exv4w1






Exhibit 4.1




Insulet Corporation




and




Computershare Trust Company, N.A.




as Rights Agent




Shareholder Rights Agreement




Dated as of November 14, 2008















 








Table of Contents




	 	 	 	 	 
	 	 	Page	 
	Section 1. Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2. Appointment of Rights Agent
	 	 	8	 
	 
	 	 	 	 
	Section 3. Issue of Right Certificates
	 	 	8	 
	 
	 	 	 	 
	Section 4. Form of Right Certificates
	 	 	10	 
	 
	 	 	 	 
	Section 5. Countersignature and Registration
	 	 	11	 
	 
	 	 	 	 
	Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates
	 	 	11	 
	 
	 	 	 	 
	Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights
	 	 	12	 
	 
	 	 	 	 
	Section 8. Cancellation and Destruction of Right Certificates
	 	 	14	 
	 
	 	 	 	 
	Section 9. Reservation and Availability of Preferred Stock
	 	 	14	 
	 
	 	 	 	 
	Section 10. Preferred Stock Record Date
	 	 	16	 
	 
	 	 	 	 
	Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights
	 	 	16	 
	 
	 	 	 	 
	Section 12. Certificate of Adjusted Exercise Price or Number of Shares
	 	 	24	 
	 
	 	 	 	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	24	 
	 
	 	 	 	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	27	 
	 
	 	 	 	 
	Section 15. Rights of Action
	 	 	28	 
	 
	 	 	 	 
	Section 16. Agreement of Right Holders
	 	 	28	 
	 
	 	 	 	 
	Section 17. Right Certificate Holder Not Deemed a Stockholder
	 	 	29	 
	 
	 	 	 	 
	Section 18. Concerning the Rights Agent
	 	 	29	 
	 
	 	 	 	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	29	 
	 
	 	 	 	 
	Section 20. Duties of Rights Agent
	 	 	30	 
	 
	 	 	 	 
	Section 21. Change of Rights Agent
	 	 	32	 
	 
	 	 	 	 
	Section 22. Issuance of New Right Certificates
	 	 	33	 






-i-









 






	 	 	 	 	 
	 	 	Page	 
	Section 23. Redemption
	 	 	33	 
	 
	 	 	 	 
	Section 24. Exchange
	 	 	34	 
	 
	 	 	 	 
	Section 25. Notice of Certain Events
	 	 	36	 
	 
	 	 	 	 
	Section 26. Notices
	 	 	37	 
	 
	 	 	 	 
	Section 27. Supplements and Amendments
	 	 	37	 
	 
	 	 	 	 
	Section 28. Successors
	 	 	38	 
	 
	 	 	 	 
	Section 29. Determinations and Actions by the Board of Directors
	 	 	38	 
	 
	 	 	 	 
	Section 30. Benefits of this Agreement
	 	 	39	 
	 
	 	 	 	 
	Section 31. Severability
	 	 	39	 
	 
	 	 	 	 
	Section 32. Governing Law
	 	 	39	 
	 
	 	 	 	 
	Section 33. Counterparts
	 	 	39	 
	 
	 	 	 	 
	Section 34. Descriptive Headings
	 	 	39	 
	 
	 	 	 	 
	Section 35. Force Majeure
	 	 	40	 
	 
	 	 	 	 
	Exhibit A — Certificate of Designations of Series A Junior Participating Cumulative Preferred
Stock
	 	 	 	 
	 
	 	 	 	 
	Exhibit B —  Form of Right Certificate
	 	 	 	 







-ii-









 








SHAREHOLDER RIGHTS AGREEMENT




     Agreement, dated as of November 14, 2008, between Insulet Corporation, a Delaware corporation
(the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company
(the “Rights Agent”).



W I T N E S S E T H




     WHEREAS, the Board of Directors of the Company desires to provide stockholders of the Company
with the opportunity to benefit from the long-term prospects and value of the Company and to ensure
that stockholders of the Company receive fair and equal treatment in the event of any proposed
takeover of the Company;



     WHEREAS, on November 14, 2008, the Board of Directors of the Company authorized and declared a
dividend distribution of one Right (as such term is hereinafter defined) for each outstanding share
of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”)
outstanding as of November 15, 2008 (the “Record Date”), and authorized the issuance of one
Right for each share of Common Stock of the Company issued (whether or not originally issued or
sold from the Company’s treasury, except in the case of treasury shares having associated Rights)
between the Record Date and the earlier of the Distribution Date or the Expiration Date (as such
terms are hereinafter defined), each Right initially representing the right to purchase one
ten-thousandth of a share of Series A Junior Participating Cumulative Preferred Stock of the
Company having the rights, powers and preferences set forth on Exhibit A hereto, upon the
terms and subject to the conditions hereinafter set forth (the “Rights”); and



     WHEREAS, the Company desires to appoint the Rights Agent to act as rights agent hereunder, in
accordance with the terms and conditions hereof.



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



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



          (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who
or which, together with all Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common Stock of the Company then outstanding,
but shall not include (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of
the Company, (iii) any employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company or (iv) any Person holding shares of Common Stock of the Company
organized, appointed or established by the Company or any Subsidiary of the Company for or pursuant
to the terms of any such employee benefit plan
or compensation arrangement (the Persons described in clauses (i) through (iv) above are















 







referred to herein as “Exempt Persons”); provided, however, that the term
“Acquiring Person” shall not include any Grandfathered Person, unless such Grandfathered Person
becomes the Beneficial Owner of a percentage of the shares of Common Stock of the Company then
outstanding equal to or exceeding such Grandfathered Person’s Grandfathered Percentage.




     Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of
an acquisition by the Company of Common Stock of the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares Beneficially Owned by such Person
to 15% (or in the case of a Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 15% (or in
the case of a Grandfathered Person, the Grandfathered Percentage applicable to such Grandfathered
Person) or more of the shares of Common Stock 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 shares (other than pursuant to a stock split, stock dividend or
similar transaction) of Common Stock of the Company and immediately thereafter be the Beneficial
Owner of 15% (or in the case of a Grandfathered Person, the Grandfathered Percentage applicable to
such Grandfathered Person) or more of the shares of Common Stock of the Company then outstanding,
then such Person shall be deemed to be an “Acquiring Person.”



     In addition, notwithstanding the foregoing, and notwithstanding anything to the contrary
provided in the Agreement including without limitation in Sections 1(jj), 3(a) or 27, a Person
shall not be an “Acquiring Person” if the Board of Directors of the Company determines at any time
that a Person who would otherwise be an “Acquiring Person,” has become such without intending to
become an “Acquiring Person,” and such Person divests as promptly as practicable (or within such
period of time as the Board of Directors of the Company determines is reasonable) a sufficient
number of shares of Common Stock of the Company (or, for the avoidance of doubt, with respect to
any Derivative Common Shares, terminates the subject derivative transaction or transactions or
disposes of the subject derivative security or securities) so that such Person would no longer be
an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a).



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




          (c) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations (the “Rules”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date
of this Agreement; provided, however, that no Person who is a director or officer
of the Company shall be deemed an Affiliate or an Associate of any other director or officer of the
Company solely as a result of his or her position as director or officer of the Company.




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




2









 









          (i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, Beneficially Owns (as determined pursuant to Rule 13d-3 of the Rules under the
Exchange Act, as in effect on the date of this Agreement);




          (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has:




          (A) the right to acquire (whether or not such right is exercisable immediately
or only after the passage of time or upon the satisfaction of any conditions or
both) pursuant to any agreement, arrangement or understanding (whether or not in
writing) (other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities), including,
for the avoidance of doubt, through agreements to enter into agreements that permit
a Person to purchase such securities, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “Beneficially Own” or have “Beneficial Ownership” of, (1)
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; (2) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering Event; or (3)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant to Sections
3(a), 11(i) or 22 hereof; or




          (B) the right to vote pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall
not be deemed the “Beneficial Owner” of, or to “Beneficially Own” or have
“Beneficial Ownership” of, any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to a written proxy or consent solicitation statement
filed with the Securities and Exchange Commission in accordance with the Rules of
the Exchange Act and (2) is not also then reportable by such person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or




          (C) the right to dispose of pursuant to any agreement, arrangement or
understanding (whether or not in writing) (other than customary arrangements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities); or




          (iii) which are Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in writing)
(other than customary agreements with and between



3









 






underwriters and selling group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in clause (B) of Section 1(d)(ii) hereof) or disposing of any
securities of the Company; or




          (iv) that are the subject of a derivative transaction entered into by such Person or
any of such Person’s Affiliates or Associates, or derivative security acquired by such
Person or any of such Person’s Affiliates or Associates, which gives such Person or any of
such Person’s Affiliates or Associates the economic equivalent of ownership of an amount of
such securities due to the fact that the value of the derivative is explicitly determined by
reference to the price or value of such securities, or which provides such Person or any of
such Person’s Affiliates or Associates an opportunity, directly or indirectly, to profit, or
to share in any profit, derived from any change in the value of such securities, in any case
without regard to whether (a) such derivative conveys any voting rights in such securities
to such Person or any of such Person’s Affiliates or Associates, (b) the derivative is
required to be, or capable of being, settled through delivery of such securities, or (c)
such Person or any of such Person’s Affiliates or Associates may have entered into other
transactions that hedge the economic effect of such derivative. In determining the number of
 shares of Common Stock of the Company Beneficially Owned by virtue of the operation of this
Section 1(d)(iv), the subject Person shall be deemed to Beneficially Own (without
duplication) the notional or other number of shares of Common Stock of the Company specified
in the documentation evidencing the derivative position as being subject to be acquired upon
the exercise or settlement of the applicable right or as the basis upon which the value or
settlement amount of such right, or the opportunity of the holder of such right to profit or
share in any profit, is to be calculated in whole or in part, and in any case (or if no such
number of shares of Common Stock of the Company is specified in such documentation or
otherwise), as determined by the Board of Directors in good faith to be the number of shares
of Common Stock of the Company to which the derivative position relates. Such shares of
Common Stock of the Company that are deemed so Beneficially Owned pursuant to the operation
of this Section 1(d)(iv) shall be referred to herein as “Derivative Common Shares”;


provided, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired through such Person’s
participation as an underwriter in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition, and (2) no Person who is a
director or an officer of the Company shall be deemed, as a result of his or her position as
director or officer of the Company, the Beneficial Owner of any securities of the Company that are
Beneficially Owned by any other director or officer of the Company.



     For all purposes of this Agreement, the phrase “then outstanding,” when used with reference to
the percentage of the then outstanding securities Beneficially Owned by a Person, shall mean the
number of securities then issued and outstanding together with the number of such securities not
then actually issued and outstanding which such Person would be deemed to Beneficially Own
hereunder.




4









 








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




          (f) “Certificate of Incorporation” when used in reference to the Company shall mean
the Amended and Restated Certificate of Incorporation, as may be amended from time to time, of the
Company.




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




          (h) “Common Stock” when used in reference to the Company shall mean the common stock,
par value $0.001 per share, of the Company or any other shares of capital stock of the Company into
which such stock shall be reclassified or changed. “Common Stock” when used with reference to any
Person other than the Company organized in corporate form shall mean (i) the capital stock or other
equity interest of such Person with the greatest voting power, (ii) the equity securities or other
equity interest having power to control or direct the management of such Person or (iii) if such
Person is a Subsidiary of another Person, the Person or Persons which ultimately control such
first-mentioned Person and which have issued any such outstanding capital stock, equity securities
or equity interest. “Common Stock” when used with reference to any Person not organized in
corporate form shall mean units of beneficial interest which (x) shall represent the right to
participate generally in the profits and losses of such Person (including without limitation any
flow-through tax benefits resulting from an ownership interest in such Person) and (y) shall be
entitled to exercise the greatest voting power of such Person or, in the case of a limited
partnership, shall have the power to remove or otherwise replace the general partner or partners.




          (i) “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.




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




          (k) “Depositary Agent” shall have the meaning set forth in Section 7(c) hereof.




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




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




          (n) “Exempt Person” shall have the meaning set forth in the definition of “Acquiring
Person.”




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




5









 








          (p) “Expiration Date” and “Final Expiration Date” shall have the meanings set
forth in Section 7(a) hereof.




          (q) “Fair Market Value” of any securities or other property shall be as determined in
accordance with Section 11(d) hereof.




          (r) “Grandfathered Percentage” shall mean, with respect to any Grandfathered Person,
the percentage of the outstanding shares of Common Stock of the Company that such Grandfathered
Person, together with all Affiliates and Associates of such Grandfathered Person, Beneficially Owns
as of the Grandfathered Time, plus an additional 1/2%; provided, however, that, in the event any
Grandfathered Person shall sell, transfer, or otherwise dispose of any outstanding shares of Common
Stock of the Company after the Grandfathered Time, the Grandfathered Percentage shall, subsequent
to such sale, transfer or disposition, mean, with respect to such Grandfathered Person, the lesser
of (i) the Grandfathered Percentage as in effect immediately prior to such sale, transfer or
disposition or (ii) the percentage of outstanding shares of Common Stock of the Company that such
Grandfathered Person Beneficially Owns immediately following such sale, transfer or disposition,
plus an additional 1/2%.




          (s) “Grandfathered Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, is, as of the Grandfathered Time, the Beneficial Owner of
15% or more of the shares of Common Stock of the Company then outstanding. Notwithstanding
anything to the contrary provided in this Agreement, any Grandfathered Person who after the
Grandfathered Time becomes the Beneficial Owner of less than 15% of the shares of Common Stock of
the Company then outstanding shall cease to be a Grandfathered Person and shall be subject to all
of the provisions of this Agreement in the same manner as any Person who is not and was not a
Grandfathered Person.




          (t) “Grandfathered Time” shall mean 5:35 p.m., New York city time, on November 14,
2008.




          (u) “Group” shall have the meaning set forth in clause (b) of the definition of
“Person.”




          (v) “Person” shall mean (a) an individual, a corporation, a partnership, a limited
liability company, an association, a joint stock company, a trust, a business trust, a government
or political subdivision, any unincorporated organization, or any other association or entity
including any successor (by merger or otherwise) thereof or thereto, and (b) a “group” as that term
is used for purposes of Section 13(d)(3) of the Exchange Act.




          (w) “Preferred Stock” shall mean shares of Series A Junior Participating Cumulative
Preferred Stock, par value $0.001 per share, of the Company having the rights and preferences set
forth in the form of Certificate of Designations attached hereto as Exhibit A.




          (x) “Preferred Stock Equivalents” shall have the meaning set forth in Section 11(b)
hereof.




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




6









 








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




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




          (bb) “Registered Common Stock” shall have the meaning set forth in Section 13(b)
hereof.




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




          (dd) “Section 11(a)(ii) Event” shall have the meaning set forth in Section 11(a)(ii)
hereof.




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




          (ff) “Section 13 Event” shall mean any event described in clauses (x), (y) or (z) of
Section 13(a) hereof.




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




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




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




          (jj) “Stock Acquisition Date” shall mean the date of the first public announcement
(which for purposes of this definition shall include, without limitation, the issuance of a press
release or the filing of a publicly-available report or other document with the Securities and
Exchange Commission or any other governmental agency) by the Company, acting pursuant to a
resolution adopted by the Board of Directors of the Company, or by an Acquiring Person, subject in
each case to the last paragraph of Section 1(a), that an Acquiring Person has become such.




          (kk) “Subsidiary” shall mean, with reference to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting power sufficient, in
the absence of contingencies, to elect a majority of the board of directors or other persons
performing similar functions of such corporation or other entity are at the time directly or
indirectly Beneficially Owned or otherwise controlled by such Person either alone or together with
one or more Affiliates of such Person.




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




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





7









 








     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. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and any Co-Rights Agents shall be as the Company
shall determine. The Company shall give ten (10) days’ prior written notice to the Rights Agent of
the appointment of one or more Co-Rights Agents and the respective duties of the Rights Agent and
any such Co-Rights Agents. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.



     Section 3. Issue of Right Certificates.



          (a) From the date hereof until the earlier of (i) the Close of Business on the tenth calendar
day after the Stock Acquisition Date or (ii) the Close of Business on the tenth Business Day (or
such later calendar day, if any, as the Board of Directors of the Company may determine in its sole
discretion) after the date a tender or exchange offer by any Person, other than an Exempt Person,
is first published or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act, or any
successor rule, if, upon consummation thereof, such Person could become the Beneficial Owner of 15%
(or in the case of a Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company then outstanding
(including any such date which is after the date of this Agreement and prior to the issuance of the
Rights) (the earliest 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 the Common Stock of the Company registered in the names of the holders of the
Common Stock of the Company (which certificates for Common Stock of the Company shall be deemed
also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of Common Stock of the
Company. As soon as practicable after the Distribution Date, the Rights Agent will, at the
Company’s expense send, by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock of the Company as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more certificates, in substantially the
form of Exhibit B hereto (the “Right Certificates”), evidencing one Right for each
share of Common Stock of the Company so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock of the Company has been
made pursuant to Section 11(o) hereof, the Company may make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such Right Certificates.




          (b) With respect to certificates for the Common Stock of the Company issued prior to the Close
of Business on the Record Date, the Rights will be evidenced by such certificates for the Common
Stock of the Company on or until the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), and the registered holders of the
Common Stock of the Company also shall be the registered holders of the associated Rights.





8









 







Until the Distribution Date (or the earlier redemption, expiration or termination of the Rights),
the transfer of any of the certificates for the Common Stock of the Company outstanding prior to
the date of this Agreement shall also constitute the transfer of the Rights associated with the
Common Stock of the Company represented by such certificate.




          (c) Certificates for the Common Stock of the Company issued after the Record Date, but prior
to the earlier of the Distribution Date or the Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear a legend, substantially in the form set forth below:





This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Rights Agreement
between Insulet Corporation and Computershare Trust Company, N.A.
(or any successor thereto), as Rights Agent, dated as of November
14, 2008 as amended, restated, renewed, supplemented or extended
from time to time (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of Insulet Corporation and
the stock transfer administration office of the Rights Agent. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Insulet Corporation may redeem
the Rights at a redemption price of $0.001 per Right, subject to
adjustment, under the terms of the Rights Agreement. Insulet
Corporation will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under
certain circumstances, Rights issued to or held by Acquiring Persons
or any Affiliates or Associates thereof (as defined in the Rights
Agreement), and any subsequent holder of such Rights, may become
null and void. The Rights shall not be exercisable, and shall be
void so long as held, by a holder in any jurisdiction where the
requisite qualification, if any, to the issuance to such holder, or
the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.



     With respect to such certificates containing the foregoing legend, the Rights associated with
the Common Stock of the Company represented by such certificates shall be evidenced by such
certificates alone until the earlier of the Distribution Date or the Expiration Date, and the
transfer of any of such certificates shall also constitute the transfer of the Rights associated
with the Common Stock of the Company represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock of the Company after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock of the Company shall
be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock of the Company which are no longer outstanding. The
failure to print the foregoing legend on any such certificate representing



9









 




Common Stock of the Company or any defect therein shall not affect in any manner whatsoever
the application or interpretation of the provisions of Section 7(e) hereof.




     Section 4. Form of Right Certificates.



          (a) The Right Certificates (and the forms of election to purchase shares and of assignment and
certificate to be printed on the reverse thereof) shall each be substantially in the form of
Exhibit B hereto and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to customary usage. The Right
Certificates shall be in a machine printable format and in a form reasonably satisfactory to the
Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, shall show the date of
countersignature, and on their face shall entitle the holders thereof to purchase such number of
one ten-thousandths of a share of Preferred Stock as shall be set forth therein at the price set
forth therein (the “Exercise Price”), but the number of such shares and the Exercise Price
shall be subject to adjustment as provided herein.




          (b) Any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights Beneficially Owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any Associate or Affiliate of an Acquiring
Person) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing) regarding the
transferred Rights, the shares of Common Stock of the Company associated with such Rights or the
Company or (B) a transfer which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and any Right Certificate issued pursuant to Section 6, Section 11 or Section
22 upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in
this sentence, shall have deleted therefrom the second sentence of the existing legend on such
Right Certificate and in substitution therefor shall contain the following legend:





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



10









 





     The Company shall give notice to the Rights Agent promptly after it becomes aware of the
existence and identity of any Acquiring Person or any Associate or Affiliate thereof. The Company
shall instruct the Rights Agent in writing of the Rights which should be so legended. The failure
to print the foregoing legend on any such Right Certificate or any defect therein shall not affect
in any manner whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.



     Section 5. Countersignature and Registration.



          (a) The Right Certificates shall be executed on behalf of the Company by its Chairman or Vice
Chairman of the Board of Directors, its President or any Vice President and by its Treasurer, any
Assistant Treasurer, Secretary or any Assistant Secretary, either manually or by facsimile
signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be
attested to by the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned, either manually or by
facsimile signature, by an authorized signatory of the Rights Agent and shall not be valid for any
purpose unless so countersigned, and such countersignature upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has been duly countersigned
as required hereunder. 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 an authorized signatory of the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed such Right Certificates had
not ceased to be such officer of the Company; and any Right Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.




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




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



          (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Right Certificate or Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Certificates, entitling the registered holder to
purchase a like number of one ten-thousandths of a share of Preferred Stock (or following a
Triggering Event, Common Stock of the Company, cash, property, debt securities, Preferred Stock or
any combination thereof, including any such securities, cash or property following a Section 13
Event) as the Right Certificate or Certificates





11









 







surrendered then entitled such holder to purchase and at the same Exercise Price. Any
registered holder desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Certificates to be transferred, split up, combined or exchanged, with the form of
assignment and certificate duly executed, at the office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates, as the case may be, as so requested. The
Company may require payment by the registered holder of a Right Certificate, of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.




          (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and 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 execute
and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.




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



          (a) Subject to Section 7(e) hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Exercise Price for the total number of one ten-thousandths of a share of
Preferred Stock (or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the earlier of (i) the Close of Business on
the tenth anniversary of the Record Date (the “Final Expiration Date”), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”) or
(iii) the time at which such Rights are exchanged as provided in Section 24 hereof (the
“Exchange Date”) (the earliest of (i), (ii) or (iii) being herein referred to as the
“Expiration Date”). Except as set forth in Section 7(e) hereof and notwithstanding any
other provision of this Agreement, any Person who prior to the Distribution Date becomes a record
holder of shares of Common Stock of the Company may exercise all of the rights of a registered
holder of a Right Certificate with respect to the Rights associated with such shares of Common
Stock of the Company in accordance with the provisions of this Agreement, as of the date such
Person becomes a record holder of shares of Common Stock of the Company.




12









 








          (b) The Exercise Price for each one ten-thousandth of a share of Preferred Stock pursuant to
the exercise of a Right shall initially be Thirty-Five United States Dollars (U.S. $35.00), shall
be subject to adjustment from time to time as provided in Section 11 and Section 13 hereof and
shall be payable in lawful money of the United States of America in accordance with Section 7(c)
below.




          (c) As promptly as practicable following the Distribution Date, the Company shall deposit with
a corporation, trust, bank or similar institution in good standing organized under the laws of the
United States or any State of the United States, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or examination by a federal
or state authority (such institution is hereinafter referred to as the “Depositary Agent”),
certificates representing the shares of Preferred Stock that may be acquired upon exercise of the
Rights and the Company shall cause such Depositary Agent to enter into an agreement pursuant to
which the Depositary Agent shall issue receipts representing interests in the shares of Preferred
Stock so deposited. Upon receipt of a Right Certificate representing exercisable Rights, with the
form of election to purchase and the certificate on the reverse side thereof duly executed,
accompanied by payment of the Exercise Price for the shares to be purchased and an amount equal to
any applicable transfer tax (as determined by the Rights Agent) by certified check or bank draft
payable to the order of the Company or by money order, the Rights Agent shall, subject to Section
20(k) and Section 14(b) hereof, thereupon promptly (i) requisition from the Depositary Agent (or
make available, if the Rights Agent is the Depositary Agent) depositary receipts or certificates
for the number of one ten-thousandths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes the Depositary Agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if any, 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 of each certificate or
depositary receipts promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate. In the event that the Company is obligated to issue other securities
(including Common Stock of the Company) of the Company, pay cash or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such
other securities, cash or other property are available for distribution by the Rights Agent, if and
when appropriate. The payment of the Exercise Price may be made by certified or bank check payable
to the order of the Company, or by money order or wire transfer of immediately available funds to
the account of the Company (provided that notice of such wire transfer shall be given by the holder
of the related Right to the Rights Agent).




          (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 and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14
hereof.




          (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event or Section 13 Event, any Rights



13









 






Beneficially Owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any Associate or Affiliate of an Acquiring
Person) who becomes a transferee after the Acquiring Person becomes such or (iii) a transferee of
an Acquiring Person (or of any Associate or Affiliate of an Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights, the shares of Common Stock of the Company associated with such Rights or the
Company, or (B) a transfer which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or any Affiliates or Associates of an Acquiring Person or any
transferee of any of them hereunder.




          (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder of
Rights upon the occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) 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) or Affiliates or Associates thereof as the Company shall reasonably
request.




     Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered
for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled
Right Certificates to the Company.



     Section 9. Reservation and Availability of Preferred Stock.



          (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Preferred Stock or any authorized and issued shares of
Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding and exercisable Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of shares of
Preferred Stock issuable upon exercise of all outstanding Rights in excess of the number then
reserved, the Company shall make appropriate increases in the number of shares so reserved.





14









 








          (b) The Company shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares of Preferred Stock issued or reserved for issuance to be listed,
upon official notice of issuance, upon the principal national securities exchange, if any, upon
which the Common Stock of the Company is listed or, if the principal market for the Common Stock of
the Company is not on any national securities exchange, to be eligible for quotation on such system
as the Common Stock is then quoted.




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




          (d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Preferred Stock delivered upon the exercise of the Rights shall, at the
time of delivery of the certificates or depositary receipts for such shares (subject to payment of
the Exercise Price), be duly and validly authorized and issued and fully paid and nonassessable.




          (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any certificates for shares of Preferred Stock and/or
other property upon the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of Right Certificates or
the issuance or delivery of other securities or property to a person other than, or in respect of
the issuance or delivery of securities or other property in a name other than that of, the
registered holder of the Right Certificates evidencing Rights surrendered for exercise
or to issue or deliver any certificates for securities or other property in a name other than
that of the registered holder upon the exercise of any Rights until
such tax shall have been paid
(any




15









 







such tax being payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company’s satisfaction that no such tax is due.




     Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for Preferred
Stock or other securities (including any fraction of a share of Preferred Stock or such other
securities) is issued upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the shares of Preferred Stock or such other securities 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 Exercise Price (and any applicable transfer taxes)
was made; provided, however, that if the date of such surrender and payment is a
date upon which the transfer books of the Company for the Preferred Stock or such other securities,
as applicable, are closed, such person shall be deemed to have become the record holder of such
shares of Preferred Stock or such other securities on, and such certificate shall be dated, the
next succeeding Business Day on which the transfer books of the Company are open; and further
provided, however, that if delivery of shares of Preferred Stock or such other
securities is delayed pursuant to Section 9(c), such Person shall be deemed to have become the
record holder of such shares of Preferred Stock or such other securities only when such shares or
such other securities first become deliverable. Prior to the exercise of the Right evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.



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



          (a) (i) In the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number
of shares or (D) issue, change or alter any shares of its capital stock in a reclassification or
recapitalization of the Preferred Stock (including any such reclassification or recapitalization in
connection with a consolidation or merger in which the Company is the continuing or surviving
Person), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Exercise
Price in effect at the time of the record date for such dividend or the effective time of such
subdivision, combination, reclassification or recapitalization, and the number and kind of shares
of capital stock issuable on such date or at such time, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive the aggregate number
and kind of shares of capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination, reclassification or
recapitalization; provided, however, that in no event shall the consideration to be
paid upon the exercise of a Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of a Right. If an event occurs which would require an





16









 







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





          (ii) Subject to the provisions of Section 24 hereof, in the event any Person, alone or
together with its Affiliates and Associates, shall become an Acquiring Person, then,
promptly following any such occurrence (a “Section 11(a)(ii) Event”), proper
provision shall be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, in lieu of a number of one
ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then current Exercise
Price by the then number of one ten-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, whether or not such Right was then exercisable, and dividing that product by (y) 50%
of the Fair Market Value per share of Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of a Section 11(a)(ii) Event (such number of
 shares being referred to as the “Adjustment Shares”).




          (iii) In lieu of issuing any shares of Common Stock of the Company in accordance with
Section 11(a)(ii) hereof, the Company, acting by or pursuant to a resolution of the Board of
Directors of the Company, may, and in the event that the number of shares of Common Stock of
the Company which are authorized by the Company’s Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, acting by or pursuant to a resolution
of the Board of Directors of the Company, shall: (A) determine the excess of (X) the Fair
Market Value of the Adjustment Shares issuable upon the exercise of a Right (the
“Current Value”) over (Y) the Exercise Price attributable to each Right (such excess
being referred to as the “Spread”) and (B) with respect to all or a portion of each
Right (subject to Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Exercise Price, (1) Common Stock of the
Company or equity securities, if any, of the Company other than Common Stock of the Company
(including without limitation shares, or units of shares, of Preferred Stock that the Board
of Directors of the Company has determined to have the same value as shares of Common Stock
of the Company (such shares of Preferred Stock being referred to herein as “Common Stock
Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4) Preferred Stock
Equivalents which the Board of Directors of the Company has deemed to have the same value as
 shares of Common Stock of the Company, (5) debt securities of the Company, (6) other assets
or securities of the Company or (7) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Company after receiving the advice of a
nationally recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days following



17









 






the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the
Company shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares of Common Stock of the Company (to
the extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares of Common Stock
of the Company could be authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such additional shares (such period, as
it may be extended, being referred to herein as the “Substitution Period”). To the
extent that the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily suspended
and a public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Stock of the Company and of the
Preferred Stock shall be the Fair Market Value (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock of the Company and the Preferred Stock, respectively,
on the Section 11(a)(ii) Trigger Date, the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Stock of the Company on such date and the value
of any Preferred Stock Equivalent shall be deemed to have the same value as the Preferred
Stock on such date.



          (b) If the Company shall fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Stock entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase Preferred Stock (or securities
having the same or more favorable rights, privileges and preferences as the shares of Preferred
Stock (“Preferred Stock Equivalents”)) or securities convertible into Preferred Stock or
Preferred Stock Equivalents at a price per share of Preferred Stock or per share of Preferred Stock
Equivalents (or having a conversion price per share, if a security convertible into Preferred Stock
or Preferred Stock Equivalents) less than the Fair Market Value (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record date, the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which
the aggregate offering price of the total number of shares of Preferred
Stock and/or Preferred Stock Equivalents to be offered (and the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such Fair Market Value and
the denominator of which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and Preferred Stock







18









 







Equivalents 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 a Right be less than the aggregate par value of
the shares of stock of the Company issuable upon exercise of a 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 the Fair Market Value thereof determined in accordance with
Section 11(d) hereof. Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.




          (c) If the Company shall fix a record date for the making of a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), of evidences of indebtedness,
cash (other than a regular periodic cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or convertible securities, subscription rights or
warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock
on such record date, less the Fair Market Value (as determined pursuant to Section 11(d) hereof) of
the portion of the cash, assets or evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants applicable to one ten-thousandth of a share
of Preferred Stock and the denominator of which shall be the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per one ten-thousandth of a share of Preferred Stock;
provided, however, that in no event shall the consideration to be paid upon the
exercise of a Right be less than the aggregate par value of the shares of stock of the Company
issuable upon exercise of a 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 Exercise Price
shall again be adjusted to be the Exercise Price which would be in effect if such record date had
not been fixed.




          (d) For the purpose of this Agreement, the “Fair Market Value” of any share of
Preferred Stock, Common Stock or any other stock or any Right or other security or any other
property shall be determined as provided in this Section 11(d).





          (i) In the case of a publicly-traded stock or other security, the Fair Market Value on
any date shall be deemed to be the average of the daily closing prices per share of such
stock or per unit of such other security for the 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; provided, however,
that in the event that the Fair Market Value per share of any share of stock is
determined during a period following the announcement by the issuer of such stock of
(x) a dividend or distribution on such stock payable in shares of such stock or securities
convertible into shares of such stock or (y) any subdivision, combination or
reclassification of such stock, and prior to the expiration of the 30 Trading Day period



19









 






after the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the Fair Market
Value shall be properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the
securities are not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which such security is listed or admitted
to trading; or, if not listed or admitted to trading on any national securities exchange,
the last quoted price (or, if not so quoted, the average of the last quoted high bid and low
asked prices) in the over-the-counter market, as reported by the OTC Bulletin Board, the
Pink Sheets or such other system then in use; or, if on any such date no bids for such
security are 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 such security selected
by the Board of Directors of the Company. If on any such date no market maker is making a
market in such security, the Fair Market Value of such security on such date shall be
determined reasonably and with utmost good faith to the holders of the Rights by the Board
of Directors of the Company, provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market Value of such security on such
date shall be determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. The term “Trading Day” shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day.




          (ii) If a security is not publicly held or not so listed or traded, “Fair Market
Value” shall mean the fair value per share of stock or per other unit of such security,
determined reasonably and in good faith to the holders of the Rights by the Board of
Directors of the Company; provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market Value of such security on such
date shall be determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights; provided, however, that for the purposes of making any adjustment
provided for by Section 11(a)(ii) hereof, the Fair Market Value of a share of Preferred
Stock shall not be less than the product of the then Fair Market Value of a share of Common
Stock multiplied by the higher of the then Dividend Multiple or Vote Multiple (as both of
such terms are defined in the Certificate of Designations attached as Exhibit A
hereto) applicable to the Preferred Stock and shall not exceed 105% of the
product of the then Fair Market Value of a share of Common Stock multiplied by the
higher of the then Dividend Multiple or Vote Multiple applicable to the Preferred Stock.



20









 






          (iii) In the case of property other than securities, the Fair Market Value thereof
shall be determined reasonably and in good faith to the holders of Rights by the Board of
Directors of the Company; provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market Value of such property on such
date shall be determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall be described in a statement
filed with the Rights Agent and shall be binding upon the Rights Agent and the holders of
the Rights.



          (e) Anything herein to the contrary notwithstanding, no adjustment in the Exercise Price shall
be required unless such adjustment would require an increase or decrease of at least 1.0% in the
Exercise Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or
to the nearest one-millionth of a share of Common Stock of the Company or hundred-millionth of a
share of Preferred Stock, as the case may be, or to such other figure as the Board of Directors of
the Company may deem appropriate. 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 (3)
years from the date of the transaction which mandates such adjustment or (ii) the Expiration Date.




          (f) If as a result of any provision of Section 11(a) or Section 13(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 Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (d), (e), (g) through (k) and (m), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock 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
Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the
number of one ten-thousandths of a share of Preferred Stock (or other securities or amount of cash
or combination thereof) purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.




          (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Exercise Price as a result of the calculations made in Section 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of one ten-thousandths
of a share of Preferred Stock (calculated to the nearest hundred-millionth) as the Board of
Directors of the Company determines is appropriate to preserve the economic value of the Rights,
including, by way of example, that number obtained by (i) multiplying (x) the number of one
ten-thousandths of a share of Preferred Stock for which a
Right may be exercisable immediately prior to this adjustment by (y) the Exercise Price in
effect immediately prior to such adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price.





21









 








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




          (j) Irrespective of any adjustment or change in the Exercise Price or the number of one
ten-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Exercise Price per share
and the number of shares which were expressed in the initial Right Certificates issued hereunder
without prejudice to any adjustment or change.




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




          (l) In any case in which this Section 11 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any Right exercised after such
record date the number of one ten-thousandths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise over and above
the number of one ten-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such





22









 







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 Exercise Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in its good faith judgment the Board of Directors of
the Company shall determine to be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the Fair
Market Value, issuance wholly for cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Stock, shall not be taxable to such stockholders.




          (n) The Company covenants and agrees that it shall not, at any time after the Distribution
Date and so long as the Rights have not been redeemed pursuant to Section 23 hereof or exchanged
pursuant to Section 24 hereof, (i) consolidate with (other than a Subsidiary of the Company in a
transaction that complies with the proviso at the end of this sentence), (ii) merge with or into,
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries taken as a whole, to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more transactions each of which
complies with the proviso at the end of this sentence) if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other instruments outstanding
or agreements or arrangements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the stockholders of a Person who constitutes,
or would constitute, the “Principal Party” for the purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its Affiliates and
Associates; provided, however, that, subject to the following sentence, this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to consolidate with, or
merge with or into, or sell or transfer assets or earning power to, any other Subsidiary of the
Company. The Company further covenants and agrees that after the Distribution Date it will not,
except as permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that such action will
substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.




          (o) Notwithstanding anything in this Agreement to the contrary, in the event the Company shall
at any time after the date of this Agreement and prior to the Distribution Date (i) declare or pay
any dividend on the outstanding Common Stock of the Company payable in shares of Common Stock of
the Company or (ii) effect a subdivision, combination or consolidation of the outstanding shares of
Common Stock of the Company (by reclassification or otherwise than by payment of dividends in
shares of Common Stock of the Company) into a
greater or lesser number of shares of Common Stock of the Company, then in any such case
(A) the number of one ten-thousandths of a share of Preferred Stock purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number of one
ten-thousandths of a share of Preferred Stock so purchasable immediately prior to such event by a




23









 







fraction, the numerator of which is the number of shares of Common Stock of the Company outstanding
immediately prior to such event and the denominator of which is the number of shares of Common
Stock of the Company outstanding immediately after such event, and (B) each share of Common Stock
of the Company outstanding immediately after such event shall have issued with respect to it that
number of Rights which each share of Common Stock of the Company outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this Section 11(o) shall
be made successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.




          (p) The exercise of Rights under Section 11(a)(ii) shall only result in the loss of rights
under Section 11(a)(ii) to the extent so exercised and neither such exercise nor any exchange of
Rights pursuant to Section 24 shall otherwise affect the rights of holders of Right Certificates
under this Rights Agreement, including rights to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter occur, as set forth in Section 13
hereof. Upon exercise of a Right Certificate under Section 11(a)(ii), the Rights Agent shall
return such Right Certificate duly marked to indicate that such exercise has occurred.




     Section 12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever an adjustment is
made as provided in Section 11 or Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Preferred
Stock and the Common Stock of the Company a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock of the Company) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment contained therein and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.



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



          (a) In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary
of the Company in a transaction which is not prohibited by Section 11(n) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which is not prohibited by the
proviso at the end of the first sentence of Section 11(n) hereof) 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 shares of Common
Stock of the Company shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of which is not prohibited by the
proviso at the end of the first sentence of Section 11(n) hereof), then, and in each such case,
proper provision shall be made so that: (i) each holder of a Right, except as provided in Section




24









 







7(e) hereof, shall have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of freely tradable Common Stock of the Principal
Party (as hereinafter defined in Section 13(b)), free and clear of rights of call or first refusal,
liens, encumbrances, transfer restrictions or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Exercise Price by the number of one ten-thousandths of
a share of Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii) or 11(a)(iii) hereof), and dividing that product by (2) 50% of the
Fair Market Value (determined pursuant to Section 11(d) hereof) per share of the Common Stock of
such Principal Party on the date of consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale, mortgage 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
Principal Party, it being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common Stock to permit
exercise of all outstanding Rights in accordance with this Section 13(a) and the making of payments
in cash and/or other securities in accordance with Section 11(a)(iii) 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 its shares of Common Stock thereafter
deliverable upon the exercise of the Rights.




          (b) “Principal Party” shall mean





          (i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a), the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of Common Stock that has the highest aggregate Fair
Market Value (determined pursuant to Section 11(d)), and if no securities are so issued, the
Person that is the other party to the merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the highest aggregate Fair Market
Value (determined pursuant to Section 11(d)); and




          (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the same portion of the assets
or earning power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate Fair
Market Value (determined pursuant to Section 11(d));


provided, however, that in any such case described in clauses (i) or (ii) of
Section 13(b) hereof, (1) if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of the Exchange Act
(“Registered Common Stock”) or such Person is not a corporation, and such Person is a
direct or indirect





25









 







Subsidiary or Affiliate of another Person who has Registered Common Stock
outstanding, “Principal Party” shall refer to such other Person; (2) if the Common Stock of such
Person is not Registered Common Stock or such Person is not a corporation, and such Person is a
direct or indirect Subsidiary of another Person but is not a direct or indirect Subsidiary of
another Person which has Registered Common Stock outstanding, “Principal Party” shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and one or more of such other Persons has Registered
Common Stock outstanding, “Principal Party” shall refer to whichever of such other Persons is the
issuer of the Registered Common Stock having the highest aggregate Fair Market Value (determined
pursuant to Section 11(d)); and (4) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons has Registered Common Stock outstanding,
“Principal Party” shall refer to whichever ultimate parent entity is the corporation having the
greatest stockholders’ equity or, if no such ultimate parent entity is a corporation, “Principal
Party” shall refer to whichever ultimate parent entity is the entity having the greatest net
assets.




          (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto (x) the Principal Party shall have a sufficient number of authorized shares of its
Common Stock, which have not been issued or reserved for issuance, to permit the exercise in full
of the Rights in accordance with this Section 13, and (y) the Company and each Principal Party and
each other Person who may become a Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Section 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or transfer of assets mentioned in
Section 13(a), the Principal Party at its own expense will:





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




          (ii) qualify or register the Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be necessary or appropriate;




          (iii) list (or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to meet the eligibility
requirements for listing on an automated quotation system or such other system on which the
Common Stock of the Company is then traded; and




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



26









 





          (d) In case the Principal Party which is to be a party to a transaction referred to in this
Section 13 has a provision in any of its authorized securities or in its certificate of
incorporation or By-laws or other instrument governing its affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to
this Section 13), in connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal Party at less than the
then current Fair Market Value (determined pursuant to Section 11(d)) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such Fair Market Value,
or (ii) providing for any special payment, tax or similar provisions in connection with the
issuance of the Common Stock of such Principal Party pursuant to the provisions of this Section 13,
then, in such event, the Company shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such Principal Party shall have
been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.




     The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.



     Section 14. Fractional Rights and Fractional Shares.



          (a) The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(o) hereof, or to distribute Right Certificates which
evidence fractional Rights. If the Company elects not to issue such fractional Rights, the Company
shall pay, in lieu of such fractional Rights, 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 Fair Market Value of a whole Right, as determined pursuant to Section
11(d) hereof.




          (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one ten-thousandth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one ten-thousandth of a share of Preferred Stock, the Company may 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 Fair Market Value of one ten-
thousandth of a share of Preferred Stock. For purposes of this Section 14(b), the Fair Market
Value of one ten-thousandth of a share of Preferred Stock shall be determined pursuant to Section
11(d) hereof for the Trading Day immediately prior to the date of such exercise.




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




27









 








     Section 15. Rights of Action. All rights of action in respect of this Agreement, other than
rights of action vested in the Rights Agent pursuant to Sections 18 and 20 hereof, are vested in
the respective registered holders of the Right Certificates (or, prior to the Distribution Date,
the registered holders of the Common Stock of the Company); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock of the Company), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock of the Company), may, in such registered holder’s own behalf
and for such registered 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, his right to
exercise the Right evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including attorneys’ fees, incurred
by them in any action to enforce the provisions of this Agreement.



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



          (a) prior to the Distribution Date, each Right will be transferable only simultaneously and
together with the transfer of shares of Common Stock of the Company;




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




          (c) subject to Sections 6(a) and 7(f), the Company and the Rights Agent may deem and treat the
person in whose name a Right Certificate (or, prior to the Distribution Date, the associated
certificate representing Common Stock of the Company) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated certificate representing Common Stock of the Company made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever, and, subject to the
last sentence of Section 7(e), neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and




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




28









 








     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 shares of Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.



     Section 18. Concerning the Rights Agent.



          (a) The Company agrees to pay to the Rights Agent such compensation as shall be agreed to in
writing between the Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and attorney fees and
disbursements and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending against any claim
of liability arising therefrom, directly or indirectly. The provisions of this Section 18(a) shall
survive the expiration of the Rights and the termination of this Agreement.




          (b) The Rights Agent shall be protected and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate representing Common Stock of the Company,
Preferred Stock, or 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 in good faith and without negligence to be genuine and to be
signed and executed by the proper Person or Persons.




          (c) The Rights Agent shall not be liable for consequential damages under any provision of this
Agreement or for any consequential damages arising out of any act or failure to act hereunder.




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



          (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stockholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any




29











 




of the parties hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor Rights Agent may
adopt the 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 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.




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




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



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




          (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
any Acquiring Person and the determination of “Fair Market Value”) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof shall be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman of the Board of Directors, a Vice Chairman of the
Board of Directors, the President, a Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company and delivered to the Rights Agent. Any such
certificate shall be full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such certificate.




          (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct.




          (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except its




          
30









 








countersignature thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.




          (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(e) hereof) or any adjustment required under the provisions of Sections 11, 13
or 23(c) hereof or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after receipt of a certificate describing
any such adjustment furnished in accordance with Section 12 hereof), nor shall it be responsible
for any determination by the Board of Directors of the Company of the Fair Market Value of the
Rights or Preferred Stock pursuant to the provisions of Section 14 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation
of any shares of Common Stock of the Company or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether or not any shares of Common Stock of the
Company or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and
nonassessable.




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




          (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder and certificates delivered pursuant to any provision hereof
from any person believed by the Rights Agent to be the Chairman of the Board of Directors, any Vice
Chairman of the Board of Directors, the President, a Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of the Company, and is authorized to apply to
such officers for advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance with instructions of
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 or omitted by the Rights Agent under this Agreement and the date on or
after which such action shall be taken or such omission shall be effective. The Rights Agent shall
not be liable for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in 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 or omitted.




31









 








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




          (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents.




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




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




     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed
to the Company by first class mail, provided, however, that in the event the
transfer agency relationship in effect between the Company and the Rights Agent with respect to the
Common Stock of the Company terminates, the Rights Agent will be deemed to have resigned
automatically on the effective date of such termination. The Company may remove the Rights Agent
or any successor Rights Agent (with or without cause), effective immediately or on a specified
date, by written notice given to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock of the Company and Preferred Stock, and by giving
notice to the holders of the Right Certificates by any means reasonably determined by the Company
to inform such holders of such removal (including without limitation, by including such information
in one or more of
the Company’s reports to stockholders or reports or filings with the Securities and Exchange
Commission). If the Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice,
submit his Right Certificate for inspection by the Company), then the incumbent Rights Agent or the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a corporation organized and doing business under the laws of the
United States, the State of Delaware or the State of New York (or of any other
state of the United States so long as such corporation is authorized to do business as a banking



32









 







institution in the State of Delaware or the State of New York), in good standing, which is
authorized under such laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $10,000,000 or (b) an
Affiliate of a Person described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock of
the Company and the Preferred Stock, and give notice to the holders of the Right Certificates by
any means reasonably determined by the Company to inform such holders of such appointment
(including without limitation, by including such information in one or more of the Company’s
reports to stockholders or reports or filings with the Securities and Exchange Commission).
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 Exercise Price per share and the number or kind
or class of shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock of the Company following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock of the Company so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustments shall otherwise have been made in lieu
of the issuance thereof.



     Section 23. Redemption.



          (a) The Board of Directors of the Company may, at its option, redeem all but not less than all
of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to
reflect any stock dividend declared or paid, any subdivision or combination of the outstanding
shares of Common Stock of the Company or any similar event
occurring after the date of this Agreement (such redemption price, as adjusted from time to
time, being hereinafter referred to as the “Redemption Price”). The Rights may be redeemed
only




33









 







until the earlier to occur of (i) the time at which any Person becomes an Acquiring Person or
(ii) the Final Expiration Date.




          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights in accordance with Section 23 hereof, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors of the Company ordering the redemption of the Rights in
accordance with Section 23 hereof, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to the Rights Agent and
to all such holders at their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock of the Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of 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 Section 24 hereof or in connection with the purchase of shares of Common Stock of the
Company prior to the Distribution Date.




          (c) The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock
of the Company (based on the Fair Market Value of the Common Stock of the Company as of the time of
redemption) or any other form of consideration deemed appropriate by the Board of Directors of the
Company.




     Section 24. Exchange.



          (a) (i) The Board of Directors of the Company may, at its option, at any time on or after the
occurrence of a Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Common Stock of the Company
at an exchange ratio of one share of Common Stock of the Company per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the “Section 24(a)(i) 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 an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock of the Company.





          (ii) Notwithstanding the foregoing, the Board of Directors of the Company may, at its
option, at any time on or after the occurrence of a Section 11(a)(ii) Event, exchange all or
part of the then outstanding and exercisable Rights (which shall
not include Rights that have become null and void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock of the Company at an exchange ratio specified



34









 







in the
following sentence, as appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement. Subject to the adjustment
described in the foregoing sentence, each Right may be exchanged for that number of shares
of Common Stock of the Company obtained by dividing the Spread (as defined in Section
11(a)(iii)) by the then Fair Market Value per one ten-thousandth of a share of Preferred
Stock on the earlier of (x) the date on which any person becomes an Acquiring Person or (y)
the date on which a tender or exchange offer by any Person (other than an Exempt Person) is
first published or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act or
any successor rule, if upon consummation thereof such Person could become an Acquiring
Person (such exchange ratio being referred to herein as the “Section 24(a)(ii) 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 an Exempt
Person), together with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Stock of the Company.



          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights pursuant to Section 11(a)(ii) shall terminate
and the only right thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock of the Company equal to the number of such Rights held by such holder multiplied by
the Section 24(a)(i) Exchange Ratio or the Section 24(a)(ii) Exchange Ratio, as applicable;
provided, however, that the holder of a Right exchanged pursuant to this Section 24
shall continue to have the right to purchase securities or other property of the Principal Party
following a Section 13 Event that has occurred or may thereafter occur. The Company shall promptly
give notice of any such exchange in accordance with Section 26 hereof and shall promptly mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of such exchange. Any
notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock of the Company 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 7(e) hereof) held by each holder of Rights.




          (c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
Preferred Stock (or Preferred Stock Equivalent, as such term is defined in Section 11(b) hereof)
for Common Stock of the Company exchangeable for Rights, at the initial rate of one ten-thousandth
of a share of Preferred Stock (or Preferred Stock Equivalent) for each share of Common Stock of the
Company, as appropriately adjusted to reflect adjustments in the voting rights of the Preferred
Stock pursuant to the terms thereof, so that the fraction of a share of Preferred Stock delivered
in lieu of each share of Common Stock of the Company shall have the same voting rights as one share
of Common Stock of the Company.




35









 








          (d) In the event that there shall not be sufficient shares of Common Stock of the Company or
Preferred Stock (or Preferred Stock Equivalents) 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 shares of Common
Stock of the Company or Preferred Stock (or Preferred Stock Equivalent) for issuance upon exchange
of the Rights.




          (e) The Company shall not be required to issue fractions of Common Stock of the Company or to
distribute certificates which evidence fractional shares of Common Stock of the Company. If the
Company elects not to issue such fractional shares of Common Stock of the Company, the Company
shall pay, in lieu of such fractional shares of Common Stock of the Company, to the registered
holders of the Right Certificates with regard to which such fractional shares of Common Stock of
the Company would otherwise be issuable, an amount in cash equal to the same fraction of the Fair
Market Value of a whole share of Common Stock of the Company. For the purposes of this
paragraph (e), the Fair Market Value of a whole share of Common Stock of the Company shall be the
closing price of a share of Common Stock of the Company (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 propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with, or to effect any sale, mortgage or other transfer (or to permit one or more of
its Subsidiaries to effect any sale, mortgage or other transfer), in one transaction or a series of
related transactions, of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person (other than a Subsidiary of the Company in one
or more transactions each of which is not prohibited by the proviso at the end of the first
sentence of Section 11(n) hereof), or (v) to effect the liquidation, dissolution or winding up of
the
Company, or (vi) to declare or pay any dividend on the Common Stock of the Company payable in
Common Stock of the Company or to effect a subdivision, combination or consolidation of the Common
Stock of the Company (by reclassification or otherwise than by payment of dividends in Common Stock
of the Company) then in each such case, the Company shall give to each holder of a Right
Certificate and to the Rights Agent, 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,
distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock of the Company and/or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such action, and in




36









 







the case of any such other action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of the shares of Common
Stock of the Company and/or Preferred Stock, whichever shall be the earlier; provided,
however, no such notice shall be required pursuant to this Section 25 as a result of any
Subsidiary of the Company effecting a consolidation or merger with or into, or effecting a sale or
other transfer of assets or earnings power to, any other Subsidiary of the Company in a manner not
inconsistent with the provisions of this Agreement.




          (b) In case any Section 11(a)(ii) Event shall occur, then, in any such case, the Company shall
as soon as practicable thereafter give to each registered holder of a Right Certificate and to the
Rights Agent, in accordance with Section 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights under Section
11(a)(ii) 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, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another address is filed in writing with
the Rights Agent) as follows:



Insulet Corporation

9 Oak Park Drive

Bedford, MA 01730

Facsimile No.: (781) 457-5011

Attention: President and Chief Executive Officer




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



Computershare Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Facsimile No.: (781) 575-4210

Attention: Client Administration




     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 (or, prior to the Distribution Date, to the
holder of any certificate representing shares of Common Stock of the Company) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.



     Section 27.
Supplements and Amendments.
Prior to the occurrence of a Section 11(a)(ii) Event, the Company and the Rights Agent shall, if
the Board of Directors of the  Company so directs, supplement or amend any provision of this
Agreement as the Board of Directors of the



37









 







Company may deem necessary or desirable without the
approval of any holders of certificates representing shares of Common Stock of the Company. From
and after the occurrence of a Section 11(a)(ii) Event, the Company and the Rights Agent shall, if
the Board of Directors of the Company so directs, supplement or amend this Agreement without the
approval of any holder of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereof in any manner which the Board of Directors of the Company may deem
necessary or desirable and which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person);
provided, however, that from and after the occurrence of a Section 11(a)(ii) Event
this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and the benefits to, the holders of Rights
(other than an Acquiring Person or any Affiliate or Associate of an Acquiring Person). Without
limiting the foregoing, the Company may at any time prior to the occurrence of a Section 11(a)(ii)
Event amend this Agreement to lower the threshold set forth in Section 1(a) to not less than the
greater of (i) the sum of 0.001% and the largest percentage of the outstanding Common Stock of the
Company then known by the Company to be Beneficially Owned by any Person (other than 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 Stock of the Company for or pursuant to the terms of any such
plan) and (ii) 10.0%. Upon the delivery of such certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent shall execute such supplement or amendment, and any failure of
the Rights Agent to so execute such supplement or amendment shall not affect the validity of the
actions taken by the Board of Directors of the Company pursuant to this Section 27. Prior to the
occurrence of a Section 11(a)(ii) Event, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock of the Company. Notwithstanding any
other provision hereof, the Rights Agent’s consent must be obtained regarding any
amendment or supplement pursuant to this Section 27 which alters the Rights Agent’s rights or
duties.



     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. Determinations and Actions by the Board of Directors. The Board of Directors of the
Company shall have the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or to the Company, or as may
be necessary or advisable in the administration of this
Agreement, including without limitation, the right and power to (i) interpret the provisions of
this Agreement and (ii) make all determinations and computations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not redeem the Rights
or to amend the Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors in good faith shall (x) be final, conclusive and



38









 







binding
on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not
subject any member of the Board of Directors to any liability to the holders of the Rights or to
any other person.



     Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Stock of the Company) 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, registered holders of the Common Stock of the
Company).



     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 notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from the Agreement would adversely affect the
purpose or effect of the Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors.



     Section 32.
Governing Law.
This Agreement, each Right 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 to be
performed entirely within such State. The courts of the State of Delaware and of the United States
of America located in the State of Delaware (the “Delaware Courts”) shall have exclusive
jurisdiction over any litigation arising out of or relating to this Agreement and the transactions
contemplated hereby, and any Person commencing or otherwise involved in any such litigation shall
waive any objection to the laying of venue of such litigation in the Delaware Courts and shall not
plead or claim in any Delaware Court that such litigation brought therein has been brought in an
inconvenient forum. Notwithstanding the foregoing, the Company and the Rights Agent may mutually
agree to a jurisdiction other than Delaware for any litigation directly between the Company and the
Rights Agent arising out of or relating to this Agreement.



     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.



39









 





     Section 35. Force Majeure. Notwithstanding anything to the contrary contained herein, neither the
Company nor the Rights Agent shall be liable for any delay or failure in performance resulting
directly from any act or event beyond its reasonable control and without the fault or gross
negligence of the delayed or non-performing party that causes a sudden, substantial or widespread
disruption in business activities, including, without limitation, fire, flood, natural disaster or
act of God, strike or other industrial disturbance, war (declared or undeclared), embargo,
blockade, legal restriction, riot, insurrection, act of terrorism, disruption in transportation,
communications, electric power or other utilities, or other vital infrastructure or any means of
disrupting or damaging internet or other computer networks or facilities (each, a “Force
Majeure Condition”); provided, that such delayed or non-performing party shall use
reasonable commercial efforts to resume performance as soon as practicable. If any Force Majeure
Condition occurs, the party delayed or unable to perform shall give prompt written notice to the
other party, stating the nature of the Force Majeure Condition and any action being taken to avoid
or minimize its effect.


[Remainder of page intentionally left blank]



40









 





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



	 	 	 	 	 	 	 	 	 
	ATTEST:	 	INSULET CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Judith A. Preston
	 	By:
	 	/s/ Duane DeSisto	 	 
	 

	 	 

	 	Name:
	 	 

Duane DeSisto
	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	COMPUTERSHARE TRUST COMPANY, N.A.,

as Rights Agent	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ James Walsh
	 	By:
	 	/s/ Dennis Moccia	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Dennis Moccia	 	 
	 

	 	 	 	Title:
	 	Managing Director	 	 






 









 





Exhibit A




CERTIFICATE OF DESIGNATIONS




of




SERIES A JUNIOR PARTICIPATING CUMULATIVE




PREFERRED STOCK




of

INSULET CORPORATION




     Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Cumulative Preferred Stock” (the “Series A Preferred
Stock”), and the number of shares initially constituting such series shall be 40,000;
provided, however, that if more than a total of 40,000 shares of Series A Preferred
Stock shall be issuable upon the exercise of Rights (the “Rights”) issued pursuant to the
Shareholder Rights Agreement dated as of November 14, 2008, between the Corporation and
Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”), the Board of
Directors of the Corporation, pursuant to Section 151(g) of the General Corporation Law of the
State of Delaware, may direct by resolution or resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the provisions of Section 103 thereof,
providing for the total number of shares of Series A Preferred Stock authorized to be issued to be
increased (to the extent that the Certificate of Incorporation then permits) to the largest number
of whole shares (rounded up to the nearest whole number) issuable upon exercise of such Rights.



     Section 2. Dividends and Distributions.



     (A) (i) 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
shares of common stock 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) $1.00 or (b) subject to the provisions for adjustment hereinafter
set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other distributions



 









 




other than a dividend payable in shares of common stock or a subdivision of the outstanding
shares of common stock (by reclassification or otherwise), declared on the common stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. The multiple of cash and non-cash dividends declared on the common stock to which
holders of the Series A Preferred Stock are entitled, which shall be 10,000 initially but which
shall be adjusted from time to time as hereinafter provided, is hereinafter referred to as the
“Dividend Multiple.” In the event the Corporation shall at any time after November 14,
2008 (the “Rights Declaration Date”) (i) declare or pay any dividend on common stock
payable in shares of common stock, or (ii) 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 Dividend Multiple thereafter applicable to the determination of the amount of
dividends which holders of shares of Series A Preferred Stock shall be entitled to receive shall be
the Dividend Multiple applicable immediately prior to such event multiplied 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.




     (ii) Notwithstanding anything else contained in this paragraph (A), the Corporation shall, out
of funds legally available for that purpose, declare a dividend or distribution on the Series A
Preferred Stock as provided in this paragraph (A) immediately after it declares a dividend or
distribution on the common stock (other than a dividend payable in shares of common stock);
provided that, in the event no dividend or distribution shall have been declared on the common
stock during the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.



     (B) 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 of Series A Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix in accordance with applicable law 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 such number of days prior to the date
fixed for the payment thereof as may be allowed by applicable law.



2









 





     Section 3. Voting Rights. In addition to any other voting rights required by law,
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 10,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. The number of votes which a holder of a share of Series A
Preferred Stock is entitled to cast, which shall initially be 10,000 but which may be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the “Vote Multiple.”
In the event the Corporation shall at any time after the Rights Declaration Date (i) declare or pay
any dividend on common stock payable in shares of common stock, or (ii) 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 Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled shall be the Vote Multiple immediately prior to such event multiplied 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 or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of common stock and the holders of shares of any other capital
stock of this 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 otherwise required by applicable law or as set forth herein, 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 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:



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



     (ii) declare or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the 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) except as permitted in subsection 4(A)(iv) below, redeem, purchase or otherwise acquire
for consideration shares of any stock ranking on a parity (either as to dividends or upon



3









 




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




     (iv) purchase or otherwise acquire for consideration any shares of Series A Preferred Stock,
or any shares of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) 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 subsection (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 canceled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of preferred stock and may be reissued as part of a new series of
preferred stock to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.



     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation (voluntary
or otherwise), dissolution or winding up of the Corporation, no distribution shall be made (x) 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 an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, plus an
amount equal to the greater of (1) $10,000.00 per share or (2) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 10,000 times the aggregate
amount to be distributed per share to holders of common stock, or (y) to the holders 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 other 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 after the Rights Declaration Date (i) declare or pay any dividend on common stock
payable in shares of common stock, or (ii) 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 per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (x) 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



4









 




denominator of which is the number of shares of common stock that were outstanding immediately
prior to such event.




     Neither the consolidation of nor merging of the Corporation with or into any other corporation
or corporations, nor the sale or other transfer of all or substantially all of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 6.



     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of common stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series A Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of common stock is
changed or exchanged, plus accrued and unpaid dividends, if any, payable with respect to the Series
A Preferred Stock. In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare or pay any dividend on common stock payable in shares of common stock, or
(ii) 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. Redemption. The shares of Series A Preferred Stock shall not be
redeemable; provided, however, that the foregoing shall not limit the ability of
the Corporation to purchase or otherwise deal in such shares to the extent otherwise permitted
hereby and by law.



     Section 9. Ranking. Unless otherwise expressly provided in the Certificate of
Incorporation or a Certificate of Designations relating to any other series of preferred stock of
the Corporation, the Series A Preferred Stock shall rank junior to every other series of the
Corporation’s preferred stock previously or hereafter authorized, as to the payment of dividends
and the distribution of assets on liquidation, dissolution or winding up and shall rank senior to
the common stock.



     Section 10. Amendment. The Certificate of Incorporation and this Certificate of
Designations 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 two-thirds or more of the outstanding shares of
Series A Preferred Stock, voting separately as a class.



     Section 11. Fractional Shares. Series A Preferred Stock may be issued in whole
shares or in any fraction of a share that is one ten-thousandth (1/10,000th) of a share or any
integral multiple of such fraction, which shall entitle the holder, in proportion to such holder’s
fractional



5









 





shares, to exercise voting rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation may elect to make a cash payment as provided in the Rights Agreement for
fractions of a share other than one ten-thousandth (1/10,000th) of a share or any integral multiple
thereof.



6









 





Exhibit B




FORM OF RIGHT CERTIFICATE




Certificate No. R-______ Rights




     NOT EXERCISABLE AFTER NOVEMBER 15, 2018 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF INSULET CORPORATION, AT $0.001 PER RIGHT, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN INSULET CORPORATION AND COMPUTERSHARE
TRUST COMPANY, N.A., AS RIGHTS AGENT, DATED AS OF NOVEMBER 14, 2008 (THE “RIGHTS
AGREEMENT”). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.



Right Certificate




INSULET CORPORATION




     This certifies that                     , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Shareholder Rights Agreement dated as of November 14, 2008 (the
“Rights Agreement”) between Insulet Corporation (the “Company”) and Computershare
Trust Company, N.A., as Rights Agent (the “Rights Agent”), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to
the close of business on November 15, 2018 at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one ten-thousandth of a fully paid,
non-assessable share of the Series A Junior Participating Cumulative Preferred Stock (the
“Preferred Stock”) of the Company, at a purchase price of $                     per one ten-thousandth
of a share (the “Exercise Price”), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related Certificate duly executed. The
number of Rights evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Exercise Price per share set forth above,
are the number and Exercise Price as of                     , based on the Preferred Stock as
constituted at such date.



     Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person or Associate or Affiliate
thereof, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a
Person who, after such transfer, became an Acquiring Person or an Affiliate or Associate of an



7









 




Acquiring Person, such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.




     As provided in the Rights Agreement, the Exercise Price and the number of shares of Preferred
Stock or other securities which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the happening of certain events.



     This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates, which limitations of rights include
the temporary suspension of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal office
of the Company and the designated office of the Rights Agent and are also available upon written
request to the Company or the Rights Agent.



     This Right Certificate, with or without other Right Certificates, upon surrender at the office
or offices of the Rights Agent designated for such purpose, may be exchanged for another Right
Certificate or Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Preferred Stock as the Rights evidenced by the Right
Certificate or 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 Certificates for the number of whole Rights not exercised. If
this Right Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii) of the
Rights Agreement, the holder shall be entitled to receive this Right Certificate duly marked to
indicate that such exercise has occurred as set forth in the Rights Agreement.



     Under certain circumstances, subject to the provisions of the Rights Agreement, the Board of
Directors of the Company at its option may exchange all or any part of the Rights evidenced by this
Certificate for shares of the Company’s Common Stock or Preferred Stock at an exchange ratio
(subject to adjustment) specified in the Rights Agreement.



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Board of Directors of the Company at its option at a redemption price of
$0.001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors).



     The Company is not obligated to issue fractional shares of stock upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts). If the Company elects not to issue such fractional shares, in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.



     No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of shares of Preferred Stock, Common Stock or any




8












 




other securities of the Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.




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



     WITNESS the facsimile signature of the proper officers of the Company as a document under
corporate seal.



	 	 	 	 	 	 	 	 	 	 	 
	Attested:	 	 	 	INSULET CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

[Secretary or Assistant Secretary]
	 	 
	 	 	 	 

Name: Duane DeSisto
	 	 
	 

	 	 	 	 	 	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	COMPUTERSHARE TRUST COMPANY, N.A.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	Name:

	 	 

	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 







9









 








[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:                                                             



CERTIFICATE




     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) the Rights evidenced by this Right Certificate                      are                      are not being transferred
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined in the Rights Agreement); and



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



     Dated:                     ,                                              
               



     Signature




 









 








NOTICE




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















 








FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to




exercise the Right Certificate.)




To INSULET CORPORATION:



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



	 	 	 	 	 
	Please insert social security or other identifying taxpayer number:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 





(Please print name and address)




     If such number of Rights shall not be all the Rights evidenced by this Right Certificate or if
the Rights are being exercised pursuant to Section 11(a)(ii) of the Rights Agreement, a new Right
Certificate for the balance of such Rights shall be registered in the name of and delivered to:



	 	 	 	 	 
	Please insert social security or other identifying taxpayer number:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 





(Please print name and address)




     Dated:                     ,                                              
               



     Signature



Signature Guaranteed:                                                             















 








CERTIFICATE




     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) the Rights evidenced by this Right Certificate                      are                      are not being exercised by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined in the Rights Agreement); and



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



     Dated:                     ,                                              
               



     Signature













 





NOTICE




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