EX-4.1






Exhibit 4.1




 






LEAR CORPORATION




and




MELLON INVESTOR SERVICES LLC,




as Rights Agent




 






RIGHTS AGREEMENT




Dated as of December 23, 2008




 






 









 





Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 1.

	 	Certain Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Issue of Right Certificates
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Form of Right Certificates
	 	 	7	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Countersignature and Registration
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 7.

	 	Exercise of Rights, Purchase Price; Expiration Date of Rights
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 8.

	 	Cancellation and Destruction of Right Certificates
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Availability of Shares of Preferred Stock
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Preferred Stock Record Date
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.

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

	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 15.

	 	Rights of Action
	 	 	24	 
	 
	 	 	 	 	 	 
	Section 16.

	 	Agreement of Right Holders
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 17.

	 	Right Certificate Holder Not Deemed a Stockholder
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 18.

	 	Concerning the Rights Agent
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 19.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 20.

	 	Duties of Rights Agent
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 21.

	 	Change of Rights Agent
	 	 	29	 
	 
	 	 	 	 	 	 
	Section 22.

	 	Issuance of New Right Certificates
	 	 	30	 






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Table of Contents

(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 23.

	 	Redemption
	 	 	30	 
	 
	 	 	 	 	 	 
	Section 24.

	 	Exchange
	 	 	31	 
	 
	 	 	 	 	 	 
	Section 25.

	 	Notice of Certain Events
	 	 	32	 
	 
	 	 	 	 	 	 
	Section 26.

	 	Notices
	 	 	32	 
	 
	 	 	 	 	 	 
	Section 27.

	 	Supplements and Amendments
	 	 	33	 
	 
	 	 	 	 	 	 
	Section 28.

	 	Successors
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 29.

	 	Benefits of this Agreement
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 30.

	 	Determinations and Actions by the Board of Directors
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 31.

	 	Severability
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 32.

	 	Governing Law
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 33.

	 	Counterparts
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 34.

	 	Descriptive Headings
	 	 	35	 







ii











 





RIGHTS AGREEMENT




     Rights Agreement, dated as of December 23, 2008 (“Agreement”), by and between Lear
Corporation, a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey
limited liability company, as Rights Agent (the “Rights Agent”).



     The Board of Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each share of Common Stock (as hereinafter defined) of the
Company outstanding as of the Close of Business (as defined below) on January 2, 2009 (the “Record
Date”), each Right representing the right to purchase one one-thousandth (subject to adjustment) of
a share of Preferred Stock (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one Right (subject to
adjustment as provided herein) with respect to each share of Common Stock that shall become
outstanding between the Record Date and the earlier of the Distribution Date and the Expiration
Date (as such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the Expiration Date in accordance with Section 22.



     Accordingly, 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 meaning indicated:



     (a) “Acquiring Person” shall mean any Person (other than the Company, any Related
Person or any Exempt Person) that has become, in itself or, together with all Affiliates and
Associates of such Person, the Beneficial Owner of 4.9% or more of the shares of Common Stock
then-outstanding, provided, however, that any Person who would otherwise qualify as
an Acquiring Person as of the Close of Business on December 23, 2008 will not be deemed to be an
Acquiring Person for any purpose of this Agreement on and after such date unless and until such
time as such stockholder acquires the beneficial ownership of additional shares of Common Stock
representing one-half of one percent (.5%) or more of the shares of Common Stock then outstanding,
unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person
is not then the Beneficial Owner of 4.9% or more of the shares of Common Stock then outstanding;
provided, further, that a Person will not be deemed to have become an Acquiring
Person solely as a result of (i) a reduction in the number of shares of Common Stock outstanding,
(ii) the exercise of any options, warrants, rights or similar interests (including restricted
stock) granted by the Company to its directors, officers and employees, (iii) any unilateral grant
of any security by the Company, or (iv) an Exempt Transaction, unless and until such time as such
stockholder acquires the beneficial ownership of one additional share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors determines in good faith that a Person who
would otherwise be an “Acquiring Person” as defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.



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     (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 Exchange Act as in effect
on the date of this Agreement, 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 a
Related Person or an Exempt Person) whose shares of Common 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 shares owned by such first Person pursuant to
the provisions of the Code, or any successor provision or replacement provision, 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 to “beneficially own” any
securities:



          (i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in
writing) (including any purchase orders for shares of Common Stock initiated prior to the first
public announcement of this Agreement) 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, or to “beneficially own” securities (including rights, options or warrants) which are
convertible or exchangeable into Common Stock until such time as the convertible or exchangeable
securities are exercised and converted or exchanged into Common 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;
provided, further, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer made by such Person or
any of such Person’s Affiliates or Associates until such tendered securities are accepted for
purchase or exchange;




          (ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, or has “beneficial ownership” of (as
defined under Rule 13d-3 of the General Rules and Regulations under the Exchange Act), 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) of which any other Person is the Beneficial Owner, if such Person or any of such
Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not
in writing) with such other Person (or any of such other Person’s Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any securities of the Company, but only if
the effect of such agreement, arrangement or understanding is to




2









 




treat such Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury Regulations;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security (A) if such Person has the right to vote such security pursuant to
an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from
a revocable proxy given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D or Schedule 13G under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises solely as a result of
such Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act;
provided, further, that nothing in this Section 1(c) shall cause a Person engaged
in business as an underwriter of securities or member of a selling group to be the Beneficial Owner
of, or to beneficially own, any securities acquired through such Person’s participation in good
faith in an underwriting syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the directors of the Company may determine in any specific case.
Notwithstanding anything herein to the contrary, to the extent not within the foregoing provisions
of this Section 1(c), a Person shall be deemed the Beneficial Owner of, and shall be deemed to
beneficially own or have beneficial ownership of, securities which such Person would be deemed to
constructively own or which otherwise would be aggregated with shares owned by such pursuant to
Section 382 of the Code, or any successor provision or replacement provision and the Treasury
Regulations thereunder.




     (d) “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, New Jersey or the city in which the principal office
of the Rights Agent is located are authorized or obligated by law or executive order to close.



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



     (f) “Code” shall mean the Internal Revenue Code of 1986, as amended.



     (g) “Common Stock” when used with reference to the Company shall mean the Common Stock,
presently par value $.01 per share, of the Company. “Common Stock” when used with reference to any
Person other than the Company shall mean the common stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.



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



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



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



3









 





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



     (l) “Exempt Person” shall mean a Person whose beneficial ownership (together with all
Affiliates and Associates of such Person) of 4.9% or more of the then-outstanding Common Stock will
not, as determined by the Board of Directors in its sole discretion, jeopardize or endanger the
availability to the Company of the Tax Attributes; provided, however, that such a
Person will cease to be an “Exempt Person” if the Board of Directors makes a contrary determination
with respect to the effect of such Person’s beneficial ownership (together with all Affiliates and
Associates of such Person) upon the availability to the Company of its Tax Attributes.



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



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



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



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



     (q) “Flip-In Event” shall have the meaning set forth in Section 11(a)(ii) hereof.



     (r) “NASDAQ” shall mean The Nasdaq Stock Market.



     (s) “New York Stock Exchange” shall mean the New York Stock Exchange, Inc.



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



     (u) “Preferred Stock” shall mean the Series A Junior Participating Preferred Stock, par value
$.01 per share, of the Company having the rights and preferences set forth in the Form of
Certificate of Designation attached to this Agreement as Exhibit A.



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



     (w) “Purchase Price” shall have the meaning set forth in Section 7(b) hereof.



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



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



4









 





     (z) “Related Person” shall mean (i) any Subsidiary of the Company or (ii) any employee benefit
or stock ownership plan of the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan.



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



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



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



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



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



     (ff) “Subsidiary” of any Person shall mean any corporation or other entity of which securities
or other ownership interests having ordinary voting power sufficient to elect a majority of the
board of directors or other persons performing similar functions are beneficially owned, directly
or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by
such Person.



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



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



     (ii) “Tax Attributes” shall mean the Company’s U.S. net operating loss, capital loss and tax
credit carryovers.



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



     (kk) “Treasury Regulations” shall mean final, temporary and proposed income tax regulations
promulgated under the Code, including any amendments thereto.



     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. Issue of Right Certificates.



5









 





     (a) Until the earlier of (i) the Close of Business on the tenth Business Day after the Stock
Acquisition Date or (ii) the Close of Business on the tenth Business Day (or, unless the
Distribution Date shall have previously occurred, such later date as may be specified by the Board
of Directors of the Company) after the commencement of a tender or exchange offer by any Person
(other than the Company, any Related Person or any Exempt Person), if upon the consummation thereof
such Person would be the Beneficial Owner of 4.9% or more of the then-outstanding Common Stock (the
earlier of such dates being referred to as the “Distribution Date”), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, (y) the registered holders of shares of
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 Common Stock. As
soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign and the Company will send or cause to be sent (and the Rights Agent will, if
requested and provided with all necessary information, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject
to adjustment as provided herein) for each share of Common Stock so held. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right Certificates, and the Rights
will be transferable only separately from the transfer of Common Stock. 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.



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



     (c) Rights shall be issued in respect of all shares of Common Stock issued or disposed of
(including, without limitation, upon disposition of Common Stock out of treasury stock or issuance
or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates issued for Common Stock
(including, without limitation, upon transfer of outstanding Common Stock,



6









 







disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock
out of authorized but unissued shares) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them a legend in substantially the following form:




This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Lear
Corporation (the “Company”) and Mellon Investor Services LLC, as
Rights Agent, dated as of December 23, 2008 and 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 principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights owned by
or transferred to any Person who is or becomes an Acquiring Person
(as defined in the Rights Agreement) and certain transferees thereof
will become null and void and will no longer be transferable.


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



Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of
any part of this Agreement or the rights of any holder of the Rights.




     Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent)
and as are not inconsistent with the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or interdealer quotation system on which the Rights may from time
to time be listed or quoted, or to conform to usage. Subject to the provisions of this Agreement,
the Right Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at the Purchase



7









 







Price, but the number of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.



     Section 5. Countersignature and Registration.



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



     (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 an office or agency designated for such purpose, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the Right Certificates.



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



     (a) Subject to the provisions of this Agreement, at any time after, and including, the
Distribution Date and prior to, and including, the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or agency of the
Rights Agent designated for such purpose. The Right Certificates are transferable only on the
registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered Right Certificate
or Certificates until the registered holder thereof shall have (i) completed and signed the
certificate contained in the form of assignment set forth on the reverse side of each such Right
Certificate, (ii) provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) thereof and of the Rights evidenced thereby and the



8









 







Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner) as the Company
or the Rights Agent shall reasonably request, and (iii) paid a sum sufficient to cover any tax or
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
countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates,
as the case may be, as so requested, registered in such name or names as may be designated by the
surrendering registered holder. The Rights Agent shall promptly 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 the provisions of this Agreement, at any time after the Distribution Date and
prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to
them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of
like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.



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



     (a) Except as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to
Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent at
the office or agency of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one one-thousandths of a share of
Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the
Rights are exercised 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, at time which is both after the Distribution Date and prior to the time (the
“Expiration Date”) that is the earliest of (i) the Close of Business on December 23, 2018 (the
“Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.



     (b) The Purchase Price shall be initially $12.00 for each one one-thousandth of a share of
Preferred Stock purchasable upon the exercise of a Right. The Purchase Price and the number of one
one-thousandths of a share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America in accordance with
paragraph (c) of this Section 7.



9









 





     (c) Except as otherwise provided herein, upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase properly completed and duly executed,
accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable tax or charge required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier’s check, bank draft or money order payable to the order of the Company, subject to Section
20 hereof, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock, or make available if the Rights Agent is the transfer agent for the Preferred
Stock, certificates for the number of shares of Preferred Stock to be purchased, and the Company
hereby irrevocably authorizes each such transfer agent to comply with all such requests, or (B)
requisition from a depositary agent appointed by the Company depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and the Company hereby directs any such
depositary agent to comply with such request, (ii) when necessary to comply with this Rights
Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as may be designated
by such holder and (iv) when necessary to comply with this Rights Agreement, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.



     (d) Except as otherwise provided herein, in case the registered holder of any Right
Certificate shall exercise less than all of the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.



     (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder of
Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) properly completed and duly
executed the certificate contained in the form of assignment or form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such transfer or exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof and of the Rights evidenced thereby and of the Affiliates and Associates
of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent shall
reasonably request.



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



10









 







Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.



     Section 9. Availability of Shares of Preferred Stock.



     (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Preferred Stock or any shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights.



     (b) So long as the shares of Preferred Stock issuable upon the exercise of Rights may be
listed or admitted to trading on any national securities exchange, or quoted on NASDAQ, the Company
shall use its best efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed or admitted to trading on such exchange, or quoted
on NASDAQ, upon official notice of issuance upon such exercise.



     (c) From and after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary to permit the issuance of shares of Preferred Stock upon the exercise of
Rights, to register and qualify such shares of Preferred Stock under the Securities Act and any
applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications effective (with a
prospectus at all times meeting the requirements of the Securities Act) until the earlier of the
date as of which the Rights are no longer exercisable for such securities and the Expiration Date.
The Company may temporarily suspend, for a period of time not to exceed 90 days, the exercisability
of the Rights in order to prepare and file a registration statement under the Securities Act 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 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 unless the requisite
qualification in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act shall have been declared effective, unless an exemption therefrom is
available.



     (d) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Preferred Stock delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the Purchase Price and compliance with
all other applicable provisions of this Agreement), be duly and validly authorized and issued and
fully paid and nonassessable shares.



     (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred Stock upon the



11









 







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



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



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



     (a)(i) In the event the Company shall at any time after the date of this Agreement (A) declare
and pay 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 of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including without limitation any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable
upon exercise of a Right as of the record date for such dividend or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the aggregate number and kind
of shares of capital stock which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the Company were open, the holder would
have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.



     (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter as the “Flip-



12









 







In Event”), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event,
whether or not such Right was then exercisable, and (B) each holder of a Right, except as otherwise
provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right
to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in
accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number
of shares of Common Stock as shall equal the result obtained by dividing the Purchase Price (as so
adjusted) by 50% of the current per share market price of the Common Stock (determined pursuant to
Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that
the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon
exercise of a Right shall, following the Flip-In Event, be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to
the contrary, however, from and after the Flip-In Event, any Rights that are beneficially owned by
(x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the
Flip-In Event or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any Person with whom
it has any continuing agreement, arrangement or understanding regarding the transferred Rights or
(II) a transfer which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be null and void without any further
action and any holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the Flip-In Event, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that represents Rights that are or have become null and void pursuant
to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become null and void pursuant to the provisions of this
paragraph shall be canceled. From and after the occurrence of an event specified in Section 13(a)
hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section
11(a)(ii). The Rights Agent shall not be deemed to have any knowledge of the identity of any such
Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing unless and until
it shall have received notice of the identity of such Person from the Company and the Rights Agent
may rely on such notice in carrying out its duties under this Agreement.



     (iii) The Company may at its option substitute for a share of Common Stock issuable upon the
exercise of Rights in accordance with the foregoing subparagraph (ii) a number of shares of
Preferred Stock or fraction thereof such that the current per share market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current per share market
price of one share of Common Stock. In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit the



13









 







exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Board
of Directors of the Company shall, with respect to such deficiency, to the extent permitted by
applicable law and any material agreements then in effect to which the Company is a party, (A)
determine the excess (such excess, the “Spread”) of (1) the value of the shares of Common Stock
issuable upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the
“Current Value”) over (2) the Purchase Price (as adjusted in accordance with the foregoing
subparagraph (ii)), and (B) with respect to each Right (other than Rights which have become null
and void pursuant to the foregoing subparagraph (ii)), make adequate provision to substitute for
the shares of Common Stock issuable in accordance with the foregoing subparagraph (ii) upon
exercise of the Right and payment of the Purchase Price (as adjusted in accordance therewith), (1)
cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other equity
securities of the Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in good faith by the Board of
Directors of the Company to have substantially the same value as the shares of Common Stock (such
shares of Preferred Stock and shares or fractions of shares of preferred stock are hereinafter
referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having a value which, when added to the value of the
shares of Common Stock issued upon exercise of 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 of the Company upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of Directors of the Company;
provided, however, that if the Company shall not make adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the Flip-In Event (the date of
the Flip-In Event being the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated
to deliver, to the extent permitted by applicable law and any material agreements then in effect to
which the Company is a party, upon the surrender for exercise of a Right and without requiring
payment of such Purchase Price, shares of Common Stock (to the extent available), and then, if
necessary, such number or fractions of shares of Preferred Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.
If, upon the occurrence of the Flip-In Event, the Board of Directors of the Company shall determine
in good faith that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, then, if the Board of Directors of the
Company so elects, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek stockholder approval for the authorization of such additional shares
(such thirty (30) day period, as it may be extended, is herein called the “Substitution Period”).
To the extent that the Company determines that some action need be taken pursuant to the second
and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant to such second
sentence and to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement (with prompt written notice thereof to the Rights Agent) stating
that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement (with prompt written notice thereof to



14









 







the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the shares of Common Stock shall be the current per share market
price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the
per share or fractional value of any “Common Stock Equivalent” shall be deemed to equal the current
per share market price of the Common Stock. The Board of Directors of the Company may, but shall
not be required to, establish procedures to allocate the right to receive shares of Common Stock
upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).



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



     (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Stock (including without limitation any such distribution made in
connection with a consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend
or a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect



15









 







immediately prior to such record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof)
on such record date, less the fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price (determined pursuant to Section
11(d) hereof) of the Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.



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



     (ii) For the purpose of any computation hereunder, if the Preferred Stock is publicly traded,
the “current per share market price” of the Preferred Stock shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly traded but the
Common Stock is publicly traded, the “current per share market price” of the Preferred Stock shall
be conclusively deemed to be the current per share market price of the



16









 







Common Stock as determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the Certificate of Designation
for the Preferred Stock). If neither the Common Stock nor the Preferred Stock is publicly traded,
“current per share market price” shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in a statement filed
with the Rights Agent.



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



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



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



     (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
11(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 one one-thousandths
of a share of Preferred Stock (calculated to the nearest one hundred-thousandth of a share of
Preferred Stock) obtained by (i) multiplying (x) the number of one one-thousandths of a share
purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment.



     (i) The Company may elect on or after the date of any adjustment of the Purchase Price
pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the unexercised Rights outstanding after



17









 







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



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



     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value, if any, of the fraction of Preferred Stock or other shares of capital stock
issuable upon exercise of a Right, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Preferred Stock or other such 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 issuing
to the holder of any Right exercised after such record date the Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and above the
Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares upon the occurrence of
the event requiring such adjustment.



18









 





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



     (n) Anything in this Agreement to the contrary notwithstanding, in the event that at any time
after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare
and pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or otherwise than by payment
of a dividend payable in Common Stock) into a greater or lesser number of shares of Common Stock,
then, in each such case, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.



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



     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
or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment or
describing such event, and a brief, reasonably detailed statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Stock and
the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof (if so required under Section 25
hereof). 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. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.



19









 





     (a) In the event, directly or indirectly, at any time after the Flip-In Event (i) the Company
shall consolidate with or shall merge into any other Person, (ii) any Person shall merge with and
into the Company and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more wholly-owned
Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall
be made so that: (A) each holder of a Right (other than Rights which have become null and void
pursuant to Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise
thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall equal the result obtained by dividing the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the current per share market price
of the Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; provided,
however, that the Purchase Price (as theretofore adjusted in accordance with Section
11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so receivable
upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof to reflect any events occurring in respect of the Common Stock of such
Principal Party after the occurrence of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement;
(C) the term “Company” shall thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection
with such consummation of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of
its Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as
provided in this Section 13(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time of such transaction, owned
the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights
in accordance with the terms hereof for such cash, shares, rights, warrants and other property.



     (b) “Principal Party” shall mean:



20









 





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




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



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




     (c) The Company shall not consummate any consolidation, merger, sale, disposition or transfer
referred to in Section 13(a) hereof unless prior thereto the Company and the Principal Party
involved therein shall have executed and delivered to the Rights Agent an agreement confirming that
the requirements of Sections 13(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets shall not result in a
default by the Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the Principal Party will:



          (i) prepare and file a registration statement under the Securities Act, if necessary, with
respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to become




21









 




effective as soon as practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date and similarly comply with applicable state
securities laws;




          (ii) use its best efforts, if the Common Stock of the Principal Party shall be listed or
admitted to trading on the New York Stock Exchange, NASDAQ or on another national securities
exchange, to list or admit to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York Stock Exchange, NASDAQ or such securities
exchange, or, if the Common Stock of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange, NASDAQ or a national securities exchange, to cause the Rights and
the securities receivable upon exercise of the Rights to be authorized for quotation on any system
then in use;




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




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




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



     (e) The Company covenants and agrees that it shall not, at any time after the Flip-In Event,
enter into any transaction of the type described in clauses (i) through (iii) of Section 13(a)
hereof if (i) at the time of or immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders



22









 







of the Person who constitutes, or would constitute, the Principal Party for purposes of
Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person
or any of its Affiliates or Associates or (iii) the form or nature of organization of the Principal
Party would preclude or limit the exercisability of the Rights.



     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 in accordance with Section 11(n) hereof) or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the current market value of
a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or NASDAQ, if the Rights are not listed or admitted to trading on
the New York Stock Exchange or NASDAQ, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as reported by such
system then in use or, if on any such date the Rights are not so quoted, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.



     (b) The Company shall not be required to issue fractions of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) or to
distribute certificates which evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a
share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the
same fraction of the current market value of a whole share of Preferred Stock (as determined in
accordance with Section 14(a) hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.



23









 





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



     (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise or exchange of a Right (except as
expressly provided above).



     (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.



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



     (b) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final)
issued by a court or by a governmental, regulatory, self-regulatory or



24









 







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.



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



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



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



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



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



     Section 18. Concerning the Rights Agent.



     (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, 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
(which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent



25









 







jurisdiction), for any action taken, suffered or omitted by the Rights Agent in connection
with the acceptance, administration, exercise and performance of its duties under this Agreement.
To the extent that the Rights Agent is successful in an action to enforce its right to
indemnification, 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.



     (b) The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Right Certificate or certificate for the Preferred Stock or Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons, 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
shareholder services business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided, that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In
case at the time such successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.



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



26









 





     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 Right Certificates,
by their acceptance thereof, shall be bound:



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



     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including without limitation, the identity of an
Acquiring Person and the determination of the current per share market price of any security) be
proved or established by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by any
one of the President and the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by
it in the absence of bad faith under the provisions of this Agreement in reliance upon such
certificate.



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



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



     (e) The Rights Agent shall not 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 Right
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or any change or adjustment in
the terms of the Rights (including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that



27









 







would require any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment, 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 other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred Stock or other
securities will, when issued, be validly authorized and issued, fully paid and nonassessable.



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



     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person reasonably believed by the Rights Agent to
be one of the President or the Secretary 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 by it in the absence of bad faith 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, 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.



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



28









 







misconduct absent gross negligence, bad faith or willful misconduct in the selection and
continued employment thereof (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).



     (j) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the form of election to purchase
set forth on the reverse thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 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.



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



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



29









 







to give any notice provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.



     Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company may with respect to
shares of Common Stock so issued or sold pursuant to (i) the exercise of stock options, (ii) under
any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of the Company, in each
case existing prior to the Distribution Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale.



     Section 23. Redemption.



     (a) The Board of Directors of the Company may, at any time prior to the Flip-In Event, redeem
all but not less than all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
in respect of the Common Stock after the date hereof (the redemption price being hereinafter
referred to as the “Redemption Price”). The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors of the Company in its sole
discretion may establish. The Redemption Price shall be payable, at the option of the Company, in
cash, shares of Common Stock, or such other form of consideration as the Board of Directors of the
Company shall determine.



     (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the
Board of Directors of the Company 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.
The Company shall promptly give public notice of any such redemption (with prompt written notice
thereof to the Rights Agent); provided, however, that the failure to give, or any
defect in, any such notice shall not affect the legality or validity of such redemption. Within 10
days after such action of the Board of Directors of the Company ordering the redemption of the
Rights (or such later time as the Board of Directors of the Company may establish for the
effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be made.



30









 





     Section 24. Exchange.



     (a) The Board of Directors of the Company may, at its option, at any time after the Flip-In
Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring in respect of the Common
Stock after the date hereof (such amount per Right being hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall not be
empowered to effect such exchange at any time after an Acquiring Person shall have become the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares of Common Stock
then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the Rights by the Board of Directors of the Company may be made effective
at such time, on such basis and with such conditions as the Board of Directors of the Company in
its sole discretion may establish.



     (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to give,
or any defect in, such notice shall not affect the legality or validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all of the holders of the Rights so
exchanged 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 will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become null and void pursuant to
the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.



     (c) The Company may at its option substitute, and, in the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit
an exchange of Rights for Common Stock as contemplated in accordance with this Section 24, the
Company shall substitute to the extent of such insufficiency, for each share of Common Stock that
would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or Equivalent Preferred Shares, as such term is defined in Section 11(b)) such
that the current per share market price (determined pursuant to Section 11(d) hereof) of one share
of Preferred Stock (or Equivalent Preferred Share) multiplied by such number or fraction is equal
to the current per share market price of one share of Common Stock (determined pursuant to Section
11(d) hereof) as of the date of such exchange.



31









 





     Section 25. Notice of Certain Events.



     (a) In case the Company shall at any time after the earlier of the Distribution Date or the
Stock Acquisition Date propose (i) to pay any dividend payable in stock of any class to the holders
of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock
(other than a regular quarterly cash dividend), (ii) to offer to the holders of its 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 or combination of outstanding Preferred Stock), (iv) to effect the liquidation,
dissolution or winding up of the Company, or (v) to pay any dividend on the Common Stock payable in
Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock), then, in each such
case, the Company shall give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such dividend or distribution or offering of rights or warrants, or the
date on which such liquidation, dissolution, winding up, reclassification, subdivision, combination
or consolidation is to take place and the date of participation therein by the holders of the
Common Stock and/or Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock for purposes of such action, and in the
case of any such other action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Stock and/or Preferred
Stock, whichever shall be the earlier.



     (b) In case any event described in Section 11(a)(ii) or Section 13 shall occur then the
Company shall as soon as practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Stock)
in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.



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


Lear Corporation

21557 Telegraph Road

Southfield, Michigan 48033

Attention: General Counsel




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



32









 




Mellon Investor Services LLC

480 Washington Boulevard, 29th Floor

Jersey City, NJ 07310

Attn: Kayur D. Patel



With a copy to:



Mellon Investor Services LLC

480 Washington Boulevard, 29th Floor

Jersey City, NJ 07310

Attention: General Counsel

Facsimile: (201) 680-4610



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




     Section 27. Supplements and Amendments. Except as provided in this Section 27, for so
long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At any time when the
Rights are no longer redeemable, except as provided in this Section 27, the Company may, and the
Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights, provided that no such supplement or amendment may (a) adversely
affect the interests of the holders of Rights as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable
other than in accordance with this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment, provided that, 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;
provided further, and notwithstanding the foregoing, in the event
that the Company determines after using reasonable diligence that the
Rights Agent is unavailable and that an amendment or supplement to
the Agreement is necessary or advisable, any supplement
or amendment to the definition of Acquiring Person, Exempt Person or
Exempt Transaction or to the definition of Final Expiration Date to
make such date an earlier date shall become effective immediately upon
execution by the Company, whether or not also executed by the Rights Agent, provided that the
Company shall promptly notify the Rights Agent of any such supplement or amendment and provide the
Rights Agent with a copy of such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests of the holders of
Common Stock.



33









 





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



     Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common 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 Right Certificates (and,
prior to the Distribution Date, the Common Stock).



     Section 30. Determinations and Actions by the Board of Directors. The Board of
Directors of the Company shall have the exclusive power and authority to administer this Agreement
and to exercise the rights and powers specifically granted to the Board of Directors of the Company
or to the Company, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or not redeem the Rights
or to amend or not amend this Agreement). All such actions, calculations, interpretations and
determinations that are done or made by the Board of Directors of the Company in good faith shall
be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as
such, and all other parties. The Rights Agent is entitled always to assume that the Board of
Directors of the Company acted in good faith and shall be fully protected and incur no liability in
reliance thereon.



     Section 31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated; and
provided however, that 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.



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



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



34









 





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



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



	 	 	 	 	 	 	 
	 	 	LEAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Terrence B. Larkin	 	 
	 

	 	Name:
	 	 
Terrence B. Larkin
	 	 
	 

	 	Title:
	 	Senior Vice President, General
Counsel
and Corporate Secretary
	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	MELLON INVESTOR SERVICES LLC,

as Rights Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kayur D. Patel	 	 
	 

	 	Name:
	 	 

Kayur D. Patel
	 	 
	 

	 	Title:
	 	Relationship Manager	 	 






35









 





Exhibit A




FORM OF

CERTIFICATE OF DESIGNATION




of




SERIES A JUNIOR PARTICIPATING PREFERRED STOCK




of




LEAR CORPORATION




Pursuant to Section 151 of the General Corporation Law

of the State of Delaware




     LEAR Corporation, a corporation organized and existing under the General Corporation Law of
the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY:



     That pursuant to the authority vested in the Board of Directors of the Corporation (the “Board
of Directors”) in accordance with the provisions of the Amended and Restated Certificate of
Incorporation (the “Certificate of Incorporation”) of the said Corporation, the said Board of
Directors on December 23, 2008 adopted the following resolution creating a series of 500,000 shares
of Preferred Stock designated as “Series A Junior Participating Preferred Stock”:




     RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of
the Amended and Restated Certificate of Incorporation, a series of
Preferred Stock, par value $.01 per share, of the Corporation be and
hereby is created, and that the designation and number of shares
thereof and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as
follows:



Series A Junior Participating Preferred Stock




     1. Designation and Amount. There shall be a series of Preferred Stock that shall be
designated as “Series A Junior Participating Preferred Stock,” and the number of shares
constituting such series shall be 500,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, however, that no decrease shall
reduce the number of shares of Series A Junior Participating Preferred Stock to less than the
number of shares then issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding securities issued by the
Corporation.



A-1









 





     2. Dividends and Distribution.



          (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock, in preference to the holders of shares of any class or series of
stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock in
respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the 30th day
of March, June, September and December, in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or
(b) the Adjustment Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $.01 per share, of the Corporation (the “Common Stock”)
since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 1000.
In the event the Corporation shall at any time after December 23, 2008 (i) declare and pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.




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




          (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior
Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A 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 the shares
of Series A Junior Participating Preferred Stock




A-2









 




in an amount less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.




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



          (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of
the stockholders of the Corporation.




          (B) Except as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A
Junior Participating Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.




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




A-3









 




of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be
in addition to any other voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.




     4. Certain Restrictions.



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




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



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



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



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




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



A-4









 





     6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up
of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Participating Preferred Stock shall have received an amount per share (the “Series
A Liquidation Preference”) equal to the greater of (i) $10.00 plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date of such payment,
or (ii) the Adjustment Number times the per share amount of all cash and other property to be
distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the
Corporation.



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




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




     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the outstanding shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment Number times the
aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or exchanged.



     8. No Redemption. Shares of Series A Junior Participating Preferred Stock shall not be
subject to redemption by the Corporation.



     9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other
series of the Preferred Stock as to the payment of dividends and as to the distribution of assets
upon liquidation, dissolution or winding up, unless the terms of any such series shall provide
otherwise, and shall rank senior to the Common Stock as to such matters.



     10. Amendment. At any time that any shares of Series A Junior Participating Preferred Stock
are outstanding, the Certificate of Incorporation of the Corporation shall not be amended, by
merger, consolidation or otherwise, which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class.



A-5









 





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



     IN WITNESS WHEREOF, the undersigned has executed this Certificate this ___day of December
2008.



	 	 	 	 	 	 	 
	 	 	LEAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 






A-6









 





Exhibit B




Form of Right Certificate




Certificate No. R-______





NOT EXERCISABLE AFTER DECEMBER 23, 2018 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.



RIGHT CERTIFICATE




LEAR CORPORATION




     This certifies that                      or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement, dated as of December 23, 2008, as the
same may be amended from time to time (the “Rights Agreement”), between Lear Corporation, a
Delaware corporation (the “Company”), and Mellon Investor Services LLC, as Rights Agent (the
“Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on December 23,
2018 at the office or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the “Preferred Stock”), of the Company at
a purchase price of $12.00 per one one-thousandth of a share of Preferred Stock (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase properly completed and duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of December 23, 2008, based on the Preferred Stock as constituted at
such date. As provided in the Rights Agreement, the Purchase Price, the number of one
one-thousandths of a share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of certain events.



B-1









 





     This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are
on file at the principal executive offices of the Company and the above-mentioned office or agency
of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor.



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



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(i) may be redeemed by the Company at a redemption price of $.01 per Right or (ii) may be exchanged
in whole or in part for shares of the Company’s Common Stock, par value $.01 per share, or shares
of Preferred Stock.



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



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



B-2









 





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



     WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of December ___, 2008.



	 	 	 	 	 	 	 
	 	 	LEAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

     [Title]
	 	 






	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	 	 	 
	[Title]
	 	 
	 
	 	 	 	 
	Countersigned:	 	 
	 
	 	 	 	 
	MELLON INVESTOR SERVICES LLC, as Rights Agent	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

     [Title]
	 	 






B-3









 





Form of Reverse Side of Right Certificate




FORM OF ASSIGNMENT




(To be executed by the registered holder if such

holder desires to transfer the Right Certificate)




     FOR VALUE RECEIVED                     
hereby sells, assigns and transfers unto
                    
                    
                     
                     
                    
                    
                  
                    
                    
                    
                    
                    
                    
                    



          (Please print name and address of transferee)




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



Dated:                     




                                                              
                  

Signature




Signature Guaranteed:



     Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion program.


 



(To be completed)




     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by, were not acquired by the undersigned from, and are not being assigned to an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).



                                                               
                 

Signature




B-4









 





Form of Reverse Side of Right Certificate — continued




FORM OF ELECTION TO PURCHASE




(To be executed if holder desires to exercise

Rights represented by the Right Certificate)




To LEAR CORPORATION:



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


 



(Please print name and address)



 




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



Please insert social security

or other identifying number


 



(Please print name and address)



 




Dated:                                                            




                                                       
                   
      

     Signature




(Signature must conform to holder specified on Right Certificate)




Signature Guaranteed:



     Signature must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion program.



B-5









 





Form of Reverse Side of Right Certificate — continued



 



(To be completed)




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



    
                                                     
                  
     

     Signature



 




NOTICE




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



     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, such Assignment or Election to Purchase
will not be honored.



B-6









 





Exhibit C





UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.



SUMMARY OF RIGHTS TO PURCHASE

SHARES OF PREFERRED STOCK OF

LEAR CORPORATION




     On December 23, 2008, the Board of Directors of Lear Corporation (the “Company”) declared a
dividend of one preferred share purchase right (a “Right”) for each outstanding share of common
stock, par value $.01 per share, of the Company (the “Common Stock”). The dividend is payable on
January 2, 2009 (the “Record Date”) to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth of a share of Series
A Junior Participating Preferred Stock, par value $.01 per share, of the Company (the “Preferred
Stock”) at a price of $12.00 per one one-thousandth of a share of Preferred Stock (the “Purchase
Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of December 23, 2008, as the same may be amended from time to time (the “Rights
Agreement”), between the Company and Mellon Investor Services LLC, as Rights Agent (the “Rights
Agent”).



     The Board of Directors adopted the Rights Agreement in an effort to protect stockholder value
by attempting to protect against a possible limitation on the Company’s ability to use its U.S. net
operating loss, capital loss and tax credit carryovers (the “Tax Attributes”). The Company has
experienced significant losses in the U.S., and under the Internal Revenue Code and rules
promulgated by the Internal Revenue Service, the Company may “carry forward” these losses and
various tax credits in certain circumstances to offset any current and future taxable income and
thus reduce our federal income tax liability, subject to certain requirements and restrictions. To
the extent that the Tax Attributes do not otherwise become limited, the Company believes that a
significant amount of Tax Attributes will be able to be carried forward, and therefore these Tax
Attributes 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, the Company’s ability
to use the Tax Attributes could be severely limited, which could therefore significantly impair the
value of the Tax Attributes.



     Until the earlier to occur of (i) the close of business on the tenth business day following a
public announcement or determination by the Board of Directors of the Company that a Person,
together with its Affiliates and Associates (as such terms are defined in the Rights Agreement)
has acquired beneficial ownership of 4.9% or more
of the outstanding shares of Common Stock (with certain exceptions,
an “Acquiring Person”) or (ii) the close of business on the tenth business day
(or such later date as may be determined by the Board of Directors of the Company prior to a public
announcement or determination by the Board of directors of the Company that a Person, together with
its Affiliates and Associates, has become an Acquiring



C-1









 




Person) following the commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the
beneficial ownership by a Person, together with its Affiliates and
Associates, (with certain exceptions) of 4.9% or more of the outstanding shares of Common Stock (the
earlier of such dates being called the “Distribution Date”), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with this Summary of Rights and the Rights will be transferable only in
connection with the transfer of Common Stock. Any Person, together with its Affiliates and
Associates, that beneficially holds 4.9% or more of
the outstanding shares of Common Stock on December 23, 2008 will not be deemed an Acquiring Person
unless and until such Person acquires the beneficial ownership of additional shares of Common Stock
representing one-half of one percent or more of the outstanding shares of Common Stock. The Board
of Directors of the Company may, in its sole discretion, exempt any
Person together with its Affiliates and
Associates, from being
deemed an Acquiring Person for purposes of the Rights Agreement if the Board of Directors of the
Company determines that such Person’s, together with its Affiliates’ and
Associates’, ownership of Common Stock will not jeopardize or
endanger the availability of the Tax Attributes to the Company and the Board of Directors of the
Company may also, in its sole discretion, exempt any transaction from the provisions of the Rights
Agreement.




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



     The Rights are not exercisable until the Distribution Date. The Rights will expire on
December 23, 2018 (the “Final Expiration Date”), unless the Final Expiration Date is advanced or
extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case as
described below.



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



     The number of outstanding Rights is subject to adjustment in the event of a stock dividend on
the Common Stock payable in shares of Common Stock or subdivisions,



C-2









 







consolidations or combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.



     Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of the greater of (a) $10.00 per share, and (b) an amount equal to 1000
times the dividend declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum
preferential payment of the greater of (a) $10.00 per share (plus any accrued but unpaid
dividends), and (b) an amount equal to 1000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have 1000 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1000
times the amount received per share of Common Stock. These rights are protected by customary
antidilution provisions.



     Because of the nature of the Preferred Stock’s dividend, liquidation and voting rights, the
value of the one one-thousandth interest in a share of Preferred Stock purchasable upon exercise of
each Right should approximate the value of one share of Common Stock.



     In
the event that any Person, together with its Affiliates and
Associates, becomes an Acquiring
Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereupon become null and void), will thereafter have the right to receive upon exercise of a
Right that number of shares of Common Stock having a market value of two times the exercise price
of the Right.



     In
the event that, after a Person, together with its Affiliates and
Associates, has become an Acquiring Person, the Company is
acquired in a merger or other business combination transaction or 50% or more of its consolidated
assets or earning power are sold, proper provisions will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will have become null and void)
will thereafter have the right to receive upon the exercise of a Right that number of shares of
common stock of the Person with whom the Company has engaged in the foregoing transaction (or its
parent) that at the time of such transaction have a market value of two times the exercise price of
the Right.



     At
any time after any Person, together with its Affiliates and
Associates, becomes an Acquiring Person and prior to the earlier of
one of the events described in the previous paragraph or the acquisition by such Acquiring Person
of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person which will have become null
and void), in whole or in part, for shares of Common Stock or Preferred Stock (or a series of the
Company’s preferred stock having equivalent rights, preferences and privileges), at an exchange
ratio of one share of Common Stock, or a fractional share of Preferred Stock (or other preferred
stock) equivalent in value thereto, per Right.



     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of
Preferred Stock or Common Stock will be issued (other than fractions of Preferred Stock which are
integral multiples of one one-thousandth of a share of Preferred Stock,



C-3









 







which may, at the election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of the Preferred Stock
or the Common Stock.



     At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
“Redemption Price”) payable, at the option of the Company, in cash, shares of Common Stock or such
other form of consideration as the Board of Directors of the Company shall determine. The
redemption of the Rights may be made effective at such time, on such basis and with such conditions
as the Board of Directors of the Company in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.



     For so long as the Rights are then redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner. After the Rights are no longer
redeemable, the Company may, except with respect to the Redemption Price, amend the Rights
Agreement in any manner that does not adversely affect the interests of holders of the Rights.



     Until a Right is exercised or exchanged, 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.



C-4









 





     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A dated December
___, 2008. A copy of the Rights
Agreement is available free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby incorporated herein by
reference.



C-5