exv4w1






Exhibit 4.1




MINDSPEED TECHNOLOGIES, INC.




and




MELLON INVESTOR SERVICES LLC




as Rights Agent




SECTION 382 RIGHTS AGREEMENT




Dated as of August 9, 2009









 









 











TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	 
	Section 1.

	 	Certain Definitions
	 	 	1	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	6	 
	Section 3.

	 	Issuance 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
	 	 	19	 
	Section 13.

	 	Reserved
	 	 	19	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	19	 
	Section 15.

	 	Rights of Action
	 	 	20	 
	Section 16.

	 	Agreement of Rights Holders
	 	 	21	 
	Section 17.

	 	Rights Certificate Holder Not Deemed a Stockholder
	 	 	21	 
	Section 18.

	 	Concerning the Rights Agent
	 	 	21	 
	Section 19.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	22	 
	Section 20.

	 	Duties of Rights Agent
	 	 	22	 
	Section 21.

	 	Change of Rights Agent
	 	 	24	 
	Section 22.

	 	Issuance of New Rights Certificates
	 	 	25	 
	Section 23.

	 	Redemption and Termination
	 	 	25	 
	Section 24.

	 	Exchange
	 	 	26	 
	Section 25.

	 	Notice of Certain Events
	 	 	27	 
	Section 26.

	 	Notices
	 	 	28	 
	Section 27.

	 	Supplements and Amendments
	 	 	28	 
	Section 28.

	 	Successors
	 	 	29	 
	Section 29.

	 	Determinations and Actions by the Board of Directors, etc
	 	 	29	 
	Section 30.

	 	Benefits of this Agreement
	 	 	29	 
	Section 31.

	 	Severability
	 	 	29	 
	Section 32.

	 	Governing Law
	 	 	29	 
	Section 33.

	 	Counterparts
	 	 	30	 
	Section 34.

	 	Descriptive Headings
	 	 	30	 






 









 





TABLE OF CONTENTS

(continued)






	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	 
	Exhibit A.

	 	Form of Rights Certificate
	 	 	A-1	 
	Exhibit B.

	 	Form of Summary of Rights
	 	 	B-1	 
	Exhibit C

	 	Certificate of Designation
	 	 	C-1	 








ii









 








SECTION 382 RIGHTS AGREEMENT




     SECTION 382 RIGHTS AGREEMENT, dated as of August 9, 2009 (the “Agreement”), between
Mindspeed Technologies, Inc., a Delaware corporation (the “Company”), and Mellon Investor
Services LLC, a New Jersey limited liability company, as rights agent (the “Rights Agent”).



     WHEREAS, the Company has generated NOLs (as defined below) for United States federal income
tax purposes, and such NOLs may potentially provide valuable tax benefits to the Company that could
be curtailed or lost if the Company were to undergo an “ownership change” within the meaning of
Section 382 of the United States Internal Revenue Code of 1986, as amended from time to time (the
“Code”), and the Treasury Regulations (as defined below), and accordingly the Company
desires to help preserve the ability to utilize fully such NOLs and certain other tax benefits and,
in furtherance of such objective, the Company desires to enter into this Agreement; and



     WHEREAS, effective August 9, 2009 (the “Rights Dividend Declaration Date”), the Board
of Directors (as defined below) of the Company (i) authorized and declared a dividend of one right
(“Right”) for each share of Common Stock, par value $0.01 per share, of the Company (the
“Company Common Stock”) outstanding at the Close of Business on August 31, 2009 (the
“Record Date”), and (ii) authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant hereto) for each share of Company Common Stock issued between the
Record Date and the earlier of the Distribution Date and the Expiration Date and, in certain
circumstances, for each share of Company Common Stock issued after the Distribution Date but before
the Expiration Date; and



     WHEREAS, each Right initially represents the right to purchase, upon the terms and subject to
the conditions hereinafter set forth, one Unit of Series B Junior Participating Preferred Stock;



     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 4.9% or more of the
Company Stock (as defined below) then outstanding. Notwithstanding the foregoing:





          (i) an “Acquiring Person” shall not include any of the following:




          (A) the Company;




          (B) any Subsidiary of the Company;




          (C) any employee benefit plan maintained by the Company or any of its
Subsidiaries;




          (D) any trustee or fiduciary with respect to such employee benefit plan acting
in such capacity or a trustee or fiduciary holding Company Stock for the purpose of
funding any such plan;




          (E) any Person whose Beneficial Ownership (together with all Affiliates and
Associates of such Person) of 4.9% or more of the then-outstanding Company Stock
would not, as determined by the Board of Directors in its sole discretion,
jeopardize or endanger the availability to the Company of its NOLs;
provided, however, that a Person shall cease to be an Exempt Person
(as defined below) pursuant to this subclause (E) if the Board of Directors, in its
sole discretion, makes a contrary determination with respect to the effect of such
Person’s Beneficial Ownership (together with all Affiliates and Associates of such
Person) with respect to



1









 







the availability to the Company of its NOLs; and provided,
further, that a Person shall cease to be an Exempt Person pursuant to this
subclause (E) as of the date that such Person (together with all Affiliates and
Associates of such Person) ceases to beneficially own 4.9% or more of the then-
outstanding Company Stock; and




          (F) any Person that (together with all Affiliates and Associates of such
Person) beneficially owns, as of the close of business on the date hereof, 4.9% or
more of the outstanding Company Stock; provided, however, that any
such Person shall be deemed pursuant to this subclause (F) to be an Exempt Person
only for so long as it (together with all Affiliates and Associates of such Person)
beneficially owns no more than the amount of Company Stock that it (together with
all Affiliates and Associates of such Person) owned on the date hereof, and such a
Person shall be deemed pursuant to this subclause (F) to be an Exempt Person only
for so long as such Person (together with all Affiliates and Associates of such
Person) does not acquire Beneficial Ownership of additional Company Stock
constituting one-half of one percent (0.5%) or more of the Company Stock outstanding
as of the date hereof (adjusted for any stock splits, subdivisions and the like)
following the date hereof (other than as a result of acquisitions after the date
hereof pursuant to (i) the grant or exercise of any options, warrants, rights or
similar interests (including restricted stock) granted by the Company to such
Person, (ii) a dividend or distribution paid or made by the Company on the
outstanding shares of Company Common Stock, (iii) a split or subdivision of the
Company Common Stock, or (iv) any Exempt Transaction); and provided,
further, that any such Person shall cease to be deemed pursuant to this
subclause (F) to be an Exempt Person as of the date that such Person (together with
all Affiliates and Associates of such Person) ceases to beneficially own 4.9% or
more of the then-outstanding Company Stock;



     and




          (ii) no Person shall be deemed an “Acquiring Person” as a result of (1) the acquisition
of Company Stock by the Company which, by reducing the amount of Company Stock outstanding,
increases the proportional amount beneficially owned by such Person; provided,
however, that if (x) a Person would become an Acquiring Person (but for the
operation of this subclause (ii)) as a result of the acquisition of Company Stock by the
Company, and (y) after such acquisition of Company Stock by the Company, such Person becomes
the Beneficial Owner of additional Company Stock constituting one-half of one percent (0.5%)
or more of the Company Stock outstanding as of the date hereof (other than as a result of
acquisitions after the date hereof pursuant (a) the grant or exercise of any options,
warrants, rights or similar interests (including restricted stock) granted by the Company to
such Person, (b) a dividend or distribution paid or made by the Company on the outstanding shares of Company Common Stock, (c) a split or subdivision of the Company Common Stock, or
(d) any Exempt Transaction), then such Person shall be deemed an Acquiring Person unless,
upon becoming the Beneficial Owner of such additional Company Stock, such Person is the
Beneficial Owner of less than 4.9% of the then-outstanding Company Stock, (2) the grant or
exercise of any options, warrants, rights or similar interests (including restricted stock)
granted by the Company to its directors, officers and employees, (3) any grant of any
security made directly by the Company to a Person, or (4) any Exempt Transaction, unless and
until after such acquisition of shares of Company Stock pursuant to each of clauses (2)
through (4), such Person becomes the Beneficial Owner of additional Company Stock
constituting one-half of one percent (0.5%) or more of the Company Stock outstanding as of
the date hereof (other than as a result of acquisitions after the date hereof pursuant (a)
the grant or exercise of any options, warrants, rights or similar interests (including
restricted stock) granted by the Company to such Person, (b) a dividend or distribution paid
or made by the Company on the outstanding shares of Company Common Stock, (c) a split or
subdivision of the Company Common Stock, or (d) any Exempt Transaction), then such Person
shall be deemed an Acquiring Person unless, upon becoming the Beneficial Owner of such
additional Company Stock, such Person is the Beneficial Owner of less than 4.9% of the
then-outstanding Company Stock.


Notwithstanding the foregoing, the Board of Directors may, in its sole discretion, determine at any
time that any Person shall not be deemed to be, and shall not be, an Acquiring Person for any
purposes of this Agreement.




2









 







Each Person identified in subclauses (A), (B), (C), (D), (E) and (F) or in the immediately
preceding sentence of this Section (1)(a) is individually an “Exempt Person” and
collectively “Exempt Persons.”




          (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as in effect on the date hereof, and, to the extent
not included within the foregoing clause of this Section 1(b), shall also include, with respect to
any Person, any other Person (whether or not an Exempt Person) whose Company Stock would be deemed
constructively owned by such first Person, owned by a single “entity” as defined in Section
1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with Company Stock owned by such
first Person pursuant to the provisions of the Code and the Treasury Regulations thereunder,
provided, however, that a Person shall not be deemed to be the Affiliate or
Associate of another Person solely because either or both Persons are or were directors of the
Company.




          (c) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to have
“Beneficial Ownership” of and to “beneficially own,” any securities or interests:





          (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, warrants,
options, or other rights (in each case, other than upon exercise or exchange of the Rights);
provided, however, that a Person shall not be deemed the “Beneficial Owner”
of, to have “Beneficial Ownership” of or to “beneficially own” securities or interests
(including rights, options or warrants) which are convertible or exchangeable into Company
Stock until such time as the convertible or exchangeable securities or interests are
exercised and converted or exchanged into Company Stock except to the extent the acquisition
or transfer of such rights, options or warrants would be treated as exercised on the date of
its acquisition or transfer under Section 1.382-4(d) of the Treasury Regulations;




          (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 under Rule
13d-3 of the General Rules and Regulations under the Exchange Act (the “Exchange Act
Regulations”) as in effect on the date hereof, including pursuant to any agreement,
arrangement or understanding (whether or not in writing), but only if the effect of such
agreement, arrangement or understanding is to treat such Persons as an “entity” under
Section 1.382-3(a)(1) of the Treasury Regulations; or




          (iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate of such other Person) with 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 or disposing of such securities or
interests, but only if the effect of such agreement, arrangement or understanding is to
treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations;
provided, however, that a Person shall not be deemed the “Beneficial Owner”
of, to have “Beneficial Ownership” of or to “beneficially own” any security or interest (A)
if such Person has the right to vote such security pursuant to an agreement, arrangement or
understanding (whether or not in writing) which (1) arises solely from a revocable proxy
given to such Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the Exchange Act and (2)
would not also then be reportable on Schedule 13D under the Exchange Act (or any comparable
or successor report), or (B) if such beneficial ownership arises solely as a result of such
Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act;


provided, however, that under this paragraph (c) a Person shall not be deemed the
“Beneficial Owner” of, to have “Beneficial Ownership” of, or to “beneficially own,” any securities





          (A) tendered pursuant to a tender or exchange offer made in accordance with
Exchange Act Regulations by such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or exchange,



3









 






          (B) that may be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or




          (C) that may be issued 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(c) or Section 22 hereof (the “Original Rights”) or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to any
Original Rights; and


further provided, however, that:





          (x) nothing in this paragraph (c) shall cause a Person (A) engaged in business as an
underwriter of securities to be the “Beneficial Owner” of, to have “Beneficial Ownership”
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 days after the
date of such acquisition, or (B) who acquires Company Stock (or securities convertible into
or exchangeable for shares of Company Stock) directly from the Company, which Person has a
bona fide intent at the time of such acquisition to resell such Company Stock (or securities
convertible into or exchangeable for shares of common stock) in a transaction that is exempt
from the registration requirements of the Securities Act pursuant to Rule 144A or Regulation
S thereunder.




          (y) no decision reached, or action taken, by the Board of Directors or any committee
thereof shall cause any Person (or any Affiliate or Associate of such Person) who is a
member of the Board of Directors or such committee to be deemed, for the purposes of this
Agreement, to be a Beneficial Owner of any securities or interests beneficially owned by any
other Person (or any Affiliate or Associate of such Person) who is a member of the Board of
Directors or any committee thereof solely by reason of such membership of the Board of
Directors or any committee thereof or participation in the decisions or actions thereof on
the part of either or both of such Persons, and




          (z) no Person who is an officer, director or employee of an Exempt Person shall be
deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial
Owner” of, to have “Beneficial Ownership” of, or to “beneficially own” any securities or
interests that are “beneficially owned” (as defined in this paragraph (c)), including,
without limitation, in a fiduciary capacity, by an Exempt Person or by any other such
officer, director or employee of an Exempt Person.


Notwithstanding anything herein to the contrary, to the extent not within the foregoing provisions
of this Section 1(c), a Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“beneficially own” or have “beneficial ownership” of, securities and any other interest in Company
Stock which such Person would be deemed to constructively own or which otherwise would be
aggregated with Company Stock owned by such Person pursuant to Section 382 of the Code and the
Treasury Regulations thereunder.




          (d) “Board of Directors” shall collectively mean the Company’s Board of Directors or
any committee of members of the Board of Directors, which committee is authorized by the Board of
Directors to take action in connection with the Agreement.




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




          (f) “Certificate of Incorporation” shall mean the Company’s Restated Certificate of
Incorporation, as amended from time to time.




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




4









 








          (h) “Common Stock” of any Person other than the Company shall mean the capital stock
of such Person with the greatest voting power, or, if such Person shall have no capital stock, the
equity securities or other equity interest having power to control or direct the management of such
Person.




          (i) “Company” has the meaning given it in the first paragraph of this Agreement.




          (j) “Company Stock” shall mean: (i) shares of Company Common Stock, (ii) shares of
preferred stock of the Company (other than preferred stock described in Section 1504(a)(4) of the
Code), (iii) warrants, rights, or options (including options within the meaning of Treasury
Regulation § 1.382-2T(h)(4)(v)) to purchase stock of the Company, and (iv) any interest that would
be treated as “stock” of the Company for purposes of Section 382 of the Code or pursuant to
Treasury Regulation § 1.382-2T(f)(18).




          (k) “Exempt Transaction” shall mean any transaction that the Board of Directors
determines, in its sole discretion, is exempt.




          (l) “NOLs” shall mean the Company’s net operating loss carryforwards.




          (m) “Person” shall mean any individual, partnership, firm, limited liability company,
corporation, association, trust, unincorporated organization or other entity, any syndicate or
group deemed to be a person under Section 14(d)(2) of the Exchange Act as in effect on the date
hereof, as well as any group of persons making a “coordinated acquisition” of shares or otherwise
treated as an entity within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations and
includes any successor (by merger or otherwise) of such individual or entity.




          (n) “Preferred Stock” shall mean the Series B Junior Participating Preferred Stock,
par value $0.01 per share, of the Company having the voting powers, designation, preferences and
relative, participating, optional or other special rights and qualifications, limitations and
restrictions described in the Certificate of Incorporation, including the Certificate of
Designation in substantially the form set forth as Exhibit C hereto and as amended or restated from
time to time.




          (o) “Stock Acquisition Date” shall mean the first date of public announcement
(including, without limitation, the filing of any report, or any amendment to any report, pursuant
to Section 13(d) of the Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person that an Acquiring Person has become such; provided, however, that
if such Person is determined not to have become an Acquiring Person pursuant to Section 1(a)
hereof, then no Stock Acquisition Date shall be deemed to have occurred.




          (p) “Subsidiary” shall mean, with reference to any Person, any other Person of which
an amount of voting securities or equity interests sufficient to elect at least a majority of the
directors or equivalent governing body of such other Person is beneficially owned, directly or
indirectly, by such Person, or any other Person otherwise controlled by such first-mentioned
Person.




          (q) “Triggering Event” shall mean any Section 11(a)(ii) Event.




          (r) “Tax Benefits” shall mean the net operating loss carry-overs, capital loss
carry-overs, general business credit carry-overs, alternative minimum tax credit carry-overs and
foreign tax credit carry-overs, as well as any “net unrealized built-in loss” within the meaning of
Section 382, of the Company or any direct or indirect subsidiary thereof.




          (s) “Treasury Regulations” shall mean the regulations, including temporary regulations
or any successor regulations, promulgated under the Code, as amended from time to time.




          In addition, the following terms are defined in the Sections indicated below:




	 	 	 
	Defined Term	 	Section Number
	Adjustment Shares
	 	11(a)(ii)






5









 






	 	 	 
	Defined Term	 	Section Number
	Agreement
	 	Preamble
	common stock equivalents
	 	11(a)(iii)
	Company
	 	Preamble
	Company Common Stock
	 	Whereas clause
	current market price
	 	11(d)
	Current Value
	 	11(a)(iii)
	Distribution Date
	 	3(a)
	Equivalent Preferred Stock
	 	11(b)
	Exchange Act
	 	1(b)
	Exchange Act Regulations
	 	1(c)
	Exchange Ratio
	 	24(a)
	Exempt Person
	 	1(a)
	Expiration Date
	 	7(a)
	Final Expiration Date
	 	7(a)
	Original Rights
	 	1(c)
	Purchase Price
	 	7(b) or 11(a)(ii), as applicable
	Record Date
	 	Whereas clause
	Redemption Price
	 	23(a)
	Registration Date
	 	9(c)
	Registration Statement
	 	9(c)
	Right
	 	Whereas clause
	Rights Agent
	 	Preamble
	Rights Certificates
	 	3(a)
	Rights Dividend Declaration Date
	 	Whereas clause
	Section 11(a)(ii) Event
	 	11(a)(ii)
	Section 11(a)(iii) Trigger Date
	 	11(a)(iii)
	Securities Act
	 	9(c)
	Spread
	 	11(a)(iii)
	Substitution Period
	 	11(a)(iii)
	Summary of Rights
	 	3(b)
	Trading Day
	 	11(d)(i)
	Unit
	 	7(b)






     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. 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. Issuance of Rights Certificates.



          (a) Until the earlier of (i) the Close of Business on the tenth Business Day after the Stock
Acquisition Date (or, if the tenth Business Day after the Stock Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date), and (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of Directors) after
the date that a tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or
any successor rule, if upon consummation thereof such Person would be an Acquiring Person
(including, in the case of both clause (i) and (ii), any such date which is after the date of this
Agreement and prior to the issuance of the Rights) (the earlier of (i) and (ii) above being the
“Distribution Date”):




6









 









          (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for shares of Company Common Stock registered in the names of
the holders of shares of Company Common Stock as of and subsequent to the Record Date (which
certificates for shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates,




          (y) the registered holders of shares of Company Common Stock shall also be the
registered holders of the Rights issued with respect thereto, and




          (z) the Rights will be transferable by, and only in connection with, the transfer of
the underlying shares of Company Common Stock including a transfer to the Company;


provided, however, that if a tender or exchange offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such tender
or exchange offer. As soon as practicable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and
the Rights Agent will, if requested and provided with all necessary information, send) by
first-class, insured, postage prepaid mail, to each record holder of shares of Company Common Stock
as of the Close of Business on the Distribution Date, at the address of such holder shown on the
records of the Company or the transfer agent or registrar for the Common Stock, one or more rights
certificates, in substantially the form of Exhibit A hereto (the “Rights Certificates”),
evidencing one Right for each share of Company Common Stock so held, subject to adjustment as
provided herein.




     The Company shall promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall confirm same in
writing on or prior to the Business Day next following. Until such notice is received by the
Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date
has not occurred.



     In the event that an adjustment in the number of Rights per share of Company Common Stock has
been made pursuant to Section 11(o) hereof, at the time of distribution of the Rights Certificates,
the Company may 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 make available a
copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form attached hereto
as Exhibit B (the “Summary of Rights”), to each record holder of shares of Company Common
Stock as of the Close of Business on the Record Date. With respect to certificates for Company
Common Stock outstanding as of the Record Date or issued subsequent to the Record Date but prior to
the earlier of the Distribution Date and the Expiration Date, until the Distribution Date the
Rights will be evidenced by such certificates registered in the names of the holders thereof.
Until the Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of
any such certificate for Company Common Stock outstanding as of the Record Date shall also
constitute the transfer of the Rights associated with the Company Common Stock represented thereby.




          (c) Rights shall, without any further action, be issued in respect of all shares of Company
Common Stock which are issued (including any shares of Company Common Stock held in treasury) after
the Record Date but prior to the earlier of the Distribution Date and the Expiration Date. In
addition, Rights shall be issued with respect to all shares of Company Common Stock described in
the second sentence of Section 22 hereof, subject to the provisions thereof. Certificates
representing such shares of Company Common Stock issued after the Record Date shall bear a legend
in substantially the following form:





This certificate also evidences and entitles the holder hereof to certain Rights as set
forth in the Section 382 Rights Agreement between Mindspeed Technologies, Inc. (the
“Company”) and Mellon Investor Services LLC, (the “Rights Agent”) dated as of August 9,
2009, as 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 office of the Rights
Agent designated for such purpose. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no longer be



7









 







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 THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.


With respect to certificates representing shares of Company Common Stock that bear the foregoing
legend, until the earlier of the Distribution Date and the Expiration Date, the Rights associated
with the shares of Company Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of the shares of Company 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 shares of Company Common Stock
represented by such certificates.




          (d) In the event that the Company purchases or acquires any shares of Company Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated with such shares of
Company Common Stock shall be deemed canceled and returned so that the Company shall not be
entitled to exercise any Rights associated with the shares of Company Common Stock that are no
longer outstanding.




          (e) Notwithstanding anything to the contrary contained herein, shares of Company Common Stock
and Rights (and any securities issuable on their exercise) may be issued and transferred by
book-entry and not represented by physical certificates. Where shares of Company Common Stock and
Rights (and any securities issuable on their exercise) are held in uncertificated form, the Company
and the Rights Agent shall cooperate in all respects to give effect to the intent of the provisions
contained herein.




     Section 4. Form of Rights Certificates.



          (a) The Rights Certificates (and the forms of election to purchase and of assignment and the
certificates to be printed on the reverse thereof) shall each be substantially in the form set
forth in Exhibit A 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, liabilities 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 any rule or regulation thereunder or with any rule or regulation of any stock
exchange or automated quotation system on which the Rights may from time to time be listed or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date (or in the case of Rights
issued with respect to Company Common Stock issued by the Company after the Record Date, as of the
date of issuance of such Company Common Stock) and on their face shall entitle the holders thereof
to purchase such number of Units of Preferred Stock as shall be set forth therein at the price set
forth therein, provided, however, that the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.




          (b) Any Rights Certificate that represents Rights which are null and void pursuant to Section
7(e) of this Agreement and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent the Rights Agent has knowledge thereof and to the
extent feasible) a legend in substantially the following form:





THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY ARE NULL AND VOID.



8









 




The provisions of Section 7(e) hereof shall be operative whether or not the foregoing legend is
contained on any such Right Certificate.




     Section 5. Countersignature and Registration.



          (a) Any Rights Certificates shall be executed on behalf of the Company by its Chief Executive
Officer or one of its Vice Presidents and shall be attested by its Secretary, Treasurer or one of
its Assistant Secretaries and shall have affixed thereto the Company’s seal (if any) or a facsimile
thereof. The signature of any of these officers on the Rights Certificates may be manual or
facsimile. Rights Certificates bearing the manual or facsimile signatures of the individuals who
were at any time the proper officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the countersignature of
such Rights Certificates or did not hold such offices at the date of such Rights Certificates. No
Rights Certificate shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly executed by the
Rights Agent by manual or facsimile signature of an authorized signatory, and such countersignature
upon any Rights Certificate shall be conclusive evidence, and the only evidence, that such Rights
Certificate has been duly countersigned as required hereunder.




          (b) Following the Distribution Date, receipt by the Rights Agent of notice to that effect and
all other relevant information referred to in Section 3(a), the Rights Agent will keep or cause to
be kept, at its office designated 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 name and address of each holder of the Rights Certificates, the number of Rights evidenced
on its face by each Rights Certificate and the date of each Rights Certificate.





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





          (a) Subject to the provisions of Sections 4, 7(e) and 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 Units of Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates surrendered then
entitled 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. The Rights Certificates are transferable only on the
registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have (i) properly completed and duly executed the certificate set
forth in the form of assignment on the reverse side of such Rights Certificate, (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights represented by such Rights Certificate or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request, and (iii) paid a sum sufficient to cover any tax or
charge that may be imposed in connection with any transfer, split up, combination or exchange of
Right Certificates as required by Section 9(e) hereof. Thereupon the Rights Agent shall, subject
to the provisions of Section 4, Section 7(e), Section 14 and Section 24 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Rights Agent shall forward any such sum collected by it to the Company or
to such Persons as the Company shall specify by written notice. The Rights Agent shall have no
duty or obligation under any Section of this Agreement which requires the payment of taxes or
charges unless and until it is satisfied that all such taxes and/or charges have been paid.




          (b) Subject to Section 7(e) hereof, if a Rights Certificate shall be mutilated, lost, stolen
or destroyed, upon request by the registered holder of the Rights represented thereby and upon
payment to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the mutilated Rights Certificate, or in
substitution for the lost, stolen or destroyed Rights Certificate, the Company will make and
deliver a new Rights Certificate in substantially the form of the prior Rights Certificate, of like
tenor and representing the equivalent number of Rights, to the Rights Agent for countersignature


9









 







and delivery to the registered holder in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated, but in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company and the Rights Agent of such loss, theft or destruction of
such Rights Certificate and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.




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



          (a) Prior to the earlier of (i) the Close of Business on the third (3rd)
anniversary hereof (the “Final Expiration Date”), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof or exchanged as provided in Section 24 hereof, and (iii)
the repeal of Section 382 of the Code or any successor statute if the Board of Directors determines
that this Agreement is no longer necessary for the preservation of Tax Benefits, at which time the
Rights are deemed terminated (the earlier of (i), (ii), and (iii) being the “Expiration
Date”), the registered holder of any Rights Certificate may, subject to the other provisions
hereof, including without limitation Sections 7(e), 7(f), 9(c), 11(a) and 23 hereof, 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 and the certificate on
the reverse side thereof properly 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
for the number of Units of Preferred Stock (or, following a Triggering Event, other securities,
cash or other assets, as the case may be) for which such surrendered Rights are then exercisable,
and an amount equal to any tax or charge required to be paid under Section 9(e) hereof, by
certified check, cashier’s check, bank draft or money order payable to the order of the Company.
Except for those provisions herein which expressly survive the termination of this Agreement, this
Agreement shall terminate at such time as the Rights are no longer exercisable hereunder. If the
Expiration Date occurs as a result of (iii) above, the Company shall give the Rights Agent written
notice of the Expiration Date, and the Rights Agent shall not be deemed to have knowledge of the
Expiration Date unless and until is has received such written notice.




          (b) The purchase price for each one one-hundredth of a share (each such one one-hundredth of a
share being a “Unit”) of Preferred Stock upon exercise of Rights shall be $15.00, subject
to adjustment from time to time as provided in Section 11 hereof (such purchase price, as so
adjusted, being the “Purchase Price”), and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.




          (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate properly completed and duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price for the Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets, as the case may
be) to be purchased thereby as set forth below and an amount equal to any applicable tax or charge
required to be paid under Section 9(e) hereof, by certified check, cashier’s check, bank draft or
money order payable to the order of the Company, or evidence satisfactory to the Company and the
Rights Agent of payment of such tax or charge, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly:





          (i) (A) requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent for the Preferred Stock) a certificate or
certificates for the number of Units of Preferred Stock to be purchased, and the Company
hereby irrevocably authorizes each such transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of Units of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing interests in such number of Units
of Preferred Stock as are to be purchased (in which case certificates for the Units of
Preferred Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby directs each such depositary agent to comply
with such request,




          (ii) after receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,



10









 






          (iii) when necessary to comply with this Rights Agreement, requisition from the Company
the amount of cash to be paid in lieu of fractional shares in accordance with Section 14
hereof, and




          (iv) when necessary to comply with this Rights Agreement, after receipt thereof,
deliver such cash to or upon the order of the registered holder of such Rights Certificate.


In the event that the Company is obligated to issue Company Common Stock or other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such Company Common Stock, other securities, cash
and/or other property are available for distribution by the Rights Agent, if and when necessary to
comply with this Rights Agreement. 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 or bank check
or money order payable to the order of the Company.




          (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 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 Sections 6 and 14 hereof.




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





          (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,




          (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee after the Acquiring Person becomes such, or




          (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring Person becoming such and
which receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders of
equity interests in such Acquiring Person (or any such Associate or Affiliate) or to any
Person with whom the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, Company Stock or
the Company or (B) a transfer which the Board of Directors has determined to be part of a
plan, arrangement or understanding which has as a primary purpose or effect the avoidance of
this Section 7(e),


shall be null and void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights or any other Person as a result of the Company’s failure to make or delay in making any
determinations with respect to an Acquiring Person or its Affiliates or Associates or any
transferee or any of them hereunder.




          (f) Notwithstanding anything in this Agreement or any Rights Certificate to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder of rights or any other securities upon the occurrence of any purported exercise
by such registered holder unless such registered holder shall have (i) properly completed and duly
executed the certificate following the form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise, (ii) not indicated an affirmative response
to clause 1 or 2 thereof, and (iii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of the Rights represented by such Rights Certificate
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, 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



11









 







Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates 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 shall, at all times prior to the occurrence of a Section 11(a)(ii) Event,
cause to be reserved and kept available, out of its authorized and unissued shares of preferred
stock or its authorized and issued shares of preferred stock held in its treasury, and, after the
occurrence of a Section 11(a)(ii) Event, to the extent reasonably practical, cause to be reserved
and kept available, out of its authorized but unissued shares of preferred stock, Company Common
Stock and/or other securities or its authorized and issued shares held in its treasury, the number
of shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event, Company
Common Stock and/or other securities) that, as provided in this Agreement, will be sufficient to
permit the exercise in full of all outstanding Rights. Upon the occurrence of any events resulting
in an increase in the aggregate number of shares of Preferred Stock (or other equity securities of
the Company) issuable upon exercise of all outstanding Rights above the number then reserved, the
Company shall make appropriate increases in the number of shares so reserved to the extent
reasonably practicable.




          (b) If the shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii)
Event, Company Common Stock and/or other securities) to be issued and delivered upon the exercise
of the Rights may be listed on any national securities exchange or automated quotation system, the
Company shall use reasonable efforts (as determined by the Board of Directors) to cause, from and
after the time that the Rights become exercisable, all securities reserved for such issuance to be
listed on such exchange or quotation system upon official notice of issuance upon such exercise.




          (c) If the Company determines that registration under the Securities Act of 1933, as amended
(the “Securities Act”) or qualification under any state securities or “blue sky” laws is
required, then the Company shall use reasonable efforts (as determined by the Board of Directors):





          (i) as soon as practicable following the earliest date after (x) the occurrence of a
Section 11(a)(ii) Event and a determination by the Company of the consideration to be
delivered by the Company upon exercise of the Rights (including in accordance with Section
11(a)(iii) hereof) or (y) if so required by law, the Distribution Date (such date being the
“Registration Date”), to file a registration statement on an appropriate form under
the Securities Act, with respect to the securities that may be acquired upon exercise of the
Rights (the “Registration Statement”),




          (ii) to cause the Registration Statement to become effective as soon as practicable
after such filing,




          (iii) to cause the Registration Statement to continue to be effective (and to include a
prospectus complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities covered by the
Registration Statement, and (B) the Expiration Date, and




          (iv) to take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the Rights
complies with any applicable state securities or “blue sky” laws. 


The Company may temporarily suspend, for a period of time not to exceed one hundred eighty (180)
days after the Registration Date, the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the


12









 






suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a
public announcement pursuant to this Section 9(c) and give the Rights Agent a copy of such
announcement. Notwithstanding any provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under applicable law or a
requisite registration statement shall not have been declared effective.




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



          (e) The Company shall pay when due and payable any and all taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of any Preferred Stock
(or any other securities or assets, as the case may be) upon the exercise of Rights;
provided, however, the Company shall not be required to pay any such tax or charge
imposed in connection with the issuance or delivery of Units of Preferred Stock, or any
certificates or depositary receipts for such Units of Preferred Stock (or, following the occurrence
of a Triggering Event, any other securities, cash or assets, as the case may be) to any Person
other than the registered holder of the Rights Certificates evidencing the Rights surrendered for
exercise. The Company shall not be required to issue or deliver any certificates or depositary
receipts for Units of Preferred Stock (or, following the occurrence of a Triggering Event, any
other securities, cash or assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax or charge shall have been paid
(any such tax or charge being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company’s or the Rights Agent’s satisfaction
that no such tax or charge is due.




     Section 10. Preferred Stock Record Date. Each Person in whose name any certificate or
depositary receipt for Units of Preferred 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
the Units of Preferred Stock (or other securities) 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 any 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 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 securities on, and
such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or
other securities) transfer books of the Company are open; further provided,
however, that if delivery of Units of Preferred Stock (or other securities, as the case may
be) is delayed pursuant to Section 9(c) hereof, such Persons shall be deemed to have become the
record holders of such Units of Preferred Stock (or other securities) only when such Units (or
other securities) first become deliverable. 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 securities 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 securities purchasable upon exercise of
each Right and the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.




     (a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into
a smaller number of shares, or (D) issue 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 for herein, including this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or other capital stock, as the case may be,
issuable on such date upon exercise of the Rights, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be



13









 







entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when the transfer
books of the Company were still open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which 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) In the event any Person, alone or together with its Affiliates and Associates,
shall become an Acquiring Person, then, immediately upon the occurrence of such event (a
“Section 11(a)(ii) Event”), each holder of a Right (except as otherwise provided
herein, including Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise of such Right at the then-current Purchase Price in accordance with the terms of
this Agreement, in lieu of the number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event (whether
or not such Right was then exercisable), such number of Units of Preferred Stock as shall
equal the result obtained by:




          (A) multiplying the then-current Purchase Price by the number of Units of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (whether or not such Right was then
exercisable) (such product thereafter being, for all purposes of this Agreement, the
“Purchase Price”), and




          (B) dividing that product by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on the date of such
first occurrence




(such Units of Preferred Stock being the “Adjustment Shares”); provided,
however, that the Purchase Price and the number of Units of Preferred 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 this Section 11.




          (iii) The Company, by the vote of the Board of Directors, may at its option substitute
for a Unit of Preferred Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii), shares of Company Common Stock or fractions thereof having a
current market price (as determined by Section 11(d) hereof) equal to the current market
price of a Unit of Preferred Stock on the date of the Section 11(a)(ii) Event. In the event
that: (x) the number of shares of Preferred Stock (or, if the Company shall have determined
to substitute shares of Company Common Stock for Units of Preferred Stock pursuant to the
preceding sentence, Company Common Stock)  which are authorized by the
Certificate of Incorporation, but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights, is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a) or (y)
the securities issuable upon exercise of the Rights are required to be registered under the
Securities Act or registered or qualified under applicable state securities laws or “blue
sky” laws and the Board of Directors has determined that it is not reasonable to pursue such
registration or qualification, then the Company shall, to the extent permitted by applicable
law:




          (A) determine the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right (the “Current Value”) over (2) the Purchase
Price (such excess being the “Spread”), and




          (B) with respect to each Right (other than Rights which have become null and
void pursuant to Section 7(e)), make adequate provision to substitute, in whole or
in part, for such Adjustment Shares, upon exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) shares of Company Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock (such other shares being “common stock equivalents”)), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value which, when added to the value of the Units of Preferred Stock
actually issued upon exercise of



14









 







such Right, shall have an aggregate value equal to the Current Value (less the
amount of any reduction in such Purchase Price), where such aggregate value has been
determined by the Board of Directors, after receiving advice from a nationally
recognized investment banking firm;




provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company’s right of redemption pursuant to Section 23(a) expires (such thirty day period, as
it may be extended hereunder, being referred to herein as the “Substitution Period,”
and the later of (x) and (y) being referred to herein as the “Section 11(a)(iii) Trigger
Date”), then, subject to Section 24 hereof, the Company shall be obligated (to the
extent permitted by applicable law) to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, either (x) to the extent permitted by
law, including applicable federal and state securities law, Units of Preferred Stock (to the
extent available) and then, if necessary, shares (or fractions of shares, at the discretion
of the Board of Directors) of Company Common Stock or (y) cash, or (z) a combination
thereof, which Units of Preferred Stock, shares (or fractions of shares) of Company Common
Stock and/or cash shall have an aggregate value equal to the Spread. If the Board of
Directors determines in good faith that: (x) it is likely that sufficient additional shares
of Preferred Stock or Company Common Stock could be authorized for issuance upon exercise in
full of the Rights or (y) the securities issuable upon exercise of the Rights are required
to be registered under the Securities Act or registered or qualified under applicable state
securities laws or “blue sky” laws, then the Substitution Period may be extended to the
extent necessary, but not more than one hundred eighty days after the Section 11(a)(iii)
Trigger Date, in order that the Company may seek stockholder approval for the authorization
of such additional shares or register or qualify such issuable securities, as applicable.




     To the extent that the Company determines that some action need be taken pursuant to
the second and/or third sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares, register or
qualify issuable securities to the extent appropriate and/or to decide the appropriate form
of distribution to be made pursuant to such second sentence and to determine the value
thereof. If any such suspension occurs, 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 the time such suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of a Unit of Preferred Stock or share of Company Common
Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per
Unit of Preferred Stock or share of Company Common Stock, as the case may be, on the Section
11(a)(iii) Trigger Date and the value of any common stock equivalent shall be deemed to have
the same value as a Unit of Preferred Stock on such date.



          (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five calendar days after such record date) shares of Preferred Stock
(or shares having substantially the same rights, privileges and preferences as 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 (as determined pursuant to
Section l1(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying:





          (i) the Purchase Price in effect immediately prior to such record date, by




          (ii) a fraction, (A) the numerator of which shall be the sum of the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such current market
price, and (B) 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



15









 







Stock and/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 consideration shall be as determined in good faith
by the Board of Directors, whose determination shall be described in a written statement filed with
the Rights Agent and shall be conclusive for all purposes. Shares of Preferred Stock owned by or
held for the account of the Company or any Subsidiary shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.




          (c) In case the Company shall fix a record date for a distribution to all holders of shares of
Preferred Stock (including any such distribution made in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash
(other than a regular periodic cash dividend paid out of funds legally available therefore), assets
(other than a dividend payable in shares of Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or subscription rights, options 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:





          (i) the Purchase Price in effect immediately prior to such record date, by




          (ii) a fraction, (A) the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of Directors,
whose determination shall be described in a written statement filed with the Rights Agent
and shall be conclusive for all purposes) of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights, options or warrants distributable in
respect of a share of Preferred Stock and (B) the denominator of which shall be such current
market price per share of Preferred Stock.


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, the “current market
price” per share of Company Common Stock or Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such shares for the thirty
consecutive Trading Days immediately prior to, but not including, such date;
provided, however, if prior to, but not including, the expiration of such
requisite thirty Trading Day period the issuer announces either (A) a dividend or
distribution on such shares payable in such shares or securities convertible into such shares (other than the Rights), or (B) any subdivision, combination or reclassification of
such shares, and the ex-dividend date for such dividend or distribution or the record date
for such subdivision, combination or reclassification, as the case may be, shall not have
occurred prior to, but not including, the commencement of the requisite thirty Trading Day
period, then, and in each such case, the “current market price” shall be properly
adjusted to take into account such event. The closing price for each day shall be:




          (x) the last sale price, regular way, or, in the 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
such shares are listed or admitted to trading, or




          (y) if such shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or such
other system then in use, or



16









 






          (z) if on any such date such shares 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 such shares selected by the Board of Directors.




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




          (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 for Company
Common Stock in clause (i) of this Section 11(d) (other than the penultimate 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 (A) 100 (as such amount may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to Company Common Stock occurring after
the date of this Agreement) multiplied by (B) the current market price per share of Company
Common Stock. If neither Company Common Stock nor 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 of Directors, whose
determination shall be described in a written statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the “current
market price” of a Unit of Preferred Stock shall be equal to (A) the current market
price of one share of Preferred Stock divided by (B) 100.



          (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 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or
to the nearest one one-thousandth of a share of Company Common Stock or Common Stock or other share
or one one hundred-thousandth 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 years from the date of the transaction which mandates such
adjustment and (ii) the Expiration Date.




          (f) If, as a result of an adjustment made pursuant to Section 11(a)(ii) 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 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), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and
the provisions of Sections 7, 9, 10 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 Units of Preferred Stock (or other securities or amount of cash or combination thereof)
that may be acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.




          (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i) multiplying (x) the
number of Units of Preferred Stock covered by a Right immediately prior




17









 







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 Units of Preferred Stock
that may be acquired 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 Units 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 (x) the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the (y) Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public announcement (with prompt
written notice thereof to the Rights Agent) of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten days
later than the date of such 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 to be so
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.




          (j) Irrespective of any adjustment or change in the Purchase Price or the number of Units 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 Unit and the number of Units of
Preferred Stock 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 par or stated value, if any, of the number of Units of Preferred Stock or other shares of
capital stock issuable upon exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the Company may validly and
legally issue such fully paid and nonassessable number of Units of Preferred Stock or other shares
at such adjusted Purchase Price.




          (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(with prompt written notice thereof to the Rights Agent) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of that number of Units of
Preferred Stock and shares of other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of Units of Preferred Stock and shares of 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 (fractional or otherwise) 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 of Directors
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 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




18









 







Company to holders of its Preferred Stock, shall not be taxable to such holders or shall
reduce the taxes payable by such holders.




          (n) After the Distribution Date, the Company shall 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.




          (o) 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 Company Common Stock payable in shares of Company
Common Stock, (ii) subdivide the outstanding shares of Company Common Stock or (iii) combine the
outstanding shares of Company Common Stock into a smaller number of shares, the number of Rights
associated with each share of Company Common Stock then outstanding, or issued or delivered
thereafter prior to the Distribution Date or in accordance with Section 22 hereof, shall be
proportionately adjusted so that the number of Rights thereafter associated with each share of
Company Common Stock following any such event shall equal the result obtained by multiplying:





     (x) the number of Rights associated with each share of Company Common Stock
immediately prior to such event, by




     (y) a fraction, (A) the numerator of which shall be the total number of shares
of Company Common Stock outstanding immediately prior to the occurrence of the event
and (B) the denominator of which shall be the total number of shares of Company
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 or any event affecting the Rights or their exercisability (including without
limitation an event which causes Rights to become null and void) occurs as provided in Section 11
hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Preferred Stock and the Company Common Stock, a copy of
such certificate, and (c) mail, or make available, a brief summary thereof to each holder of a
Rights Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing sentence,
the failure of the Company to make such certification or give such notice shall not affect the
validity of such adjustment or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or
statement therein contained and shall have no duty or liability with respect to, and shall not be
deemed to have knowledge of, any adjustment or any such event unless and until it shall have
received such a certificate.



     Section 13. Reserved.



     Section 14. Fractional Rights and Fractional Shares.



          (a) The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(o) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of issuing such fractional Rights, there shall be paid to the
Persons to which such fractional Rights would otherwise be issuable an amount in cash equal to such
fraction of the market value of a whole Right. For purposes of this Section 14(a), the 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:





          (x) the last sale price, regular way, or, in the 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



19









 






          (y) if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then in use, or




          (z) if on any such date the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors.


If on any such date no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors shall be used and such
determination shall be described in a written statement filed with the Rights Agent and shall be
conclusive for all purposes.




          (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-hundredth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence such fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share
of Preferred Stock); provided, however, that in lieu of fractions of shares of
Preferred Stock which are integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may provide for the issuance of depositary receipts pursuant to Section 7(c) hereof.
In lieu of such fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share, 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 then current market price of a share of Preferred Stock on the day of exercise, determined
in accordance with Section 11(d) hereof.




          (c) The Company shall not be required to issue fractions of shares of Company Common Stock
upon exercise of the Rights or to distribute certificates which evidence fractional shares of
Company Common Stock. In lieu of such fractional shares of Company 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 (1)
share of Company Common Stock. For purposes of this Section 14(c), the current market value of one
share of Company Common Stock shall be the closing price per share of Company Common Stock (as
determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately prior to the date of
such exercise.




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




          (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 payments 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 pursuant to Section 18 and Section 20
hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to
the Distribution Date, the registered holders of certificates representing shares of Company Common
Stock); and any registered holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company 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 a
certificate representing shares of Company Common Stock), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company
or any other Person to enforce, or otherwise act in respect of, his 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



20









 







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 Company 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 office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates duly executed;




          (c) subject to Section 6(a) and Section 7(f) 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 Company 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 Company Common Stock certificate made by any Person 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 7(e) hereof, shall be affected by any notice to the
contrary; and




          (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or any 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, judgment or ruling (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental, regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree, judgment or ruling lifted or otherwise overturned as
promptly as practicable.




     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 shares of Preferred Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any 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, except as provided in Section 25 hereof,
to receive notice of meetings or other actions affecting stockholders, 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. This Section 17 shall also
apply to holders, as such, of Rights prior to the issuance of Rights Certificates.



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




21









 







performance of its duties hereunder, including without limitation, the reasonable costs and
expenses of defending against a claim of liability hereunder. 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, replacement or removal of the Rights Agent hereunder,
including, without limitation, the reasonable costs and expenses of defending against a claim of
liability hereunder.




          (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 to be taken by it in connection with its
acceptance and administration of this Agreement and the exercise and performance of its duties
hereunder, in reliance upon any Rights Certificate or certificate for Preferred 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 have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons, or otherwise upon the advice of counsel as set forth
in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which
it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected
and shall incur no liability for failing to take any action in connection therewith unless and
until it has received such notice.




     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
corporate trust or stockholder services businesses 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 document 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 countersignature 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 Rights Agent or in 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 to perform only the
duties and obligations expressly imposed by this Agreement (and no implied duties) upon the
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
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted to be taken by it in
accordance with such advice or opinion.




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




22









 







Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full and complete authorization and protection to
the Rights Agent 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 to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable judgment 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 annual
fees paid by the Company to the Rights Agent.




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




          (f) The Company shall perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further acts, instruments and assurances as may
reasonably be required by the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.




          (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chief Executive 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 not be liable for or in respect of any action taken, suffered or omitted to be taken by
it in accordance with instructions of any such officer or for any delay in acting while waiting for
those instructions. The Rights Agent shall be fully authorized and protected in relying upon the
most recent instructions received by any such officer. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights Agent under this Agreement and
the date on and/or after which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission
of, the Rights Agent in accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken, suffered or
omitted.




23









 








          (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 have
a pecuniary interest in any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder,
affiliate, director, officer or employee 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 (through its directors, officers and employees) or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence or bad faith in the selection and continued employment thereof (which gross
negligence or bad faith must be determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction).




          (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 or in the
exercise of its rights hereunder if the Rights Agent believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably assured to it.




          (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been completed, not signed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such
requested exercise 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 days’ prior notice in
writing mailed to the Company and to each transfer agent for the Company Common Stock or Preferred
Stock known to the Rights Agent, by registered or certified mail, and, if such resignation occurs
after the Distribution Date, 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 days’ prior notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent for the Company Common Stock or Preferred Stock, by registered or certified mail,
and, if such removal occurs after the Distribution Date, 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 days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a 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
of the United States in good standing, shall be authorized under applicable laws to exercise
corporate trust or stock transfer or stockholder service powers and shall be subject to supervision
or examination by federal or state authorities 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 such a
Person described in clause (a). 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 Company Common Stock or Preferred Stock,
and, if such appointment occurs after the Distribution Date, 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.



24









 





     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or 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 of Directors
to reflect any adjustment or change made in accordance with the provisions of this Agreement in the
Purchase Price or the number or kind or class of shares or other securities or property that may be
acquired under the Rights Certificates.



     In addition, in connection with the issuance or sale of shares by the Company of Company
Common Stock following the Distribution Date and prior to the Expiration Date, the Company (a)
shall, with respect to shares of Company Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement granted or awarded as of the Distribution
Date, or upon the exercise, conversion or exchange of any other securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board of
Directors, 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 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) Subject to Section 31 hereof, the Company may, at its option, by action of the Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior
to the Record Date, the Close of Business on the tenth Business Day following the Record Date) or
(ii) the Final Expiration Date, redeem all but not less than all of the then-outstanding Rights at
a redemption price of $0.00001 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 the “Redemption Price”). The Company may, at its option, by action
of the Board of Directors, pay the Redemption Price either in shares of Company Common Stock (based
on the current market price, as defined in Section 11(d) hereof, of the shares of Company Common
Stock at the time of redemption) or cash or any other form of consideration deemed appropriate by
the Board of Directors and the redemption of the Rights shall be effective at such time and on the
basis and with such conditions as the Board of Directors may in its sole discretion establish.
Notwithstanding anything in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the Company’s right of
redemption has expired.




          (b) Immediately upon the action of the Board of Directors ordering the redemption of the
Rights as provided in Section 23(a) above (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so held. The Company
shall promptly give notice of such redemption to the Rights Agent 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 Company Common Stock, provided,
however, that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.




          (c) The Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the Rights in
accordance with this Agreement, and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights as their last addresses as they appear on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer agent of the
Company Common Stock, and upon such action, all outstanding Rights and Rights Certificates shall be
null and void without any further action by the Company.




          (d) Neither the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner, other than that specifically set forth in
this Section 23 or in




25









 







Section 24 hereof and other than in connection with the purchase or repurchase by any of them
of Company Common Stock prior to the Distribution Date.




     Section 24. Exchange.



          (a) The Company, upon resolution of the Board of Directors, may, at its option, at any time
after the first occurrence of a Section 11(a)(ii) Event, exchange all or part of the
then-outstanding and exercisable Rights (which shall not include Rights that have become null and
void pursuant to Section 7(e) hereof) for Units of Preferred Stock or shares of Company Common
Stock (at the election of the Board of Directors) at an exchange ratio of one Unit of Preferred
Stock or one share of Company Common Stock, as the case may be, per Right, as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being the “Exchange Ratio”). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.




          (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to Section 24(a), and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of Units of Preferred Stock or shares of Company Common Stock, as the
case may be, equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly provide public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to give or
any defect in such notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange shall state the method by which the exchange of Units of Preferred
Stock or shares of Company Common Stock, as the case may be, for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than Rights which have
become null and void pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.




          (c) In the event that: (x) the number of Units of Preferred Stock or shares of Company Common
Stock, as the case may be, which are authorized by the Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not
sufficient to permit any exchange of Rights as contemplated in accordance with this Section 24 or
(y) the securities issuable upon exercise of the Rights are required to be registered under the
Securities Act or registered or qualified under applicable state securities laws or “blue sky”
laws, then the Company, at the election of the Board of Directors, shall take all such action as
may be necessary to authorize additional shares of Preferred Stock or Company Common Stock,
register or qualify any securities as the case may be, for issuance upon exchange of the Rights or
shall make adequate provision to substitute, in whole or in part, (1) cash, (2) other equity
securities of the Company, (3) debt securities of the Company, (4) other assets, or (5) any
combination of the foregoing, having an aggregate value for each Right to be exchanged equal to the
per share market price of one Unit of Preferred Stock or share of Company Common Stock, as the case
may be (determined pursuant to Section 11(d) hereof) as of the date of a Section 11(a)(ii) Event,
where such aggregate value has been determined by the Board of Directors. To the extent that the
Company determines that action must be taken pursuant to the foregoing clauses of this Section
24(c), the Board of Directors may suspend the exercisability of the Rights for a period of up to
one hundred eighty (180) days following the date on which the event described in Section 24(a)
shall have occurred, in order to seek any authorization of additional shares of Preferred Stock or
Company Common Stock, register or qualify any securities that will be issued on exercise of the
Rights as the case may be, and/or to decide the appropriate form of distribution to be made
pursuant to the above provision and to determine the value thereof.




          (d) The Company shall not be required to issue fractions of Units of Preferred Stock or
fractions of shares of Company Common Stock or to distribute certificates which evidence fractional
Units or fractional shares. In lieu of issuing fractional Units or fractional shares, the Company
may pay to the registered holders of Rights Certificates at the time such Rights are exchanged as
herein provided an amount in cash equal to the same fraction of the current market price
(determined pursuant to Section 11(d) hereof) of one Unit of Preferred




26









 







Stock or one share of Company Common Stock, as the case may be, on the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.




     Section 25. Notice of Certain Events.



          (a) In case the Company shall propose, at any time after the Distribution Date:





               (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock
or to make any other distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend paid out of funds legally available therefore),




               (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,




               (iii) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Preferred Stock),




               (iv) to effect any consolidation or merger into or with any other Person (other than a
wholly owned Subsidiary of the Company in a transaction which complies with Section 11(n)
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 or more transactions, of more
than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or any of its
wholly owned Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), or




          (v) to effect the liquidation, dissolution or winding up of the Company,


then, in each such case, the Company shall give to the Rights Agent and to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of 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; provided, however, no such notice shall be required pursuant to this
Section 25, if any wholly owned Subsidiary of the Company effects a consolidation or merger with or
into, or effects a sale or other transfer of assets, cash flow or earnings power to, any other
wholly owned Subsidiary of the Company.




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




27









 








     Section 26. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing and mailed or sent or delivered, if to the
Company, at its address at:




4000 MacArthur Boulevard

East Tower

Newport Beach, California 92660

Attention: Secretary





and if to the Rights Agent, at its address at:




Mellon Investor Services LLC

400 South Hope Street, 4th Floor

Los Angeles, CA 90071

Attention: Sharon Knepper, Vice President & Relationship Manager





Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention: Legal Department

Facsimile: (201) 680-4610



     Notices or demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Company 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. Prior to the Distribution Date, and subject
to the other provisions of this Section 27, 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 (including, without limitation, an amendment to cause the Rights to
immediately expire and the Agreement to immediately terminate) without the approval of any holders
of certificates representing Rights or shares of Company Common Stock. From and after the
Distribution Date, the Company may, in its sole and absolute discretion, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order:




          (i) to cure any ambiguity,




          (ii) to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein,




          (iii) to shorten or lengthen any time period hereunder, or




          (iv) to change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person);


provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 31 hereof, a time
period relating to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Associate or Affiliate of an Acquiring Person).




28









 








     Upon the delivery of a certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment. Notwithstanding anything contained in
this Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any
supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement.



     Prior to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.



     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 Company Common Stock or the
amount of Company Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Company Common Stock or amount of Company
Stock of which any Person is the Beneficial Owner, shall be made by the Board of Directors in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in
effect on the date hereof or the provisions of Section 382 of the Code and the regulations
thereunder. Except as otherwise specifically provided herein, the Board of Directors shall have
the exclusive power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without limitation, the right and
power (i) to interpret the provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement (including, without limitation, a
determination whether to redeem or not redeem the rights or to amend this Agreement and whether any
proposed amendment adversely affects the interest of the holders of Rights Certificates). All such
actions, calculations, interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by the Board of
Directors in good faith shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject the Board of Directors
or any member thereof to any liability to the holders of the Rights. The Rights Agent is entitled
always to assume the Company’s Board of Directors acted in good faith and shall be fully protected
and incur no liability in reliance thereon.



     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 shares of Company
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 shares of Company 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, null and
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; and provided, further, that if any such excluded term, provision,
covenant or restriction shall adversely affect the rights, immunities, duties or obligations of the
Rights Agent, the Rights Agent shall be entitled to resign immediately; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be invalid, null and void
or unenforceable and the Board of Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or effect of this Agreement
and the Rights shall not then be redeemable, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the tenth Business Day
following the date of such determination by the Board of Directors.



     Section 32. Governing Law. This Agreement, each Right and each Rights Certificate
issued hereunder shall be governed by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts executed in and to be performed entirely in such State; provided,
however, that all provisions, regarding



29









 







the rights, duties, obligations and liabilities of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to contracts made and to
be performed entirely within such State.



     Section 33. Counterparts. This Agreement may be executed (including by facsimile) in
one or more counterparts, and by the different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.



     Section 34. Descriptive Headings. The headings contained in this Agreement are for
descriptive purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.



[signature page follows]




30









 








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



	 	 	 	 	 
	 	        Mindspeed Technologies, Inc.

 	 
	 	By:  	/s/ Bret W. Johnsen
 	 
	 	 	     Name:  	Bret W. Johnsen 	 
	 	 	     Title:  	Senior Vice President, Chief Financial
Officer and Treasurer 	 
	 
	 	        Mellon Investor Services LLC

 	 
	 	By:  	/s/ Sharon Knepper
 	 
	 	 	     Name:  	Sharon Knepper 	 
	 	 	     Title:  	Vice President & Relationship Manager 	 
	 




31









 








EXHIBIT A

TO RIGHTS AGREEMENT




FORM OF RIGHTS CERTIFICATE




			
	 	 	 
	Certificate No.                     
	 	                     Rights






     NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED TO
BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION OR EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR
ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.



Rights Certificate




Mindspeed Technologies, Inc.




     This certifies that                                         , or registered assigns, is the registered holder of
the number of Rights set forth above, each of which entitles the registered holder thereof, subject
to the terms and conditions of the Section 382 Rights Agreement dated as of August 9, 2009, as
amended from time to time (the “Rights Agreement”) (terms defined therein being used herein
with the same meaning unless otherwise defined herein), between Mindspeed Technologies, Inc., a
Delaware corporation (the “Company”), and Mellon Investor Services LLC, as Rights Agent
(which term shall include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Distribution Date and prior to the Expiration Date, at the office
of the Rights Agent, one one-hundredth of a fully paid and nonassessable share of Series B Junior
Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the
Company at the Purchase Price initially of $15.00 per one one-hundredth share of Preferred Stock
(each such one one-hundredth of a share being a “Unit”), upon presentation and surrender of
this Rights Certificate with the Election to Purchase and related certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number and kind of shares which may
be purchased upon exercise thereof) and the Purchase Price per Unit set forth above, are the number
and Purchase Price as of August 9, 2009, based on the Preferred Stock as constituted at such date.



     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 any
such Acquiring Person or (ii) under certain circumstances described in the Rights Agreement, a
direct or indirect transferee of any such Acquiring Person, Associate or Affiliate, including a
transferee of any person who, after such transfer, becomes an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall
have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.



     As provided in the Rights Agreement, the 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 a Triggering Event. In certain circumstances described in the Rights
Agreement, the Rights evidenced hereby may entitle the registered holder thereof to receive common
stock, cash or other assets, all as provided in the Rights Agreement.



     This Rights Certificate is subject to all of the terms and conditions of the Rights Agreement,
which terms 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. Notwithstanding anything contained herein to the contrary, if any
terms or conditions of this



A-1









 







Rights Certificate shall be found to conflict with any terms or conditions of the Rights
Agreement, the Rights Agreement shall control. Copies of the Rights Agreement are on file at the
office of the Rights Agent designated for such purpose and are available from the Rights Agent upon
written request.



     This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the registered 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 under certain circumstances at its option at a redemption price of
$0.00001 per Right (as such amount may be adjusted pursuant to the Rights Agreement), at any time
prior to the earlier of the Close of Business on (i) the tenth business day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the Close of Business on the tenth Business Day following the Record Date) and (ii) the Final
Expiration Date. In addition, subject to the provisions of the Rights Agreement, at the option of
the Company, the Rights may be exchanged, in whole or in part, for Units of Preferred Stock or
shares of the Common Stock of the Company or other consideration. Immediately upon the action of
the Board of Directors of the Company authorizing any such exchange, and without any further action
or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate
and the Rights will only enable holders to receive the shares issuable upon such exchange.



     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-hundredth of
a share of Preferred Stock, which may, at the election of the Company be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.



     No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of Preferred Stock or of any other securities 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 of subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the
Rights Agreement.



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



     WITNESS the facsimile signature of the proper officers of the Company. Dated as of                           ,



	 	 	 	 	 
	 	Mindspeed Technologies, Inc.

 	 
	 	By:  	 	 
	 	 	     Name:  	 	 
	 	 	     Title:  	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	     Name:  	 	 
	 	 	     Title:  	 	 
	 




A-2









 





Countersigned:




Mellon Investor Services LLC




as Rights Agent




	 	 	 
	By:

	 	 
	 

	 	 
	 

	 	     Name:
	 

	 	     Title:






A-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:




Certificate




     The undersigned hereby certifies by checking the appropriate boxes in (1) and (2) 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 any such
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.



A-4









 





     Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.



     In the event the certification set forth above is not completed, the Company will deem the
Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights Agreement) and, in the case
of an Assignment, will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.



A-5









 





FORM OF ELECTION TO PURCHASE

(To be executed if the registered holder desires to exercise

Rights represented by the Rights Certificate.)




To: Mindspeed Technologies, Inc.



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




					
	name of and delivered to:
	 	 	 	(Please print name and
	 

	 	 	 	 






					
	address)

	 	 
	 	 
	 

	 	 	 	 





(Please insert social security or other identifying number).




     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 print name and
	 

	 	 	 	 





					
	address)

	 	 
	 	 
	 

	 	 	 	 





(Please insert social security or other identifying number).




Dated:                           ,           




 

Signature


Signature Guaranteed:




Certificate




     The undersigned hereby certifies by checking the appropriate boxes in (1) and (2) 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 an Associate thereof (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 thereof.




Dated:                           ,           




 

Signature


Signature Guaranteed:




A-6









 





NOTICE




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



     Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.



     In the event the certification set forth above is not completed, the Company will deem the
Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights Agreement) and the election
to purchase will not be honored.




A-7









 








EXHIBIT B

TO RIGHTS AGREEMENT




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 THEREOF

(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),

WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT

HOLDER,

MAY BECOME NULL AND VOID.




SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK




     On August 9, 2009, the Board of Directors (the “Board of Directors”) of Mindspeed
Technologies, Inc. (the “Company”) authorized and declared a dividend of one right
(“Right”) for each outstanding share of its Common Stock, par value $0.01 per share (the
“Company Common Stock”), to stockholders of record at the close of business on August 31,
2009 (the “Record Date”), and authorized the issuance of one Right for each share of
Company Common Stock issued by the Company (except as otherwise provided in the Rights Agreement,
as defined below) between the Record Date and the Distribution Date (as defined below). Each Right
entitles the registered holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-hundredth of a share (a “Unit”) of Series B Junior
Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at a
purchase price of $15.00 per Unit, subject to adjustment. The purchase price is payable in cash or
by certified or bank check or money order payable to the order of the Company. The description and
terms of the Rights are set forth in a Section 382 Rights Agreement between the Company and Mellon
Investor Services LLC, as Rights Agent, dated as of August 9, 2009, as amended from time to time
(the “Rights Agreement”).



     Copies of the Rights Agreement and the Certificate of Designation for the Preferred Stock have
been filed with the Securities and Exchange Commission as an Exhibit to a Current Report on Form
8-K. Copies of the Rights Agreement and the Certificate of Designation are available free of
charge from the Company. This summary description of the Rights and the Preferred Stock does not
purport to be complete and is qualified in its entirety by reference to all of the provisions of
the Rights Agreement and the Certificate of Designation, including the definitions therein of
certain terms, which Rights Agreement and Certificate of Designation are incorporated herein by
reference.



     The Board of Directors adopted the Rights Agreement in an effort to help preserve the ability
to utilize fully the Company’s net operating loss carryforwards (the “NOLs”) to reduce
potential future federal income tax obligations. The Company has experienced substantial operating
losses, and under the Internal Revenue Code and rules promulgated by the Internal Revenue Service,
the Company may “carry forward” these losses in certain circumstances to offset any current and
future earnings and thus reduce its federal income tax liability, subject to certain requirements
and restrictions. To the extent that the NOLs do not otherwise become limited, the Company
believes that it will be able to carry forward a significant amount of NOLs, and therefore these
NOLs could be a substantial asset to the Company. However, if the Company experiences an “Ownership
Change,” as defined in Section 382 of the Internal Revenue Code, its ability to use the NOLs will
be significantly limited, and the timing of the usage of the NOLs could be significantly limited,
which could therefore significantly impair the value of that asset.



     The Rights Agreement is intended to act as a deterrent to any person or group acquiring,
without the approval of the Company’s Board of Directors, beneficial ownership of 4.9% or more of
the Company Stock, defined to include (i) shares of Company Common Stock, (ii) shares of preferred
stock of the Company (other than preferred stock described in Section 1504(a)(4) of the Internal
Revenue Code), (iii) warrants, rights, or options (including options within the meaning of Treasury
Regulation § 1.382-2T(h)(4)(v)) to purchase stock of the Company, and (iv) any interest that would
be treated as “stock” of the Company for purposes of Section 382 of the



B-1









 







Internal Revenue Code or pursuant to Treasury Regulation § 1.382-2T(f)(18). Holders of 4.9%
or more of the Company Stock outstanding as of the close of business on August 9, 2009 will not
trigger the Rights Agreement so long as they do not (i) acquire additional Company Stock
constituting one-half of one percent (0.5%) or more of the Company Stock outstanding as of the date
of the Rights Agreement (as adjusted for stock splits, subdivisions and the like, as well as other
exceptions detailed in the Rights Agreement), or (ii) fall under 4.9% ownership of Company Stock
and then re-acquire 4.9% or more of the Company Stock. Any Rights held by an Acquiring Person
(defined below) are void and may not be exercised. The Board of Directors may, in its sole
discretion, exempt any person or group from being deemed an Acquiring Person for purposes of the
Rights Agreement.



     The Rights Agreement



     Certificates; Distribution Date. Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no separate Rights Certificates will
be distributed. Subject to the provisions of the Rights Agreement, the Rights will separate from
the Company Common Stock and the “Distribution Date” will occur upon the earlier of (i) ten
business days following a public announcement (the date of such announcement being the “Stock
Acquisition Date”) that a person or group of affiliated or associated persons (an
“Acquiring Person”) has acquired or otherwise obtained beneficial ownership of 4.9% or more
of the then-outstanding Company Stock (or, if the tenth business day after the Stock Acquisition
Date occurs before the Record Date, the close of business on the Record Date), and (ii) ten
business days (or such later date as may be determined by action of the Board of Directors)
following the commencement of a tender offer or exchange offer that would result in a person or
group becoming an Acquiring Person. Until the Distribution Date, (i) the Rights will be evidenced
by Company Common Stock certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after the Record Date (also
including shares distributed from Treasury) will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates representing
outstanding Company Common Stock will also constitute the transfer of the Rights associated with
the Company Common Stock represented by such certificates.



     An “Acquiring Person” does not include certain persons specified in the Rights Agreement.



     The Rights are not exercisable until the Distribution Date. Under certain circumstances, as
provided in the Rights Agreement, the exercisability of the Rights may be suspended.



     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of Company Common Stock as of the close of business on the Distribution Date (and
to each initial holder of certain shares of Company Common Stock issued after the Distribution
Date) and, thereafter, the separate Rights Certificates alone will represent the Rights.



     Flip-In. If a person becomes an Acquiring Person, then each holder of a Right will thereafter
have the right to receive, upon exercise, Units of Preferred Stock or, at the option of the
Company, shares of Company Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price of the Right. The
exercise price is the purchase price multiplied by the number of Units of Preferred Stock issuable
upon exercise of a Right prior to the event described in this paragraph. Notwithstanding any of
the foregoing, following the occurrence of the event set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person or any affiliate or associate thereof (or certain transferees of any thereof)
will be null and void.



     Redemption. At any time until ten business days following the Stock Acquisition Date (or, if
the Stock Acquisition Date shall have occurred prior to the Record Date, until ten business days
following the Record Date), the Board of Directors may redeem the Rights in whole, but not in part,
at a price of $0.00001 per Right (subject to adjustment in certain events) payable, at the election
of the Board of Directors, in cash, shares of Company Common Stock or other consideration
considered appropriate by the Board of Directors. Immediately upon the action of the Board of
Directors ordering the redemption of the Rights, the Rights will terminate and the only right of
the holders of Rights will be to receive the redemption price.



     Exchange. The Company may, at any time after there is an Acquiring Person, until the time
specified in the Rights Agreement, exchange all or part of the then-outstanding and exercisable
Rights (other than Rights that



B-2









 







shall have become null and void) for Units of Preferred Stock or shares of Company Common
Stock pursuant to a one-for-one exchange ratio, subject to adjustment or, at the election of the
Company, other consideration.



     Expiration. The Rights will expire on the earliest of (i) the third (3rd)
anniversary of the Rights Agreement, (ii) the time at which the Rights are redeemed or exchanged,
and (iii) the repeal of Section 382 of the Internal Revenue Code or any successor statute if the
Board of Directors determines that the Rights Agreement is no longer necessary for the preservation
of NOLs and certain other tax benefits.



     No Stockholder Rights; Taxation. 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 Units of Preferred Stock (or
other consideration) or in the event of the redemption of Rights as set forth above.



     Amendment. Any of the provisions of the Rights Agreement may be amended without the approval
of the holders of the Rights or Company Common Stock at any time prior to the Distribution Date.
After such date, the provisions of the Rights Agreement may be amended in order to cure any
ambiguity, defect or inconsistency, to shorten or lengthen any time period under the Rights
Agreement, or to make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person); provided, that no amendment
shall be made to lengthen (i) the time period governing redemption at such time as the Rights are
not redeemable or (ii) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights.



     Description of Preferred Stock



     The Units of Preferred Stock that may be acquired upon exercise of the Rights will be
nonredeemable.



     Each Unit of Preferred Stock will have a minimum preferential quarterly dividend of $0.01 per
Unit or any higher per share dividend declared on the Company Common Stock.



     In the event of liquidation, the holder of a Unit of Preferred Stock will receive a preferred
liquidation payment equal to the greater of $1.00 per Unit and the per share amount paid in respect
of a share of the Company Common Stock.



     Each Unit of Preferred Stock will have one vote, voting together with the Company Common
Stock.



     In the event of any merger, consolidation or other transaction in which shares of Company
Common Stock are exchanged, each Unit of Preferred Stock will be entitled to receive the per share
amount paid in respect of each share of Company Common Stock.



     The rights of holders of the Preferred Stock with respect to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by customary antidilution
provisions.



     The economic value of one Unit of Preferred Stock that may be acquired upon the exercise of
each Right should approximate the economic value of one share of Company Common Stock.




B-3









 








EXHIBIT C

TO RIGHTS AGREEMENT




CERTIFICATE OF DESIGNATION

OF THE

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

OF

MINDSPEED TECHNOLOGIES, INC.




     The undersigned officers of Mindspeed Technologies, Inc., a Delaware corporation (the
“Corporation”), DO HEREBY CERTIFY:



     That, pursuant to the authority conferred upon the Board of Directors of the Corporation by
its Restated Certificate of Incorporation (as amended, the “Certificate of
Incorporation”), the said Board of Directors, at a duly called meeting held on August 9, 2009,
at which a quorum was present and acted throughout, adopted the following resolution, which
resolution remains in full force and effect on the date hereof, creating a series of preferred
stock having a par value of $0.01 per share, designated as Series B Junior Participating Preferred
Stock (the “Series B Junior Participating Preferred Stock”), out of the Corporation’s
authorized shares of preferred stock of the par value of $0.01 per share (the “Preferred
Stock”):



     RESOLVED, that pursuant to the authority vested in the Board of Directors in accordance with
the provisions of its Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for 3,500,000 shares of its authorized Preferred Stock to be designated and
issued as the “Series B Junior Participating Preferred Stock,” having the relative rights,
preferences and limitations that are set forth as follows:



     1. Dividends and Distributions.



          (A) Subject to the prior and superior rights of the holders of any shares of any other series
of Preferred Stock or any other shares of stock of the Corporation ranking prior and superior to
the shares of Series B Junior Participating Preferred Stock with respect to dividends, each holder
of one one-hundredth (1/100) of a share (a “Unit”) of Series B Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for that purpose, (i) quarterly dividends payable in cash on the
second Monday of March, June, September and December in each year (each such date being a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a Unit of Series B Junior Participating Preferred Stock, in an amount
per Unit (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to the
provision for adjustment hereinafter set forth, the aggregate per share amount of all cash
dividends declared on shares of the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of a Unit of Series B Junior Participating Preferred Stock, and (ii) subject to the
provision for adjustment hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per share amount of
all non-cash dividends or other distributions (other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock, by reclassification or otherwise)
declared on shares of Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit
of Series B Junior Participating Preferred Stock. In the event that the Corporation shall at any
time after August 9, 2009 (the “Rights Declaration Date”) (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock or (iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of Series B Junior
Participating Preferred Stock was entitled immediately prior to such event under clause (i) (b) or
clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction
(y) the numerator of which shall be the number of shares of Common Stock that are outstanding
immediately after such event and (z) the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.




 









 








          (B) The Corporation shall declare a dividend or distribution on Units of Series B Junior
Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a
dividend or distribution on the shares of Common Stock (other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock, by reclassification or
otherwise).




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




     2. Voting Rights. The holders of Units of Series B Junior Participating Preferred
Stock shall have the following voting rights:



          (A) Subject to the provision for adjustment hereinafter set forth, each Unit of Series B
Junior Participating Preferred Stock shall entitle the holder thereof to one vote on all matters
submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall, at
any time after the Rights Declaration Date, (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock
or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, then in
each such case the number of votes per Unit to which holders of Units of Series B Junior
Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction (y) the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such event and (z) the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to such event.




          (B) Except as otherwise provided herein, in the Certificate of Incorporation or the Bylaws of
the Corporation or as required by law, the holders of Units of Series B Junior Participating
Preferred Stock and the holders of shares of Common Stock and any other stock of the Corporation
having general voting rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.




     3. Certain Restrictions.



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




               (i) declare or pay dividends on, or make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of junior stock;



               (ii) declare or pay dividends on, or make any other distributions on, any shares of parity
stock, except dividends paid ratably on Units of Series B Junior Participating Preferred Stock and
shares of all such parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of such Units and all such shares are then entitled;



 









 





               (iii) redeem or purchase or otherwise acquire for consideration shares of any parity stock,
provided, however, that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any junior stock; or



               (iv) redeem or purchase or otherwise acquire for consideration any Units of Series B Junior
Participating Preferred Stock, or any shares of parity 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 Units and shares of parity stock 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 and 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 3, purchase or otherwise acquire such shares at such
time and in such manner.




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



     5. Liquidation, Dissolution or Winding Up.



          (A) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of junior stock, unless the
holders of Units of Series B Junior Participating Preferred Stock shall have received, subject to
adjustment as hereinafter provided in paragraph (B), the greater of either (a) $1.00 per Unit plus
an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, or (b) the amount per unit equal to the aggregate per share
amount to be distributed to holders of shares of Common Stock, or (ii) to the holders of shares of
parity stock, unless simultaneously therewith distributions are made ratably on Units of Series B
Junior Participating Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of Units of Series B Junior Participating Preferred Stock are
entitled under clause (i)(a) of this sentence and to which the holders of shares of such parity
stock are entitled, in each case upon such liquidation, dissolution or winding up.




          (B) In the event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the aggregate amount to which holders of
Units of Series B Junior Participating Preferred Stock were entitled immediately prior to such
event pursuant to clause (i)(b) of paragraph (A) of this Section 5 shall be adjusted by multiplying
such amount by a fraction (y) the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and (z) the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to such event.




     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 converted into other stock or securities, cash and/or any other property, then in
any such case Units of Series B Junior Participating Preferred Stock shall at the same time be
similarly exchanged for or converted into an amount per Unit (subject to the provision for
adjustment hereinafter set forth) equal to the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each share of
Common Stock is converted or exchanged. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case the amount set
forth in the immediately preceding sentence with respect to the exchange or conversion of Units of
Series B Junior Participating Preferred Stock shall be adjusted by multiplying such amount



 









 







by a fraction (y) the numerator of which shall be the number of shares of Common Stock that
are outstanding immediately after such event and (z) the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior to such event.



     7. Redemption. The Units of Series B Junior Participating Preferred Stock and shares
of Series B Junior Participating Preferred Stock shall not be redeemable.



     8. Ranking. The Units of Series B Junior Participating Preferred Stock and shares of
Series B Junior Participating Preferred Stock shall rank junior to all other series of the
Preferred Stock and to any other class of Preferred Stock that hereafter may be issued by the
Corporation as to the payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.



     9. Fractional Shares. The Series B Junior Participating Preferred Stock may be issued
in Units or other fractions of a share, which Units or other fractions shall entitle the holder, in
proportion to such holder’s Units or other fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other rights of holders of
Series B Junior Participating Preferred Stock.



     10. Amendment. At any time when any Units of Series B Junior Participating Preferred
Stock are outstanding, neither the Certificate of Incorporation of the Corporation nor this
Certificate of Designation shall be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Units of Series B Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of a majority or
more of the outstanding Units of Series B Junior Participating Preferred Stock, voting separately
as a class.



     11. Certain Definitions. As used in this resolution with respect to the Series B
Junior Participating Preferred Stock, the following terms shall have the following meanings:



          (A) The term “Common Stock” shall mean the class of stock designated as the common stock, par
value $0.01 per share, of the Corporation at the date hereof or any other class of stock resulting
from successive changes or reclassification of the common stock.




          (B) The term “junior stock” (i) as used in Section 3, shall mean the Common Stock and any
other class or series of capital stock of the Corporation over which the Series B Junior
Participating Preferred Stock has preference or priority as to dividends and (ii) as used in
Section 5, shall mean the Common Stock and any other class or series of capital stock of the
Corporation over which the Series B Junior Participating Preferred Stock has preference or priority
in any liquidation, dissolution or winding up of the Corporation.




          (C) The term “parity stock” (i) as used in Section 3, shall mean any class or series of
capital stock of the Corporation hereafter authorized or issued ranking pari passu with the Series
B Junior Participating Preferred Stock as to dividends and (ii) as used in Section 5, shall mean
any class or series of capital stock of the Corporation ranking pari passu with the Series B Junior
Participating Preferred Stock in any liquidation, dissolution or winding up.




 









 








     IN WITNESS WHEREOF, Mindspeed Technologies, Inc. has caused this Certificate of Designation to
be signed by its Chief Financial Officer and its Secretary this August 9, 2009.



	 	 	 	 	 
	 	Mindspeed Technologies, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	Bret W. Johnsen 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer   
       and
Treasurer 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	Brandi R. Steege 	 
	 	 	Title:  	Secretary