exv4w1



 






EXHIBIT 4.1




 





ALTEON INC.




and




AMERICAN STOCK TRANSFER & TRUST COMPANY




as Rights Agent




 






AMENDED AND RESTATED




STOCKHOLDER RIGHTS AGREEMENT




Dated as of July 27, 2005




 







 









 








Table of Contents




	 	 	 	 	 	 	 
	Section	 	 	 	Page
	Section 1.

	 	Certain Definitions
	 	 	1	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	6	 
	Section 3.

	 	Issue of Rights Certificates
	 	 	6	 
	Section 4.

	 	Form of Rights Certificates
	 	 	8	 
	Section 5.

	 	Countersignature and Registration
	 	 	9	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
	 	 	9	 
	Section 7.

	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8.

	 	Cancellation and Destruction of Rights Certificates
	 	 	11	 
	Section 9.

	 	Reservation and Availability of Capital Stock
	 	 	12	 
	Section 10.

	 	Preferred Stock Record Date
	 	 	13	 
	Section 11.

	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	13	 
	Section 12.

	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	21	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	21	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	24	 
	Section 15.

	 	Rights of Action
	 	 	25	 
	Section 16.

	 	Agreement of Rights Holders
	 	 	25	 
	Section 17.

	 	Rights Certificate Holder Not Deemed a Stockholder
	 	 	26	 
	Section 18.

	 	Concerning the Rights Agent
	 	 	26	 
	Section 19.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	27	 
	Section 20.

	 	Duties of Rights Agent
	 	 	27	 
	Section 21.

	 	Change of Rights Agent
	 	 	29	 
	Section 22.

	 	Issuance of New Rights Certificates
	 	 	30	 
	Section 23.

	 	Redemption and Termination
	 	 	31	 
	Section 24.

	 	Exchange
	 	 	31	 
	Section 25.

	 	Notice of Certain Events
	 	 	32	 
	Section 26.

	 	Notices
	 	 	33	 
	Section 27.

	 	Supplements and Amendments
	 	 	34	 
	Section 28.

	 	Successors
	 	 	34	 
	Section 29.

	 	Determinations and Actions by the Board of Directors, etc.
	 	 	34	 
	Section 30.

	 	Benefits of this Agreement
	 	 	35	 
	Section 31.

	 	Severability
	 	 	35	 
	Section 32.

	 	Governing Law
	 	 	35	 
	Section 33.

	 	Counterparts
	 	 	35	 
	Section 34.

	 	Descriptive Headings
	 	 	35	 
	Section 35.

	 	Certain Exceptions
	 	 	35	 






Exhibit A — Form of Amended Certificate of Designation

Exhibit B — Form of Rights Certificate

Exhibit C — Form of Summary of Rights




 









 








AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT




     This AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT, is effective as of July 27, 2005 (the
“Agreement”), between ALTEON INC., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company , as rights agent (the “Rights Agent”).



WITNESSETH




     WHEREAS, on July 20, 1995 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company (the “Board”) authorized and declared a dividend distribution of
one Right (a “Right”) for each share of Common Stock (as hereinafter defined) of the
Company outstanding at the close of business on August 11, 1995 (the “Record Date”), and
has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions hereof) for each share of Common Stock of the Company issued (whether originally
issued or delivered from the Company’s treasury) between the Record Date and the Distribution Date,
each Right initially representing the right to purchase one one-thousandth (1/1,000) of a share of
Series F Preferred Stock upon the terms and conditions hereinafter set forth (the
“Rights”);



     WHEREAS, the Company entered into a Stockholders Rights Agreement with Registrar and Transfer
Company, as Rights Agent, dated as of July 27, 1995 (the “Old Rights Agreement”), which
sets forth the description and terms of the Rights;



     WHEREAS, the Rights under the Old Rights Agreement are scheduled to expire upon the Close of
Business (as such term is defined in the Old Rights Agreement) on July 27, 2005;



     WHEREAS, the Board has determined it desirable and in the best interests of the Company and
its shareholders for the Company to amend the Old Rights Agreement to, among other things, extend
the Expiration Date (as such term is defined in the Old Rights Agreement);



     WHEREAS, the Board has determined that pursuant to Section 26 of the Old Rights Agreement,
prior to the Distribution Date (as such term is defined in the Old Rights Agreement) the Old Rights
Agreement may be amended and restated by the Company and the Rights Agent without the approval of
any holders of the Rights;



     WHEREAS, the Company desires to amend and restate in its entirety the Old Rights Agreement to
extend the Expiration Date (as such term is defined in the Old Rights Agreement) and to make
additional changes as recommended by the Board and the Company and the Rights Agent have executed
and delivered this Agreement;



     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 who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan or employee stock plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan; provided, however, that (i) if the Board of
Directors determines in good faith that a Person who would otherwise be an “Acquiring Person”
became inadvertently the Beneficial Owner of a number of shares of Common Stock such that the
Person would otherwise qualify as an “Acquiring Person” (including, without limitation, because (A)
such Person was unaware that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent
of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and without any intention of changing or influencing
control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring
Person” for any purposes of this Agreement unless and until such Person shall have failed to divest
itself, as soon as practicable (as determined, in good faith, by the Board of Directors), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no
longer otherwise qualify as an “Acquiring Person”; (ii) if, as of the date hereof or prior to the
first public announcement of the adoption of this Agreement, any Person is or becomes the
Beneficial Owner of 20% or more of the shares of Common Stock outstanding, such Person shall not be
deemed to be or to become an “Acquiring Person” unless and until such time as such Person shall,
after the first public announcement of the adoption of this Agreement, become the Beneficial Owner
of an additional 1% or more of the shares of Common Stock outstanding (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to
a split or subdivision of the outstanding Common Stock), unless, upon becoming the Beneficial Owner
of such additional shares of Common Stock, such Person is not then the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding; and (iii) no Person shall become an “Acquiring
Person” as the result of an acquisition of shares of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 20% or more of the shares of Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding by reason of such share acquisitions by the
Company and shall thereafter become the Beneficial Owner of an additional 1% or more of the shares
of Common Stock outstanding (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), then such Person shall be deemed to be an “Acquiring Person” unless upon becoming
the Beneficial Owner of such additional shares of Common Stock such Person does not beneficially
own 20% or more of the shares of Common Stock then outstanding. For all purposes of this
Agreement, any calculation of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act (as
such term is hereinafter defined).



     (b) “Act” shall mean the Securities Act of 1933, as amended.



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     (c) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement (the “Exchange Act”);
provided that, for the purpose of determining whether a Person is an “Affiliate” or
“Associate” of an executive officer of the Corporation, the definitions of “Affiliate” and
“Associate” shall not include any relative of such executive officer other than his or her spouse,
children or grandchildren.



     (d) “Agreement” shall mean this Stockholder Rights Agreement as originally executed or
as it may from time to time be supplemented or amended pursuant to the applicable provisions
hereof.



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



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




          (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act, or any
comparable or successor rule), including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own”, any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or




          (iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) and with respect to which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding, whether or not in
writing, for the purpose of acquiring, holding, voting (except pursuant to a revocable




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proxy as described in the proviso to subparagraph (ii) of this paragraph (e)) or disposing of
such securities of the Company (a joint filing of a Schedule 13D under the Exchange Act or any
comparable or successor report being deemed to be conclusive evidence of such an agreement,
arrangement or understanding); provided, however, that nothing in this paragraph
(e) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial

Owner” of, or to “beneficially own”, any securities acquired through such Person’s participation in
good faith in a firm commitment underwriting until the expiration of forty (40) days after the date
of such acquisition.




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




     (f) “Board” shall have the meaning set forth in the preamble of the Agreement.



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



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



     (i) “Common Stock” shall mean the voting common stock, $0.01 par value per share, of
the Company, except that “Common Stock” when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the management, of such
Person.



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



     (k) “Company” shall mean the Person named as the “Company” in the first paragraph of
this Agreement until a successor corporation shall have become such or until a Principal Party
shall assume, and thereafter be liable for, all obligations and duties of the Company hereunder,
pursuant to the applicable provisions of this Agreement, and thereafter “Company” shall mean such
successor corporation or Principal Party.



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



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



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



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



     (p) “Exchange Act” shall have the meaning set forth in Section 1(c) hereof.



     (q) “Exempt Issued Shares” shall have the meaning set forth in Section 35 hereof.



     (r) “Exempt Shares” shall have the meaning set forth in Section 35 hereof.



     (s) “Exempt Unissued Shares” shall have the meaning set forth in Section 35 hereof.



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



     (u) “Final Expiration Date” shall mean the close of business on July 27, 2015.



     (v) “Genentech” shall have the meaning set forth in Section 35 hereof.



     (w) “Genentech Preferred Stock” shall have the meaning set forth in Section 35 hereof.



     (x) “Initial Exercise Price” shall be $13.00.



     (y) “AMEX” shall mean The American Stock Exchange, Inc.



     (z) “Original Rights” shall have the meaning set forth in Section 1(e)(i) hereof.



     (aa) “Person” shall mean any natural person, firm, association, corporation, limited
liability company, partnership, trust or other entity or organization.



     (bb) “Preferred Stock” shall mean the Series F Preferred Stock, $0.01 par value per
share, of the Company having the terms set forth in the form of certificate of designation, as
amended and restated, attached hereto as Exhibit A.



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






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



     (ee) “Record Date” shall have the meaning set forth in the preamble of the Agreement.



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






     (gg) “Rights” shall have the meaning set forth in the preamble of the Agreement.



     (hh) “Rights Agent” shall mean the Person named as the “Rights Agent” in the first
paragraph of this Agreement until a successor Rights Agent shall have become such pursuant to the
applicable provisions hereof, and thereafter “Rights Agent” shall mean such successor Rights Agent.
If at any time there is more than one Person appointed by the Company as Rights Agent pursuant to
the applicable provisions of this Agreement, “Rights Agent” shall mean and include each such
Person.



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



     (jj) “Rights Dividend Declaration Date” shall have the meaning set forth in the
preamble of this Agreement.



     (kk) “Section 11(a)(ii) Event” shall mean the event described in Section 11(a)(ii)
hereof.



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



     (mm) “Section 13 Event” shall mean any event described in clauses (i), (ii) or (iii)
of Section 13(a) hereof.



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



     (oo) “Stock Acquisition Date” shall mean the first date of a public announcement or
disclosure (which, for purposes of this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.



     (pp) “Subsidiary” shall mean, with reference to any Person, including the Company, any
corporation of which an amount of voting securities sufficient to elect at least a majority of the
directors of such corporation is Beneficially Owned, directly or indirectly, by such Person, or
which is otherwise controlled by such Person.



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



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



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



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



     Section 3. Issue of Rights Certificates.



     (a) Until the earlier of (i) the Close of Business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record
Date, the Close of Business on the Record Date) or (ii) the Close of Business on the tenth Business
Day (or, if such tenth Business Day occurs before the Record Date, the Close of Business on the
Record Date), or such later date as may be determined by action of the Board
prior to such time as any Person becomes an Acquiring Person, after the date that a tender
offer or exchange offer, or an intention to make a tender offer or exchange offer, by any Person
(other



6









 







than the Company, any Subsidiary of the Company, any employee benefit plan or employee stock
plan of the Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof for the maximum number of shares that may be
purchased thereunder, such Person would be the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding (the earlier of (i) or (ii) being herein referred to as the
“Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names
of the holders of the Common Stock (which certificates for Common Stock 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 (including a transfer
to the Company). As soon as practicable after the Distribution Date and upon receipt of all
necessary information, the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the Distribution Date (other
than to any Acquiring Person or any Associate or Affiliate of an Acquiring Person) at the address
of such holder shown on the records of the Company, one or more rights certificates, in the form
specified in Section 4 hereof (the “Rights Certificates”), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made pursuant to this
Agreement, at the time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.



     (b) As promptly as practicable following the Record Date, the Company will send a copy of a
Summary of Rights, in substantially the form attached hereto as Exhibit C, by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the Close of Business on the
Record Date (other than to any Acquiring Person or any Associate or Affiliate of an Acquiring
Person) at the address of such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common Stock together with the Summary of
Rights and the registered holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration Date (as such term
is defined in Section 7 hereof), the transfer of any certificates representing shares of Common
Stock, with or without a copy of the Summary of Rights, shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such certificates.



     (c) Rights shall be issued in respect of all shares of Common Stock that are issued (whether
originally issued or from the Company’s treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Rights shall also be issued to the extent provided in
Section 22 in respect of all shares of Common Stock which are issued (whether originally issued or
from the Company’s treasury) after the Distribution Date and prior to the
Expiration Date. Certificates representing such shares of Common Stock in respect of which
Rights are issued pursuant to the first sentence of this Section 3(c) shall also be deemed to be



7









 







certificates for Rights, and commencing as soon as reasonably practicable following the date hereof
shall bear the following legend:




This certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Amended and Restated Stockholder Rights Agreement between Alteon
Inc. (the “Company”) and American Stock Transfer & Trust Company (the “Rights
Agent”) dated as of July 27, 2005, as it may be further amended 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 the Company.
Under certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, will 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 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, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. Notwithstanding the foregoing, the
omission of a legend shall not affect the enforceability of any part of this Agreement or the
rights of any holder of the Rights.




     Section 4. Form of Rights Certificates.



     (a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit
B hereto and may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate (but which do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or
trading market on which the Rights may from time to time be listed, or to conform to usage. Subject
to the provisions hereof, the Rights Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders thereof to purchase such number
of one one-thousandths of a share of Preferred Stock as shall be set forth therein at the price per
share set forth therein (such exercise price per one one-thousandth of a share hereinafter referred



8









 







to as the “Purchase Price”), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.



     Section 5. Countersignature and Registration.



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



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



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



     (a) Subject to the provisions of Section 7(e), Section 11(a)(ii) 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 Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitle such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights Certificate or Certificates



9









 







until the registered holder shall have properly completed and signed the certificate contained in
the form of assignment set forth on the reverse side of each such Rights 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 or the Rights Agent shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 7(e), Section 11(a)(ii) and Section
14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or
Certificates, as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates. The Rights Agent shall have no
duty or obligation to take any action under any Section of this Agreement which requires the
payment by a Rights holder of applicable taxes and governmental charges unless and until the Rights
Agent is satisfied that all such taxes and/or charges have been paid.



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



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



     (a) Except as otherwise provided herein, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase set forth on the
reverse side thereof and the certificate contained therein completed and duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of one one-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 exercisable, at or prior to the earlier of (i) 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 earliest of (i), (ii) or (iii) being herein referred to as the
“Expiration Date”).



     (b) The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to
the exercise of a Right shall initially be the Initial Exercise Price, and shall be subject
to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.



     (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase set forth on the reverse side thereof and the certificate contained therein
completed and duly executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price per one one-thousandth of a share of Preferred Stock (or other securities, cash
or other assets, as the case may be) to be purchased as set forth below and an



10









 







amount equal to any
applicable tax or charge, the Rights Agent shall, subject to Section 20(k) hereof, promptly (i)
requisition from any transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total number of one
one-thousandths of a share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered in such name or names as may
be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by
certified check, cashier’s check or bank draft payable to the order of the Company. In the event
that immediately prior to the occurrence of a Distribution Date, the number of shares of Common
Stock which are authorized by the Company’s Restated Certificate of Incorporation, as amended and
in effect at such time, but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, is not sufficient to permit exercise in full of the Rights in accordance
with their terms, the Company, acting by resolution of the Board, shall follow the same procedures
and may take any of the same actions in connection with the exercise of Rights under this Section
7(c) as are required or permitted to be followed or taken pursuant to Section 11(a)(iii) hereof
with respect to substitution of value in connection with the exercise of Rights under Section
11(a)(ii) hereof. The Company reserves the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, such number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.



     (d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.



     (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder of any
Rights Certificate upon the occurrence of any purported assignment or 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 Rights
Certificate surrendered for such assignment or 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 or the Rights Agent shall reasonably request.



     Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, and any Rights Certificate representing Rights that become null and void and nontransferable
pursuant to Section 7(e) surrendered for any purpose shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement.



11









 







The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof
to the Company.



     Section 9. Reservation and Availability of Capital 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 (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common Stock or other securities or
out of its authorized and issued shares held in its treasury), the number of shares of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock or other securities) that,
as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.



     (b) So long as the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock or other securities) issuable and deliverable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall use all reasonable efforts to
cause all shares reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.



     (c) The Company shall use all reasonable efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a Triggering Event in which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in accordance with this
Agreement, a registration statement under the Act, with respect to the Common Stock or other
securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to 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 set forth
in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become effective. In addition, if
the Company shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective. Upon any suspension of the
exercisability of the Rights referred to in this Section 9(c), 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. The Company shall
promptly provide the Rights Agent with copies of such announcements. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable and shall be void so long as
held by a holder in any jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such



12









 







jurisdiction shall not have been
obtained or be obtainable, the exercise thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.



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



     (e) The Company further covenants and agrees that, except as set forth in Section 6(a) hereof
and this Section 9(e), it will pay when due and payable any and all taxes and governmental charges
that may be payable in respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of Preferred Stock (or Common Stock or
other securities, as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any tax or charge that may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a number of one
one-thousandths of a share of Preferred Stock (or Common Stock or other securities, as the case may
be) in respect of a name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of
one one-thousandths of a share of Preferred Stock (or Common Stock or other securities, as the case
may be) in a name other than that of the registered holder upon the exercise of any Rights until
such tax or charge shall have been paid (any such tax or charge being payable by the holder of such
Rights Certificates at the time of surrender) or until it has been established to the Company’s
satisfaction that no such tax or charge is due.



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



     Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The
Purchase 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.



13









 





     (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 or
split the outstanding Preferred Stock, (C) combine or consolidate the outstanding Preferred Stock
into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, split, combination, consolidation
or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the
case may be, issuable on such date, shall be proportionately adjusted so that if a holder of Rights
after such time were to exercise that number of Rights (or fraction thereof) which would result in
the aggregate amount of the Purchase Price payable upon such exercise (at the Purchase Price then
in effect) being equal to the amount of the Purchase Price payable prior to such time upon exercise
of a Right, such holder would be entitled to receive the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which, if a Right had been exercised
immediately prior to such time and at a time when the Preferred Stock transfer books (or other
capital stock transfer books, as the case may be) of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
split, combination, consolidation or reclassification. If an event occurs that would require an
adjustment under both this 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 Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter as the “Section 11(a)(ii)
Event”), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Section 11(a)(ii) Event multiplied by the number of one one-thousandths of
a share of Preferred Stock for which a Right was exercisable immediately prior to such Section
11(a)(ii) Event, whether or not such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall
thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price
(as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Preferred
Stock, such number of shares of Common Stock as shall equal the result obtained by dividing the
Purchase Price (as so adjusted) by 50% of the Current Market Price per
share of the Common Stock (determined pursuant to Section 11(d) hereof) on the date of such
Section 11(a)(ii) Event; provided, however, that the Purchase Price (as so
adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall,
following the Section 11(a)(ii) Event, be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary,
from and after the Section 11(a)(ii) Event, any Rights that are beneficially owned by (x) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the Section
11(a)(ii) Event or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the Section 11(a)(ii) Event pursuant to
either (I) a transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (II)




14









 







a transfer which the Board has determined is part of a plan, arrangement
or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and
after the Section 11(a)(ii) Event, no Rights Certificate shall be issued pursuant to Section 3 or
Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of
this paragraph, and any Rights Certificate delivered to the Rights Agent that represents Rights
that are or have become void pursuant to the provisions of this paragraph shall be canceled. From
and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore
have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii).




          (iii) In the event that the number of shares of Common Stock which are authorized by the
Company’s Restated Certificate of Incorporation, as amended, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are 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 shall (A) determine the value of the shares of Common Stock issuable upon the
exercise of a Right (the “Current Value”), and (B) with respect to each Right, (subject to
Section 11(a)(ii)) make adequate provision to substitute, upon the exercise of a Right and payment
of the applicable Purchase Price, (1) cash, (2), a reduction in the Purchase Price (but in no event
shall the Purchase Price be less than the par value per share), (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units of shares, of preferred
stock which the Board has deemed to have the same value as shares of Common Stock (such shares of
Preferred Stock being referred to herein as “Common Stock Equivalents”)), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, as adjusted (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the Board based upon the advice
of a nationally recognized investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days following the
first occurrence of a Section 11(a)(ii) Event (the “Section 11(a)(ii) Trigger Date”), then
the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares or cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value
over (ii) the Purchase Price. If the number of shares of Common Stock that are authorized by the
Company’s Restated Certificate of Incorporation, as amended, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights, are not sufficient to permit the
exercise in full of any Rights and the Board determines in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full
of the Rights, the thirty (30) day period set forth above may be extended to the extent




15









 







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 thirty
(30) day period, as it may be extended, shall be referred to as the “Substitution Period”).
To the extent that the Company determines that some action need be taken pursuant to the preceding
provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii)
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 or to decide the appropriate form of distribution to be made
pursuant to such provisions and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect and the Company shall promptly provide the Rights Agent copies of
such announcements. For purposes of this Section 11(a)(iii), the value of each share of Common
Stock shall be the Current Market Price per share of the Common Stock (as determined pursuant to
Section 11(d) hereof) on the Section 11(a)(ii) Trigger Date and the per share or per unit value of
any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the
Common Stock on such date.




     (b) In case the Company shall fix a record date for the issuance of rights (other than the
Rights), options or warrants to all holders of Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within forty-five (45) calendar days after such record date)
Preferred Stock, shares having the same rights, privileges and preferences as the shares of
Preferred Stock (“Equivalent Preferred Stock”) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the Current Market Price per share of
Preferred Stock (as determined pursuant to Section 11(d) hereof) on such record date (except as
otherwise provided in Section 11(a) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the 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 or Equivalent Preferred Stock (or
the aggregate initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of additional
shares of Preferred Stock or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or all of which may be
in a form other than cash, the value of such noncash consideration shall be as determined in good
faith by the Board, whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights. 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 adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.



16









 





     (c) In case the Company shall fix a record date for 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 quarterly or other 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 subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market Price per share of
Preferred Stock (as determined pursuant to Section 11(d) hereof) on such record date, less the fair
market value (as determined in good faith by the Board whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of
the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share of Preferred Stock (as determined
pursuant to Section 11(d) hereof). Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would have been in effect if such record date had
not been fixed.



     (d) (i) For the purpose of any computation hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days immediately prior to but not including such date, and for the
purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the ten (10) consecutive Trading Days immediately following but not
including such date; provided, however, that in the event that the Current Market
Price per share of the Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) any dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common Stock (other than
Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to
the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set
forth above, after the ex-dividend date for such dividend or distribution, or the record date for
such subdivision,
combination, consolidation, reverse stock split or reclassification, then, and in each such
case, the Current Market Price 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 on, the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter market, as
reported by AMEX or such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock selected by the Board.
If on



17









 







any such date no market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used. The term “Trading
Day” shall mean a day on which the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open for the transaction of business or, if
the shares of Common Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded,
Current Market Price per share shall mean the fair value per share as determined in good faith by
the Board whose determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.



          (ii) For the purpose of any computation hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in
clause (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement,
the Current Market Price of one one-thousandth of a share of Preferred Stock shall be equal to the
Current Market Price of one share of Preferred Stock divided by 100.




          (iii) For the purpose of any computation hereunder, the value of any securities or assets
other than Common Stock or Preferred Stock shall be the fair value as determined in good faith by
the Board or by a nationally recognized investment banking firm selected by the Board, which
determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.




     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least
one percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.



     (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of such other shares so receivable



18









 







upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
hereof, 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
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-thousandths of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided herein.



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



     (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of 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 one-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-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made, and shall promptly give the Rights
Agent a copy of such announcement. The record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least
ten (10) days later than the date of the public
announcement. If Rights 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 Rights Certificates on such record date Rights 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 Rights Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.



19









 





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



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



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



     (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in their good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the Current
Market Price, (iii) issuance wholly for cash of any shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends, or (v) issuance of rights, options or warrants referred to 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 a Section 11(a)(ii)
Event, (i) consolidate with any other Person, (ii) merge with or into any other Person, 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 more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company or any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities outstanding or agreements in
effect that 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 the Person who constitutes, or would



20









 







constitute,
the “Principal Party” for 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.



     (o) The Company covenants and agrees that, after the earlier of the Stock Acquisition Date or
the Distribution Date, it will not, except as permitted by Section 23, Section 24 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 diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.



     (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the occurrence of such event.



     Section 12. Certificate of Adjusted Purchase 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 computations and
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, a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 26 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to prepare such certificate or statement or make such filings of the Company to prepare
such certificate or statement or make such filings or mailings shall not affect the validity of, or
the force or effect of, the requirement for such adjustments. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein contained and
shall have no duty with respect to 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, directly or indirectly, at any time after a Section 11(a)(ii) Event (i) the
Company shall consolidate with or shall merge into any other Person, (ii) any Person shall merge
with and into the Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common Stock shall be changed into
or exchanged for stock or other securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,



21









 







assets or earning
power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more wholly-owned
Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall
be made so that each holder of a Right (other than Rights which have become void pursuant to
Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise thereof at
the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof), in
accordance with the terms of this Agreement and in lieu of shares of Preferred Stock or Common
Stock of the Company, such number of validly authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims,
as shall equal the result obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the current per share market price of the
Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; provided, however,
that (A) the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof)
and the number of shares of Common Stock of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof
to reflect any events occurring in respect of the Common Stock of such Principal Party after the
occurrence of such consolidation, merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) 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 only to such Principal Party following the first
occurrence of a Section 13 Event; (D) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its common stock) in connection
with the consummation of any such transaction 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; and (E) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13
Event.



     (b) “Principal Party” shall mean



          (i) in the case of any transaction described in clause (i) or (ii) of the first sentence of
Section 13(a) hereof, the Person that is the issuer of any securities into which shares of Common
Stock are converted in such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation (or, if there is more than one such Person,
the Person the Common Stock of which has the greatest market value), or if the other party to the
merger does not survive the merger, the Person that does survive the merger (including the Company,
if it survives); and




          (ii) in the case of any transaction described in clause (iii) of the first sentence of Section
13(a) hereof, the Person that is the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions or, if each Person that is a party
to such transaction or transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets or earning power cannot
be determined, whichever of such Persons is the issuer of Common Stock having the greatest




22









 







market
value; provided, however, that in any such case, (1) if the common stock of such
Person is not at such time and has not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the common stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the common stock of two or more of which are and have been so
registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the common
stock having the greatest aggregate market value and (3) if the Common Stock of such Person is not
and has not been registered and such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a Subsidiary of both or all of such joint
venturers, and the Principal Parties in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or indirect interests in such Person bear to the
total of such interests.




     (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless
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 unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any Section 13 Event, the Principal Party will:



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




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




          (iii) use all reasonable efforts to list or obtain quotation of (or continue the listing or
quotation of) the Rights and the securities purchasable upon exercise of the Rights on a national
securities exchange or by an automated quotation services; and




          (iv) use all reasonable efforts to list or obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event,




23









 







the
Rights which have not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a) hereof.




     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(p) hereof, or to distribute Rights Certificates that
evidence fractional Rights. If the Company determines not to issue fractional Rights, there shall
be paid in lieu thereof to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by AMEX or such other system then in
use or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by the Board shall be
used.



     (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates that evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates, with regard to which such fractional shares of Preferred
Stock would otherwise be issuable, at the time such Rights are exercised as herein provided,
an amount in cash equal to the same fraction of the current market value of one one-thousandth of a
share of Preferred Stock. For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price per
share of Common Stock (as determined pursuant to Section 11(d)(ii) hereof), or if unavailable, the
appropriate alternative price, on the Trading Day immediately prior to the date of such exercise.



     (c) Following the occurrence of a Triggering Event, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section



24









 







14(c), the current market value of
one share of Common Stock shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof), or if unavailable, the appropriate alternative price, for the
Trading Day immediately prior to the date of such exercise.



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



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



     Section 15. Rights of Action. All rights of action in respect of this Agreement, other
than rights of action vested in the Rights Agent in Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such
holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights 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.



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



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



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



25









 







transfer
and with the appropriate forms of assignment and certificates duly completed and fully executed;



     (c) subject to Section 6(a) and Section 7(e) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates
or the associated Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 11(a)(ii) hereof, shall be required to 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 a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however, the
Company must use reasonable efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.



     Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of one one-thousandths of a share 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 Rights Certificate be construed
to confer upon the holder of any Rights 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 Rights Certificate shall have been exercised in accordance with the provisions
hereof.



     Section 18. Concerning the Rights Agent.



     (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation, execution, delivery,
amendment and administration of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction) for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this



26









 







Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability in the premises. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by the Company. The
provisions of this Section 18 and Section 20 below shall survive the termination of this Agreement,
the exercise or expiration of the Rights and the resignation or removal of the Rights Agent.



     (b) The Rights Agent shall be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons. The Rights Agent shall not
be deemed to have knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith unless and until it has received such notice in writing.



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



     (a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In
case at the time such successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the counter-signature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall have the full
force provided in the Rights 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 Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.



     Section 20. Duties of Rights Agent. The Rights Agent undertakes only the duties and
obligations imposed by this Agreement (and no implied duties and obligations) upon the



27









 







following
terms and conditions, by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:



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



     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of Current Market Price) be proved or established by the
Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman, the Chief Executive
Officer and President, the Chief Operating Officer, the Chief Financial Officer, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of,
any action taken, suffered or omitted to be taken 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 (each as determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction). Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or
damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the Rights Agent under
this Agreement will be limited to the amount of fees paid by the Company to the Rights Agent.



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



     (e) The Rights Agent shall not be under any responsibility or have any liability in respect of
the validity of this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any Rights 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 Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11 or Section 13 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 Rights Certificates after receipt of a certificate describing any such
adjustment furnished in accordance with Section 12); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of any



28









 







shares of
Preferred Stock or Common Stock to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Preferred Stock or Common Stock will, when so issued, be validly
authorized and issued, fully paid and non-assessable.



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



     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from the Chairman, the Chief Executive Officer and
President, the Chief Operating Officer, the Chief Financial Officer, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by
it in good faith and in accordance with instructions of any such officer.



     (h) The Rights Agent and any stockholder, affiliate, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though 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 Person.



     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct absent gross negligence, bad faith or willful misconduct (each as determined

by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction)
in the selection and continued employment thereof.



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



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



     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



29









 







in
writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock
by registered or certified mail, and to the holders of the Rights Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by any registered
holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights 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 Person organized and
doing business under the laws of the United States or any state thereof in good standing, which is
authorized under such laws to exercise stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 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 and the Preferred
Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.



     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions
of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock following the
Distribution Date (other than upon exercise of a Right) and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes, warrants or debentures issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights 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
Rights Certificate would be issued, and (ii) no such Rights Certificate



30









 







shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.



     Section 23. Redemption and Termination.



     (a) The Board may, at its option, at any time prior to a Section 11(a)(ii) Event, redeem all
but not less than all of the then outstanding Rights at a redemption price of $0.01 per Right, as
such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being hereinafter referred to as
the “Redemption Price” ). The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board in its sole discretion may establish.



     (b) The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price as defined in Section 11(d) hereof, of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by the Board, in the
exercise of its sole discretion, to be at least equivalent in value to the Redemption Price.



     (c) Immediately upon the action of the Board ordering the redemption of the Rights, and
without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board ordering the redemption of the Rights,
the Company shall give notice of such redemption to the Rights Agent in writing and the holders of
the then outstanding Rights by mailing such notice to all such holders at each holder’s last
address as it appears upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed duly given, whether or not the holder receives the
notice. Each such notice of the redemption will state the method by which the payment of the
Redemption Price will be made. In any case, failure to give such
notice by mail, or any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights.



     Section 24. Exchange.



     (a) At any time after a Section 11(a)(ii) Event, the Board may, at its option, exchange all or
part of the then outstanding and exercisable Rights (which (i) shall not include Rights that have
become null and void pursuant to Section 11(a)(ii) hereof and (ii) shall include, without
limitation, any Rights issued after the Distribution Date in connection with the exercise of
options pursuant to any employee benefit plan or stock option plan of the Company or any Subsidiary
of the Company) for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any of its Subsidiaries,
any employee benefit plan or stock option plan of the Company or any of its Subsidiaries or any
Person organized, appointed or established by the Company or any of its



31









 







Subsidiaries for or
pursuant to the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
From and after the occurrence of a Section 13 Event, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercised only in accordance with
Section 13 and may not be exchanged pursuant to this Section 24(a).



     (b) Immediately upon the action of the Board electing to exchange any Rights pursuant to
Section 24(a) and without any further action and without any notice, the right to exercise such
Rights will terminate and thereafter the only right of the holders of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly thereafter give written notice
of such exchange to the Rights Agent and the holders of the Rights to be exchanged in the manner
set forth in Section 26; 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
for Rights will be effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to Section 11(a)(ii)) held by each holder of
Rights.



     (c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
Common Stock Equivalents (as defined in Section 11(a)(iii)) for shares of Common Stock exchangeable
for Rights, at the initial rate of one Common Stock Equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and voting rights of Common
Stock Equivalents pursuant to the terms thereof, so that each Common Stock Equivalent delivered in
lieu of each share of Common Stock shall have essentially the same dividend, liquidation and voting
rights as one share of Common Stock.



     (d) In the event that the number of shares of Common Stock which are authorized by the
Company’s Restated Certificate of Incorporation, as amended, but not outstanding or reserved for
issuance are not sufficient to permit an exchange of Rights as contemplated by this Section 24, the
Company shall take all such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights.



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



     Section 25. Notice of Certain Events.



32









 





     (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 quarterly 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 any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of
related transactions, of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company or any of
its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, to the extent feasible, in
accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the shares of
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 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 Preferred
Stock, whichever shall be the earlier.



     (b) In case any Section 11(a)(ii) Event or Section 13 Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate and to the Rights Agent, and 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) or Section 13 hereof and (ii) all references in the
preceding paragraph to Common Stock shall, to the extent appropriate, also be deemed thereafter to
refer to other securities.



     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 Rights Certificate (or, prior to the Distribution
Date, of the Common Stock) to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) or by facsimile transmission as follows:


Alteon Inc.

6 Campus Drive

Parsippany, NJ 07054

Attention: President and Chief Executive Officer



33









 







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 Rights Certificate (or, prior to the
Distribution Date, of the Common Stock) to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) or by facsimile transmission as follows:



American Stock Transfer & Trust Company

59 Maiden Lane, Plaza Level

New York, NY 10038


Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) 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. Except as provided in the penultimate
sentence of this Section 27, for so long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the approval of any holders of the
Rights. At any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent shall if the Company
so directs, supplement or amend this Agreement without the approval of any holders of Rights,
provided that no such supplement or amendment may (a) adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), (b) cause this Agreement again to become amendable other than in
accordance with this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment,
provided that any supplement or amendment that does not amend Sections 18, 19, 20 or 21
hereof in a manner adverse to the Rights Agent shall become effective immediately upon execution by
the Company, whether or not also executed by the Rights Agent.



     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, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the provisions of the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and
Regulations under the Exchange Act. The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically granted



34









 







to the Board
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 deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or not redeem the Rights
or, to amend this Agreement). All such actions, calculations, interpretations and determinations
which are done or made by the Board in good faith, shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other Persons.



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



     Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, 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.



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



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



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



     Section 35. Certain Exceptions. For purposes of this Agreement and subject to the
following sentence, neither Genentech, Inc. (“Genentech”) nor its Affiliates (which term
shall, for purposes of this Section 35 only, have the meaning given it below) shall be deemed to be
a Beneficial Owner of Common Stock which are (i) issuable (but unissued) upon conversion of the
Company’s Series G Preferred Stock or Series H Preferred Stock (collectively, the “Genentech
Preferred Stock”) or (ii) issued upon conversion of the Preferred Stock (the Common Stock
referred to in phrase (i) being referred to as the “Exempt Unissued Shares” and the Common
Stock referred to in phrase (ii) being referred to as the “Exempt Issued Shares” and such
shares



35









 







being referred to collectively as the “Exempt Shares”). Genentech and its
Affiliates shall not be deemed to be the Beneficial Owners of the Exempt Issued Shares only if, and
for so long as, the total number of Common Stock (excluding Exempt Unissued Shares and Exempt
Shares issued upon conversion of the Preferred Stock at the option of the Company) of which
Genentech, its Affiliates and any “group” (within the meaning of Rule 13d-5 promulgated pursuant to
the Exchange Act) of which Genentech or any of its Affiliates is a member would be deemed to be the
Beneficial Owner does not exceed forty percent (40%) of the Company’s issued and outstanding Common
Stock, provided that any increase in the percentage of Common Stock Beneficially
Owned by Genentech or an Affiliate or a group of which Genentech or any of its Affiliates is a
member solely as the result of a reduction in the Company’s outstanding Common Stock shall be
disregarded for purposes of determining such forty percent (40%) Beneficial Ownership. Common
Stock which would be Exempt Issued Shares but for the preceding sentence shall be treated as
Beneficially Owned for purposes of this Agreement for so long as they are not eligible for the
exemption provided by the preceding sentence. For purposes of this Section 35 only, “Affiliate”
shall mean an affiliate (as such term is defined in Rule 405 promulgated under the Act) of
Genentech, provided, however, that an affiliate of Genentech which is not
controlled (within the meaning of Rule 405) by Genentech shall not be deemed to be an Affiliate
unless such affiliate files statements regarding the securities of the Company pursuant to
Regulation 13D-G under the Exchange Act and provided, further, that neither
Genentech nor its Affiliate(s) shall be deemed to be a member of a group unless a member of such
group has filed statements regarding the securities of the Company pursuant to Regulation 13D-G
under the Exchange Act stating that Genentech or its Affiliate(s) is a member of such group.



36









 





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



	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	ALTEON INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Mary Phelan	 	 	 	By:	 	Kenneth I. Moch
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Mary Phelan
	 	 	 	 	 	Kenneth I. Moch
	 

	 	Title: Director of Finance and Financial
Reporting
	 	 	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 	 	 	 	 
	Attest:	 	 	 	AMERICAN STOCK TRANSFER
& TRUST COMPANY
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Susan Silber	 	 	 	By:	 	Herbert J. Lemmer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Susan Silber
	 	 	 	 	 	Name: Herbert J. Lemmer
	 

	 	Title: Assistant Secretary
	 	 	 	 	 	Title: Vice President






37









 






EXHIBIT A




AMENDED CERTIFICATE OF THE VOTING POWERS,

DESIGNATIONS, PREFERENCES AND RELATIVE

PARTICIPATING, OPTIONAL AND OTHER SPECIAL

RIGHTS AND QUALIFICATIONS, LIMITATIONS

OR RESTRICTIONS OR SERIES F

PREFERRED STOCK OF

ALTEON INC.




 






($.01 Par Value)




Pursuant to Section 151 of the

General Corporation Law of the State of Delaware




 






     Pursuant to Section 151 of the General Corporation Law of the State of Delaware, Alteon Inc.
(the “Corporation”) organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:



     That, pursuant to the authority conferred upon the Board of Directors of the Corporation by
Article Fifth of the Restated Certificate of Incorporation of the Corporation (the “Certificate of
Incorporation”), the Board of Directors of the Corporation on July 15, 2005, adopted the following
resolution, no shares of the Series F Preferred Stock having been issued, amending the provisions
of the Series F Preferred Stock:



     RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation
in accordance with the provisions of the Certificate of Incorporation of the Corporation, the
designation and number of shares thereof an the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions of the Series F Preferred Stock of the Corporation are
amended and restated as follows:



     SECTION 1. Designation and Number of Shares. The shares of such series shall be
designated as “Series F Preferred Stock” (the “Series F Preferred Stock”), par value $0.01 per
share. The number of shares initially constituting the Series F Preferred Stock shall be 400,000;
provided, however, that, if more than a total of 400,000 shares of Series F Preferred Stock shall
be issuable upon the exercise of Rights (the “Rights”) issued pursuant to the Stockholders Rights
Agreement dated as of July 27, 1995, between the Corporation and Registrar and Transfer Company, as
Rights Agent, as amended by the Amended and Restated Stockholder Rights



A-1









 







Agreement dated as of July 27, 2005 between the Corporation and American Stock Transfer & Trust
Company, 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, shall 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 F 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 or Distributions.



          (a) Subject to the prior and superior rights of the holders of shares of any other series of
Preferred Stock or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series F Preferred Stock with respect to dividends, the holders of shares of the
Series F Preferred Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation legally available therefore, (1) quarterly
dividends payable in cash on the last day of each fiscal quarter in each year, or such other dates
as the Board of Directors of the Corporation shall approve (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 a fraction of a share of Series F Preferred Stock, in the
amount of $.01 per whole share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series F Preferred Stock pursuant to the following clause (2) 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 F Preferred Stock (the
total of which shall not, in any event, be less than zero) and (2) dividends payable in cash on the
payment date for each cash dividend declared on the Common Stock in an amount per whole share
(rounded to the nearest cent) equal to the Formula Number (as hereinafter defined) then in effect
times the cash dividends then to be paid on each share of Common Stock. In addition, if the
Corporation shall pay any dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or distributions solely in
shares of Common Stock), then, in each such case, the Corporation shall simultaneously pay or make
on each outstanding whole share of Series F Preferred Stock a dividend or distribution in like kind
equal to the Formula Number then in effect times such dividend or distribution on each share of the
Common Stock. As used herein, the “Formula Number” shall be 1,000; provided, however, that, if at
any time after July 20, 1995, the Corporation shall (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock or make any distribution on the Common Stock in share of
Common Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of Common Stock
into a larger number of shares of Common Stock or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock, into a smaller number of shares of Common Stock,
then in each such event the Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction, the numerator of which
is the number of shares of Common Stock that are outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that are outstanding immediately prior
to such event (and rounding the result to the nearest whole number); and provided further, that, if
an any time after July 20, 1995, the Corporation shall




A-2









 








issue any shares of its capital stock in a merger, reclassification, or change of the outstanding
shares of Common Stock, then in each such event the Formula Number shall be appropriately adjusted
to reflect such merger, reclassification or change so that each share of Preferred Stock continues
to be the economic equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.




          (b) The Corporation shall declare a dividend or distribution on the Series F Preferred Stock
as provided in Section 2(a) immediately prior to or at the same time it declares a dividend or
distribution on the Common Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or distribution (other than a dividend or
distribution in shares of Common Stock) 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 $.01 per share on the Series F Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a record
date for the determination of holders of shares of Series F Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the same as the record date
for corresponding dividend or distribution on the Common Stock.




          (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series F
Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the date of
original issue of such shares of Series F Preferred Stock; provided, however, that dividends on
such shares which are originally issued after the record date for the determination of holders of
shares of Series F Preferred Stock entitled to receive a quarterly dividend and on or prior to the
next succeeding Quarterly Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing, dividends on shares of
Series F Preferred Stock which are originally issued prior to the record date for the determination
of holders of shares of Series F Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative from and after the last
day of the fiscal quarter next preceding the date of original issuance of such shares. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series F 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.




          (d) So long as any shares of the Series F Preferred Stock are outstanding, no dividends or
other distributions shall be declared, paid or distributed, or set aside for payment or
distribution, on the Common Stock unless, in each case, the dividend required by this Section 2 to
be declared on the Series F Preferred Stock shall have been declared.




          (e) The holders of the shares of Series F Preferred Stock shall not be entitled to receive any
dividends or other distribution except as provided herein.




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



A-3









 





          (a) Each holder of Series F Preferred Stock shall be entitled to a number of votes equal to
the Formula Number then in effect, for each share of Series F Preferred Stock held of record on
each matter on which holders of the Common Stock or stockholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any holding period or other
requirement to vote a greater number of shares is satisfied).




          (b) Except as otherwise provided herein or by applicable law, the holders of shares of Series
F Preferred Stock and the holders of shares of Common Stock shall vote together as one class for
the election of directors of the Corporation and on all other matters submitted to a vote of
stockholders of the Corporation.




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




          (d) Except as provided herein, in Section 11 or by applicable law, holders of Series F
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
authorizing or taking any corporate action.




     SECTION 4. Certain Restrictions.



          (a) Whenever quarterly dividends or other dividends or distributions payable on the Series F
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all




A-4









 








accrued and unpaid dividends and distributions, whether or not declared, on shares of Series F
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 F 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 F Preferred Stock, except dividends paid ratably on the Series F Preferred Stock and all
such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;



               (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series F
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 F Preferred Stock; or



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



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




     SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series F Preferred Stock unless, prior thereto, the holders of shares of Series F
Preferred Stock shall have received an amount equal to the 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 (x) $.01 per whole share or (y) an aggregate amount per share equal to the
Formula Number then in effect times the aggregate amount to be distributed per share to holders of
Common Stock or (2) to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series F Preferred Stock, except distributions
made ratably on the Series F Preferred Stock and all other such parity stock in



A-5









 







proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.



     SECTION 6. 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 or any other property, then in any
such case the then outstanding shares of Series F Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula Number then in effect
times the aggregate amount of stock, securities, cash or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is exchanged or changed. In the
event both this Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.



     SECTION 7. No Redemption; No Sinking Fund.



          (a) The shares of Series F Preferred Stock shall not be subject to redemption by the
Corporation or at the option of any holder of Series F Preferred Stock except as set forth in the
Certificate of Incorporation of the Corporation; provided, however, that the Corporation may
purchase or otherwise acquire outstanding shares of Series F Preferred Stock in the open market or
by offer to any holder or holders of shares of Series F Preferred Stock.




          (b) The shares of Series F Preferred Stock shall not be subject to or entitled to the
operation of a retirement or sinking fund.




     SECTION 8. Ranking. The Series F Preferred Stock shall rank junior to all other series
of Preferred Stock of the Corporation, unless the Board of Directors shall specifically determine
otherwise in fixing the powers, preferences and relative, participating, optional and other special
rights of the shares of such series and the qualifications, limitations and restrictions thereof.



     SECTION 9. Fractional Shares. The Series F Preferred Stock shall be issuable upon
exercise of the Rights issued pursuant to the Rights Agreement in whole shares or in any fraction
of a share that is one one-thousandth (1/1,000ths) of a share of any integral multiple of such
fraction which shall entitle the holder, in proportion to such holder’s fractional shares, to
receive dividends, exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series F Preferred Stock. In lieu of fractional shares, the
Corporation, prior to the first issuance of a share or a fraction of a share of Series F Preferred
Stock, may elect (1) to make a cash payment as provided in the Rights Agreement for fractions of a
share other than one one-thousandth (1/1,000th) of a share or any integral multiple thereof or (2)
to issue depository receipts evidencing such authorized fraction of a share of Series F Preferred
Stock pursuant to an appropriate agreement between the Corporation and a depository selected by the
Corporation; provided that such agreement shall provide that the holders of such depository
receipts shall have all the rights, privileges and preferences to which they are entitled as
holders of the Series F Preferred Stock.



     SECTION 10. Reacquired Shares. Any shares of Series F Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled



A-6









 







promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of Directors pursuant
to the provisions of Article Fifth of the Certificate of Incorporation.



     SECTION 11. Amendment. None of the powers, preferences and relative, participating,
optional and other special rights of the Series F Preferred Stock as provided herein or in the
Certificate of Incorporation shall be amended in any manner which would alter or change the powers,
preferences, rights or privileges of the holders of Series F Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least 66-2/3% of the outstanding shares
of Series F Preferred Stock, voting as a separate class; provided, however, that no such amendment
approved by the holders of at least 66-2/3% of the outstanding shares of Series F Preferred Stock
shall be deemed to apply to the powers, preferences, rights or privileges of any holder of shares
of Series F Preferred Stock originally issued upon exercise of the Rights after
the time of such approval without the approval of such holder.



     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed in its
corporate name on this 27th day of July 2005.



	 	 	 	 	 
	 	 	Alteon Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: Kenneth I. Moch
	 	 	Title: Chairman and CEO





Attest:



Name: Mary Phelan

Title: Director of Finance and Financial Reporting




A-7









 








EXHIBIT B




[FORM OF RIGHTS CERTIFICATE]




			
	 	 	 
	Certificate No. R-
	 	                     Rights






     NOT EXERCISABLE AFTER JULY 27, 2015 OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID.



Rights Certificate




ALTEON INC.




     This Rights Certificate certifies that                                                             , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which entitles the holder
thereof, subject to the terms, provisions and conditions of the Amended and Restated Stockholder
Rights Agreement, dated as of July 27, 2005 (the “Rights Agreement”), between Alteon Inc., a
Delaware corporation (the “Company”), and American Stock Transfer & Trust Company (the “Rights
Agent”), to purchase from the Company after the Distribution Date (as such term is defined in the
Rights Agreement) and at any time prior to the Expiration Date (as such term is defined in the
Rights Agreement) at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series F
Preferred Stock (the “Preferred Stock”) of the Company, at a purchase price of $13.00 per one
one-thousandth of a share (the “Purchase Price”), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of                                         , based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.



     Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Rights Agreement.



     Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate of
an Acquiring Person), 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 Associate or
Affiliate of an Acquiring Person), such Rights shall become null and void and no holder hereof



B-1









 







shall have any right with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.



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



     This Rights 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 Rights 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
office of the Company and are also available upon written request to the Company.



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



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at the option of the Board at a redemption price of $0.01 per Right
at any time prior to a Section 11(a)(ii) Event.



     No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral-multiples of one one-thousandth of
a share of Preferred Stock), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.



     No holder of this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything contained in
the 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 Rights Certificate shall have been exercised as
provided in the Rights Agreement.



B-2









 





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



     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal by its authorized officers.



Dated:




	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	ALTEON INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	 	 	Kenneth I. Moch,
	Title:

	 	 	 	 	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMERICAN STOCK TRANSFER &
TRUST COMPANY	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	Authorized Signature	 	 	 	 	 	 






B-3









 






[Form of Reverse Side of Rights Certificate]




FORM OF ASSIGNMENT




(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)




	 	 	 
	FOR VALUE RECEIVED
	 	 
	 

	 	 





	 	 	 
	hereby sells, assigns and transfers unto
	 	 
	 

	 	 





 




(Please print name and address of transferee)




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




Dated:





	 	 	 	 	 
	 	
Signature

 	 
	Signature Guaranteed:	 	 





B-4









 








Certificate





     The undersigned hereby certifies by checking the appropriate boxes that:



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



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



Dated:




	 	 	 	 	 
	 	
Signature

 	 
	Signature Guaranteed:	 	 




NOTICE





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



B-5









 





FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to

exercise Rights represented by the

Rights Certificate.)



To: ALTEON INC.:




     The undersigned hereby irrevocably elects to exercise                      Rights represented by this Rights
Certificate to purchase the shares or portion thereof 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 and delivered to:



Please insert social security

or other identifying number



 





 




(Please print name and address)




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



Please insert social security

or other identifying number



 





 




(Please print name and address)




Dated:




	 	 	 	 	 
	 	
Signature

 	 
	Signature Guaranteed:	 	 





B-6









 








Certificate





     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) the Rights evidenced by this Rights 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 an
Acquiring Person (as such terms are defined in the Rights Agreement); and



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



Dated:




	 	 	 	 	 
	 	
Signature

 	 
	Signature Guaranteed:	 	 





NOTICE





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



B-7









 





EXHIBIT C




SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK




     On July 20, 1995 the Board of Directors of Alteon Inc. (the “Company”) declared a dividend of
one preferred stock purchase right (a “Right”) for each outstanding share of the Company’s voting
common stock, $.01 par value (the “Common Stock”) to stockholders of record at the close of
business on August 11, 1995 (the “Record Date”). Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of Series F Preferred Stock, $.01 par value
per share (the “Preferred Stock”), at a purchase price, which has been recently adjusted, of $13.00
in cash (the “Purchase Price”), subject to further adjustment. The description and terms of the
Rights are set forth in an Amended and Restated Stockholder Rights Agreement (the “Rights
Agreement”) between the Company and American Stock Transfer & Trust Company, as Rights Agent.



     Initially, the Rights will be attached to all Common Stock certificates representing shares
then outstanding, and no separate certificates for Rights will be distributed. The Rights will
separate from the Common Stock and a “Distribution Date” will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or associated persons (an
“Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of the Company’s Common Stock (the “Stock Acquisition Date”) or (ii)
10 business days following the commencement of a tender offer or exchange offer that may result in
a person or group beneficially owning 20% or more of the outstanding shares of the Company’s Common
Stock.



     Until the Distribution Date (or earlier redemption or expiration of the Rights), (i) the
Rights will be evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock outstanding, even without such
notation, will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.



     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on July 27, 2015, unless earlier redeemed by the Company as described below.



     As soon as practicable after the Distribution Date, separate certificates evidencing the
Rights (“Rights Certificates”) will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date (other than to any Acquiring Person or any associate or
affiliate of an Acquiring Person), and thereafter, such separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the Board and except in connection with
shares of Common Stock issued after the Distribution Date upon the exercise of employee stock
options, under other employee stock benefit plans, or upon the conversion of convertible
securities, only shares of Common Stock issued prior to the Distribution Date will be issued with
Rights.



C-1









 





     In the event any Person becomes an Acquiring Person, also known as a “Section 11(a)(ii)
Event”, each holder of a Right will thereafter have the right to receive, upon exercise, that
number of shares of Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) which equals the exercise price of the Right divided by one-half of the current
market price (as defined in the Rights Agreement) of the Common Stock at the date of the occurrence
of the event. Notwithstanding any of the foregoing, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by an Acquiring Person
will be null and void.



     In the event that, at any time following a Section 11(a)(ii) Event, (i) the Company is
acquired in a merger or other business combination transaction or (ii) more than 50% of the
Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the right to receive,
upon exercise, that number of shares of common stock of the acquiring company which equals the
exercise price of the Right divided by one-half of the current market price (as defined in the
Rights Agreement) of such common stock at the date of the occurrence of the event. The events set
forth in this paragraph and in the preceding paragraph are referred to as the “Triggering Events.”



     At any time after the occurrence of a Section 11(a)(ii) Event, the Board may exchange the
Rights (other than Rights owned by an Acquiring Person which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one Common Stock Equivalent (as defined
in the Rights Agreement), per Right (subject to adjustment).



     The Purchase Price payable, and the number of units of Preferred Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).



     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a share of Preferred
Stock) will be issued and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the date of exercise.



     In general, the Company may redeem the Rights in whole, but not in part, at any time before a
Section 11(a)(ii) Event, at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board). Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 per Right redemption price. The redemption price is payable in cash,
stock or other consideration deemed appropriate by the Board.



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



     Subject to certain exceptions, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to such time as the Rights are no longer redeemable.



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an exhibit to the Company’s Amended Registration of Certain Classes of Securities Pursuant to
Section 12(b) or (g) on Form 8-A, dated and filed on July 27, 2005. A copy of the Rights Agreement
is available free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which
is incorporated herein by reference.





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