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Exhibit 4.1    
  


 
 

SECOND AMENDED AND RESTATED RIGHTS AGREEMENT    
  


        Second Amended and Restated Rights Agreement, dated as of March 11, 2002 ("Rights Agreement"), between CAREMARK
RX, INC., a Delaware corporation formerly known as MedPartners, Inc. (the "Company") and FIRST UNION NATIONAL
BANK, a North Carolina corporation (the "Rights Agent"). 



        Whereas,
as of March 1, 1995, the Company's predecessor and Chemical Bank, as Rights Agent, entered into a Rights Agreement (the "Original Rights Agreement"). In connection,
therewith, the Board of Directors of the Company authorized and declared a dividend of one preferred share purchase right (a "Right") for each Common Share of the Company outstanding on the Record
Date (as defined in the Original Rights Agreement"), each Right representing the right to purchase one one-hundredth of a Preferred Share, upon the terms and subject to the conditions
therein set forth, and further authorized and directed the issuance of one Right with respect to each Common Share that became outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Expiration Date; 


        Whereas,
as of November 29, 1995, the Original Rights Agreement was amended to substitute under the Original Rights Agreement the Company (then known as
MedPartners/Mullikin, Inc., subsequently known as MedPartners, Inc. and now known as Caremark Rx, Inc.) for the Company's predecessor; 


        Whereas,
as of September 5, 1996, the Original Rights Agreement was further amended to substitute First Chicago Trust Company of New York as Rights Agent (the "Prior Rights
Agent"); 


        Whereas,
as of February 1, 2000, the Original Rights Agreement, together with the Exhibits thereto, was amended and restated in its entirety (the "Amended and Restated Rights
Agreement"); and 


        Whereas,
pursuant to the Amended and Restated Rights Agreement, the Company has removed the Prior Rights Agent as Rights Agent and now desires to appoint in its place First Union
National Bank, as Rights Agent, and to further amend the Amended and Restated Rights Agreement, together with the Exhibits thereto, and to restate the terms of the Amended and Restated Rights
Agreement, and such Exhibits, in the form of this Second Amended and Restated Rights Agreement and Exhibits A, B and C hereto. 



        Accordingly,
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 Rights Agreement, the following terms have the
meanings indicated: 


                (a)  "Acquiring
Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the
Common Shares then outstanding, but shall not include (i) the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan, (ii) any Person who or which becomes the Beneficial Owner of 20% or more of the Common Shares then outstanding as the result
of a reduction in the outstanding Common Shares resulting from acquisition of Common Shares by the Company approved by the Board of Directors, unless and until such Person becomes the Beneficial Owner
of any additional Common Shares, other than pursuant to a stock dividend or stock split, (iii) any Person who or which the Board of Directors of the Company determines, in good faith, became an
Acquiring Person inadvertently, if such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person, or (iv) any
Person who or which the Board of Directors of the Company determines, prior to the time such Person would otherwise be an Acquiring Person, should be exempted from the definition of Acquiring Person,
provided that the 





 




Board of Directors may make such exemption subject to such conditions, if any, which the Board may determine. 


                (b)  "Affiliate"
and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act. 



                (c)  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 beneficially owns, directly or indirectly; 


                        (ii)  which
such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise, provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange or (B) the right to vote pursuant to any agreement, arrangement or understanding, provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report) or 


                        (iii)  which
are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any securities of 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 such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person
would be deemed to Beneficially Own hereunder. 


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


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


                (f)    "Common
Shares" shall mean the shares of common stock, par value $.001 per share, of the Company, except that "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person. 


                (g)  "Company"
shall have the meaning set forth in the preamble hereof. 


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                (h)  "Current
per share market price" shall have the meaning set forth in Section 11(d) hereof. 


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


                (j)    "Equivalent
preferred shares" shall have the meaning set forth in Section 11(b) hereof. 


                (k)  "Exchange
Act" shall mean the Securities Exchange Act of 1934. 


                (l)    "Exchange
Ratio" shall have the meaning set forth in Section 24(a) hereof. 


                (m)  "Expiration
Date" shall mean the Close of Business on February 28, 2005. 


                (n)  "Nasdaq"
shall mean the Nasdaq Stock Market. 



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


                (p)  "Preferred
Shares" shall mean shares of Series C Junior Participating Preferred Stock, $.001 par value, of the Company having the rights and preferences set
forth in Section 4.2 of the Company's Third Restated Certificate of Incorporation attached to this Rights Agreement as Exhibit A. 



                (q)  "Purchase
Price" shall initially be $52.00 for each one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right, and shall be
subject to adjustment from time to time as provided in Section 11 or 13 hereof. 


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


                (s)  "Redemption
Date" shall mean the time at which the Rights are redeemed as provided in Section 23 hereof. 



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


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


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


                (w)  "Rights
Agent" shall have the meaning set forth in the preamble hereof. 


                (x)  "Security"
shall have the meaning set forth in Section 11(d)(i) hereof. 


                (aa) "Stock
Acquisition Date" shall mean the first date of public announcement (including, without limitation, by a filing under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such or such earlier date as a majority of the Board shall become aware of the existence of an Acquiring Person. 



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


                (cc) "Trading
Day" shall have the meaning set forth in Section 11(d)(i) hereof. 


        Section 2.    Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. The
Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-Rights Agent. In the event the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights Agent will be as the Company may determine. 


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        Section 3.    Issue of Right Certificates.    (a) Until the earlier of the Close of Business on
(i) the tenth day after the Stock Acquisition Date or (ii) such date, if any, as may be determined by action of the Board of Directors of the Company after the date of the commencement
by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) 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 entity holding Common Shares for or pursuant to the terms of any such plan) to commence, a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person (including any such date which is after the date of this Rights Agreement and prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares registered in the names
of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business
on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 


                (b)  The
Company will make available, as promptly as practicable following the Record Date, a Summary of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto, to any holder of Rights who may so request from time to time prior to the Expiration Date. With respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates and the registered holders of the Common Shares shall also be the registered holders of the associated Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Expiration Date), the surrender for transfer of any certificate for Common Shares in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such Common Shares. 



                (c)  Rights
shall be issued in respect of all Common Shares which are issued (whether originally issued or from the Company's treasury) after the Record Date but prior to
the earliest of the Distribution
Date, the Redemption Date or the Expiration Date. Certificates representing such Common Shares shall bear the following legend: 



        This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between Caremark Rx, Inc. (the "Company") and the Rights Agent
hereunder (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, rights issued to any person
who becomes an Acquiring Person (as defined in the rights agreement), including such rights held by a subsequent holder, may become null and void. 




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


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purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. 



        Section 4.    Form of Right Certificates.    The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Rights 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 or automated quotation system on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set forth therein, but the number of one
one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein. 


        Section 5.    Countersignature and Registration.    (a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents, or its Treasurer, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned by 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 and issued and delivered by the Company 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. 


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


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


                (a)  Subject
to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right
Certificates entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent
shall 


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countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. 


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


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



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



                (b)  The
Purchase Price shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 


                (c)  Upon
receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) requisition from
the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent of the Preferred Shares with such depositary agent) and the Company hereby directs such depositary agent to comply with such
request; (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof;
(iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder; and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right
Certificate. 


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


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


        Section 9.    Availability of Preferred Shares.    



                (a)  The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held
in its treasury, the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7. The Company covenants and agrees
that it will take all such action as may be necessary to ensure that all securities delivered upon exercise of Rights shall, at the time of delivery of the certificates for such securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable. 



                (b)  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 Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than
that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due. 


                (c)  The
Company will use its best efforts to ensure that any securities issued pursuant hereto are issued in compliance with all applicable laws. 


        Section 10.    Preferred Shares Record Date.    Each Person in whose name any certificate for Preferred Shares
is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 


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


                (a)  (i) In
the event the Company shall at any time after the date of this Rights Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the 


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outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided
in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. 



                (ii)  Subject
to Section 24 of this Rights Agreement, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Rights Agreement and in lieu of Preferred Shares, such number of Common Shares as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per
share market price of the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights. 


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


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



                (b)  In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring
within 45 calendar days after 


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such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares 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, the numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of
capital stock of the
Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed. 


                (c)  In
case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be such current per share market price of the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed. 


                (d)  (i) For
the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such 


9





 




Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, 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 Security is 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 Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price 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 Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of
Directors of the Company. If on any such date no such market maker is making a market in the Security, the fair value of the Security on such date as determined in good faith by the Board of Directors
of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. 



                (ii)  For
the purpose of any computation hereunder, the "current per share market price" of the Preferred Shares shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preferred Shares are not publicly traded, the "current per share market price" of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the
date hereof), multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. 


                (e)  No
adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one-millionth of a Preferred Share or one ten-thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights. 


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


                (g)  All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the 


10





 




number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided 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 Sections 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 one one-hundredths of a Preferred Share (calculated to the nearest one millionth of a Preferred Share) obtained by (A) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and
(B) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 


                (i)    The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest one millionth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein 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 one one-hundredths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preferred Share which were expressed
in the initial Right Certificates issued hereunder. 


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


                (l)    In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such 


11





 


exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment. 



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


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


        Section 12.    Certificate of Adjusted Purchase Price or Number of Shares.    Whenever an adjustment is made as
provided in Sections 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate and (c) if a Distribution Date has occurred, mail a
brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment therein and shall not be obligated or responsible for calculating any adjustment nor shall it be deemed to have knowledge of any such adjustment unless and until it shall have received such
a certificate. 


        Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power.    In the event, directly
or indirectly, at any time after a Person has become an Acquiring Person, (a) the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the
Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries 


12





 




(taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that 


                        (i)    each
holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Rights Agreement and in lieu
of Preferred Shares, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by
(B) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; 


                        (ii)  the
issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Rights Agreement; 


                        (iii)  the
term "Company" shall thereafter be deemed to refer to such issuer; and 


                        (iv)  such
issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights. 


        The
Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights,
warrants,
instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. 


        Section 14.    Fractional Rights and Fractional Shares.    


                (a)  The
Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the 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 


13





 


Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company
shall be used. 


                (b)  The
Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to which they are entitled as Beneficial Owners of the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise. 



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


        Section 15.    Rights of Action.    All rights of action in respect of this Rights Agreement, except the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Rights 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 Rights Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Rights Agreement. 


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


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



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


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


14





 




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


        Section 17.    Right 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 Preferred
Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained 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 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the
provisions hereof. 


        Section 18.    Concerning the Rights Agent.    


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


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


                (c)  The
indemnity provided in this Section 18 shall survive the expiration of the Rights, the resignation or removal of the Rights Agent and the termination of this
Rights Agreement. 


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



                (a)  Any
corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under this Rights Agreement without the execution or filing of any paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights 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 Rights Agreement. 


15





 

                (b)  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 Rights Agreement. 



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


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



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


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


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



                (e)  The
Rights Agent shall not be under any responsibility in respect of the validity of this Rights 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 Rights Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred
Shares to be issued pursuant to this Rights Agreement or any Right Certificate or as to whether any Preferred Shares will, when issued, be validly authorized and issued, fully paid and nonassessable. 


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


16





 



                (g)  The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those
instructions. 


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



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


                (j)    The
Rights Agent undertakes only the express duties and obligations imposed on it by this Rights Agreement and no implied duties or obligations shall be read into this
Rights Agreement against the Rights Agent. 


                (k)  Anything
in this Rights Agreement to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits); provided, however, that this paragraph (k) shall not apply in the case of the Rights Agent's bad faith or willful misconduct. 


        Section 21.    Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent, as the case may be, upon 30 days' notice
in writing to the Rights Agent or any successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent, then the registered holder of any Right Certificate may submit to the Company a written request (together with such holder's Right
Certificate for inspection by the Company) that the Company appoint a successor Rights Agent. If the Company shall not have appointed a successor Rights Agent within 30 days after receiving
such request, such holder may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation or trust company organized and doing business under the laws of the United States, in good standing, which is authorized under such laws to exercise corporation trust or stock
transfer powers and is subject to supervision or examination by federal or state authority and which has individually or combined with an Affiliate at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million dollars. 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 


17





 




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 in the Common Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21 however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 


        Section 22.    Issuance of New Right Certificates.    Notwithstanding any of the provisions of this Rights
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Rights Agreement. 


        Section 23.    Redemption.    (a) The Board of Directors of the Company may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $.001 per Right, appropriately adjusted to reflect
any stock split, stock combination, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company, in its sole
discretion, may establish. The Company may, at its option, pay the Redemption Price in cash, Common Shares (based on the current market price at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. 


                (b)  Immediately
upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23,
and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors of the Company ordering the redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner 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 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date. 


        Section 24.    Exchange.    (a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to
Section 11(i) (such exchange ratio being 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
Shares for or pursuant to the terms of any such plan), together with all Affiliates and 


18





 




Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. 


                (b)  Immediately
upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights. 


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


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


        Section 25.    Notice of Certain Events.    (a) In case the Company, at any time after the Distribution
Date, shall propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of
stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a 


19





 




Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by
the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least 10 days prior to
the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier. 



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


        Section 26.    Notices.    Notices or demands authorized by this Rights Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows: 




Caremark
Rx, Inc.

3000 Galleria Tower

Suite 1000

Birmingham, Alabama 35244

Attention: Corporate Secretary 





        Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this Rights 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: 




First
Union National Bank

1525 West W.T. Harris Boulevard, 3C3

Charlotte, North Carolina 28288-1153

Attention: Equity Services Group 





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



        Section 27.    Supplements and Amendments.    The Board of Directors of the Company may from time to time
supplement or amend this Rights Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Board of Directors of the Company may deem necessary or desirable, any
such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent, provided, however, after any Person becomes an Acquiring Person, this Rights Agreement shall not
be amended in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person or Affiliate or Associate thereof). Upon the delivery of a certificate from
an 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.
Notwithstanding anything contained in this Rights Agreement to the 


20





 




contrary, no supplement or amendment that changes the rights, duties or liabilities of the Rights Agent under this Rights Agreement shall be effective without the consent of the Rights Agent. 



        Section 28.    Successors.    All the covenants and provisions of this Rights Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 


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


        Section 30.    Severability.    If any term, provision, covenant or restriction of this Rights Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Rights Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated. 



        Section 31.    Governing Law.    This Rights Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be
made and performed entirely within such State. 


        Section 32.    Counterparts.    This Rights 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 Rights Agreement
are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 


        Section 34.    Entire Agreement.    This Second Amended and Restated Rights Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter
hereof. 


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



	 	CAREMARK RX, INC.
	

 	

By:	
 	

/s/ Sara J. Finley
	 	Name:	 	Sara J. Finley
	 	Title:	 	SVP and Secretary
	

 	
FIRST UNION NATIONAL BANK
	

 	

By:	
 	

/s/ Steven M. Turner
	 	Name:	 	Steven M. Turner
	 	Title:	 	Asst. Vice President




21







 
 

EXHIBIT A    
  


 
 

THIRD RESTATED CERTIFICATE OF INCORPORATION
  OF
  MEDPARTNERS, INC.    
  



        MEDPARTNERS, INC., a corporation organized and existing under and by virtue of the Delaware General
Corporation Law ("DGCL"), does hereby certify that: 


        The
present name of the corporation is MedPartners, Inc. ("Corporation"); 


        The
date of filing of the original Certificate of Incorporation of the Corporation with the Delaware Secretary of State was August 14, 1995, under the name
MedPartners/Mullikin, Inc.; 


        The
date of filing of the Restated Certificate of Incorporation of the Corporation with the Delaware Secretary of State was November 29, 1995; 



        The
date of filing of the Certificate of Correction of Restated Certificate of Incorporation of the Corporation with the Delaware Secretary of State was May 13, 1996; 


        The
date of filing of the Second Amended and Restated Certificate of Incorporation of the Corporation with the Delaware Secretary of State was May 13, 1996; 


        The
date of filing of a Certificate of Amendment to Second Amended and Restated Certificate of Incorporation of the Corporation with the Delaware Secretary of State was
September 5, 1996; and 


        The
date of filing of a Certificate of Amendment to Second Amended and Restated Certificate of Incorporation of the Corporation with the Delaware Secretary of State was
December 13, 1996. 


        The
provisions of the Second Amended and Restated Certificate of Incorporation, as previously amended, are hereby restated and integrated into the single instrument which is hereinafter
set forth, and which is entitled Third Restated Certificate of Incorporation of MedPartners, Inc., without any further amendment and without any discrepancy between the provisions of the Second
Amended and Restated Certificate of Incorporation, as previously amended, and the provisions of the said single instrument hereinafter set forth. 



        The
Board of Directors of the Corporation duly adopted this Third Restated Certificate of Incorporation pursuant to the provisions of Section 245 of the DGCL in the form set forth
as follows: 


 
 

ARTICLE I    
  


        The name of the Corporation is MedPartners, Inc. 


 
 

ARTICLE II    
  


        The address of the Corporation's registered office in the State of Delaware is The Prentice-Hall Corporation System, Inc. at 1013 Centre Road,
in the City of Wilmington, County of New Castle. The Registered Agent in charge thereof is The Prentice-Hall Corporation System, Inc. 


 
 

ARTICLE III    
  


        The purposes of the Corporation are to engage in any lawful act or activity for which corporations may be organized under the DGCL, including, but not limited to,
the following: 


        SECTION 3.1    To engage in any lawful act or activity for which corporations may be organized under the DGCL; 


        SECTION 3.2    To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or
otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description; 





 



        SECTION 3.3    To acquire, and pay for in cash, stock or bonds of this Corporation or otherwise, the goodwill, rights, assets
and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation; 


        SECTION 3.4    To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of
letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or
useful in connection with any business of this Corporation; 



        SECTION 3.5    To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange,
transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip,
warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint
stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory,
province, municipality or other political subdivision or by any governmental agency, and as owner thereto to possess and exercise all the rights, powers and privileges of ownership, including the
right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof; 


        SECTION 3.6    To borrow or raise money for any of the purposes of the Corporation and, from time to time without limit as to
amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and
evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property
of the Corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the Corporation for its corporate purposes; 


        SECTION 3.7    To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold,
improve, employ, use and otherwise deal in and with real or personal property, or any interest therein, wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the Corporation's property and assets, or any interest therein, wherever situated; and 


        SECTION 3.8    In general, to possess and exercise all the powers and privileges granted by the DGCL or by any other law of
Delaware or by this Certificate of Incorporation together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment
of the business or purposes of the Corporation. 


        SECTION 3.9    The business and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in
nowise limited or restricted by reference to, or inference from, the terms of any other clause in this Certificate of Incorporation, but the business and purposes specified in each of the foregoing
clauses of this Article shall be regarded as an independent business and purpose. 


 
 

ARTICLE IV    
  


        SECTION 4.1    AUTHORIZATION OF CAPITAL.    The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is Four Hundred Ten Million (410,000,000) shares, comprised of (a) Four Hundred Million (400,000,000) shares of Common Stock,
with a par value of $.001 per share; (b) Five Hundred Thousand (500,000) shares of Series C Junior Participating Preferred Stock (the "Series C Preferred Stock"), with a par value
of $.001 per share; and (c) Nine Million Five Hundred Thousand (9,500,000) shares of such other Preferred Stock, with a par 


A-2





 




value of $.001 per share, as the Board of Directors may decide to issue pursuant to Section 4.3, which constitutes a total authorized capital of all classes of capital stock of Four Hundred
Ten Thousand Dollars ($410,000.00). 


        A
description of the respective classes of stock and a statement of the designations, preferences, voting powers, relative, participating, optional or other special rights and
privileges, and the qualifications, limitations and restrictions of the Series C Preferred Stock, such other Preferred Stock as the Board of Directors may by resolution or resolutions decide to
issue, and the Common Stock are as follows: 


        SECTION 4.2    SERIES C PREFERRED STOCK.



        (a)    Voting Rights.    The holders of shares of Series C Preferred Stock shall have the following voting
rights: 


                (1)  Subject
to the provisions for adjustment hereinafter set forth, each share of Series C Preferred Stock shall entitle the holder thereof to one hundred
(100) votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (as defined in subsection 4.2(b)) (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event. 


                (2)  Except
as otherwise provided herein or by law, the holders of shares of Series C Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders of the Corporation. 


                (3)  (A)    If
at any time dividends on any Series C Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") which shall extend until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all shares of Series C Preferred Stock then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including holders of the Series C Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class irrespective of series, shall have the right to elect two (2) Directors. 


                        (B)  During
any default period, such voting right of the holders of Series C Preferred Stock may be exercised initially at a special meeting called pursuant to
subsection 4.2(a)(3)(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of ten
percent (10%) in number of shares of Series C Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Series C Preferred Stock of such voting right. At any meeting at which the holders of Series C Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two
(2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the
required number, the holders of the Series C Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the
required number. After the holders of the Series C Preferred Stock shall have exercised their right to elect Directors in any default 


A-3





 




period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Series C Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or pari passu with the Series C Preferred Stock. 


                        (C)  Unless
the holders of Series C Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of
Directors may order, or any stockholder
or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Series C Preferred Stock outstanding, irrespective of series, may request, the calling
of a special meeting of the holders of Series C Preferred Stock, which meeting shall thereupon be called by the President, a Vice President or the Secretary of the Corporation. Notice of such
meeting and of any special meeting at which holders of Series C Preferred Stock are entitled to vote pursuant to this subsection 4.2(a)(3)(C) shall be given to each holder of record of
Series C Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier
than twenty (20) days and not later than sixty (60) days after such order or request or, in default of the calling of such meeting within sixty (60) days after such order or
request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this subsection 4.2(a)(3)(C), no such special meeting shall be called during the period within sixty (60) days immediately preceding the date
fixed for the next annual meeting of the stockholders. 


                        (D)  In
any default period, the holders of Common Stock, and other classes of stock of the Corporation, if applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Series C Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right
(x) the Directors so elected by the holders of Series C Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as provided in subsection 4.2(a)(3)(B) hereof) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this Section 4.2(a)(3)(D) to Directors elected by the
holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. 


                        (E)  Immediately
upon the expiration of a default period, (x) the right of the holders of Series C Preferred Stock as a class to elect Directors shall cease,
(y) the term of any Directors elected by the holders of Series C Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be
provided for in this Certificate of Incorporation or the Bylaws of the Corporation, irrespective of any increase made pursuant to the provisions of subsection 4.2(a)(3)(B) hereof (such number being
subject, however, to change thereafter in any manner provided by law or in the Certificate of Incorporation or Bylaws). Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. 


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


        (b)    Dividends and Distributions.    


                (1)  The
holders of shares of Series C Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available
for the purposes, quarterly dividends
payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share of Series C 


A-4





 


Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $.001 or (b) subject to the provision for adjustment hereinafter set forth, one hundred
(100) times the aggregate per share amount of all cash dividends, and one hundred (100) times the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock,
since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series C Preferred Stock. In the event the Corporation shall, at any time after November 10, 1994 (the "Rights Declaration Date"), (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount
to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. 


                (2)  The
Corporation shall declare a dividend or distribution on the Series C Preferred Stock as provided in subsection 4.2(b)(1) hereof immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.001 per share on the Series C Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 


                (3)  Dividends
shall begin to accrue and be cumulative on outstanding shares of Series C Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series C Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series C Preferred Stock
in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series C Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than thirty (30) days prior to the date fixed for the payment thereof. 


        (c)    Restrictions.    


                (1)  Whenever
quarterly dividends or other dividends or distributions payable on the Series C Preferred Stock as provided in subsection 4.2(b) hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series C Preferred Stock outstanding shall have been paid in full, the Corporation
shall not 


                        (A)  declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock; 


                        (B)  declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the 


A-5





 




Series C Preferred Stock, except dividends paid ratably on the Series C Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled; 


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


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



                (2)  The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under subsection 4.2(c)(1) hereof, purchase or otherwise acquire such shares at such time and in such manner. 


        (d)    Reacquired Shares.    Any shares of Series C Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall, upon their cancellation, become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. 


        (e)    Liquidation, Dissolution or Winding Up.    


                (1)  Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock unless, prior thereto, the holders of shares of Series C Preferred Stock
shall have received an amount equal to one hundred (100) times the Exercise Price, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment (the "Series C Liquidation Preference"). The term "Exercise Price" means the price established by the Board of Directors for the purchase of one unit of Series C
Preferred Stock equal to one-one-hundredth of one share of Series C Preferred Stock. If no shares of convertible Preferred Stock are outstanding at the time of
liquidation, then, following the payment of the full amount of the Series C Liquidation Preference, no additional distributions shall be made to the holders of shares of Series C
Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the
Series C Liquidation Preference by (ii) one hundred (100) (as approximately adjusted as set forth in subparagraph (3) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series C
Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series C Preferred Stock and Common Stock, respectively, holders of Series C Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one (1) with respect to
such Series C Preferred Stock and Common Stock, on a per share basis, respectively. 


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                (2)  In
the event, however, that there are not sufficient assets available to permit payment in full of the Series C Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series C Preferred Stock, then such remaining assets shall be distributed ratable to the holders of
such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common Stock. 


                (3)  In
the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then, in each such case, the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 


        (f)    Consolidation, Merger, etc.    In case the Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then, in any such case, the shares of
Series C Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to one hundred
(100) times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then, in each such case, the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series C Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 



        (g)    No Redemption.    The shares of Series C Preferred Stock shall not be redeemable. 


        (h)    Amendment.    The Certificate of Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights of the Series C Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series C Preferred Stock, voting separately as a class. 



        (i)    Fractional Shares.    Series C Preferred Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to exercise voting rights, to receive dividends, to participate in distributions and to have the benefit of all other rights of holders of
Series C Preferred Stock. 


        SECTION 4.3    OTHER PREFERRED STOCK.    The Board of Directors of the Corporation is authorized, subject to the
limitations prescribed by law and the provisions of this Section 4.3, to adopt one or more resolutions to provide for the issuance from time to time in one or more series of any number of
shares of Preferred Stock, up to a maximum of nine million five hundred thousand (9,500,000) shares, and to establish the number of shares to be included in each such series, and to fix the
designation, relative rights, preferences, qualifications and limitations of the shares of each such 


A-7





 




series. The authority of the Board of Directors with respect to each such series shall include, but not be limited to, a determination of the following: 


                (a)  The
number of shares constituting that series and the distinctive designation of that series; 



                (b)  The
dividend rate on the shares of that series, whether dividends shall be cumulative and, if so, from which date or dates, and whether they should be payable in
preference to, or in another relation to, the dividends payable on any other class or classes or series of stock; 


                (c)  Whether
that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; 


                (d)  Whether
that series shall have conversion or exchange privileges and, if so, the terms and conditions of such conversion or exchange, including provision for
adjustments for the conversion or exchange rate in such events as the Board of Directors shall determine; 


                (e)  Whether
or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the manner of selecting shares for
redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates; 



                (f)    Whether
that series shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of that series and, if so, the terms and
amounts of such sinking funds; 


                (g)  The
rights of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the
issuance of any additional stock (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Corporation or any subsidiary of, any outstanding stock of the Corporation; 



                (h)  The
right of the shares of that series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and whether such rights
shall be in preference to, or in other relation to, the comparable rights of any other class or classes or series of stock; and 


                (i)    Any
other relative, participating, optional or other special rights, qualifications, limitations or restrictions of that series. 


        SECTION 4.4    COMMON STOCK.



        (a)    Voting Rights.    Except as otherwise required by law or this Certificate of Incorporation, each holder of
Common Stock shall have one vote in respect of each share of stock held by him of record on the books of the Corporation for the election of Directors and on all matters submitted to a vote of
stockholders of the Corporation. 


        (b)    Dividends.    Except as otherwise provided by the resolution or resolutions of the Board of Directors providing
for the issuance of any series of Preferred Stock pursuant to Section 4.3, the holders of shares of Common Stock shall be entitled to receive, when and if declared by the Board of Directors,
out of the assets of the Corporation which are by law available therefor, dividends payable either in cash, in property or in shares of capital stock. 


        (c)    Dissolution, Liquidation or Winding Up.    Except as otherwise provided by the resolution or resolutions of the
Board of Directors providing for the issuance of any series of Preferred Stock pursuant to Section 4.3, in the event of any dissolution, liquidation or winding up of the affairs of the
Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the 


A-8





 




holders of the Series C Preferred Stock, the rights of the holders of Common Stock to receive any remaining assets of the Corporation shall be as provided in subsection 4.2(e). 


 
 

ARTICLE V    
  


        SECTION 5.1    GENERAL PROVISIONS.    The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. The exact number of Directors shall be fixed from time to time by, or in the manner provided in, the Bylaws of the Corporation, and may be
increased or decreased as therein provided. Directors of the Corporation need not be elected by ballot unless required by the Bylaws. 


        SECTION 5.2    CLASSIFICATION OF BOARD OF DIRECTORS.    The Directors shall be divided into three (3) classes.
Each such class shall consist, as nearly as may be possible, of one-third of the total number of Directors, and any remaining Directors shall be included within such groups as the Board of
Directors shall designate. The first class of Directors will be elected for a term which expires in 1996. The second class will be elected for a term which expires in 1997. The third class will be
elected to a term which expires in 1998. At each annual meeting of stockholders, beginning in 1996, successors to the class of Directors whose term expires at the annual meeting shall be elected for a
three-year term. If the number of Directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly
equal as possible, but in no case shall a decrease in the number of Directors shorten the term of any incumbent Director. A Director may be removed from office for cause only and, subject to such
removal, death, resignation, retirement or disqualification, shall hold office until the annual meeting for the year in which his term expires and
until his successor shall be elected and qualify. No alteration, amendment or repeal of this Article V or the Bylaws of the Corporation shall be effective to shorten the term of any Director
holding office at the time of such alteration, amendment or repeal, to permit any such Director to be removed without cause, or to increase the number of Directors in any class or in the aggregate
from that existing at the time of such alteration, amendment or repeal until the expiration of the terms of office of all Directors then holding office, unless (i) in the case of this
Article V, such alteration, amendment or repeal has been approved by the holders of all shares of stock entitled to vote thereon, or (ii) in the case of the Bylaws, such alteration,
amendment or repeal has been approved by either the holders of all shares entitled to vote thereon or by a vote of a majority of the entire Board of Directors. 



        SECTION 5.3    DIRECTORS APPOINTED BY A SPECIFIC CLASS OF STOCKHOLDERS.    To the extent that any holders of any class
or series of stock other than Common Stock issued by the Corporation shall have the separate right, voting as a class or series, to elect Directors, the Directors elected by such class or series shall
be deemed to constitute an additional class of Directors and shall have a term of office for one year or such other period as may be designated by the provisions of such class or series providing such
separate voting right to the holders of such class or series of stock, and any such class of Directors shall be in addition to the classes designated above. 



        SECTION 5.4    NOMINATIONS.    Advance notice of nominations for the election of Directors shall be given in the
manner and to the extent provided in the Bylaws of the Corporation. 


        SECTION 5.5    VACANCIES.    Vacancies and newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Board of Directors, and any vacancies on the Board of Directors resulting from death, resignation, removal or other cause shall only be filled by
the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining Director. Any Director elected in
accordance with the preceding sentence of this Section 5.5 shall hold office for the remainder of the full term of the Directors whose vacancy is so filled and until such Director's successor
shall have been elected and qualified. 


A-9





 


 
 

ARTICLE VI    
  


        The Corporation is to have perpetual existence. 


 
 

ARTICLE VII    
  


        In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors is expressly authorized: 



        SECTION 7.1    To adopt, repeal, alter or amend the Bylaws of the Corporation by a vote of a majority of the entire Board of
Directors. 


        SECTION 7.2    To authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation. 


        SECTION 7.3    To set apart, out of any of the funds of the Corporation available for dividends, a reserve or reserves for any
proper purpose and to abolish any such reserve in the manner in which it was created. 



        SECTION 7.4    By a majority of the whole Board of Directors, to designate one or more committees, each committee to consist of
one or more of the Directors of the Corporation. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. The Bylaws may provide that, in the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the Board of Directors, or in the Bylaws of the Corporation, shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall
have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the Bylaws of the
Corporation; and, unless the resolution or Bylaws expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. 


A-10









  





        SECTION 7.5    When and as authorized by the stockholders in accordance with statute, to sell, lease or exchange all or
substantially all of the property and assets of the Corporation, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in
whole or in part of money or property, including shares of stock in and/or other securities of any other corporation or corporations, as the Board of Directors shall deem expedient and for the best
interests of the Corporation. 


 
 

ARTICLE VIII    
  


        SECTION 8.1    Except as provided in Section 8.2 of this Article VIII, any action required
or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders. Advance notice of items of business to be considered at any meeting of the stockholders shall be given in the manner and to the extent provided in the Bylaws
of the Corporation. 


        SECTION 8.2    Notwithstanding the foregoing, this Article VIII shall not apply to the Corporation if it does not have a
class of voting stock that is either (i) listed on a national securities exchange, (ii) authorized for quotation on an inter dealer quotation system of the registered national securities
association, or (iii) held of record by more than two thousand (2,000) stockholders. 


 
 

ARTICLE IX    
  


        SECTION 9.1    LIMITATION OF LIABILITY OF DIRECTORS.    A Director of the Corporation shall
not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction from which the Director derived an improper personal benefit. 


        If
the DGCL is amended after the date hereof to authorized action by corporations organized pursuant to the DGCL to further eliminate or limit the personal liability of directors, then
the liability of a
Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as amended. 


        SECTION 9.2    INDEMNIFICATION OF DIRECTORS.


                        (a)  Each
person who was or is made a party to, or is threatened to be made a party to, or is involved in, any threatened, pending or completed action, suit or proceeding,
whether formal or informal, whether of a civil, criminal, administrative or investigative nature (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is
the legal representative, is or was a Director of the Corporation, whether the basis of such proceeding is an alleged action or inaction in an official capacity or in any other capacity while serving
as a Director, shall be indemnified and held harmless by the Corporation to the fullest extent permissible under Delaware law, as the same exists or may hereafter exist in the future (but, in the case
of any future change, only to the extent that such change permits the Corporation to provide broader indemnification rights than the law permitted prior to such change), against all costs, charges,
expenses, liabilities and losses (including, without limitation, attorneys' fees, judgments, fines, Employee Retirement Income Security Act of 1974 ("ERISA") excise taxes, or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a Director and
shall inure to the benefit of his or her heirs, executors and administrators. 


                        (b)  The
Corporation shall pay expenses actually incurred in connection with any proceeding in advance of its final disposition; provided, however, that if Delaware law then
requires, 


A-11





 




the payment of such expenses incurred in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such Director or
officer, to repay all amounts so advanced if it shall ultimately be determined that such Director or officer is not entitled to be indemnified. 


                        (c)  If
a claim under subsection 9.2(a) hereof is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a
determination that indemnification of the claimant is permissible in the circumstances because the claimant has met the applicable standard of conduct, if any, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met the standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the standard of conduct. 



        SECTION 9.3    INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.    The Corporation may provide indemnification to
employees and agents of the Corporation to the fullest extent permissible under Delaware law. 


        SECTION 9.4    EXPENSES AS A WITNESS.    To the extent that any Director, officer, employee or agent of the
Corporation is, by reason of such position, or position with another entity at the request of the Corporation, a witness in any action, suit or proceeding, he or she shall be indemnified against all
costs and expenses actually and reasonably incurred by him or her on his or her behalf in connection therewith. 



        SECTION 9.5    INSURANCE.    The Corporation may maintain insurance, at its expense, to protect itself and any
Director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense, liability or loss under Delaware law. 


        SECTION 9.6    INDEMNITY AGREEMENTS.    The Corporation may enter into agreements with any Director, officer, employee
or agent of the Corporation providing for indemnification to the fullest extent permissible under Delaware law. 


        SECTION 9.7    SEPARABILITY.    Each and every paragraph, sentence, term and provision of this Article IX is
separate and distinct, so that if any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect
the validity or enforceability of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision of this Article IX may be modified
by a court of competent jurisdiction to preserve its validity and to provide the claimant with, subject to the limitations set forth in this Article IX and any agreement between the Corporation
and claimant, the broadest possible indemnification permitted under applicable law. 


        SECTION 9.8    CONTRACT RIGHT.    Each of the rights conferred on Directors of the Corporation by Sections 9.1, 9.2
and 9.4 of this Article IX, and on officers, employees or agents of the Corporation by Section 9.4 of this Article, shall be a contract right, and any repeal or amendment of the
provisions of this Article shall not adversely affect any right hereunder of any person existing at the time of such repeal or amendment with respect to any act or omission occurring prior to the time
of such repeal or amendment, and, further, shall not apply to any proceeding, irrespective of when the proceeding is initiated, arising from the service of such person prior to such repeal or
amendment. 


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        SECTION 9.9    NONEXCLUSIVITY.    The rights conferred in this Article shall not be exclusive of any other rights that
any person may have or hereafter acquire under any statute, Bylaw, agreement, vote of stockholders or disinterested Directors or otherwise. 


 
 

ARTICLE X


        The
Corporation reserves the right to amend, alter or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are subject to this reservation. 


        IN WITNESS WHEREOF, MedPartners, Inc. has caused this Certificate to be signed by Harold O. Knight, Jr., its
Executive Vice President and Chief Financial Officer, and attested to by Tracy P. Thrasher, its Executive Vice President and Corporate Secretary, this 24th day of March, 1997. 



	 	MEDPARTNERS, INC.
	

 	

By:	
 	

/s/  HAROLD O. KNIGHT, JR.      
 Harold O. Knight, Jr.
 Executive Vice President and

Chief Financial Officer
	

ATTEST:	

 	
 	

 





	

/s/ TRACY P. THRASHER
 Tracy P. Thrasher
 Its Secretary	
 	

 




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EXHIBIT B    
  


Form of Right Certificate 


Certificate
No. R- 


                  
Rights 


NOT EXERCISABLE AFTER FEBRUARY 28, 2005 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.


Rights Certificate 


Caremark
Rx, Inc. 


        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 Second Amended and Restated Rights Agreement, dated as of March     , 2002 (the "Rights Agreement"), between Caremark Rx, Inc., a
Delaware corporation (the "Company"), and First Union National Bank (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 time, on February 28, 2005 at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series C Junior Participating Preferred Stock of the Company, par value $.001 per share (the "Preferred Shares"),
at a purchase price of $52.00 per one one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of March     , 2002, based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the
happening of certain events. 


        This
Right Certificate is subject to all of the terms, provisions and conditions of the 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 principal executive offices of the Company and the offices of the Rights Agent. 



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


        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Right Certificate (i) may be redeemed by the Company at a redemption price of $.001 per Right or
(ii) may be exchanged, in whole or in part, for Preferred Shares or shares of the Company's Common Stock, par value $.001 per share. 


        No
fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, 





 




which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof, a cash payment will be made, as provided in the 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 Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the 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 as provided in the Rights Agreement. 


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


        WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. 


Dated
as of                        , 20    . 



	 	CAREMARK RX, INC.
	

 	

By:	
 	

    
 Name:

Title:
	

COUNTERSIGNED:	

 	
 	

 





	

By:	
 	

    
 Name:

Title:	

 




B-2





 
[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 Certificate.) 


        FOR
VALUE RECEIVED
                                         
                                          
                                hereby sells, assigns and transfers unto
 


                                        
                                          
                                         
                                          
                 
 


                                        
                                          
                                         
                                          
                 


        (Please print name and address of transferee) 


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


Dated:
                                       



Signature:
                                       


Signature Guaranteed 


        Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States. 


Certificate 


        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement). After due inquiry and to the best knowledge of the undersigned, the Rights evidenced by this Right Certificate were not acquired or beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof. 


Dated:
                                       



Signature:
                                       


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. 


B-3





 
FORM OF ELECTION TO PURCHASE  


(To
be executed if holder desires to exercise Rights

represented by the Right Certificate.) 


To:
                                       



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


                                        
                                          
    



Please
insert social security

or other identifying number: 


                                        
                          



Please
print name and address: 


                                        
                          
 


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


                                        
                                          
    



Please
insert social security

or other identifying number: 


                                        
                          
 


Please
print name and address: 


                                        
                          



Dated:
                                       



Signature:
                                       


Signature Guaranteed 


        Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States. 


B-4





 
Certificate 


        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement). After due inquiry and to the best knowledge of the undersigned, the Rights evidenced by this Right Certificate were not acquired or beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof. 


Dated:
                                       


Signature:
                                       


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



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


B-5









 
 

EXHIBIT C    
  


 
 

SUMMARY OF RIGHTS TO PURCHASE
  PREFERRED SHARES    
  


        On March 1, 1995, the Board of Directors of the predecessor of Caremark Rx, Inc. (the "Company") declared a dividend, which was subsequently paid,
of one preferred share purchase right (an "Original Right") for each outstanding share of common stock, par value $.001 per share (the "Common Shares"), of the Company. The Original Rights were
subsequently amended and, on March 11, 2002, the Original Rights were amended and restated in their entirety to represent a right (the "Rights") to purchase from the Company one
one-hundredth of a share of Series C Junior Participating Preferred Stock of the Company, par value $.001 per share (the "Preferred Shares"), at a price of $52.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Second Amended and Restated Rights Agreement
(the "Rights Agreement") between the Company and First Union National Bank as Rights Agent (the "Rights Agent"). 



Distribution Date; Exercisability  


        Initially, the Rights will be attached to all Common Share certificates and no separate Rights certificates will be issued. Separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of record of the Common Shares as of the close of business on the earlier to occur of (i) a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 20% or more of the outstanding Common Shares or (ii) such date as may be determined by action of
the Board of Directors of the Company following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding Common Shares (the earlier of such dates being the "Distribution Date"). 


        The
Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the Rights will be transferred with and only with the
Common Shares, (ii) new Common Share certificates issued after the Record Date upon transfer or new issuance of Common Shares will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common Shares outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common Shares represented by such certificate. 



        The
Rights are not exercisable until the Distribution Date. The Rights will expire on February 28, 2005 (the "Expiration Date"), unless the Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in each case, as described below. 


Flip-In  


        If a person or group becomes an Acquiring Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common Shares (or, in certain
circumstances, Preferred Shares or other similar securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the
existence of an Acquiring Person, 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. 


        For
example, at an exercise price of $50 per Right, each Right not owned by an Acquiring Person following an event set forth in the preceding paragraph would entitle its holder to
purchase $100 worth of Common Shares (or other consideration, as noted above) for $50. Assuming a value of $25 per Common Share at such time, the holder of each valid Right would be entitled to
purchase four Common Shares for $50. 





 



Flip-Over  


        In the event that the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are
sold after a person or group has become an Acquiring Person, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price
of the Right. In the event that any person or group becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a market value of two times the exercise price of the Right. 


Exchange  


        At any time after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will have become void), in whole or in part, at an exchange ratio of one
Common Share, or one one-hundredth of a Preferred Share (or of a share of a class or series of the Company's preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment). 


Redemption  


        At any time prior to the existence of an Acquiring Person, the Board of Directors of the Company may redeem the Rights, in whole but not in part, at a price of
$.001 per Right (the "Redemption Price"). The redemption of the Rights may be made effective at such time on such basis with such conditions as the Board of Directors, in its sole discretion, may
establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 


Amendment  


        The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders of the Rights, except that from and after the
existence of an Acquiring Person no such amendment may adversely affect the interests of the holders of the Rights (other than the Acquiring Person). 



Adjustment  


        The number of outstanding Rights and the number of one one-hundredths of a Preferred Share issuable upon exercise of each Right are subject to
adjustment under certain circumstances. 


Preferred Stock  


        Because of the nature of the Preferred Shares' dividend, liquidation and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of one Common Share. 



Rights of Holders  


        Until a Right is exercised, 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. 


Further Information  


        A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to an amendment to Form 8-A dated
March     , 2002. 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. 


C-2









QuickLinks



Exhibit 4.1


SECOND AMENDED AND RESTATED RIGHTS AGREEMENT




EXHIBIT A


THIRD RESTATED CERTIFICATE OF INCORPORATION OF MEDPARTNERS, INC.

ARTICLE I

ARTICLE II

ARTICLE III

ARTICLE IV

ARTICLE V

ARTICLE VI

ARTICLE VII


ARTICLE VIII

ARTICLE IX

ARTICLE X



EXHIBIT B




EXHIBIT C


SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES