Exhibit 4.1





Exhibit 4.1




EXECUTION VERSION




RENTECH, INC.




and




COMPUTERSHARE TRUST COMPANY, N.A.




as Rights Agent




Tax Benefit Preservation Plan




Dated as of August 5, 2011




 


 









 







TAX BENEFIT PRESERVATION PLAN




Tax Benefit Preservation Plan, dated as of August 5, 2011 (this “Plan”), between RENTECH,
INC., a Colorado corporation (the “Company”), and COMPUTERSHARE TRUST COMPANY, N.A, a federally
chartered trust company, as Rights Agent (the “Rights Agent”).



RECITALS




WHEREAS, the Board of Directors (the “Board”) of the Company has approved this
Plan and has authorized and declared a dividend of one preferred stock purchase right (a “Right”)
for each share of Common Stock (as defined in Section 1.6) of the Company outstanding at
the close of business on August 19, 2011 (the “Record Date”) and has authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with respect to each share of
Common Stock that shall become outstanding between the Record Date and the earliest of the
Distribution Date and the Expiration Date (as such terms are defined in Sections 3.1 and
7.1, respectively), each Right initially representing the right to purchase one
ten-thousandth (subject to adjustment) of a share of Series D Junior Participating Preferred Stock,
par value $10.00 per share (the “Preferred Stock”), of the Company having the rights, powers and
preferences set forth in the form of Articles of Amendment to the Company’s Amended and Restated
Articles of Incorporation attached hereto as Exhibit A (as amended from time to time), upon
the terms and subject to the conditions hereinafter set forth; provided, however, that Rights may
be issued with respect to Common Stock that shall become outstanding after the Distribution Date
and prior to the Expiration Date in accordance with Section 22;



WHEREAS, if the Company experiences an “ownership change,” as defined in Section 382 of the
Internal Revenue Code of 1986, as amended (the “Code”), its ability to use net operating losses and
certain other tax attributes (collectively, “NOLs”) for income tax purposes could be substantially
limited or lost altogether; and



WHEREAS, the Company views its NOLs as a highly valuable asset of the Company, which is likely
to inure to the benefit of the Company and its stockholders, and the Company believes that it is in
the best interests of the Company and its stockholders that the Company provide for the protection
of the Company’s NOLs on the terms and conditions set forth herein.


 


 









 





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



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



1.1. “Acquiring Person” shall mean any Person who or which, from and after the date of this
Plan, shall be the Beneficial Owner of 4.99% or more of the Common Stock then outstanding, but
shall not include (i) an Exempt Person or (ii) any Existing Holder, unless and until such time as
such Existing Holder shall become the Beneficial Owner of (A) a percentage of the Common Stock of
the Company then outstanding that is greater than 1% more than the
aggregate percentage of the outstanding Common Stock that such Existing Holder Beneficially
Owns as of the date hereof (such aggregate amount being the “Exempt Ownership Percentage”) or (B)
less than 4.99% of the Common Stock of the Company then outstanding (after which time, if such
Person shall be the Beneficial Owner of 4.99% or more of the Common Stock of the Company then
outstanding, such Person shall be or become deemed an “Acquiring Person”). Notwithstanding the
foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common
Stock by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares Beneficially Owned by such Person to 4.99% (or, in the case of an
Existing Holder, the Exempt Ownership Percentage) or more of the Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 4.99% (or, in the case of
an Existing Holder, the Exempt Ownership Percentage) or more of the Common Stock then outstanding
solely by reason of share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of one or more additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock
in Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner of
such additional Common Stock, such Person does not Beneficially Own 4.99% (or, in the case of an
Existing Holder, the Exempt Ownership Percentage) or more of the Common Stock then outstanding.
Notwithstanding the foregoing, if the Board determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
Section 1.1, has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it Beneficially Owned a percentage of Common Stock that would otherwise
cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Plan), and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this Section 1.1, then such
Person shall not be deemed to be or have become an “Acquiring Person” at any time for any purposes
of this Plan. For all purposes of this Plan, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining the particular
percentage of such outstanding Common Stock of which any Person is the Beneficial Owner, shall be
made pursuant to and in accordance with Section 382 of the Code and the Treasury Regulations
promulgated thereunder.



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



 


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1.3. A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially
Own” or have “Beneficial Ownership” of any securities:



1.3.1. which such Person, directly or indirectly, has the Right to Acquire; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to “Beneficially Own” (w) securities
(including rights, options or warrants) which are convertible or exchangeable into or exercisable
for Common Stock until such time as such securities are
converted or exchanged into or exercised for Common Stock except to the extent the acquisition
or transfer of securities (including rights, options or warrants) would be treated as exercised on
the date of its acquisition or transfer under Section 1.382-4(d) of the Treasury Regulations
promulgated under Section 382 of the Code; (x) securities tendered pursuant to a tender or exchange
offer made by such Person until such tendered securities are accepted for purchase or exchange; (y)
securities which such Person has a Right to Acquire upon the exercise of Rights at any time prior
to the time that any Person becomes an Acquiring Person, or (z) securities issuable upon the
exercise of Rights from and after the time that any Person becomes an Acquiring Person if such
Rights were acquired by such Person prior to the Distribution Date or pursuant to Section
3.1 or Section 22 (“Original Rights”) or pursuant to Section 11.9 or
Section 11.15 with respect to an adjustment to Original Rights;



1.3.2. which such Person, directly or indirectly, has or shares the right to vote or dispose
of, or otherwise has “beneficial ownership” of (as defined under Rule 13d-3 of the General Rules
and Regulations under the Exchange Act); provided, however, that Beneficial Ownership arising
solely as a result of any such Person’s participation in a “group” (within the meaning of Rule
13d-5(b) of the General Rules and Regulations under the Exchange Act) shall be determined under
Section 1.3.3 of this Plan and not under this Section 1.3.2; or



1.3.3. of which any other Person is the Beneficial Owner, if such Person has any agreement,
arrangement or understanding (whether or not in writing) with such other Person with respect to
acquiring, holding, voting or disposing of such securities of the Company, but only if the effect
of such agreement, arrangement or understanding is to treat such Persons as an “entity” under
Section 1.382-3(a)(1) of the Treasury Regulations; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own, any security (A) if such Person has the
right to vote such security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D or Schedule
13G under the Exchange Act (or any comparable or successor report), or (B) if such beneficial
ownership arises solely as a result of such Person’s status as a “clearing agency,” as defined in
Section 3(a)(23) of the Exchange Act; provided, further, that nothing in this Section 1.3.3
shall cause a Person engaged in business as an underwriter of securities or member of a selling
group to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such
Person’s participation in good faith in an underwriting syndicate until the expiration of 40
calendar days after the date of such acquisition, or such later date as the Board of the Company
may determine in any specific case.



Notwithstanding anything herein to the contrary, to the extent not within the foregoing
provisions of this Section 1.3, a Person shall be deemed the Beneficial Owner of, and shall
be deemed to Beneficially Own, securities held by any other Person that such Person would be deemed
to constructively own or that otherwise would be aggregated with shares owned by such Person
pursuant to Section 382 of the Code, or any successor provision or replacement provision and the
Treasury Regulations thereunder.


 


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No Person who is an officer, director or employee of an Exempt Person shall be deemed, solely
by reason of such Person’s status or authority as such, to be the “Beneficial
Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities that are
“Beneficially Owned” (as defined in this Section 1.3), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an
Exempt Person.



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



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



1.6. “Common Stock” when used with reference to the Company shall mean the Common Stock, par
value $0.01 per share, of the Company. “Common Stock” when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the management of, such other
Person or, if such Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person, and which has issued and outstanding such capital stock,
equity securities or equity interest.



1.7. “Exempt Person” shall mean (i) the Company, any Subsidiary of the Company, in each case
including, without limitation, the officers and members of the board of directors thereof acting in
their fiduciary capacities, or any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity or trustee holding shares of capital stock of the Company for or pursuant to
the terms of any such plan, or for the purpose of funding other employee benefits for employees of
the Company or any Subsidiary of the Company, and (ii) any Person deemed to be an “Exempt Person”
in accordance with Section 28 or Section 29.



1.8. “Existing Holder” shall mean any Person who, immediately prior to the first public
announcement of the adoption of this Plan, is the Beneficial Owner of 4.99% or more of the Common
Stock then outstanding.



1.9. “Person” shall mean any individual, partnership, joint venture, limited liability
company, firm, corporation, unincorporated association or organization, trust or other entity, and
shall include any successor (by merger or otherwise) of any such entity.



1.10. “Right to Acquire” shall mean a legal, equitable or contractual right to acquire
(whether directly or indirectly and whether exercisable immediately, or only after the passage of
time, compliance with regulatory requirements, fulfillment of a condition or otherwise), pursuant
to any agreement, arrangement or understanding, whether or not in writing (excluding customary
agreements entered into in good faith with and between an underwriter and selling group members in
connection with a firm commitment underwriting registered under the Securities Act of 1933, as
amended (the “Securities Act”)), or upon the exercise of any option, warrant or right, through
conversion of a security, pursuant to the power to revoke a trust, discretionary account or similar
arrangement, pursuant to the power to terminate a repurchase or similar so-called “stock borrowing”
agreement or arrangement, or pursuant to the automatic termination of a trust, discretionary
account or similar arrangement.


 


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1.11. “Stock Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, the filing of a report pursuant to
Section 13(d) of the Exchange Act or pursuant to a comparable successor statute) by the Company or
an Acquiring Person that an Acquiring Person has become such or that discloses information which
reveals the existence of an Acquiring Person or such earlier date as a majority of the Board shall
become aware of the existence of an Acquiring Person.



1.12. “Stockholder Approval” shall mean the approval of this Plan by the affirmative vote of
the holders of a majority of the voting power of the outstanding shares of Common Stock (or other
shares that vote together with the Common Stock as one class for purposes of such an approval) that
are present in person or by proxy at a Stockholder Meeting and entitled to vote on the proposal to
approve this Plan.



1.13. “Stockholder Meeting” shall mean a meeting of stockholders of the Company duly held in
accordance with the Company’s Bylaws, as amended from time to time, the Company’s Amended and
Restated Articles of Incorporation, as amended from time to time, and applicable law.



1.14. “Subsidiary” of any Person shall mean any partnership, joint venture, limited liability
company, firm, corporation, unincorporated association, trust or other entity of which a majority
of the voting power of the voting equity securities or equity interests is owned, of record or
beneficially, directly or indirectly, by such Person.



1.15. A “Trigger Event” shall be deemed to have occurred upon any Person becoming an Acquiring
Person.



1.16. The following terms shall have the meanings defined for such terms in the Sections set
forth below:



	 	 	 
	Term	 	Section
	 
	 	 
	Adjustment Shares
	 	11.1.2
	Board
	 	Recitals
	Book Entry Shares
	 	3.1
	Code
	 	Recitals
	common stock equivalent
	 	11.1.3
	Company
	 	Preamble
	current per share market price
	 	11.4.1
	Current Value
	 	11.1.3
	Distribution Date
	 	3.1
	equivalent preferred stock
	 	11.2
	Exchange Act
	 	1.2
	Exchange Consideration
	 	27.1
	Exempt Ownership Percentage
	 	1.1





 


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	Term	 	Section
	 
	 	 
	Exemption Request
	 	28
	Expiration Date
	 	7.1
	Final Expiration Date
	 	7.1
	NOLs
	 	Recitals
	Original Rights
	 	1.3.2
	Plan
	 	Preamble
	Preferred Stock
	 	Recitals
	Principal Party
	 	13.2
	Purchase Price
	 	4
	Record Date
	 	Recitals
	Redemption Date
	 	7.1
	Redemption Price
	 	23.1
	Requesting Person
	 	28
	Right
	 	Recitals
	Right Certificate
	 	3.1
	Rights Agent
	 	Preamble
	Securities Act
	 	1.10
	Security
	 	11.4.1
	Spread
	 	11.1.3
	Substitution Period
	 	11.1.3
	Summary of Rights
	 	3.2
	Trading Day
	 	11.4.1
	Trust
	 	27.1
	Trust Agreement
	 	27.1
	Waiver Request
	 	29







Section 2. Appointment of Rights Agent.



The Company hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable,
upon 10 (ten) days prior written notice to the 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 shall
be as the Company shall determine. Contemporaneously with such appointment, if any, the Company
shall notify the Rights Agent thereof. 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.




Section 3. Issuance of Right Certificates.



3.1. Rights Evidenced by Stock Certificates. Until the earlier of (i) the close of
business on the tenth (10th) Business Day after the Stock Acquisition Date or (ii) the
close of business on the tenth (10th) Business Day after the date of the commencement
of, or first public announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in any Person (other
than an Exempt Person) becoming the Beneficial Owner of Common Stock aggregating 4.99% or more of
the then outstanding Common Stock (the earlier of (i) and (ii) being herein referred to as the
“Distribution Date”), (x) the Rights (unless earlier expired, redeemed or terminated) will be
evidenced (subject to the provisions of Section 3.2) by the certificates for Common Stock
registered in the names of the holders thereof or, in the case of uncertificated Common Stock
registered in book entry form (“Book Entry Shares”), by notation in book entry (which certificates
for Common Stock


 


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and Book Entry Shares shall also be deemed to be Right
Certificates) and not by
separate certificates, and (y) the Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the underlying Common Stock. The preceding
sentence notwithstanding, (A) prior to the occurrence of a Distribution Date specified as a result
of an event described in clauses (i) or (ii) (or such later Distribution Date as the Board may
select pursuant to this sentence), the Board may postpone, one or more times, the Distribution Date
in order to make a determination pursuant to Section 7.1(vi) or Section 29 or (B)
prior to the occurrence of a Distribution Date specified as a result of an event described in
clause (ii) (or such later Distribution Date as the Board may select pursuant to this sentence),
the Board may postpone, one or more times, the Distribution Date which would occur as a result of
an event described in clause (ii) beyond the date set forth in such clause (ii). Nothing herein
shall permit such a postponement of a Distribution Date after a Person becomes an Acquiring Person,
except as a result of the operation of the third sentence of Section 1.1. As soon as
practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign and the Company (or, if requested, the Rights Agent) will send, by first-class,
postage-prepaid mail, to each record holder of Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person), at the address of such holder shown on the
records of the Company, one or more certificates for Rights, in substantially the form of
Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.



3.2. Summary of Rights. On the Record Date or as soon as practicable thereafter, the
Company will send or cause to be sent a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C (the “Summary of Rights”), by
first-class, postage-prepaid mail, to each record holder of Common Stock as of the close of
business on the Record Date (other than any Acquiring Person) at the address of such holder shown
on the records of the Company. Any failure to send a copy of the Summary of Rights shall not
invalidate the Rights or affect their transfer with the Common Stock. With respect to certificates
for Common Stock and Book Entry Shares outstanding as of the close of business on the Record Date,
until the Distribution Date (or the earlier Expiration Date), the Rights will be evidenced by such
certificates for Common Stock registered in the names of the holders thereof or Book Entry Shares,
as applicable, together with a copy of the Summary of Rights and the registered holders of the
Common Stock shall also be registered holders of the associated Rights. Until the Distribution
Date (or the earlier Expiration Date), the surrender for transfer of any certificate for Common
Stock or Book Entry Shares outstanding at the close of business on the Record Date, with or without
a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby and the Book Entry Shares, as applicable.


 


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3.3. New Certificates and Uncertificated Shares After Record Date. Certificates for
Common Stock which become outstanding (whether upon issuance out of authorized but unissued Common
Stock, disposition out of treasury or transfer or exchange of
outstanding Common Stock) after the Record Date but prior to the earliest of the Distribution
Date or the Expiration Date, shall have impressed, printed, stamped, written or otherwise affixed
onto them the following legend:




This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Tax Benefit Preservation Plan
between Rentech, Inc. (the “Company”) and Computershare Trust
Company, N.A., as Rights Agent, dated as of August 5, 2011 as the
same may be amended from time to time (the “Plan”), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Plan, such Rights
(as defined in the Plan) 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 Plan
without charge after receipt of a written request therefor. As
described in the Plan, Rights which are owned by, transferred to or
have been owned by Acquiring Persons (as defined in the Plan) shall
become null and void and will no longer be transferable.



With respect to any Book Entry Shares, such legend shall be included in a notice to the record
holder of such shares in accordance with applicable law. Until the Distribution Date (or the
earlier Expiration Date), the Rights associated with the Common Stock represented by such
certificates and such Book Entry Shares shall be evidenced by such certificates and the Book Entry
Shares alone, and the surrender for transfer of any such certificates or Book Entry Shares, except
as otherwise provided herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer outstanding.



Notwithstanding this Section 3.3, neither the omission of the legend, nor the failure
to provide the notice thereof, shall affect the enforceability of any part of this Plan or the
rights of any holder of the Rights.



Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase shares and assignment, including the certifications therein, to be printed on
the reverse thereof) shall each be substantially in the form set forth 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 Plan, 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
trading system on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the terms and conditions hereof, the Right Certificates, whenever issued, shall
be dated as of the Record Date, and shall show the date of countersignature by the Rights Agent,
and on their face shall entitle the holders thereof to purchase such number of one ten-thousandths of a share of Preferred Stock as shall be set forth therein at the price per one
ten-thousandth of a share of Preferred Stock set forth therein (the “Purchase Price”), but the
number of such one ten-thousandths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.


 


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Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by the Chief Executive Officer, the Chief Financial Officer or
the General Counsel of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign
all of the Right Certificates hereunder. No Right Certificate shall 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 Plan any such
Person was not such an officer.



Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal 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, the certificate
number of each of the Right Certificates and the date of each of the Right Certificates.



Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section
11.1.2 and Section 14, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights that have become void
pursuant to Section 11.1.2 or that have been exchanged pursuant to Section 27) may
be transferred, split up or combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one ten-thousandths of a
share of Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up or combine or
exchange any Right Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender, together with any required form of assignment and certificate duly executed
and properly completed, the Right Certificate or Right Certificates to be transferred, split up or
combined or exchanged at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or Right Certificates until the registered
holder shall have duly executed and properly completed the certification contained in the form of
assignment on the reverse side of such Right Certificate or Right Certificates and shall have
provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) thereof as the Company shall reasonably request. Thereupon, the Rights Agent shall
countersign and
deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment from the holders of Right Certificates of
a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split up or combination or exchange of such Right Certificates.


 


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Subject to the provisions of Section 11.1.2, at any time after the Distribution Date
and prior to the Expiration Date, 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 countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.



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



7.1. Exercise of Rights. Subject to Section 11.1.2 and except as otherwise
provided herein, the registered holder of any Right Certificate may exercise the Rights evidenced
thereby 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 and certification on the reverse side thereof
duly executed and properly completed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase Price for the total
number of one ten-thousandths of a share of Preferred Stock (or other securities, cash or other
assets) as to which the Rights are exercised, at or prior to the time (the “Expiration Date”) that
is the earliest of (i) the close of business on August 5, 2014 (the “Final Expiration Date”), (ii)
the time at which the Rights are redeemed as provided in Section 23 (the “Redemption
Date”), (iii) the closing of any merger or other acquisition transaction involving the Company
pursuant to an agreement of the type described in Section 13.3 at which time the Rights are
deemed terminated, (iv) the time at which the Rights are exchanged as provided in Section 27, (v) the close of business on August 5, 2012, if Stockholder Approval has not been obtained
by that date, or (vi) the time at which the Board determines that the NOLs are fully utilized or no
longer available under Section 382 of the Code or that an ownership change under Section 382 of the
Code would not adversely impact in any material respect the time period in which the Company could
use the NOLs, or materially impair the amount of the NOLs that could be used by the Company in any
particular time period, for applicable tax purposes.



7.2. Purchase. The Purchase Price for each one ten-thousandth of a share of Preferred
Stock pursuant to the exercise of a Right shall be initially $3.75, shall be subject to adjustment
from time to time as provided in Sections 11, 13 and 26 and shall be
payable in lawful money of the United States of America in accordance with Section 7.3.



7.3. Payment Procedures. Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and certification duly executed and properly
completed, accompanied by payment of the aggregate Purchase Price for the total number of one
ten-thousandths of a share of Preferred Stock 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, in cash or by certified or 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 Stock (or make available, if the Rights Agent is the
transfer agent) certificates for the number of shares of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or


 


10









 






(B)
if the Company
shall have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing interests in such number of one ten-thousandths of a share
of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with all such requests; (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of
fractional shares in accordance with Section 14 or otherwise in accordance with Section
11.1.3; (iii) promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to the registered holder of such Right Certificate, 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 the
registered holder of such Right Certificate, or upon the order of the registered holder of such
Right Certificate, to such other Person as designated by such holder. In the event that the
Company is obligated to issue other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11.1.3, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.



7.4. Partial Exercise. 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 and delivered to
the registered holder of such Right Certificate or to his or her duly authorized assigns, subject
to the provisions of Section 14.



7.5. Full Information Concerning Ownership. Notwithstanding anything in this Plan to
the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any purported exercise as set
forth in this Section 7 unless the certification contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for such exercise shall
have been duly executed and properly completed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) as the Company shall reasonably request.



Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Plan. 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. Subject to applicable law
and regulation, the Rights Agent shall maintain in a retrievable database electronic records
or physical records of all cancelled or destroyed Rights Certificates which have been cancelled or
destroyed by the Rights Agent. The Rights Agent shall maintain such electronic records or physical
records for the time period required by applicable law and regulation. Upon written request of the
Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its
designee copies of such electronic records or physical records relating to Rights Certificates
cancelled or destroyed by the Rights Agent.


 


11









 





Section 9. Reservation and Availability of Capital Stock. The Company covenants and
agrees that, from and after the Distribution Date, it will cause to be reserved and kept available
out of its authorized and unissued Preferred Stock (and, following the occurrence of a Trigger
Event, out of its authorized and unissued Common Stock or other securities or out of its shares
held in its treasury) the number of shares of Preferred Stock (and, following the occurrence of a
Trigger Event, Common Stock and/or other securities) that will be sufficient to permit the exercise
in full of all outstanding Rights.



So long as the Preferred Stock (and, following the occurrence of a Trigger Event, Common Stock
and/or other securities) issuable upon the exercise of Rights may be listed on the NYSE Amex or any
other national securities exchange or traded in the over-the-counter market, the Company shall use
its best efforts to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed or admitted to trading on the NYSE Amex or such other
exchange or market upon official notice of issuance upon such exercise.



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



From and after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary, to permit the issuance of Preferred Stock upon the exercise of Rights,
to register and qualify such Preferred Stock under the Securities Act and any applicable state
securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause such
registration statement and qualifications to become effective as soon as possible after such filing
and keep such registration and qualifications effective until the earlier of the date as of which
the Rights are no longer exercisable for such securities and the Expiration Date. The Company may
temporarily suspend, from time to time for a period of time not to exceed one hundred twenty (120)
days in any particular instance, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become effective or in order to
prepare and file any supplement or amendment to such registration statement that the Board
determines to be necessary and appropriate under applicable law. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no longer
in effect. Notwithstanding any provision of this Plan to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Securities Act (if required) shall have
been declared effective.


 


12









 





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 Stock (or Common Stock and/or other
securities, as the case may be) 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 for the
Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than
that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates for Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered holder upon the
exercise of any Rights until any such tax shall have been paid (any such tax being payable by the
registered holder of such Right Certificate at the time of surrender) or until it has been
established to the Company’s satisfaction that no such tax is due.



Section 10. Preferred Stock Record Date. Each Person in whose name any certificate
for Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the holder of record of the
Preferred Stock (or Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the 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 Stock (or Common Stock and/or other securities, as the case may be) transfer books of
the Company are closed, such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder of Preferred Stock for which
the Rights shall be exercisable, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.



Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number of shares of Preferred Stock or other securities or property purchasable
upon exercise of each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.



11.1. Post-Execution Events.



11.1.1. Corporate Dividends, Reclassifications, Etc. In the event the Company shall,
at any time after the date of this Plan, (A) declare and pay a dividend on the Preferred Stock
payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this Section 11.1.1,
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 Stock 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. If an event occurs which would require
an adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided
for in this Section 11.1.1 shall be in addition to, and shall be made prior to, the
adjustment required pursuant to, Section 11.1.2.


 


13









 





11.1.2. Acquiring Person Events; Triggering Events. Subject to Section
27, in the event that a Trigger Event occurs, then, from and after the first occurrence of
such event, each holder of a Right, except as provided below, shall thereafter have a right to
receive, upon exercise thereof at a price per Right equal to the then current Purchase Price
multiplied by the number of one ten-thousandths of a share of Preferred Stock for which a Right is
then exercisable (without giving effect to this Section 11.1.2), in accordance with the
terms of this Plan and in lieu of Preferred Stock, such number of shares of Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by the number of one
ten-thousandths of a share of Preferred Stock for which a Right is then exercisable (without giving
effect to this Section 11.1.2) and (y) dividing that product by 50% of the current per
share market price of the Common Stock (determined pursuant to Section 11.4) on the first
of the date of the occurrence of, or the date of the first public announcement of, a Trigger Event
(the “Adjustment Shares”); provided that the Purchase Price and the number of Adjustment Shares
shall thereafter be subject to further adjustment as appropriate in accordance with Section
11.6. Notwithstanding the foregoing, upon and after the occurrence of a Trigger Event, any
Rights that are or were acquired or Beneficially Owned by (1) any Acquiring Person, (2) a
transferee of any Acquiring Person who becomes a transferee after the Acquiring Person becomes
such, or (3) a transferee of any Acquiring Person who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of this Section 11.1.2, and subsequent transferees, shall become void without any
further action, and any holder (whether or not such holder is an Acquiring Person) of such Rights
shall thereafter have no right to exercise such Rights under any provision of this Plan or
otherwise. From and after the Trigger Event, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 that represents Rights that are or have become void pursuant
to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions of this paragraph shall
be canceled.



The Company shall use all reasonable efforts to ensure that the provisions of this Section
11.1.2 are complied with, but shall have no liability to any holder of Right Certificates or
any other Person as a result of its failure to make any determinations with respect to any
Acquiring Person or transferees hereunder.


 


14









 





From and after the occurrence of an event specified in Section 13.1, any Rights that
theretofore have not been exercised pursuant to this Section 11.1.2 shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this Section
11.1.2.



11.1.3. Insufficient Shares. The Company may at its option substitute for Common
Stock issuable upon the exercise of Rights in accordance with the foregoing Section 11.1.2
a number of shares of Preferred Stock or fraction thereof such that the current per share market
price of one share of Preferred Stock multiplied by such number or fraction is equal to the current
per share market price of one share of Common Stock. In the event that upon the occurrence of a
Trigger Event there shall not be sufficient Common Stock authorized but unissued, or held by the
Company as treasury shares, to permit the exercise in full of the Rights in accordance with the
foregoing Section 11.1.2, the Company shall take all such action as may be necessary to
authorize additional Common Stock for issuance upon exercise of the Rights, provided, however, that
if the Company determines that it is unable to cause the authorization of a sufficient number of
additional shares of Common Stock, then, in the event the Rights become exercisable, the Company,
with respect to each Right and to the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date hereof to which it is a party, shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the “Current Value”), over (2) the Purchase Price (such excess, the “Spread”) and (B) with
respect to each Right (other than Rights which have become void pursuant to Section
11.1.2), make adequate provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Preferred Stock,
(4) other equity securities of the Company (including, without limitation, shares, or fractions of
shares, of preferred stock which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the Common Stock, the Board has deemed in good faith to have
substantially the same value as the Common Stock) (each such share of preferred stock or fractions
of shares of preferred stock constituting a “common stock equivalent”)), (5) debt securities of the
Company, (6) other assets or (7) any combination of the foregoing having an aggregate value equal
to the Current Value, where such aggregate value has been determined by the Board based upon the
advice of a nationally recognized investment banking firm selected in good faith by the Board;
provided, however, that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the occurrence of a Trigger Event,
then the Company shall be obligated to deliver, to the extent necessary and permitted by applicable
law and any agreements or instruments in effect on the date hereof to which it is a party, upon the
surrender for exercise of a Right and without requiring payment of the Purchase Price, Common Stock
(to the extent available) and then, if necessary, such number or fractions of Preferred Stock (to
the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board shall determine in good faith that it is unlikely that
sufficient additional Common Stock would be authorized for issuance upon exercise in full of the
Rights within the thirty (30) day period set forth above, such period may be extended and
re-extended to the extent necessary, but not more than ninety (90) days following the occurrence of
a Trigger Event, in order that the Company may seek stockholder approval for the authorization of
such additional shares (such period as may be extended, the “Substitution Period”). To the extent
that the
Company determines that some actions need be taken pursuant to the second and/or third
sentences of this Section 11.1.3, the Company (x) shall provide that such action shall
apply uniformly to all



 


15









 






outstanding Rights, and (y) may suspend the exercisability of the Rights
until the
expiration of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended as well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11.1.3, the value of a share of Common Stock shall
be the current per share market price (as determined pursuant to Section 11.4) on the date
of the occurrence of a Trigger Event and the value of any “common stock equivalent” shall be deemed
to have the same value as the Common Stock on such date. The Board may, but shall not be required
to, establish procedures to allocate the right to receive Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section 11.1.3.



11.2. Dilutive Rights Offering. In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Stock (or securities having the same rights, privileges and preferences as the
Preferred Stock (“equivalent preferred stock”)) or securities convertible into Preferred Stock or
equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion or exercise price per share, if a security convertible into
or exercisable for Preferred Stock or equivalent preferred stock) less than the current per share
market price of the Preferred Stock (as determined pursuant to Section 11.4) 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 shares of Preferred Stock and shares of equivalent preferred stock
outstanding on such record date plus the number of shares of Preferred Stock and shares of
equivalent preferred stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or shares of equivalent preferred stock to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would purchase at such
current per share market price and the denominator of which shall be the number of shares of
Preferred Stock and shares of equivalent preferred stock outstanding on such record date plus the
number of additional Preferred Stock and/or shares of equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case such subscription price may be paid 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, 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 Stock and shares of equivalent preferred stock owned by or
held for the account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such rights 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.


 


16









 





11.3. Distributions. In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic
cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore
been paid, at a rate not in excess of 50% of the average net income per share of the Company for
the four quarters ended immediately prior to the payment of such dividend, or a dividend payable in
Preferred Stock (which dividend, for purposes of this Plan, shall be subject to the provisions of
Section 11.1.1(A))) or convertible securities, or subscription rights or warrants
(excluding those referred to in Section 11.2), 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 current per share market
price of the Preferred Stock (as determined pursuant to Section 11.4) on such record date,
less the fair market value (as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the cash, assets,
securities or evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock and the denominator of which shall be such
current per share market price of the Preferred Stock (as determined pursuant to Section
11.4); 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.



11.4. Current Per Share Market Value.



11.4.1. General. For the purpose of any computation hereunder, the “current per share
market price” of any security (a “Security” for the purpose of this Section 11.4.1) on any
date shall be deemed to be the average of the daily closing prices per share of such Security for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to
such date; provided, however, that in the event that the current per share market price of the
Security is determined during any period following the announcement by the issuer of such Security
of (i) a dividend or distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or reclassification of such
Security, and prior to the expiration of thirty (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 NYSE Amex or, if the Security is not listed or
admitted to trading on the NYSE Amex, 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 thereby or
such



 


17









 






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. 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 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. If the Security is not publicly held or not so
listed or traded, or if on any such date the Security is not so quoted and no such market maker is
making a market in the Security, “current per share market price” shall mean the fair value per
share as determined in good faith by the Board or, if at the time of such determination there is an
Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which
shall have the duty to make such determination in a reasonable and objective manner, whose
determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.



11.4.2. Preferred Stock. Notwithstanding Section 11.4.1, for the purpose of
any computation hereunder, the “current per share market price” of the Preferred Stock shall be
determined in the same manner as set forth above in Section 11.4.1 (other than the last
sentence thereof). If the current per share market price of the Preferred Stock cannot be
determined in the manner described in Section 11.4.1, the “current per share market price”
of the Preferred Stock shall be conclusively deemed to be an amount equal to 10,000 (as such number
may be appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of this Plan)
multiplied by the current per share market price of the Common Stock (as determined pursuant to
Section 11.4.1). If neither the Common Stock nor the Preferred Stock are publicly held or
so listed or traded, or if on any such date neither the Common Stock nor the Preferred Stock are so
quoted and no such market maker is making a market in either the Common Stock or the Preferred
Stock, “current per share market price” of the Preferred Stock shall mean the fair value per share
as determined in good faith by the Board, or, if at the time of such determination there is an
Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which
shall have the duty to make such determination in a reasonable and objective manner, which
determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. For purposes of this Plan, the “current per share market price” of one
ten-thousandth of a share of Preferred Stock shall be equal to the “current per share market price”
of one share of Preferred Stock divided by 10,000.



11.5. Insignificant Changes. 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.
Any adjustments which by reason of this Section 11.5 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-hundred thousandth of a
share of Preferred Stock or the nearest ten-thousandth of a share of Common Stock or other share or
security, as the case may be.



11.6. Shares Other Than Preferred Stock. If as a result of an adjustment made
pursuant to Section 11.1, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in Sections 11.1,
11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on like terms to any such
other shares.


 


18









 





11.7. Rights Issued Subsequent to Adjustment. All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one ten-thousandths of a share of
Preferred Stock and shares of other capital stock or other securities, assets or cash of the
Company, if any, purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.



11.8. Effect of Adjustments. Unless the Company shall have exercised its election as
provided in Section 11.9, upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11.2 and 11.3, 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 ten-thousandths of a share of Preferred Stock
(calculated to the nearest one-hundred thousandth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one ten-thousandths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.



11.9. Adjustment in Number of Rights. 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 ten-thousandths of a share of Preferred Stock issuable 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 ten-thousandths of a share of Preferred Stock for which
a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at
least ten (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 11.9,
the Company may, as promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.


 


19









 





11.10. Right Certificates Unchanged. Irrespective of any adjustment or change in the
Purchase Price or the number of one ten-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of one ten-thousandths of a share of Preferred
Stock which were expressed in the initial Right Certificates issued hereunder.



11.11. Par Value Limitations. Before taking any action that would cause an adjustment
reducing the Purchase Price below one ten-thousandth of the then par value, if any, of the
Preferred Stock or other shares of capital stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable Preferred Stock or
other such shares at such adjusted Purchase Price.



11.12. Deferred Issuance. 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 issuance to the holder
of any Right exercised after such record date of that number of shares of Preferred Stock and
shares of other capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Stock and shares of other capital stock or other securities, assets or
cash 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.



11.13. Reduction in Purchase Price. 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 Stock, issuance wholly for cash of any of the
Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock
or securities which by their terms are convertible into or exchangeable for Preferred Stock,
dividends on Preferred Stock payable in Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.



11.14. Company Not to Diminish Benefits of Rights. The Company covenants and agrees
that after the earlier of the Stock Acquisition Date or Distribution Date it will not, except as
permitted by Section 23, Section 26 or Section 27, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable
that
such action will substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.


 


20









 





11.15. Adjustment of Rights Associated with Common Stock. Notwithstanding anything
contained in this Plan to the contrary, in the event that the Company shall at any time after the
date hereof and prior to the Distribution Date (i) declare or pay any dividend on the outstanding
Common Stock payable in shares of Common Stock, (ii) effect a subdivision or consolidation of the
outstanding Common Stock (by reclassification or otherwise than by the payment of dividends payable
in shares of Common Stock), or (iii) combine the outstanding Common Stock into a greater or lesser
number of shares of Common Stock, then in any such case, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date or in accordance with Section 22 shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. The adjustments provided for in
this Section 11.15 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, the Company shall (a) promptly
prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock or the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if before the Distribution Date, to each holder of a
certificate representing shares of Common Stock or Book Entry Shares in respect thereof) in
accordance with Section 25. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received such certificate.



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



13.1. Certain Transactions. In the event that, from and after the first occurrence of
a Trigger Event, directly or indirectly, (A) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or surviving corporation, (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 Stock shall be changed into or exchanged for stock or other
securities of the Company or any other Person or cash or any other property, or (C) the Company
shall sell, exchange, mortgage or otherwise transfer (or one or more of its Subsidiaries shall
sell, exchange, mortgage or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company or one or
more wholly-owned Subsidiaries of the Company in one or more transactions each of which
complies with Section 11.14), then, and in each such case, proper provision shall be made
so that (i) each holder of a Right (other than Rights which have become void pursuant to


 


21









 






Section 11.1.2) shall thereafter have the right to receive, upon the exercise thereof at a
price per Right equal to the then current Purchase Price multiplied by the number of one
ten-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Trigger Event (as subsequently adjusted pursuant to Sections
11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the terms of this Plan
and in lieu of Preferred Stock or Common Stock, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable Common Stock of the Principal Party (as such term is
hereinafter defined) not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (x) multiplying the then current
Purchase Price by the number of one ten-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Trigger Event (as subsequently
adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and (y)
dividing that product by 50% of the then current per share market price of the Common Stock of such
Principal Party (determined pursuant to Section 11.4) on the date of consummation of such
consolidation, merger, sale or transfer; provided that the price per Right so payable and the
number of shares of Common Stock of such Principal Party so receivable upon exercise of a Right
shall thereafter be subject to further adjustment as appropriate in accordance with Section
11.6 to reflect any events covered thereby occurring in respect of the Common Stock of such
Principal Party after the occurrence of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all of the obligations and duties of the Company pursuant to this Plan;
(iii) the term “Company” shall thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9) in connection
with such consummation as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Stock thereafter deliverable
upon the exercise of the Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise
of a Right and payment of the Purchase Price as provided in this Section 13.1, such cash,
shares, rights, warrants and other property which such holder would have been entitled to receive
had such holder, at the time of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13.1, and such Principal
Party shall take such steps (including, but not limited to, reservation of shares of stock) as may
be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental agreement confirming
that the requirements of this Section 13.1 and Section 13.2 shall promptly be
performed in accordance with their terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under this Plan as the same shall have
been assumed by the Principal Party pursuant to this Section 13.1 and Section 13.2
and providing that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party, at its own expense, shall:



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


 


22









 





(2) use its best efforts, if the Common Stock of the Principal Party shall be listed or
admitted to trading on the NYSE Amex or on another national securities exchange, to list or admit
to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of
the Rights on the NYSE Amex or such securities exchange;



(3) deliver to holders of the Rights historical financial statements for the Principal Party
which comply in all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and



(4) obtain waivers of any rights of first refusal or preemptive rights in respect of the
Common Stock of the Principal Party subject to purchase upon exercise of outstanding Rights.



In case the Principal Party has provision in any of its authorized securities or in its
articles or certificate of incorporation or by-laws or other instrument governing its corporate
affairs, which provision would have the effect of (i) causing such Principal Party to issue (other
than to holders of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section 13, Common
Stock or common stock equivalents of such Principal Party at less than the then current market
price per share thereof (determined pursuant to Section 11.4) or securities exercisable
for, or convertible into, Common Stock or common stock equivalents of such Principal Party at less
than such then current market price (other than to holders of Rights pursuant to this Section
13), or (ii) providing for any special payment, taxes or similar provision in connection with
the issuance of the Common Stock of such Principal Party pursuant to the provision of Section
13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision will have no effect
in connection with, or as a consequence of, the consummation of the proposed transaction.



The Company covenants and agrees that it shall not, at any time after the Trigger Event, enter
into any transaction of the type described in clauses (A) through (C) of this Section 13.1
if (i) at the time of or immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section 13.2 shall
have
received a distribution of Rights previously owned by such Person or (iii) the form or nature
of organization of the Principal Party would preclude or limit the exercisability of the Rights.
The provisions of this Section 13 shall similarly apply to successive transactions of the
type described in clauses (A) through (C) of this Section 13.1.


 


23









 





13.2. Principal Party. “Principal Party” shall mean:



(i) in the case of any transaction described in clauses (A) or (B) of the first sentence of
Section 13.1: (i) the Person that is the issuer of the securities into which the Common
Stock is converted in such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest aggregate market value of shares outstanding, or
(ii) if no securities are so issued, (x) the Person that is the other party to the merger, if such
Person survives said merger, or, if there is more than one such Person, the Person the Common Stock
of which has the greatest aggregate market value of shares outstanding or (y) if the Person that is
the other party to the merger does not survive the merger, the Person that does survive the merger
(including the Company if it survives) or (z) the Person resulting from the consolidation; and



(ii) in the case of any transaction described in clause (C) of the first sentence in
Section 13.1, the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if each Person that is
a party to such transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; provided, however, that in any such case described in
the foregoing clause (i) or (ii) of this Section 13.2, if the shares of Common Stock of
such Person are not at such time or have not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the shares of Common Stock of which are and have been so registered,
the term “Principal Party” shall refer to such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the shares of Common Stock of all of which are and
have been so registered, the term “Principal Party” shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares outstanding, or (3) if
such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the rules set forth in clauses (1) and
(2) above shall apply to each of the owners having an interest in the venture as if the Person
owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the
Principal Party in each such case shall bear the obligations set forth in this Section 13
in the same ratio as its interest in such Person bears to the total of such interests.



13.3. Approved Acquisitions. Notwithstanding anything contained herein to the
contrary, upon the consummation of any merger or other acquisition transaction of the type
described in clause (A), (B) or (C) of Section 13.1 involving the Company pursuant to a
merger or other acquisition agreement between the Company and any Person which agreement has been
approved by the Board prior to any Person becoming an Acquiring Person, this Plan and the rights of
holders of Rights hereunder shall be terminated in accordance with Section 7.1.


 


24









 






Section 14. Fractional Rights and Fractional Shares.



14.1. Cash in Lieu of Fractional Rights. The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which evidence fractional Rights (except
prior to the Distribution Date in accordance with Section 11.15). 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
14.1, the current market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the NYSE Amex or, if the Rights are not
listed or admitted to trading on the NYSE Amex, 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 the NYSE Amex 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. If on any such
date no such market maker is making a market in the Rights, the current market value of the Rights
on such date shall be the fair value of the Rights as determined in good faith by the Board, or, if
at the time of such determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board, which shall have the duty to make such determination
in a reasonable and objective manner, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.



14.2. Cash in Lieu of Fractional Shares of Preferred Stock. The Company shall not be
required to issue fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one ten-thousandth of a share of Preferred Stock) upon exercise or exchange of the
Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other
than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock).
Interests in fractions of shares of Preferred Stock in integral multiples of one ten-thousandth of
a share of Preferred Stock 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 Stock represented by such depositary receipts. In lieu of fractional shares of Preferred
Stock that are not integral multiples of one ten-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the same fraction of the
current per share market price of one share of Preferred Stock (as determined in accordance with
Section 14.1) for the Trading Day immediately prior to the date of such exercise or
exchange.


 


25









 





14.3. Cash in Lieu of Fractional Shares of Common Stock. The Company shall not be
required to issue fractions of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market value of a whole share
of Common Stock (as determined in accordance with Section 14.1) for the Trading Day
immediately prior to the date of such exercise or exchange.



14.4. Waiver of Right to Receive Fractional Rights or Shares. The holder of a Right
by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right, except as permitted by this Section
14.



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



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 not be evidenced by a Right
Certificate and will be transferable only in connection with the transfer of the Common
Stock;




(b) as of and after the Distribution Date, the Right Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer
with all required certifications completed; 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 Stock
certificate or Book Entry Shares) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock certificate or Book
Entry Shares 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.


 


26









 





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 Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any 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 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.



Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder in accordance with a fee
schedule to be mutually agreed upon 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 Plan and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Plan, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.



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



Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation or limited liability company or other entity into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or any corporation or
limited liability company or other entity resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation or limited
liability company succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan 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 or limited liability company or other entity would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this Plan, 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 Plan.


 


27









 





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 Plan.



Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Plan 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:



20.1. Legal Counsel. The Rights Agent may consult with legal counsel selected by it
(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.



20.2. Certificates as to Facts or Matters. Whenever in the performance of its duties
under this Plan 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 Chief
Executive Officer, the Chief Financial Officer or the General Counsel 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 Plan in reliance upon
such certificate.



20.3. Standard of Care. The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.



20.4. Reliance on Plan and Right Certificates. The Rights Agent shall not be liable
for or by reason of any of the statements of fact or recitals contained in this Plan or in the
Right Certificates (except as to 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.


 


28









 





20.5. No Responsibility as to Certain Matters. The Rights Agent shall not be under
any responsibility in respect of the validity of this Plan 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 Plan 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 11.1.2) or any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 27 or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation
of any Preferred Stock or other securities to be issued pursuant to this Plan or any Right
Certificate or as to whether any Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.



20.6. Further Assurance by Company. 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 Plan.



20.7. Authorized Company Officers. 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
Chief Executive Officer, the Chief Financial Officer or the General Counsel of the Company, and to
apply to such officers for advice or instructions in connection with its duties under this Plan,
and it shall not be liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in acting while waiting for these
instructions. Any application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties or obligations under this Plan and the date on
and/or after which such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable to the Company for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three (3) Business Days after the date any such officer
actually receives such application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking of any such action (or the effective date in the case of
omission), the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.



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



20.9. Reliance on Attorneys and Agents. 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, omission, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, omission, default, neglect or
misconduct, provided that reasonable care was exercised in the selection and continued employment
thereof.


 


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20.10. Incomplete Certificate. If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment
or the form of election to purchase set forth on the reverse thereof, as the case may be, has not
been completed to certify the holder is not an Acquiring Person, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer without first consulting
with the Company.



20.11. Rights Holders List. At any time and from time to time after the Distribution
Date, upon the request of the Company, the Rights Agent shall promptly deliver to the Company a
list, as of the most recent practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.



Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Plan upon thirty (30) days’ notice in
writing mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is
not also the transfer agent for the Company, to each transfer agent of the Common Stock and/or
Preferred Stock, as applicable, by registered or certified mail. Following the Distribution Date,
the Company shall promptly notify the holders of the Right Certificates by first-class mail of any
such resignation. In the event the transfer agency relationship in effect between the Company and
the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be
discharged from its duties under this Plan as of the effective date of such termination, and the
Company shall be responsible for sending any required notice. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and/or Preferred Stock, as applicable, reputable overnight courier (e.g., FedEx), postage prepaid,
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 resigning, removed, or
incapacitated Rights Agent shall remit to the Company, or to any successor Rights Agent designated
by the Company, all books, records, funds, certificates or other documents or instruments of any
kind then in its possession which were acquired by such resigning, removed or incapacitated Rights
Agent in connection with its services as Rights Agent hereunder in accordance with the Company’s
request; provided, however, that notwithstanding anything in this Plan to the contrary, the Rights
Agent may retain a copy of such books, records, funds, certificates or other documents or
instruments to the extent necessary to meet legal, audit or regulatory requirements, including
applicable law and internal retention policies. Following notice of such removal, resignation or
incapacity, the Company shall appoint a successor to such Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice,
submit his Right Certificate for inspection by the Company), then the registered holder of any
Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court, shall be


 


30









 






a
corporation organized and doing business under the laws of the State of New York or the State of
Delaware (or any other state of the United States so long as such corporation is authorized to do
business as a banking institution in such state) in good standing, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus, along with its Affiliates, of at least $50 million. After
appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock and/or Preferred Stock, as applicable, and, following the
Distribution Date, 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 Plan or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board 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 Plan. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company shall, with respect
to Common Stock so issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded, or upon exercise, conversion or exchange of securities
hereinafter issued by the Company, in each case existing prior to the Distribution Date, issue
Right Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to whom such Right
Certificate would be issued and (ii) no such Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.



Section 23. Redemption.



23.1. Right to Redeem. The Board may, at its option, at any time prior to a Trigger
Event, redeem all but not less than all of the then outstanding Rights at a redemption price of
$0.0001 per Right, appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the “Redemption Price”), and the Company may, at its option, pay
the Redemption Price in Common Stock (based on the “current per share market price,” determined
pursuant to Section 11.4, of the Common Stock at the time of redemption), cash or
any other form of consideration deemed appropriate by the Board. The redemption of the Rights
by the Board may be made effective at such time, on such basis and subject to such conditions as
the Board in its sole discretion may establish.


 


31









 





23.2. Redemption Procedures. Immediately upon the action of the Board ordering the
redemption of the Rights (or at such later time as the Board may establish for the effectiveness of
such redemption), 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 for each Right so held. The Company shall promptly give public notice of such
redemption; provided, however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. The Company shall promptly give, or cause the Rights
Agent to give, notice of such redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall 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
27, and other than in connection with the purchase, acquisition or redemption of Common Stock
prior to the Distribution Date.



Section 24. Notice of Certain Events. In case the Company shall propose at any time
after the earlier of the Stock Acquisition Date and the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of
the average net income per share of the Company for the four quarters ended immediately prior to
the payment of such dividends, or a stock dividend on, or a subdivision, combination or
reclassification of the Common Stock), or (b) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (c) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of outstanding
Preferred Stock), or (d) 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 (other than pursuant to a
merger or other acquisition agreement of the type excluded from the definition of “Beneficial
Ownership” in Section 1.3), or (e) to effect the liquidation, dissolution or winding up of
the Company, or (f) to declare or pay any dividend on the Common Stock payable in Common Stock or
to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall
give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section
25, a notice of such proposed action, which shall specify the record date for the purposes of
such stock dividend, 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 Preferred Stock
and/or Common Stock, if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (a) or (b) above at least ten (10) days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and in the case of any
such other action, at least ten (10) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Preferred Stock and/or Common Stock,
whichever shall be the earlier.


 


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In case any event set forth in Section 11.1.2 or Section 13 shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter give to the Rights Agent
and to each holder of a Right Certificate, in accordance with Section 25, a notice of the
occurrence of such event, which notice shall describe the event and the consequences of the event
to holders of Rights under Section 11.1.2 and Section 13, and (ii) all references
in this Section 24 to Preferred Stock shall be deemed thereafter to refer to Common Stock
and/or, if appropriate, other securities.



Section 25. Notices. Notices or demands authorized by this Plan 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 reputable overnight courier (e.g., FedEx), postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as follows:




Rentech, Inc.

10877 Wilshire Boulevard, Suite 600

Los Angeles, CA 90024

Attention: General Counsel



Subject to the provisions of Section 21 and Section 24, any notice or demand
authorized by this Plan 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 reputable
overnight courier (e.g., FedEx), postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:




Computershare Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Attention: Client Services



Notices or demands authorized by this Plan to be given or made by the Company or the Rights Agent
to the holder of any Right Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing Common Stock or of any Book Entry Shares) 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; provided, that prior to the Distribution Date
a filing by the Company with the Securities and Exchange Commission shall constitute sufficient
notice to the holders of securities of the Company, including the Rights, for purposes of this Plan
and no other notice need be given.


 


33









 





Section 26. Supplements and Amendments. For so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Plan in any respect without the
approval of any holders of Rights or Common Stock. From and after the time that the Rights are no
longer redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from
time to time supplement or amend this Plan without the approval of any holders of Rights (i) to
cure any ambiguity or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein or (ii) to make any other changes or
provisions in regard to matters or questions arising hereunder which the Company may deem necessary
or desirable, including but not limited to extending the Final Expiration Date; provided, however,
that no such supplement or amendment shall adversely affect the interests of the holders of Rights
as such (other than an Acquiring Person), and no such supplement or amendment may cause the Rights
again to become redeemable or cause this Plan again to become amendable as to an Acquiring Person,
other than in accordance with this sentence; provided further, that the right of the Board to
extend the Distribution Date shall not require any amendment or supplement hereunder. Upon the
delivery of a certificate from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights, duties, or obligations of the Rights Agent under this Plan.



Section 27. Exchange.



27.1. Exchange of Common Stock for Rights. The Board may, at its option, at any time
after the occurrence of a Trigger Event, exchange Common Stock for all or part of the then
outstanding Rights (which shall not include Rights that have become void pursuant to the provisions
of Section 11.1.2) by exchanging at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such amount per Right being hereinafter referred to as the
“Exchange Consideration”). Notwithstanding the foregoing, the Board shall not be empowered to
effect such exchange at any time after any Acquiring Person shall have become the Beneficial Owner
of 50% or more of the Common Stock then outstanding. From and after the occurrence of an event
specified in Section 13.1, any Rights that theretofore have not been exchanged pursuant to
this Section 27.1 shall thereafter be exercisable only in accordance with Section
13 and may not be exchanged pursuant to this Section 27.1. The exchange of the Rights
by the Board may be made effective at such time, on such basis and with such conditions as the
Board in its sole discretion may establish. Without limiting the foregoing, prior to effecting an
exchange pursuant to this Section 27, the Board may direct the Company to enter into a
Trust Agreement in such form and with such terms as the Board shall then approve (the “Trust
Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall
issue to the trust created by such agreement (the “Trust”) all of the Common Stock issuable
pursuant to the exchange (or any portion thereof that has not theretofore been issued in connection
with the exchange). From and after the time at which such shares are issued to the Trust, all
stockholders then entitled to receive shares pursuant to the exchange shall be entitled to receive
such shares (and any dividends or distributions made thereon after the date on which such shares
are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms
and provisions of the Trust Agreement. Any Common Stock issued at the
direction of the Board in connection herewith shall be validly issued, fully paid and
nonassessable Common Stock or Preferred Stock (as the case may be), and the Company shall be deemed
to have received as consideration for such issuance a benefit having a value that is at least equal
to the aggregate par value of the shares so issued.


 


34









 





27.2. Exchange Procedures. Immediately upon the action of the Board ordering the
exchange for any Rights pursuant to Section 27.1 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 the Exchange Consideration. 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 shall state the method by which the exchange of the Common Stock 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 the Rights that have become void pursuant to the provisions of Section 11.1.2) held by
each holder of Rights.



27.3. Insufficient Shares. The Company may at its option substitute, and, in the
event that there shall not be sufficient Common Stock issued but not outstanding or authorized but
unissued to permit an exchange of Rights for Common Stock as contemplated in accordance with this
Section 27, the Company shall substitute to the extent of such insufficiency, for each
share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares
of Preferred Stock or fraction thereof (or equivalent preferred stock, as such term is defined in
Section 11.2) such that the current per share market price (determined pursuant to
Section 11.4) of one share of Preferred Stock (or equivalent preferred share) multiplied by
such number or fraction is equal to the current per share market price of one share of Common Stock
(determined pursuant to Section 11.4) as of the date of such exchange.



Section 28. Process to Seek Exemption Prior to Trigger Event. Any Person who desires
to effect any acquisition of Common Stock that would, if consummated, result in such Person
beneficially owning 4.99% (or, in the case of an Existing Holder, the Exempt Ownership Percentage)
or more of the then outstanding Common Stock (a “Requesting Person”) may, prior to the Stock
Acquisition Date and in accordance with this Section 28, request that the Board grant an
exemption with respect to such acquisition under this Plan so that such Person would be deemed to
be an “Exempt Person” under subsection (ii) of Section 1.7 hereof for purposes of this Plan
(an “Exemption Request”). An Exemption Request shall be in proper form and shall be delivered by
reputable overnight courier (e.g., FedEx), postage prepaid, to the Secretary of the Company at the
principal executive office of the Company. The Exemption Request shall be deemed made upon receipt
by the Secretary of the Company. To be in proper form, an Exemption Request shall set forth (i)
the name and address of the Requesting Person, (ii) the number and percentage of shares of Common
Stock then Beneficially Owned by the Requesting Person, together with all Affiliates and Associates
of the Requesting Person, and (iii) a reasonably detailed description of the transaction or
transactions by which the Requesting Person would propose to acquire Beneficial


 


35









 





Ownership of Common
Stock aggregating 4.99%
(or, in the case of an Existing Holder, the Exempt Ownership Percentage) or more of the then
outstanding Common Stock and the maximum number and percentage of shares of Common Stock that the
Requesting Person proposes to acquire. The Board shall make a determination whether to grant an
exemption in response to an Exemption Request as promptly as practicable (and, in any event, within
ten (10) Business Days) after receipt thereof; provided, that the failure of the Board to make a
determination within such period shall be deemed to constitute the denial by the Board of the
Exemption Request. The Requesting Person shall respond promptly to reasonable and appropriate
requests for additional information from the Board and its advisors to assist the Board in making
its determination. The Board shall only grant an exemption in response to an Exemption Request if
the Board determines in its sole discretion that the acquisition of Beneficial Ownership of Common
Stock by the Requesting Person will not limit or impair the availability to the Company of the
NOLs. Any exemption granted hereunder may be granted in whole or in part, and may be subject to
limitations or conditions (including a requirement that the Requesting Person agree that it will
not acquire Beneficial Ownership of shares of Common Stock in excess of the maximum number and
percentage of shares approved by the Board), in each case as and to the extent the Board shall
determine necessary or desirable to provide for the protection of the Company’s NOLs. Any
Exemption Request may be submitted on a confidential basis and, except to the extent required by
applicable law, the Company shall maintain the confidentiality of such Exemption Request and the
Board’s determination with respect thereto, unless the information contained in the Exemption
Request or the Board’s determination with respect thereto otherwise becomes publicly available.
The Exemption Request shall be considered and evaluated by directors serving on the Board, or a
duly constituted committee thereof, who are independent of the Company and the Requesting Person
and disinterested with respect to the Exemption Request, and the action of a majority of such
independent and disinterested directors shall be deemed to be the determination of the Board for
purposes of such Exemption Request.



Section 29. Waiver Subsequent to Stock Acquisition Date. The Board may, of its own
accord or upon the request of a shareholder (a “Waiver Request”), subsequent to a Stock Acquisition
Date and prior to the Distribution Date, and in accordance with this Section 29, grant an
exemption with respect to any Acquiring Person under this Plan so that such Acquiring Person would
be deemed to be an “Exempt Person” under subsection (ii) of Section 1.7 hereof for purposes
of this Plan. A Waiver Request shall be in proper form and shall be delivered by reputable
overnight courier (e.g., FedEx), postage prepaid, to the Secretary of the Company at the principal
executive office of the Company. The Waiver Request shall be deemed made upon receipt by the
Secretary of the Company. To be in proper form, a Waiver Request shall set forth (i) the name and
address of the Acquiring Person, (ii) the number and percentage of shares of Common Stock then
Beneficially Owned by the Acquiring Person, together with all Affiliates and Associates of the
Acquiring Person, and (iii) a reasonably detailed description of the transaction or transactions by
which the Acquiring Person acquired Beneficial Ownership of Common Stock aggregating 4.99% (or, in
the case of an Existing Holder, the Exempt Ownership Percentage) or more of the then outstanding
Common Stock and the maximum number and percentage of shares of Common Stock that the Acquiring
Person proposes to acquire. The Board shall make a determination whether to grant an exemption in
response to a Waiver Request as promptly as practicable (and, in any event, within ten (10)
Business Days) after receipt thereof; provided, that the failure of the Board to make a
determination within such period shall be deemed to constitute the denial by


 


36









 






the Board of the
Waiver Request. The
Acquiring Person shall respond promptly to reasonable and appropriate requests for additional
information from the Board and its advisors to assist the Board in making its determination. The
Board shall only grant an exemption for an Acquiring Person if the Board determines in its sole
discretion that the acquisition of Beneficial Ownership of Common Stock by such Acquiring Person
does not limit or impair the availability to the Company of the NOLs. Any exemption granted
hereunder may be granted in whole or in part, and may be subject to limitations or conditions
(including a requirement that such Acquiring Person agree that it will not acquire Beneficial
Ownership of shares of Common Stock in excess of the maximum number and percentage of shares
approved by the Board), in each case as and to the extent the Board shall determine necessary or
desirable to provide for the protection of the Company’s NOLs. The facts and circumstances with
respect to the Trigger Event, including whether to grant an exemption, shall be considered and
evaluated by directors serving on the Board, or a duly constituted committee thereof, who are
independent of the Company and such Acquiring Person and disinterested with respect to the Trigger
Event, and the action of a majority of such independent and disinterested directors shall be deemed
to be the determination of the Board for purposes of any exemption granted pursuant to this
Section 29.



Section 30. Successors. All the covenants and provisions of this Plan 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 31. Benefits of this Plan. Nothing in this Plan shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Plan; but this Plan 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 Stock).



Section 32. Determination and Actions by the Board or Committee Thereof. The Board,
or a duly authorized committee thereof, shall have the exclusive power and authority to administer
this Plan and to exercise the rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this Plan, including, without
limitation, the right and power to (i) interpret the provisions of this Plan and (ii) make all
determinations deemed necessary or advisable for the administration of this Plan (including,
without limitation, a determination to redeem or not redeem the Rights or amend this Plan). In
administering this Plan and exercising the rights and powers specifically granted to the Board and
to the Company hereunder, and in interpreting this Plan and making any determination hereunder, the
Board, or a duly authorized committee thereof, may consider any and all facts, circumstances or
information it deems to be necessary, useful or appropriate. All such actions, calculations,
interpretations and determinations that are done or made by the Board, or a duly authorized
committee thereof, in good faith shall be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights, as such, and all other parties to the fullest extent permitted by
applicable law.


 


37









 





Section 33. Severability. If any term, provision, covenant or restriction of this
Plan 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 Plan
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.



Section 34. Governing Law. This Plan and each Right Certificate issued hereunder
shall be deemed to be a contract made under the internal laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.



Section 35. Counterparts. This Plan 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. A signature to this Plan
transmitted electronically shall have the same authority, effect and enforceability as an original
signature.



Section 36. Descriptive Headings. Descriptive headings of the several Sections of
this Plan are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.



Section 37. Force Majeure. Notwithstanding anything to the contrary contained herein,
the Rights Agent shall not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage
of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.



(Signature Page Follows)



 


38









 







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



	 	 	 	 	 
	 	RENTECH, INC.

 	 
	 	By:  	/s/ Colin M. Morris
 	 
	 	 	Name:  	Colin M. Morris 	 
	 	 	Title:  	Vice President and General Counsel 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ John M. Wahl
 	 
	 	 	Name:  	John M. Wall 	 
	 	 	Title:  	Corporate Trust Officer 	 



(Signature Page to Tax Benefit Preservation Plan)




 


 









 







EXHIBIT A




FORM OF ARTICLES OF AMENDMENT




to the




AMENDED AND RESTATED ARTICLES OF INCORPORATION




of




RENTECH, INC.




PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF 

SERIES D JUNIOR PARTICIPATING PREFERRED STOCK




(Pursuant to Section 7-106-102 of the

Colorado Business Corporation Act)





RENTECH, INC., a Colorado corporation, (hereinafter called the “Corporation”), does hereby
certify that pursuant to the authority conferred upon the Board of Directors (the “Board of
Directors”) by the Amended and Restated Articles of Incorporation of the Corporation and pursuant
to Section 7-106-102 of the Colorado Business Corporation Act, said Board of Directors, at a duly
convened meeting held on July 29, 2011, adopted the following resolution:



RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of
Directors in accordance with the provisions of the Amended and Restated Articles of Incorporation
of the Company, the Board of Directors hereby creates the Series D Preferred Stock and hereby
states the designation and number of shares, and fixes the relative rights, powers and preference,
and qualifications, limitations and restrictions thereof as follows:



Section 1. Designation and Amount. The shares of such series shall be designated as
“Series D Junior Participating Preferred Stock” (the “Series D Preferred Stock”) and the number of
shares constituting the Series D Preferred Stock shall be 45,000. Such number of shares may be
increased or decreased by further resolution duly adopted by the Board of Directors and by the
filing of an amendment to the Corporation’s Articles of Incorporation pursuant to the provisions of
the Colorado Business Corporation Act stating that such reduction or increase has been so
authorized; provided, that no decrease shall reduce the number of shares of Series D Preferred
Stock to a number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation convertible into Series D
Preferred Stock.


 


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Section 2. Dividends and Distributions.




(A) Subject to the prior and superior rights of the holders of any shares of any class
or series of stock of this Corporation ranking prior and superior to the Series D Preferred
Stock with respect to dividends, the holders of shares of Series D Preferred Stock, in
preference to the holders of Common Stock, par value $0.01 per share (the “Common Stock”),
of the Corporation, and of any other stock ranking junior to the Series D Preferred Stock,
shall be entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being referred to
herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of Series D
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 10,000
times the aggregate per share amount of all cash dividends, and 10,000 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 D Preferred Stock. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in each such case the amount to
which holders of shares of Series D Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of
 shares of Common Stock that were outstanding immediately prior to such event.




(B) The Corporation shall declare a dividend or distribution on the Series D Preferred
Stock as provided in paragraph (A) of this Section 2 immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on
the Series D Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.


 


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(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series D
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series D 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 D 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 D Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty (60) days prior to the date fixed for the payment thereof.



Section 3. Voting Rights. The holders of shares of Series D Preferred Stock shall
have the following voting rights:




(A) Subject to the provision for adjustment hereinafter set forth, each share of Series
D Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted
to a vote of the shareholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Series D Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.




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




(C) Except as set forth herein, or as otherwise provided by law, holders of Series D
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.


 


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(D) If, at the time of any annual meeting of shareholders for the election of
directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on
any share or shares of Series D Preferred Stock are in default, the number of directors
constituting the Board of Directors of the Corporation shall be increased by two. In
addition to voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series D Preferred Stock, voting
separately as a class to the exclusion of the holders of Common Stock, shall be
entitled at such meeting of shareholders (and at each subsequent annual meeting of
shareholders), unless all dividends in arrears on the Series D Preferred Stock have been
paid or declared and set apart for payment prior thereto, to vote for the election of two
directors of the Corporation, the holders of any Series D Preferred Stock being entitled to
cast a number of votes per share of Series D Preferred Stock as is specified in paragraph
(A) of this Section 3. Each such additional director shall serve until the next
annual meeting of shareholders for the election of directors, or until his successor shall
be elected and shall qualify, or until his right to hold such office terminates pursuant to
the provisions of this Section 3(D). Until the default in payments of all dividends
which permitted the election of said directors shall cease to exist, any director who shall
have been so elected pursuant to the provisions of this Section 3(D) may be removed
at any time, without cause, only by the affirmative vote of the holders of the shares of
Series D Preferred Stock at the time entitled to cast a majority of the votes entitled to be
cast for the election of any such director at a special meeting of such holders called for
that purpose, and any vacancy thereby created may be filled by the vote of such holders. If
and when such default shall cease to exist, the holders of the Series D Preferred Stock
shall be divested of the foregoing special voting rights, subject to revesting in the event
of each and every subsequent like default in payments of dividends. Upon the termination of
the foregoing special voting rights, the terms of office of all persons who may have been
elected directors pursuant to said special voting rights shall forthwith terminate, and the
number of directors constituting the Board of Directors shall be reduced by two. The voting
rights granted by this Section 3(D) shall be in addition to any other voting rights
granted to the holders of the Series D Preferred Stock in this Section 3.



Section 4. Certain Restrictions.




(A) Whenever quarterly dividends or other dividends or distributions payable on the
Series D Preferred Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
D Preferred Stock outstanding shall have been paid in full, the Corporation shall not:




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




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




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


 


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




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



Section 5. Reacquired Shares. Any shares of Series D Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the
Amended and Restated Articles of Incorporation or in any amendment thereto creating a series of
Preferred Stock or any similar stock or as otherwise required by law.



Section 6. Liquidation, Dissolution or Winding Up.




(A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise no distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series D
Preferred Stock unless, prior thereto, the holders of Series D Preferred Stock shall have
received an amount per share (the “Series D Liquidation Preference”) equal to $10,000 per
share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders of shares of
Series D Preferred Stock shall be entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 10,000 times the aggregate
amount to be distributed per share to holders of Common Stock, or (ii) to the holders of
 shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series D Preferred Stock, except distributions made ratably on the
Series D Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of Series D Preferred Stock were
entitled immediately prior to such event under the proviso in clause (i) 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 are outstanding
immediately prior to such event.


 


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(B) In the event, however, that there are not sufficient assets available to permit
payment in full of the Series D Liquidation Preference and the liquidation preferences of
all other classes and series of stock of the Corporation, if any, that rank on a parity with
the Series D Preferred Stock in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series D Preferred Stock and
the holders of such parity shares in proportion to their respective liquidation preferences.




(C) Neither the merger or consolidation of the Corporation into or with another
corporation nor the merger or consolidation of any other corporation into or with the
Corporation shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6.



Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series D Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series D Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.



Section 8. No Redemption. The Series D Preferred Stock shall not be redeemable by the
Corporation.



Section 9. Rank. The Series D Preferred Stock shall rank, with respect to the payment
of dividends and the distribution of assets upon liquidation, dissolution or winding up, junior to
all series of any other class of the Corporation’s Preferred Stock, except to the extent that any
such other series specifically provides that it shall rank on a parity with or junior to the Series
D Preferred Stock.


 


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Section 10. Amendment. At any time any shares of Series D Preferred Stock are
outstanding, the Corporation’s Articles of Incorporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights of the Series D
Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series D Preferred Stock, voting separately as a
single class.



Section 11. Fractional Shares. Series D Preferred Stock may be issued in fractions of
a share that shall entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series D Preferred Stock.



* * *



 


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IN WITNESS WHEREOF, RENTECH, INC. has caused this certificate to be executed on behalf of the
Corporation by the undersigned authorized officer this 5th day of August, 2011.




	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	 
	 

	 	Title:	 	 






 


A- 8









 







EXHIBIT B




[Form of Right Certificate]




			
	 	 	 
	Certificate No. R-
	 	                     Rights







NOT EXERCISABLE AFTER AUGUST 5, 2014 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE
IS GIVEN, IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT TO AN AGREEMENT OF THE TYPE
DESCRIBED IN SECTION 13.3 OF THE TAX BENEFIT PRESERVATION PLAN (THE “PLAN”),
OR IF THE BOARD OF DIRECTORS DETERMINES THAT THE NOLS ARE UTILIZED IN ALL MATERIAL
RESPECTS OR NO LONGER AVAILABLE IN ANY MATERIAL RESPECT UNDER SECTION 382 OF THE
CODE (AS DEFINED IN THE PLAN) OR THAT AN OWNERSHIP CHANGE UNDER SECTION 382 OF THE
CODE WOULD NOT ADVERSELY IMPACT IN ANY MATERIAL RESPECT THE TIME PERIOD IN WHICH THE
COMPANY COULD USE THE NOLS, OR MATERIALLY IMPAIR THE AMOUNT OF THE NOLS THAT COULD
BE USED BY THE COMPANY IN ANY PARTICULAR TIME PERIOD, FOR APPLICABLE TAX PURPOSES.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE PLAN), RIGHTS
BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE
PLAN), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, WILL BECOME NULL AND VOID AND WILL
NO LONGER BE TRANSFERABLE.



Right Certificate




RENTECH, 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 Tax Benefit Preservation Plan, dated as of August 5, 2011, as the
same may be amended from time to time (the “Plan”), between Rentech, Inc., a Colorado corporation
(the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company, as
Rights Agent (the “Rights Agent”), to purchase from the Company at any time after the Distribution
Date and prior to 5:00 P.M. (New York time) on the earliest to occur of: (i) August 5, 2014 or (ii)
August 5, 2012 if stockholder approval of the Plan has not been obtained by that date, at the
offices of the Rights Agent, or its successors as Rights Agent, designated for such purpose, one
ten-thousandth of a fully paid, nonassessable share of Series D Junior Participating Preferred
Stock, par value $10.00 per share (the “Preferred Stock”), of the Company, at a purchase price of
$3.75 per one ten-thousandth of a share of Preferred Stock, subject to adjustment (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase and certification duly executed. The number of Rights evidenced by this Right Certificate
(and the number of one ten-thousandths of a share of
Preferred Stock which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of                     , 20     , based on
the Preferred Stock as constituted at such date. Capitalized terms used in this Right Certificate
without definition shall have the meanings ascribed to them in the Plan. As provided in the Plan,
the Purchase Price and the number of shares of Preferred Stock 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.


 


B- 1









 





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



This Right Certificate, with or without other Right Certificates, upon surrender at the
offices of the Rights Agent designated for such purpose, 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 one ten-thousandths of a share of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.



Subject to the provisions of the Plan, the Board may, at its option, (i) redeem the Rights
evidenced by this Right Certificate at a redemption price of $.0001 per Right or (ii) exchange
Common Stock for the Rights evidenced by this Certificate, in whole or in part.



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



No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the Plan 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 Plan), 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
Plan.


 


B- 2









 





If any term, provision, covenant or restriction of the Plan 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 the Plan shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.



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


 


B- 3









 





WITNESS the facsimile signature of the proper officer of the Company.



Dated as of                     , 20     .



	 	 	 	 	 
	RENTECH, INC.
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	Countersigned:	 	 
	 
	 	 	 	 
	COMPUTERSHARE TRUST COMPANY, N.A.,	 	 
	as Rights Agent	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signature	 	 





 


B- 4









 





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)




Rights evidenced by 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 Medallion Guaranteed:

	 	 
	 
	 	 
	 	 	 






Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule
17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended, which is a member of a
recognized Medallion Signature Guarantee Program.


 


B- 5









 





The undersigned hereby certifies that:



(1) the Rights evidenced by this Right Certificate are not Beneficially Owned by and are not
being assigned to an Acquiring Person; and



(2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person.



Dated:                     



	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature
	 	 





 


B- 6









 





FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to

exercise the Right Certificate.)




To: Rentech, Inc.



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



	 	 	 	 	 
	 	 	 
	(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 Medallion Guaranteed:

	 	 
	 
	 	 
	 	 	 






Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule
17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended, which is a member of a
recognized Medallion Signature Guarantee Program.


 


B- 7









 





The undersigned hereby certifies that:



(1) the Rights evidenced by this Right Certificate are not Beneficially Owned by and are not
being assigned to an Acquiring Person; and



(2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person.



Dated:                     




	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature
	 	 






NOTICE




The signature in the foregoing Form of Assignment and Form of Election to Purchase 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 Form of Election
to Purchase is not completed, the Company will deem the Beneficial Owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person and such Assignment or Election to Purchase will
not be honored.



 


B- 8









 







EXHIBIT C




As described in the Tax Benefit Preservation Plan, Rights which are

held by or have been held by an Acquiring Person (as defined in the

Tax Benefit Preservation Plan) and certain transferees thereof shall

become null and void and will no longer be transferable.




SUMMARY OF RIGHTS TO PURCHASE

PREFERRED STOCK




The Board of Directors of Rentech, Inc. (the “Company”) declared a dividend
of one preferred stock purchase right (individually, a “Right” and collectively, the “Rights”) for
each share of Common Stock, par value $.01 (the “Common Stock”), of the Company outstanding at the
close of business on August 19, 2011 (the “Record Date”). As long as the Rights are attached to
the Common Stock, the Company will issue one Right (subject to adjustment) with each new share of
Common Stock so that all such shares will have attached Rights. When exercisable, each Right will
entitle the registered holder to purchase from the Company one ten-thousandth of a share of Series
D Junior Participating Preferred Stock (the “Preferred Stock”) of the Company at a price of $3.75
per one ten-thousandth of a share of Preferred Stock, subject to certain anti-dilution adjustments
(the “Purchase Price”). The description and terms of the Rights are set forth in a Tax Benefit
Preservation Plan, dated as of August 5, 2011, as the same may be amended from time to time (the
“Plan”), between the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights
Agent”).



By adopting the Plan, the Board of Directors is seeking to protect the Company’s ability to
carry forward its net operating losses (collectively, “NOLs”). The Company has experienced
substantial operating losses, and for federal and state income tax purposes, the Company may “carry
forward” net operating losses in certain circumstances to offset current and future taxable income,
which will reduce federal and state income tax liability, subject to certain requirements and
restrictions. These federal and state NOLs are a valuable asset of the Company, which may inure to
the benefit of the Company and its stockholders. However, if the Company experiences an “ownership
change,” as defined in Section 382 of the Internal Revenue Code (the “Code”), its ability to use
the NOLs could be substantially limited, and the timing of the usage of the NOLs could be
substantially delayed, which could significantly impair the value of the Company’s NOL asset.
Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or
more “five percent stockholders” increases by more than fifty percentage points over the lowest
percentage of stock owned by such stockholders at any time during the prior three-year period or,
if sooner, since the last “ownership change” experienced by the Company. The Plan is intended to
act as a deterrent to any person acquiring 4.99% or more of the outstanding shares of Common Stock
without the approval of the Board of Directors. This would protect the Company’s NOL asset because
changes in ownership by a person owning less than 4.99% of the Common Stock are not included in the
calculation of “ownership change” for purposes of Section 382 of the Code.


 


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Until the earlier to occur of (i) the close of business on the tenth (10) business day
following a public announcement that a person or group has acquired, or obtained the right to
acquire, beneficial ownership of 4.99% or more of the Common Stock (an “Acquiring Person”)
or (ii) the close of business on the tenth (10) business day (or such later date as may be
determined by action of the Board of Directors prior to such time as any person becomes an
Acquiring Person) following the commencement 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 4.99% or more of the Common Stock (the earlier of (i) and (ii) being called the
“Distribution Date”), the Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificates or, with respect
to any uncertificated Common Stock registered in book entry form, by notation in book entry, in
either case together with a copy of this Summary of Rights. The Board can postpone the
Distribution Date in certain circumstances. Shares held by persons participating in a group are
deemed to be beneficially owned by all persons treated as the same entity for purposes of Section
382 of the Code. The Plan provides that any person who beneficially owned 4.99% or more of the
Common Stock immediately prior to the first public announcement of the adoption of the Plan (each
an “Existing Holder”), shall not be deemed to be an “Acquiring Person” for purposes of the Plan
unless the Existing Holder becomes the beneficial owner of (x) a percentage of the Common Stock of
the Company then outstanding that is more than 1% more than the aggregate percentage of the
outstanding Common Stock that such Existing Holder Beneficially Owns as of the date of the Plan or
(y) less than 4.99% of the Common Stock of the Company then outstanding (after which, if the
Existing Holder becomes the Beneficial Owner of 4.99% or more of the Common Stock of the Company
then outstanding, the Existing Holder shall be deemed to be an “Acquiring Person”). The Plan
includes a procedure whereby the Board of Directors will consider requests to exempt certain
acquisitions of Common Stock of the Company from the applicable ownership trigger if the Board
determines that the acquisition will not jeopardize or endanger the availability of the NOLs to the
Company.



The Plan provides that until the Distribution Date (or earlier redemption, exchange,
termination or expiration of the Rights), the Rights will be transferred with and only with the
Common Stock. Until the Distribution Date (or earlier redemption, exchange, termination or
expiration of the Rights), new Common Stock certificates issued after the close of business on the
Record Date upon transfer or new issuance of the Common Stock will contain a notation incorporating
the Plan by reference. Until the Distribution Date (or earlier redemption, exchange, termination
or expiration of the Rights), the surrender for transfer of any certificates for Common Stock, with
or without such notation or a copy of this Summary of Rights, will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing the Rights (“Right
Certificates”) will be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will evidence the Rights.



The Rights are not exercisable until the Distribution Date. The Rights will expire, unless
earlier redeemed or exchanged by the Company or terminated, on the earliest to occur of: (i) August 5, 2014, subject to the Company’s right to extend such date (the “Final Expiration Date”), (ii)
August 5, 2012 if stockholder approval of the Plan has not been obtained by that date, or (iii) the
time at which the Board of Directors determines that the NOLs are utilized in all material respects
or no longer available in any material respect under Section 382 of the Code or that an ownership
change under Section 382 of the Code would not adversely impact in any
material respect the time period in which the Company could use the NOLs, or materially impair
the amount of the NOLs that could be used by the Company in any particular time period, for
applicable tax purposes.


 


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Each share of Preferred Stock purchasable upon exercise of the Rights will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of $1.00 per share or, if
greater, an aggregate dividend of 10,000 times the dividend, if any, declared per share of Common
Stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment of $10,000 per share
(plus any accrued but unpaid dividends), provided that such holders of the Preferred Stock will be
entitled to an aggregate payment of 10,000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have 10,000 votes and will vote together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which shares of Common
Stock are exchanged, each share of Preferred Stock will be entitled to receive 10,000 times the
amount received per share of Common Stock. Preferred Stock will not be redeemable. These rights
are protected by customary antidilution provisions. Because of the nature of the Preferred Stock’s
dividend, liquidation and voting rights, the value of one ten-thousandth of a share of Preferred
Stock purchasable upon exercise of each Right should approximate the value of one share of Common
Stock.



The Purchase Price payable, and the number of shares of Preferred Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock or convertible securities
at less than the current market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness, cash, securities or assets (excluding
regular periodic cash dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income per share of the
Company for the four quarters ended immediately prior to the payment of such dividend, or dividends
payable in Preferred Stock (which dividends will be subject to the adjustment described in clause
(i) above)) or of subscription rights or warrants (other than those referred to above).



In the event that a Person becomes an Acquiring Person or if the Company were the surviving
corporation in a merger with an Acquiring Person and shares of the Common Stock were not changed or
exchanged, each holder of a Right, other than Rights that are or were acquired or beneficially
owned by the Acquiring Person (which Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of shares of Common Stock having a market value of two
times the then current Purchase Price of the Right. In the event that, after a Person has become
an Acquiring Person, the Company were acquired in a merger or other business combination
transaction or more than 50% of its assets or earning power were sold, proper provision shall be
made so that each holder of a Right shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market value of two times
the then current Purchase Price of the Right.


 


C-3









 





At any time after a Person becomes an Acquiring Person and prior to the earlier of one of the
events described in the last sentence of the previous paragraph or the acquisition by such
Acquiring Person of 50% or more of the outstanding Common Stock, the Board of Directors may cause
the Company to exchange the Rights (other than Rights owned by an Acquiring Person which will have
become void), in whole or in part, for Common Stock at an exchange rate of one share of Common
Stock per Right (subject to adjustment).



No adjustment in the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral multiples of one
ten-thousandth of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts), and in lieu thereof, a payment in cash will be made based on the
market price of the Preferred Stock or Common Stock on the last trading date prior to the date of
exercise.



The Rights may be redeemed in whole, but not in part, at a price of $.0001 per Right (the
“Redemption Price”) by the Board of Directors at any time prior to the time that an Acquiring
Person has become such. The redemption of the Rights may be made effective at such time, on such
basis and 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.



Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company beyond those as an existing stockholder, including, without limitation, the right to
vote or to receive dividends.



Any of the provisions of the Plan may be amended by the Board of Directors, or a duly
authorized committee thereof, for so long as the Rights are then redeemable, and after the Rights
are no longer redeemable, the Company may amend or supplement the Plan in any manner that does not
adversely affect the interests of the holders of the Rights (other than an Acquiring Person).



A copy of the Plan has been filed with the Securities and Exchange Commission as an Exhibit to
a Current Report on Form 8-K. A copy of the Plan 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 Plan, which is incorporated herein by reference.




 


C-4