EX-4.1 Rights Agreement dated July 28, 2008





Exhibit 4.1





 




 




 




 




REPUBLIC




SERVICES, INC.




and




THE BANK OF NEW YORK MELLON




 




Rights Agreement




Dated as of July 28, 2008





 









 








TABLE OF CONTENTS




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





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	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	Number	 
	Section 20.	 	Duties of Rights Agent
	 	 	21	 
	 	 	 	 	 	 	 	 	 
	Section 21.	 	Change of Rights Agent
	 	 	24	 
	 	 	 	 	 	 	 	 	 
	Section 22.	 	Issuance of New Right Certificates
	 	 	24	 
	 	 	 	 	 	 	 	 	 
	Section 23.	 	Redemption
	 	 	25	 
	 	 	 	 	 	 	 	 	 
	Section 24.	 	Exchange
	 	 	25	 
	 	 	 	 	 	 	 	 	 
	Section 25.	 	Notice of Certain Events
	 	 	26	 
	 	 	 	 	 	 	 	 	 
	Section 26.	 	Notices
	 	 	27	 
	 	 	 	 	 	 	 	 	 
	Section 27.	 	Supplements and Amendments
	 	 	28	 
	 	 	 	 	 	 	 	 	 
	Section 28.	 	Successors
	 	 	28	 
	 	 	 	 	 	 	 	 	 
	Section 29.	 	Benefits of this Agreement
	 	 	28	 
	 	 	 	 	 	 	 	 	 
	Section 30.	 	Determinations and Actions by the Board of Directors
	 	 	28	 
	 	 	 	 	 	 	 	 	 
	Section 31.	 	Severability
	 	 	29	 
	 	 	 	 	 	 	 	 	 
	Section 32.	 	Governing Law
	 	 	29	 
	 	 	 	 	 	 	 	 	 
	Section 33.	 	Counterparts
	 	 	29	 
	 	 	 	 	 	 	 	 	 
	Section 34.	 	Descriptive Headings
	 	 	29	 
	 	 	 	 	 	 	 	 	 
	Signatures	 	 
	 	 	30	 
	 	 	 	 	 	 	 	 	 
	Exhibit A	 	-          Form of Certificate of Designations
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Exhibit B	 	-          Form of Right Certificate
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Exhibit C	 	-          Summary of Rights to Purchase Preferred Shares
	 	 	 	 






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          Agreement, dated as of July 28, 2008, between Republic Services, Inc., a Delaware
corporation (the “Company”), and The Bank of New York Mellon, as rights agent (the
“Rights Agent”).




          The Board of Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the
Company outstanding on August 7, 2008 (the “Record Date”), each Right representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).




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




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




          (a) “Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 10% or more of the
Common Shares of the Company then outstanding, but shall not include the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common
Shares by the Company which, by reducing the number of Common Shares of the Company outstanding,
increases the proportionate number of Common Shares of the Company beneficially owned by such
Person to 10% or more of the Common Shares of the Company then outstanding; provided,
however, that, if a Person shall become the Beneficial Owner of 10% or more of the Common
Shares of the Company then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the
foregoing, the definition of “Acquiring Person” as to any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 10% or more of the
Common Shares of the Company as of the date of the first public announcement of this Agreement,
shall be as set forth above, except that “20%” shall be substituted for “10%” in the definition
thereof.




          Notwithstanding the foregoing, if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of Common Shares so that such Person would no longer
be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement.




 









 





          Notwithstanding the foregoing, or any provision to the contrary in this Agreement, Allied
Waste Industries, Inc. (“Allied”) is not, nor shall it be deemed to be, an “Acquiring Person”
solely by virtue of (i) its acquisition, or its right to acquire, beneficial ownership of Common
Shares of the Company as a result of its execution of the Agreement and Plan of Merger, dated as of
June 22, 2008 (the “Merger Agreement”), by and among the Company, RS Merger Wedge, Inc. and Allied,
(ii) the consummation of the Merger (as defined in the Merger Agreement) or (iii) any other
transaction contemplated by the Merger Agreement.




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




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




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





     (i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly;




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




     (iii) which are beneficially owned, directly or indirectly, by any other Person with
which such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company.



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          “Beneficial Ownership” of any Person shall also include for purposes of this Agreement,
anything which such Person or any of such Person’s Affiliates or Associates or any other Person of
the nature described in Section 1(d)(iii) hereof shall have an obligation (contingent or otherwise)
to acquire Beneficial Ownership of, and anything of which any other Person or any of such Person’s
Affiliates or Associates shall have acquired Beneficial Ownership, or the right or obligation to
acquire Beneficial Ownership, in connection with, as a result of, in anticipation of, or in order
to hedge or offset the risk of, any contractual or financial agreement, arrangement or
understanding (including any swap, option, put, call, straddle or other derivative, whether or not
settlable in kind or in cash) with such Person or any of such Person’s Affiliates or Associates or
any other Person of the nature described in Section 1(d)(iii) hereof.




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




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




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




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




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




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




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




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




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




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          (m) “Permitted Offer” shall mean a tender offer or an exchange offer, or a combination
thereof, in each such case for all of the Common Shares of the Company then outstanding for the
same per-share consideration; provided that the Company has received an
irrevocable written commitment of the offeror to consummate, as promptly as practicable upon
successful completion of the offer, a second step transaction whereby all Common Shares of the
Company not purchased in the offer will be acquired for the same per-share consideration actually
paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if any.




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




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




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




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




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




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




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




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




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




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




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




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




          (z) “Unaffiliated Shares” shall mean the Common Shares of the Company outstanding,
less any Common Shares of the Company Beneficially Owned by an offeror of a Permitted Offer, or by
such offeror’s Affiliates and Associates, prior to such offeror’s purchase of Common Shares of the
Company pursuant to the Permitted Offer.




          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. Notwithstanding the
foregoing, the Rights Agent will have no duty to supervise, and shall in no event be liable for,
the acts or omissions of any such co-rights agent.




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          Section 3. Issue of Right Certificates. (a) Until the earlier of the Close of
Business on (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors of the Company prior to
such time as any Person becomes an Acquiring Person) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares of the Company for
or pursuant to the terms of any such plan) of a tender or exchange offer, other than a Permitted
Offer, the consummation of which would result in any Person becoming an Acquiring Person (including
any such date which is after the date of this Agreement and prior to the issuance of the Rights;
the earlier of such dates being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares of the Company registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection with the transfer of
Common Shares of the Company. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested and provided with all necessary information, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company
as of the Close of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right Certificates. The Company
shall promptly notify the Rights Agent in writing upon the occurrence of a Distribution Date, and
if such notification is given orally, the Company shall confirm the same in writing on or before
the Business Day next following. Until such notice is received by the Rights Agent, the Rights
Agent may presume conclusively that the Distribution Date has not occurred.




          (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C hereto
(the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares of the Company
outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares
of the Company outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated with the Common
Shares of the Company represented thereby.




-5-









 








          (c) Certificates for Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph
(c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them a legend in substantially the following form:





This certificate also evidences and entitles the holder hereof to certain rights as
set forth in an Agreement between Republic Services, Inc. and The Bank of New York
Mellon, dated as of July 28, 2008, as it may be amended from time to time (the
“Agreement”), the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of Republic Services,
Inc. Under certain circumstances, as set forth in the Agreement, such Rights (as
defined in the Agreement) will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Republic Services, Inc. will mail to the
holder of this certificate a copy of the Agreement without charge after receipt of a
written request therefor. As set forth in the Agreement, Rights beneficially owned
by any Person (as defined in the Agreement) who becomes an Acquiring Person (as
defined in the Agreement) become null and void.


With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares of the Company represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares of the Company
represented thereby. In the event that the Company purchases or acquires any Common Shares of the
Company after the Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares of the Company which are no
longer outstanding.




          Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto, and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent)
and as are not inconsistent with the provisions of this Agreement, or as may be required to comply
with any applicable law or with any applicable rule or regulation made pursuant thereto or with any
applicable rule or regulation of any stock exchange or the Financial Industry Regulatory Authority,
or to conform to usage. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set
forth therein (the “Purchase Price”), but the number of such one one-hundredths of a
Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.




-6-









 








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




          Following the Distribution Date and receipt by the Rights Agent of notice to that effect and
all other necessary information, the Rights Agent will keep or cause to be kept, at its office
designated for such purpose, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.




          Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof,
at any time after the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing Rights that have become null and
void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right
Certificates entitling the registered holder to purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the designated office of the Rights Agent. The Right Certificates are
transferable only on the registry books of the Rights Agent. 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 Certificates until the holder thereof shall have (i) completed and
signed the certificate contained in the form of assignment set forth on the reverse side of each
such Right Certificate, (ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby and the Affiliates
and Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights
Agent shall reasonably request, and (iii) paid a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. 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 Rights Agent shall have no duty or obligation under any Section of this Agreement requiring the
payment of taxes and/or
governmental charges unless and until it is satisfied that all such taxes and/or governmental
charges have been paid.




-7-









 








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




          Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The
registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon
surrender of the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed and properly completed, to the Rights Agent at the designated office of the
Rights Agent, together with payment of the Purchase Price for each one one-hundredths of a
Preferred Share as to which the Rights are exercised, and an amount equal to any tax or
governmental charge required to be paid under Section 9 hereof by certified check, cashier’s check
or money order payable to the order of the Company at or prior to the earliest of (i) the Close of
Business on July 27, 2009 (the “Expiration Date”), (ii) the time at which a Person,
together with such Person’s Affiliates and Associates, purchases more than 50% of the Unaffiliated
Shares of the Company pursuant to a Permitted Offer (the “Permitted Offer Expiration
Date”), (iii) the time at which the merger of RS Merger Wedge, Inc., a wholly owned subsidiary
of the Company, with and into Allied becomes effective (the “Merger Expiration Date,” and
the earliest of the Expiration Date, the Permitted Offer Expiration Date and the Merger Expiration
Date, the “Final Expiration Date”), (iv) the time at which the Rights are redeemed as
provided in Section 23 hereof (the “Redemption Date”) or (v) the time at which such Rights
are exchanged as provided in Section 24 hereof.




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




          (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed and properly completed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to any applicable tax or governmental
charge required to be paid by the holder of such Right Certificate in accordance with Section 9
hereof by certified check, cashier’s check or money order payable to the order of the Company,
subject to Section 20(k) hereof, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts




-8-









 





shall be deposited by the transfer agent of the Preferred Shares with such depositary agent)
and the Company hereby directs such depositary agent to comply with such request; (ii) when
necessary, requisition from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof; (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as may be designated
by such holder; and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate.




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




          (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a holder of Rights or other
securities upon the occurrence of any purported exercise as set forth in this Section 7 unless such
holder shall have (i) properly completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) thereof and of the Rights evidenced thereby and of the Affiliates and
Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent
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 cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and, in such case, shall
deliver a certificate of destruction thereof to the Company.




          Section 9. Availability of Preferred Shares. The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or
any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The
Company covenants and agrees that it will take all such action as may be necessary to ensure that
all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.




-9-









 








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




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




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




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




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




               From and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be null and void, and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights
would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be
null and void pursuant to the preceding sentence shall be cancelled. The Company shall give the
Rights Agent written notice of the identity of any such Acquiring Person, Associate or Affiliate,
or the nominee of any of the foregoing, and the Rights Agent may rely on such notice in carrying
out its duties under this Agreement and shall be deemed not to have any knowledge of the identity
of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing unless
and until it shall have received such notice.




               The Company shall notify the Rights Agent when this Section 11(a)(ii) applies and shall use
all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with,
but neither the Company nor the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Company’s failure to make any determinations with
respect to any Acquiring Person (or any Associate or Affiliate of such Acquiring Person).




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




-11-









 








          (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares
having the same rights, privileges and preferences as the Preferred Shares (“equivalent
preferred shares”)) or securities convertible into Preferred Shares or equivalent preferred
shares at a price per Preferred Share or equivalent preferred share (or having a conversion price
per share, if a security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as defined in Section 11(d))
on such record date, the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed; and,
in the event that such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.




          (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then-current per share market price of the Preferred
Shares on such record date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and holders of the Rights)




-12-









 




of the portion of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the denominator of which
shall be such then-current per share market price of the Preferred Shares on such record date;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and, in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.




          (d) (i) For the purpose of any computation hereunder, the “current per share market price”
of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall
be deemed to be the average of the daily closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to but not including such date; provided,
however, that, in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or Securities
convertible into such shares, or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after but not including the ex-dividend
date for such dividend or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular way, reported at or prior to
4:00 P.M. Eastern time or, in case no such sale takes place on such day, the average of the bid and
asked prices, regular way, reported as of 4:00 P.M. Eastern time, in either case, as reported in
the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the Security is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price reported at or prior to 4:00 P.M. Eastern time or, if
not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as
reported as of 4:00 P.M. Eastern time by the NYSE or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the Security selected
by the Board of Directors of the Company. The term “Trading Day” shall mean a day on which
the principal national securities exchange on which the Security is listed or admitted to trading
is open for the transaction of business, or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.




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




-13-









 








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




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




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




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




          (i) The Company may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths
of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of




-14-









 





the Purchase Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement (with prompt written notice thereof
to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned and delivered in the manner provided for herein, and shall be registered in the
names of the holders of record of Right Certificates on the record date specified in the public
announcement.




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




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




          (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(with prompt written notice thereof to the Rights Agent) until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such exercise over and
above the Preferred Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.




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




-15-









 








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




          Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made or any event affecting the Rights or their excercisability (including, without
limitation, an event which causes Rights to become null and void) occurs as provided in Section 11
or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment or
describing such event and a brief, reasonably detailed statement of the facts, computations and
methodology accounting for such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares and the Securities and Exchange Commission a
copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date,
mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to give such notice
shall not affect the validity of or the force or effect of or the requirement for such adjustment.
The Rights Agent shall be fully protected in relying on any certificate prepared by the Company
pursuant to Sections 11 and 13 and on any adjustment or statement therein contained and shall have
no duty or liability with respect to, and shall not be deemed to have knowledge of, any such
adjustment or any such event unless and until it shall have received such a certificate. Any
adjustment to be made pursuant to Sections 11 and 13 of this Rights Agreement shall be effective as
of the date of the event giving rise to such adjustment.




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




-16-









 





Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other
Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of such other Person
(including the Company as successor thereto or as the surviving corporation) as shall equal the
result obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in accordance with Section
9 hereof) in connection with such consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common
Shares of the Company thereafter deliverable upon the exercise of the Rights. The Company shall
not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company
and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other transfers.




          Once an event that triggers the provision of this Section 13 occurs, the Company, as soon as
practicable, shall provide the Rights Agent with a certificate stating that the provisions of this
Section 13 have been fulfilled. The Rights Agent shall have no obligation to perform under this
Section 13 until it receives such certificate and may conclusively rely and be fully protected in
conclusively relying upon such certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this Agreement to the contrary, the
prior written consent of the Rights Agent must be obtained in connection with any supplemental
agreement which in any way alters the rights or duties of the Rights Agent.




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




-17-









 





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




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




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




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




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          Section 15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18 and Section 20 hereof,
are vested in the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement by the Company, and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations by the Company of
the obligations of any Person subject to this Agreement.




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




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




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




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




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




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          Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.




          Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any and all loss, liability, claim, damage, judgment, fine, penalty, demand,
settlement, cost or expense (including without limitation, the reasonable fees and expenses of
counsel) incurred without negligence, bad faith or willful misconduct on the part of the Rights
Agent (which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appelable order, judgment, decree or ruling of a court of competent jurisdiction), for anything
done or omitted by the Rights Agent in connection with the acceptance, administration, exercises
and performance of its duties under this Agreement, including, without limitation, the costs and
expenses (including without limitation, the reasonable fees and expenses of counsel) of defending
against any claim of liability arising therefrom, directly or indirectly. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the Company.




          The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its acceptance and
administration of this Agreement and the exercises and performance of its duties hereunder, in
reliance upon any written instruction from the Company, Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not
be deemed to have knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith unless and until it has received such notice.




-20-









 








          The provisions of this Section 18 and Section 20 below shall survive the expiration of the
Rights and the termination of this Agreement, the exercise or expiration of the Rights and the
designation, replacement or removal of the Rights Agent.




          Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in
all such cases, such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.




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




          Section 20. Duties of Rights Agent. The Rights Agent undertakes only the duties and
obligations expressly imposed by this Agreement (and no implied duties or obligations) upon the
following terms and conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:




          (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no
liability for or in respect of, any action taken, suffered or omitted by it in accordance with such
advice or opinion.




          (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
an Acquiring Person and the determination of the current per share market price of any security) be
proved or established by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, the Chief Executive




-21-









 





Officer, the President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full and complete authorization and
protection to the Rights Agent for, and the Rights Agent shall incur no liability for or in respect
of, any action taken or suffered by it under the provisions of this Agreement in reliance upon such
certificate.




          (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction). Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or
damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the Rights Agent under
this Rights Agreement will be limited to the amount of annual fees paid by the Company to the
Rights Agent.




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




          (e) The Rights Agent shall not be under any responsibility or have any liability in respect of
the validity of this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24
hereof, or the ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after
receipt of the certificate described in Section 12 hereof, upon which the Rights Agent may rely);
nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable.




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




          (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection with its duties,
and such instructions shall be full authorization and protection to the Rights




-22-









 





Agent, and the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. The Rights Agent shall be fully authorized and
protected in relying upon the most recent instructions received by any such officer. Any
application by the Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted to be taken
by the Rights Agent under this Rights Agreement and the date on and/or after which such action
shall be taken or suffered or such omission shall be effective. Subject to Section 20(c) hereof,
the Rights Agent shall not be liable for any action taken or suffered by or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken, suffered or omitted to be taken.




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




          (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself (through its directors, officers and employees) or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, bad faith or willful misconduct in the selection and continued employment thereof
(which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).




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




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




-23-









 








          (l) The Company agrees to give the Rights Agent prompt written notice of any event or
ownership which would prohibit the exercise or transfer of the Right Certificates.




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




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




-24-









 








          Section 23. Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as the
“Redemption Price”). The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as the Board of
Directors of the Company, in its sole discretion, may establish.




          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23, written evidence of which
shall have been filed with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company shall promptly give public notice (as
well as prompt written notice thereof to the Rights Agent) of any such redemption;
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the legality or validity of such redemption. Within 10 days after such action of
the Board of Directors of the Company ordering the redemption of the Rights, the Company shall mail
a notice of redemption to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the Redemption Price will
be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.




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




          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of the holders of such Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange (with prompt written notice thereof to the Rights Agent);
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail or cause to be mailed 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


-25-









 







mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights which have become null and void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.




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




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




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




-26-









 





therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and, in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, whichever shall be the earlier.




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




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



Republic Services, Inc.

110 S.E. 6th Street, 28th Floor

Fort Lauderdale, Florida 33301

Attention: Corporate Secretary



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



The Bank of New York Mellon

480 Washington Boulevard, 29th Floor

Aim # 074-2930

Jersey City NJ 07310

Attention: Kayur Patel

Facsimile: (201) 680-4606



With a copy to:



The Bank of New York Mellon

480 Washington Boulevard, 29th Floor

Jersey City NJ 07310

Attention: General Counsel

Facsimile: (201) 680-4610



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




-27-









 








          Section 27. Supplements and Amendments. The Company may in its sole discretion, and
the Rights Agent shall, if the Company so directs but subject to the other provisions of this
Section, supplement or amend any provision of this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company may deem necessary or desirable, any
such supplement or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that, from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is in compliance with
the terms of this Section 27, and provided, such supplement or amendment does not change or
increase the Rights Agent’s rights, duties, liabilities or obligations without the Right’s Agent’s
written consent, the Rights Agent shall execute such supplement or amendment. Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes an Acquiring Person
amend this Agreement to lower the thresholds set forth in Section 1(a) and 3(a) hereof to not less
than 10% (the “Reduced Threshold”); provided, however, that no Person who
beneficially owns a number of Common Shares equal to or greater than the Reduced Threshold shall
become an Acquiring Person unless such Person shall, after the public announcement of the Reduced
Threshold, increase its beneficial ownership of the then outstanding Common Shares (other than as a
result of an acquisition of Common Shares by the Company) to an amount equal to or greater than the
greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such
Person as a percentage of the outstanding Common Shares as of any date on or after the date of the
public announcement of such Reduced Threshold plus (ii) .001%.




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




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




          Section 30. Determinations and Actions by the Board of Directors. All such actions,
calculations, interpretations and determinations which are done or made by the Board of Directors
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 Persons. The Rights Agent is entitled always to assume that
the Board of Directors acted in good faith and shall be fully protected and incur no liability in
reliance thereon.




-28-









 








          Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that if such excluded provisions shall adversely affect the rights, immunities,
duties or obligations of the Rights Agent, the Rights Agent shall be entitled to resign
immediately.




          Section 32. Governing Law. This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state and performed entirely within such
state; provided, however, that all provisions regarding the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such state.




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




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




-29-









 





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





	 	 	 	 	 
	Attest: 

 	 
	By:  	/s/ James E. O’Connor 	 
	 	 	Name:  	James E. O’Connor 	 
	 	 	Title:  	Chief Executive Officer 	 
	 






	 	 	 	 	 
	REPUBLIC SERVICES, INC.

 	 
	By:  	/s/
David A. Barclay	 
	 	 	Name:  	David A. Barclay 	 
	 	 	Title: 	Senior Vice President and 
General Counsel 	 
	 












	 	 	 	 	 
	Attest:



 	 
	By:  	/s/ Stephen Jones 	 
	 	 	Name:  	Stephen Jones 	 
	 	 	Title:  	Assistant Vice President 	 
	 






	 	 	 	 	 
	THE BANK OF NEW YORK MELLON, as Rights Agent

 	 
	By:  	/s/ Kayur Patel 	 
	 	 	Name:  	Kayur Patel 	 
	 	 	Title:  	Assistant Treasurer 	 
	 









-30-









 





Exhibit A






FORM




of




CERTIFICATE OF DESIGNATIONS




of




SERIES A JUNIOR PARTICIPATING PREFERRED STOCK




of




REPUBLIC SERVICES, INC.




(Pursuant to Section 151 of the

Delaware General Corporation Law)





 







          Republic Services, Inc., a corporation organized and existing under the General Corporation
Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the
following resolution was adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called and held on July 24, 2008:




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




          Series A Junior Participating Preferred Stock:




          Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of
shares constituting the Series A Preferred Stock shall be 2,000,000. Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Preferred Stock.





A-1









 





          Section 2. Dividends and Distributions.




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




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




     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of
 shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest.



A-2









 







Dividends paid on the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.



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





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




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




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



          Section 4. Certain Restrictions.





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



A-3









 






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




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




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




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




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



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




          Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,



A-4









 






provided that the holders of shares of Series A Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock,
or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.




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




          Section 8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.




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




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




A-5









 





     IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Chairman of the Board and attested by its Secretary this ______ day of _____________, 2008.



	 	 	 	 	 
	 	 	 
	 	 	 
	 	Chairman of the Board 	 
	 	 	 
	 



	 	 	 	 	 
	Attest:

 	 
	 	 
	Assistant Secretary 	 
	 	 	 
	 




A-6









 








Exhibit B




Form of Right Certificate




			
	Certificate No. R-
	 	___ Rights







NOT EXERCISABLE AFTER JULY 27, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.



Right Certificate




REPUBLIC SERVICES, 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 Agreement, dated as of July 28, 2008 (the
“Agreement”), between Republic Services, Inc., a Delaware corporation (the “Company”), and The Bank
of New York Mellon (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York City
time, on July 27, 2009 at the designated office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred
Shares”), at a purchase price of $125 per one one-hundredth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed and properly completed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of August 7, 2008, based on the Preferred Shares as constituted at such date.
As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of certain events.




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




B-1









 








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




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




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




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




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




          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of _________, ___.







	 	 	 	 	 
	Attest: 

 	 
	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Countersigned:  	 	 
	 






	 	 	 	 	 
	REPUBLIC SERVICES, INC.

 	 
	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 













	 	 	 	 	 
	THE BANK OF NEW YORK MELLON
 	 
	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 






	 	 	 	 	 
	 	 
	  	 	 
	 	 	  	 	 
	 	 	  	 	 
	 









B-2









 





Form of Reverse Side of Right Certificate


FORM OF ASSIGNMENT


(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)




     FOR VALUE RECEIVED __________________ hereby sells, assigns
and transfers unto _____________________________________


 



(Please print name and address of transferee)



 



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

substitution.




Dated: ___________________




	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature 	 
	 	 	 
	 




Signature Guaranteed:



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



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



	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature 	 
	 	 	 



B-3









 






	 	 	 	 	 



Form of Reverse Side of Right Certificate — continued




FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise

Rights represented by the Right Certificate.)




To: REPUBLIC SERVICES, INC.




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




Please insert social security

or other identifying number



 



(Please print name and address)



 



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




Please insert social security

or other identifying number



 



(Please print name and address)



 




Dated: _______________




	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature 	 
	 	 	 
	 




B-4









 





Signature Guaranteed:




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



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



	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature 	 
	 	 	 
	 



NOTICE





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



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




B-5









 








Exhibit C




SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES




Introduction




          On July 28, 2008, the Board of Directors of our Company, Republic Services, Inc., a Delaware
corporation, declared a dividend of one preferred share purchase right (a “Right”) for each
outstanding share of common stock, par value $0.01 per share. The dividend is payable on August
7, 2008 to the stockholders of record on August 7, 2008.




          Our Board has adopted this Rights Agreement to protect stockholders from coercive or otherwise
unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any
person or group which acquires 10% (20% in the case of existing 10% holders) or more of our
outstanding common stock, including derivatives, unless such acquisition was approved by our Board
or such acquisition was in connection with an offer for all of the outstanding shares of our common
stock at the same price and for the same consideration. The Rights will terminate concurrently with
the purchase of more than 50% of the outstanding shares not owned by the acquiring person in such
an offer, provided that the acquiring person irrevocably commits to purchase all remaining
untendered shares at the same price and the same consideration as in the tender offer as promptly
as practicable following completion of the offer.




          For those interested in the specific terms of the Rights Agreement as made between our Company
and The Bank of New York Mellon, as the Rights Agent, on July 28, 2008, we provide the following
summary description. Please note, however, that this description is only a summary, and is not
complete, and should be read together with the entire Rights Agreement, which has been filed with
the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated
July 28, 2008. A copy of the agreement is available free of charge from our Company.



The Rights. Our Board authorized the issuance of a Right with respect to each outstanding share of
common stock on August 7, 2008. The Rights will initially trade with, and will be inseparable
from, the common stock. The Rights are evidenced only by certificates that represent shares of
common stock. New Rights will accompany any new shares of common stock we issue after August 7,
2008 until the Distribution Date described below.



Exercise Price. Each Right will allow its holder to purchase from our Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock (“Preferred Share”) for $125, once the
Rights become exercisable. This portion of a Preferred Share will give the stockholder
approximately the same dividend, voting, and liquidation rights as would one share of common stock.
Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.





C-1









 





Exercisability. The Rights will not be exercisable until





	•	 	10 days after the public announcement that a person or group has become an “Acquiring
Person” by obtaining “Beneficial Ownership,” as defined in the Rights Agreement, of 10% or
more of our outstanding common stock, or, if earlier,






	•	 	10 business days (or a later date determined by our Board before any person or group
becomes an Acquiring Person) after a person or group begins a tender or exchange offer which,
if completed, would result in that person or group becoming an Acquiring Person.





“Beneficial Ownership” as defined in the Rights Agreement includes interests a person may have as a
result of hedging and similar transactions.



          We refer to the date when the Rights become exercisable as the “Distribution Date.” Until
that date, the common stock certificates will also evidence the Rights, and any transfer of shares
of common stock will constitute a transfer of Rights. After that date, the Rights will separate
from the common stock and be evidenced by book-entry credits or by Rights certificates that we will
mail to all eligible holders of common stock. Any Rights held by an Acquiring Person are void and
may not be exercised.




     Permitted Offer Exemption: The Rights will automatically expire concurrently with the purchase of
50% of our outstanding common stock not previously owned by the acquiring person, pursuant to an
offer for all of the outstanding shares of Company common stock at the same price and for the same
consideration, provided that the offeror irrevocably commits to purchase all remaining untendered
shares at the same price and the same consideration actually paid pursuant to the offer.



Consequences of a Person or Group Becoming an Acquiring Person.





	•	 	Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except
the Acquiring Person may, for $125, purchase shares of our common stock with a market value of
$250, based on the market price of the common stock prior to such acquisition.






	•	 	Flip Over. If our Company is later acquired in a merger or similar transaction after the
Rights Distribution Date, all holders of Rights except the Acquiring Person may, for $125,
purchase shares of the acquiring corporation with a market value of $250 based on the market
price of the acquiring corporation’s stock, prior to such merger.





Preferred Share Provisions.




Each one one-hundredth of a Preferred Share, if issued:




	•	 	will not be redeemable;






	•	 	will entitle holders to quarterly dividend payments of $0.01, or an amount equal to the
dividend paid on one share of common stock, whichever is greater;






	•	 	will entitle holders upon liquidation either to receive $1.00, or an amount equal to the
payment made on one share of common stock, whichever is greater;




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	•	 	will have the same voting power as one share of common stock;






	•	 	if shares of our common stock are exchanged via merger, consolidation, or a similar
transaction, will entitle holders to a per share payment equal to the payment made on one
share of common stock.




The value of one one-hundredth interest in a Preferred Share should approximate the value of one
share of common stock.



Expiration. The Rights will expire on the earlier of (i) the close of business on July 27, 2009,
(ii) the date on which a person or group purchases more than 50% of the unaffiliated shares of the
Company pursuant to a Permitted Offer and (iii) the consummation of the merger between the Company
and Allied Waste Industries, Inc.



Redemption. Our Board may redeem the Rights for $0.01 per Right at any time before any person or
group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the
Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive
the redemption price of $0.01 per Right. The redemption price will be adjusted if we have a stock
split or stock dividends of our common stock.



Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns
50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one
share of common stock or an equivalent security for each Right, other than Rights held by the
Acquiring Person.



Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares, the
number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that
may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or
common stock. No adjustments to the Exercise Price of less than 1% will be made.



Amendments. The terms of the Rights Agreement may be amended by our Board without the consent of
the holders of the Rights. However, our Board may not amend the Rights Agreement to lower the
threshold at which a person or group becomes an Acquiring Person to below 10% of our outstanding
common stock. In addition, the Board may not cause a person or group to become an Acquiring Person
by lowering this threshold below the percentage interest that such person or group already owns.
After a person or group becomes an Acquiring Person, our Board may not amend the agreement in a way
that adversely affects holders of the Rights.





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