm selected by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
The term “Trading Day” shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions
in the State of New York and New Jersey are not authorized or obligated by law or executive order
to close. If the Common Stock is not publicly held or not so listed or traded, “Current Market
Price” per share shall mean the fair value per share as determined by the Board of Directors of the
Company upon the advice of a nationally-recognized, independent investment banking firm selected by
the Board of Directors, whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.



     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least 1% in such
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
ten-thousandth of a share of Common Stock. 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 mandates such adjustment or (ii) the Expiration
Date.



     (f) If, as a result of an adjustment made pursuant to Section 11(a) or Section 13(a), the
holder of any Right thereafter exercised shall become entitled to receive any shares of capital
stock other than shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof 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 Common Stock contained in Section 11(a) through (p), inclusive, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to Common Stock shall apply on like terms to any such other
shares.



-19-









 





     (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 shares of Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.



     (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and
(c), 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 shares (calculated
to the nearest one tenth-thousandth) obtained by (i) multiplying (x) the number of shares 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 (ii) 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 shares of Common
Stock 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 shares of Common Stock
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 hundredth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after the adjustment
of the Purchase Price. The Company shall make a public announcement and shall give simultaneous
written notice to the Rights Agent 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 subparagraph (i), the 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, 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 herein (and may bear, at the option of the Company,
the adjusted Purchase Price) 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 the number of shares of
Common Stock issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.



-20-









 





     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value, if any, of a share of Common Stock 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 such number of fully paid and nonassessable
shares of such Common Stock 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
(with prompt written notice thereof to the Rights Agent) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the number of shares of
Common Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of shares of Common Stock 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 reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that the Board of Directors of the Company, in its sole
discretion, shall determine to be advisable in order that any consolidation or subdivision of
shares of Common Stock, issuance wholly for cash of any shares of Common Stock at less than the
Current Market Price, issuance wholly for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of Common Stock, stock dividends or
issuance of rights, options or warrants referred to hereinabove in this Section 11 hereafter made
by the Company to holders of its Common Stock shall not be taxable to such stockholders.



     (n) Notwithstanding anything in this Agreement to the contrary, prior to the Distribution
Date, the Company may, in lieu of making any adjustment to the Purchase Price, the number of shares
of Common Stock eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(i), 11(b), 11(c), 11(h)
or 11(i), make such other equitable adjustment or adjustments thereto as the Board of Directors
(whose determination shall be conclusive) deems appropriate in the circumstances and not
inconsistent with the objectives of the Board of Directors in adopting this Agreement and such
Sections.



     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made or any event affecting the Rights or their exercisability (including without
limitation an event which causes Rights to become null and void) occurs as provided in Section 11
or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment or
describing such event, and a brief, reasonably detailed statement of the facts, computations and
methodology accounting for any adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Stock and the Securities and Exchange Commission a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 and Section 26 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement therein contained and shall



-21-









 







have no duty or liability with respect to, and shall not be deemed to have knowledge of, any
adjustment or any such event unless and until it shall have received such a certificate.



     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a)
In the event that, following the Shares Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any Person shall
consolidate or merge with and into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and in connection with such consolidation or merger,
all or part of the Common Stock shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or (z) 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 or Persons (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 provided in Section 7(e)) shall thereafter have
the right to receive, upon the exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly issued, fully paid, nonassessable and
freely tradable shares of Common Stock of the Principal Party (as hereinafter defined) , not
subject to any liens, encumbrances, rights of call or first refusal, or other adverse claims as
shall be equal to the result obtained by (1) multiplying the then current Purchase Price for a full
share of Common Stock by the number of shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such
shares for which a Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price for a full share of Common Stock in effect immediately prior
to such first occurrence), and dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes
of this Agreement) by (2) 50% of the Current Market Price per share of the Common Stock of such
Principal Party (determined in the manner described in Section 11(d)) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the provisions of Section 11
shall thereafter apply to such Principal Party, (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with Section 9) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be,
in relation to the shares of its Common Stock thereafter deliverable upon the exercise of the
Rights, and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.



     (b) “Principal Party” shall mean



          (1) in the case of any transaction described in (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities into which shares of Common Stock



-22-









 







of the Company are converted in such merger or consolidation and, if no securities are so
issued, the Person that is the other party to the merger or consolidation; and



          (2) in the case of any transaction described in (z) of the first sentence in Section 13(a),
the Person that is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided, however, that in any such case,
(x) if the Common Stock of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another corporation the Common Stock of which is and has been so
registered, “Principal Party” shall refer to such other corporation and (y) if such Person is a
Subsidiary, directly or indirectly, of more than one corporation, the Common Stocks of two or more
of which are and have been so registered, “Principal Party” shall refer to whichever of such
corporations is the issuer of the Common Stock having the greatest market value.



          (3) The Company shall not consummate any Section 13 Event unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which are neither outstanding nor
reserved for issuance to permit the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party



               (i) will prepare and file a registration statement under the Act with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate form, will use its
best efforts to cause such registration statement to become effective as soon as practicable after
such filing and will use its best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the Expiration Date;



               (ii) shall take all such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such securities on such exchanges and
trading markets as may be necessary or appropriate; and



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


The provisions of this Section 13 shall similarly apply to successive Section 13 Events. In the
event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).





-23-












 





     Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, the Company shall pay 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 New
York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock
Exchange, 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 shares of Common Stock or Common
Stock Equivalents (i) upon exercise or exchange of the Rights or (ii) following the occurrence of a
Triggering Event, or to distribute certificates which evidence fractional shares of Common Stock or
Common Stock Equivalents. In lieu of fractional shares of Common Stock or Common Stock
Equivalents, the Company may pay to the registered holders of Right Certificates at the time the
Rights evidenced thereby are exercised or exchanged as herein provided an amount in cash equal to
the same fraction of the current market value of Common Stock or Common Stock Equivalents. For
purposes of this Section 14(b), the current market value of one share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to Section 11(d)) for the Trading
Day immediately prior to the date of such exercise or exchange, as the case may be, and the current
market value of any Common Stock Equivalent shall be the same as the current market value of the
Common Stock on such date.



     (c) The holder of a Right by the acceptance of the Right expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise or exchange of a Right, except as
otherwise permitted by this Section 14.



     (d) Whenever a payment for fractional Rights or fractional shares is to be made by the Rights
Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting
forth in reasonable detail the facts related to such payments and the prices and/or formulas
utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in
the form of fully collected funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed
to have knowledge of any payment for fractional Rights or fractional



-24-









 







shares under any Section of this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received such a certificate and
sufficient monies.



     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 and Section 20 hereof,
are vested in the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such 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 hereunder and injunctive relief against actual
or threatened violations of the obligations hereunder 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 shares of Common Stock;



     (b) after the Distribution Date, the Right Certificates will be transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request;



     (c) subject to Section 6 and Section 7(f) hereof, 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 Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary;



     (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental



-25-









 







authority, prohibiting or otherwise restraining performance of such obligation; provided,
however, that the Company must use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.



     Section 17. Right Certificate 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 number of shares of Common Stock or any other securities of the Company that may at
any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein 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), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised or exchanged for Common Stock 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 preparation, delivery, amendment, 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, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable
fees and expenses of legal counsel), incurred without gross negligence, willful misconduct or bad
faith on the part of the Rights Agent (which gross negligence, willful misconduct or bad faith must
be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance, administration, exercise and performance of its duties under this Agreement. The costs
and expenses incurred in enforcing this right of indemnification shall be paid by the Company. The
provisions of this Section 18 and Section 20 below shall survive the termination of this Agreement,
the exercise or expiration of the Rights and the resignation, replacement or removal of the Rights
Agent.



     The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Right Certificate or certificate for Common Stock or other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice, 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.



     In addition to the foregoing, the Rights Agent shall be protected and shall incur no liability
for, or in respect of, any action taken or omitted by it in connection with its administration of
this Agreement in reliance upon (i) the proper execution of the certification appended to the Form
of Assignment and the Form of Election to Purchase included as part of



-26-









 







Exhibit A hereto (the “Certification”), unless the Rights Agent’s reliance is in bad faith or
is willful misconduct or (ii) the non-execution or failure to complete the Certification including,
without limitation, any refusal to honor any otherwise permissible assignment or election by reason
of such nonexecution or failure.



     Notwithstanding anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, punative, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profit), even if the Rights Agent has been advised of
the likelihood of such loss or damage and regardless of the form of the action, and the Company
agrees to indemnify the Rights Agent and to hold it harmless against any loss, liability or expense
incurred as a result of claims for special, punitive, indirect, consequential or incidental loss or
damages of any kind whatsoever (including but not limited to lost profits).



     Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such 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 to perform, subject
to the implied covenant of good faith and fair dealing applicable generally to all contracts, only
the duties and obligations expressly imposed by this Agreement (and no other implied duties) 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
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent and the Rights Agent



-27-









 







shall incur no liability for or in respect of any action taken, suffered or omitted by it in
accordance with such advice or 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 (including without limitation, the identity of an
Acquiring Person and the determination of the current per share market price of any security) be
proved or established by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, the President, any Senior Vice President, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full and complete authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or omitted by it under the
provisions of this Agreement in reliance upon such certificate.



     (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The
issuance or non-issuance of a Right Certificate or Common Stock or other security issued in lieu of
Common Stock in accordance with instructions given to the Rights Agent by the Company pursuant to
Section 20(k) hereof or in accordance with the terms hereof shall not constitute negligence, bad
faith or willful misconduct; provided, however, that in no event shall the Rights Agent be liable
for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage.



     (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 have any liability for or 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
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 null and void pursuant to Section 11(a)(ii) hereof) or any change or adjustment in
the terms of the Rights (including adjustment required under the provisions of Section 11 or 13 or
responsible for the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24,
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 receipt of the
certificate described in Section 12 hereof, upon which the Rights Agent may rely); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Right



-28-









 







Certificate or as to whether any shares of Common Stock 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 and certificates delivered pursuant to any provision hereof
from any one of the Chairman of the Board, the President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its duties, and such instructions shall be
full authorization and protection to the Rights Agent and the Rights Agent shall not be liable for
or in respect of any action taken, suffered or omitted by it in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent instructions received by
any such officer. Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent with respect to its duties and obligations under this
Agreement and the date on and/or after which such action shall be taken or suffered or such
omission shall be effective, and the Rights Agent shall not be liable for any action taken or
suffered by, or omitted by the Rights Agent in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less than one Business
Day after the Company receives such application) without the consent of the Company unless, prior
to taking or omitting such action (or the effective date in the case of an omission), the Rights
Agent has received written instructions in response to an application specifying the actions to be
taken, suffered or omitted.



     (h) The Rights Agent and any stockholder, affiliate, 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 the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer or employee from acting in any other
capacity for the Company or for any other Person.



     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either by itself (through its directors, officers and employees) 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 or any other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence or bad faith in the selection and continued employment thereof (which gross
negligence or bad faith must be determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction.



-29-









 





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



     (k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the form of election to purchase
set forth on the reverse thereof, as the case may be, has either not been properly completed or
indicates an affirmative response to clause 1 or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first consulting with
the Company. The Company shall give the Rights Agent prompt written instructions as to the action
to be taken regarding the Right Certificates involved. The Rights Agent shall not be liable for
acting in accordance with such instructions.



     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 thirty (30) days’ notice in
writing mailed to the Company by registered or certified mail, and, at the Company’s expense, to
the holders of the Right Certificates by first class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock 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 thirty (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 (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Company shall become the temporary Rights
Agent and 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 (i) an eligible Person organized and doing
business under the laws of the United States or of the State of New York (or of any other state of
the United States so long as such Person is authorized to do business in the State of New York), in
good standing, which is authorized under such laws to exercise shareholder services powers, is
subject to supervision or examination by federal or state authority, and has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50 million, or (ii) an
affiliate of a Person described in clause (i) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock,
and 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



-30-









 







the case may be. Predecessor Rights Agent shall be released and discharged from any and all
further responsibility incurred after its termination as Rights Agent.



     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 its Board of Directors 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. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such Right Certificate would
be issued, and (ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.



     Section 23. Redemption and Termination. (a) The Board of Directors of the Company,
upon the affirmative vote of three-fourths of the entire Board of Directors, may, at its option, at
any time prior to the earlier of (x) the Close of Business on the tenth day following the Shares
Acquisition Date or (y) the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.005 per Right as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the “Redemption Price”), and the Company may, at
its option, pay the Redemption Price in shares of its Common Stock (valued at their Current Market
Price as defined in Section 11(d) on the date of the redemption), other securities, cash, other
assets or any other form of consideration deemed appropriate by the Board of Directors.
Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company’s right of redemption hereunder has expired.



     (b) In deciding whether or not to exercise the Company’s right of redemption hereunder, the
Board of Directors of the Company shall act in good faith, in a manner they reasonably believe to
be in the best interests of the Company and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar circumstances, and they may
consider the long-term and short-term effects of any action upon employees, customers and creditors
of the Company and upon communities in which offices or other establishments of the Company are
located, and all other pertinent factors.



     (c) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, 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



-31-









 







receive the Redemption Price for each Right held. Within 10 days after the action of the
Board of Directors of the Company ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by mailing such notice to
the Rights Agent and to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made. 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, and
other than in connection with the repurchase of shares of Common Stock prior to the Distribution
Date.



     Section 24. Exchange. (a) The Board of Directors of the Company, upon the affirmative
vote of three-fourths of the entire Board of Directors, may, at its option but subject to the
receipt by the Company of any required regulatory approvals, at any time and from time to time on
or after a Section 11(a)(ii) Event, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such exchange ratio being hereinafter referred to 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 Stock 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
Stock then outstanding.



     (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of Common Stock 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 (with prompt written notice thereof to the Rights
Agent); provided, however, that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will state the method
by which the exchange will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become null and void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.



     (c) In the event that there shall not be sufficient shares of Common Stock 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



-32-









 







authorize additional shares of Common Stock for issuance upon exchange of the Rights, subject,
however, to Section 24(d) hereof.



     (d) In any exchange pursuant to this Section 24, the Company, at its option but subject to the
receipt by the Company of any required regulatory approvals, may substitute for any share of Common
Stock exchangeable for a Right (i) Common Stock Equivalents, (ii) cash, (iii) debt securities of
the Company, (iv) other assets, or (v) any combination of the foregoing, having an aggregate value
which three-fourths of the entire Board of Directors of the Company shall have determined in good
faith to be equal to the Current Market Price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately preceding the date of exchange pursuant to
this Section 24.



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



     Section 25. Notice of Certain Events. In case the Company shall propose at any time
following the Distribution Date (a) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of Common Stock (other
than a regular periodic cash dividend), or (b) to offer to the holders of Common Stock rights or
warrants to subscribe for or to purchase any additional shares of Common Stock or shares of stock
of any class or any other securities, rights or options, or (c) to effect any reclassification of
Common Stock (other than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (d) to effect any consolidation or merger into or with any other Person, 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 than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other Person or Persons, or
(e) to effect the liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to the Rights Agent and to each holder of a Right Certificate, in accordance
with Section 26, 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 Common Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action covered by clause
(a) or (b) above at least ten (10) days prior to the record date for determining holders of Common
Stock for purposes of such action, and in the case of any such other action, at least ten (10) days
prior to the date of the taking of such proposed action or the date of participation therein by the
holders of Common Stock, whichever shall be the earlier.



-33-









 





     In case a Section 11(a)(ii) Event shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to the Rights Agent and to each holder of a Right Certificate,
to the extent feasible and in accordance with Section 26 a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of Rights under Section
11(a)(ii).



     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 (unless and
until another address is filed in writing with the Rights Agent) as follows:


National Fuel Gas Company

6363 Main Street

Williamsville, New York 14221

Attention: Corporate Secretary




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


BNY Mellon Shareowner Services

480 Washington Boulevard — 29th Floor

Jersey City, NJ 07310

Attention: Stock Transfer Division




     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. Prior to the earlier of the Distribution Date
or the Shares Acquisition Date and subject to the penultimate sentence of this Section 27, the
Company may from time to time supplement or amend this Agreement in writing without the approval of
any holders of Right Certificates; provided that any such supplement or amendment shall have been
approved by the affirmative vote of three-fourths of the entire Board of Directors of the Company.
From and after the earlier of the Distribution Date or the Shares Acquisition Date, and subject to
the penultimate sentence of this Section 27, the Company, pursuant to a like three-fourths vote of
its Board of Directors, may from time to time supplement or amend this Agreement in writing without
the approval of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to lengthen the time period during which the Rights may be
redeemed following the Shares Acquisition Date for up to an additional twenty days beyond the time
period set forth in Section 23(a), or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a



-34-









 







certificate from an appropriate officer of the Company, which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment, but the Rights Agent shall not be obligated to enter into any
supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made on or after the Distribution Date which changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the number of shares of Common
Stock for which a Right is then exercisable. Prior to the earlier of the Shares Acquisition Date
or the Distribution Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock.



     Section 28. Successors; Assignment. 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. The Agreement shall extend to and
shall be binding upon the parties hereto and their respective successors and assigns; provided
however, that this Agreement shall not be assignable by either party without the prior written
consent of the other party; and provided, further, that (a) the foregoing proviso shall not apply
to assignments by the Rights Agent to an affiliate or subsidiary of the Rights Agent (provided such
assignments are made in compliance with Section 21 hereof) and (b) any reorganization, merger,
consolidation, sale of assets or other form of business combination by the Rights Agent shall not
be deemed to constitute an assignment of this Agreement.



     Section 29. Determinations and Actions by the Board of Directors. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers specifically granted
to the Board or the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement); and, where specifically prescribed herein, such Board actions,
calculations, interpretations and determinations shall be undertaken or made only pursuant to the
affirmative vote of three-fourths of the entire Board of Directors of the Company. All such
actions, calculations, interpretations and determinations (including, for the purpose of clause
(ii) below, all omissions with respect to the foregoing) which are done or made by the Board in
good faith, shall (i) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (ii) not subject the Board to any
liability to the holders of the Right Certificates. The Rights Agent is entitled always to assume
the Company’s Board of Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.



     Section 30. 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 Stock) any



-35-









 







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, registered holders of the Common
Stock).



     Section 31. 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, null and
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or authority to be invalid,
null and void or unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in Section 23, hereof, if
then expired, shall be reinstated and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board of Directors.



     Section 32. 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, provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent shall be governed by
and construed in accordance with the laws of the State of New York applicable to contracts made and
to be 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.



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



	 	 	 	 	 
	 	NATIONAL FUEL GAS COMPANY

 	 
	 	By:  	/s/ David F. Smith
 	 
	 	 	Name:  	David F. Smith 	 
	 	 	Title:  	Chief Executive Officer 	 
	 


Attest:




	 	 	 	 	 
	By:  	/s/ James R. Peterson
 	 
	 	Name:  	James R. Peterson 	 
	 	Title: 	Assistant Secretary 	 	 
	 




-36-









 





[SEAL]




	 	 	 	 	 
	 	THE BANK OF NEW YORK

 	 
	 	By:  	/s/ Phil Triolo
 	 
	 	 	Name:  	Phil Triolo 	 
	 	 	Title:  	Assistant Vice President 	 
	 


Attest:




	 	 	 	 	 
	By:  	/s/ Eli Guardiola
 	 
	 	Name:  	Eli Guardiola 	 
	 	Title:  	Assistant Treasurer 	 
	 




-37-









 









EXHIBIT A




[Form of Right Certificate]




			
	Certificate No. R-
	 	                     Rights






NOT EXERCISABLE AFTER JULY 31, 2018 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.005 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS MAY NOT BE
EXERCISABLE AND THE RIGHTS AGREEMENT MAY BE AMENDED WITHOUT THE APPROVAL OF THE RIGHTS OWNERS.




NATIONAL FUEL GAS COMPANY

Right Certificate




     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 June 12, 1996, as amended and restated [     ], and as
the same may from time to time be amended in accordance with its terms (as amended, the “Rights
Agreement”) between National Fuel Gas Company, a New Jersey corporation (the “Company”) and
                     (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (New
York, New York time) on July 31, 2018 at the designated office of the Rights Agent, or its
successors as Rights Agent, in                     , New York, one-half of one fully paid, nonassessable
share of the Common Stock, $1.00 par value (the “Common Stock”), of the Company, at a purchase
price of $75.00 per half share (the “Purchase Price”), being $150.00 per share, upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase and related
certificate duly executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the number and Purchase Price as of
                    , based on the Common Stock of the Company as constituted at such date.



     Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of
a person who after such transfer, became an Acquiring Person, such Rights shall become null and
void and no holder hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.



     As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Common Stock (or, in certain circumstances, other securities) which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to modification



A-1









 








and adjustment upon the happening of certain events, including Triggering Events (as such term
is defined in the Rights Agreement).



     This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights 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 Rights Agreement are
on file at the above-mentioned office of the Rights Agent, and at the executive offices of the
Company.



     This Right Certificate, with or without other Right Certificates, upon surrender at the
designated office of the Rights Agent, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, 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 shares of Common Stock 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, along with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, another Right Certificate or Right Certificates for the number
of whole Rights not exercised.



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(a) may be redeemed by the Company at its option at a redemption price of $.005 per Right prior to
the earlier of the Close of Business on (i) the tenth day following the Shares Acquisition Date and
(ii) the Final Expiration Date or (b) may be exchanged in whole or in part for shares of Common
Stock and/or other securities, cash or other assets of the Company deemed to have the same value as
shares of Common Stock, at any time after a Section 11(a)(ii) Event. The Rights Agreement may be
amended without the approval of the holders of the Rights as and to the extent set forth therein.



     No fractional shares of Common Stock will be issued upon the exercise or exchange of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the
Rights 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 Common Stock 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
Rights 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 Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been exercised or
exchanged for Common Stock as provided in the Rights Agreement.




A-2











 





     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                     .



[SEAL]




	 	 	 	 	 
	 	NATIONAL FUEL GAS COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Attest:
 	 	 
	 
 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



	 	 	 	 	 
	 	Countersigned:

 	 
	 	
 	 
	 	as Rights Agent 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Signature
 	 
	 	 	Date:                                          	 



A-3









 






	 	 	 	 	 



[Form of Reverse Side of Right Certificate]




FORM OF ASSIGNMENT



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





     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.




	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Signature 	 
	 	 	 	 
	 



Dated:                                         




Signature Guaranteed:

(Signatures must be guaranteed.)




A-4









 





CERTIFICATE





     The undersigned hereby certifies by checking the appropriate space that:



     Exercising this Right Certificate will       will not       enable the undersigned, its
Affiliates, its Associates and/or any other Person with which the undersigned or any of the
undersigned’s Affiliates or Associates has any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting or disposing of securities of the
Company to obtain, individually or in the aggregate, beneficial ownership of Common Stock or other
securities that have 10% or more of the aggregate voting power of the outstanding shares of the
Common Stock and other securities having voting power.



	 	 	 	 	 
	 	 	 
	Dated:                                          	  	
 	 
	 	 	Signature 	 



Signature Guaranteed:

(Signatures must be guaranteed.)




NOTICE





     The signature to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.



A-5









 





FORM OF ELECTION TO PURCHASE



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



To National Fuel Gas Company:



     The
undersigned hereby irrevocably elects to exercise ___ Rights represented by this Right
Certificate to purchase the shares of Common Stock issuable upon the exercise of such Rights (or
such other securities of the Company or of any other Person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares be issued in the name of:



 

(Please print name and address)




 

(Please insert social security or other taxpayer identifying number)




     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 print name and address)




 

(Please insert social security or other taxpayer identifying number)




Dated:                     ,      




                                                                      

Signature

Signature Guaranteed:

(Signatures must be guaranteed.)




A-6









 





EXHIBIT B




SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK




     On March 19, 1996, the Board of Directors (the “Board”) of National Fuel Gas Company (the
“Company”) authorized the Company to enter into the Rights Agreement, dated as of June 12, 1996
(the “Original Rights Agreement”), between the Company and Marine Midland Bank, as rights agent.
In connection therewith, the Board authorized and declared a dividend distribution of one right
(collectively, the “Rights”) for each outstanding share of Common Stock, $1.00 par value, of the
Company (the “Common Stock”). Rights were distributed to the holders of record of Common Stock
outstanding at the Close of Business on July 31, 1996 (the “Record Date”), the record date
established by the Board on June 13, 1996. Each Right entitles the registered holder to purchase
from the Company one-half of a share of Common Stock at a price of $75.00 per half share (the
“Purchase Price”), being $150.00 per share, subject to adjustment.



     On September 17, 1998, the Board approved certain amendments to the Original Rights Agreement
and authorized the Company to enter into an Amended and Restated Rights Agreement to reflect those
amendments. On April 30, 1999, the Company entered into the Amended and Restated Rights Agreement,
dated as of April 30, 1999 (the Original Rights Agreement, as amended and restated, being
hereinafter referred to as the “Rights Agreement”), with HSBC Bank USA, (formerly known as Marine
Midland Bank) as rights agent. Among the amendments made to the Original Rights Agreement are (i)
a two-year extension of the term of the Rights Agreement to July 31, 2008, (ii) the qualification
of certain obligations of the Company under the Rights Agreement by reference to any regulatory
approvals that may be required in connection therewith, and (iii) in connection with the voting
standard required under the Rights Agreement for certain Board actions, the substitution of the
affirmative vote of three-fourths of the entire Board for the “Independent Director” vote required
under the Original Rights Agreement.



     On June 7, 2007, the Board approved certain amendments to the Amended and Restated Rights
Agreement and authorized the Company to enter into a second Amended and Restated Rights Agreement
to reflect those amendments. On June 7, 2007, the Company entered into the second Amended and
Restated Rights Agreement, dated as of June 8, 2007 (the Original Rights Agreement, as amended and
restated, being hereinafter referred to as the “Rights Agreement”), with HSBC Bank USA, National
Association (a national banking association formerly known as Marine Midland Bank and as HSBC Bank
USA) as rights agent. Among the amendments made to the Original Rights Agreement are (i) a change
in the definition of “Acquiring Person” under the Rights Agreement, (ii) certain changes to the
date on which the Rights are distributed to shareholders in the event of a tender or exchange
offer, (iii) a change to permit the Company to pay the redemption price in respect of the rights in
cash, shares of common stock, or any other form of consideration deemed appropriate by the Board
and (iv) changes to effect certain other technical amendments.



     On September 1, 2007, HSBC Bank USA, National Association, resigned as Rights Agent and the
Company substituted The Bank of New York as successor Rights Agent. On July [     ], 2008, the
Company and The Bank of New York entered into another Amended and



 









 







Restated Rights Agreement. Among the amendments made are (i) a ten-year extension of the term
of the Rights Agreement to July 31, 2018, (ii) a change in the Purchase Price per full share from
$65 to $150, and (iii) an expansion of the definition of the shares “beneficially owned” to
include, among other things, certain derivative or synthetic arrangements having characteristics of
a long position in the Company’s Common Stock. Currently, the Rights are attached to all Common
Stock certificates representing shares presently outstanding and the Rights will be attached to any
new Common Stock certificates representing shares hereafter issued.



Distribution Date; Transfer of Rights




     Until the earlier to occur of (i) ten days following the date (the “Shares Acquisition Date”)
of the public announcement that a person or group of affiliated or associated persons (an
“Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of Common
Stock or other voting securities (“Voting Stock”) that have 10% or more of the voting power of the
outstanding shares of Voting Stock or (ii) ten business days following the commencement or
announcement of an intention to make a tender offer or exchange offer the consummation of which
would result in such person acquiring, or obtaining the right to acquire, beneficial ownership of
Voting Stock having 10% or more of the voting power of the outstanding shares of Voting Stock (the
earlier of such dates being called the “Distribution Date”), the Rights will be evidenced, with
respect to any of the Company’s Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate. The term “beneficial owner” is defined in the Rights Agreement and
includes, among other things, certain derivative or synthetic arrangements having characteristics
of a long position in the Company’s Common Stock. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Company’s Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuance of the Company’s Common
Stock will contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer
of any of the Company’s Common Stock certificates outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Company’s
Common Stock as of the Close of Business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.



     The Rights are not exercisable until the Distribution Date. The Rights will expire at the
Close of Business on July 31, 2018, unless earlier redeemed or exchanged by the Company as
described below.



Exercise of Rights for Common Stock of the Company




     Subject to redemption or exchange of the Rights, at any time any Person, alone or together
with its Affiliates or Associates, becomes an Acquiring Person (other than pursuant to a Permitted
Offer), each holder of a Right will thereafter have the right to receive, upon exercise, the number
of shares of Common Stock (or, in certain circumstances, cash, property or other securities of the
Company) equal to the result obtained by dividing the then current Purchase



 









 







Price per Right by one-half of the then current market price, calculated pursuant to Section
11(a)(ii) of the Rights Agreement. Notwithstanding any of the foregoing, following the occurrence
of such event set forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.



Exercise of Rights for Shares of the Acquiring Company




     In the event that, at any time following the Shares Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction, or (ii) 50% or more of the
Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the right to receive,
upon exercise, Common Stock of the acquiring company having a value equal to two times the Purchase
Price of the Right then in effect.



Adjustments to Purchase Price




     The Purchase Price payable, and the number of shares of Common Stock (or other securities, as
the case may be) issuable upon exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the Common Stock of
certain rights or warrants to subscribe for or purchase shares of the Common Stock or convertible
securities at less than the then Current Market Price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in the Common Stock) or of subscription rights
or warrants (other than those referred to above). Prior to the Distribution Date, the Board of
Directors of the Company may make such equitable adjustments as it deems appropriate in the
circumstances in lieu of any adjustment otherwise required by the foregoing.



     With certain exceptions, no adjustment in the Purchase Price will be required until the
earlier of (i) three years from the date of the event giving rise to such adjustment or (ii) the
time at which cumulative adjustments require an adjustment of at least 1% in such Purchase Price.
No fractional shares of Common Stock will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Stock on the last trading date prior to the
date of exercise.



Redemption and Exchange of Rights




     At any time prior to 5:00 P.M. New York, New York time on the tenth day following the Shares
Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.005
per Right (the “Redemption Price”). The decision to redeem shall require the affirmative vote of
three-fourths of the entire Board of Directors. Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, the Company shall make announcement
thereof, and upon such action, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.



     At any time after the occurrence of the event set forth under the heading “Exercise of Rights
for Common Stock of the Company” above, the Board of Directors, acting by the



 









 







affirmative vote of three-fourths of the entire Board of Directors, may exchange the Rights
(other than Rights owned by an Acquiring Person, which have become null and void), in whole or in
part, at an exchange ratio of one share of Common Stock, and/or other securities, cash or other
assets deemed to have the same value as one share of Common Stock, per Right, subject to
adjustment.



     Until a Right is exercised or exchanged for Common Stock, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation, the right to vote or
to receive dividends. While the distribution of the Rights will not be taxable to stockholders or
to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock or other consideration of the Company or
for the stock of the Acquiring Person as set forth above, or are exchanged as provided in the
preceding paragraph.



Amendments to Terms of the Rights




     Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights prior to the Distribution Date; provided
that any such amendment is approved by the affirmative vote of three-fourths of the entire Board of
Directors. Thereafter, the provisions of the Rights Agreement may be amended by the Board of
Directors, acting by a like three-fourths vote, in order to cure any ambiguity, defect or
inconsistency, or to make changes which do not adversely affect the interests of holders of Rights
(excluding the interest of any Acquiring Person); provided, however, that no supplement or
amendment may be made on or after the Distribution Date which changes those provisions relating to
the principal economic terms of the Rights. The Board of Directors may also, by a like
three-fourths vote, extend the redemption period for up to an additional 20 days.



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to [                    ] dated [                    ] (as such may be amended from time to time). A
copy of the Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by reference.