**Exhibit 4.6**LODGENET INTERACTIVE CORPORATION,a Delaware corporation,andCOMPUTERSHARE INVESTOR SERVICES, LLC,a Delaware Limited Liability Company,Rights AgentRights AgreementDated as of February 28, 2008
 

 
**TABLE OF CONTENTS**       **PAGE** 1. CERTAIN DEFINITIONS  1      2. APPOINTMENT OF RIGHTS AGENT  9      3. ISSUE OF RIGHTS CERTIFICATES  9      4. FORM OF RIGHTS CERTIFICATES  11      5. COUNTERSIGNATURE AND REGISTRATION  11      6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTSCERTIFICATES  12      7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS  12      8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES  14      9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK  15      10. PREFERRED STOCK RECORD DATE  16      11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS  16      12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES  23      13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS, CASH FLOW OR EARNING POWER  24      14. ADDITIONAL COVENANTS  26      15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES  26      16. RIGHTS OF ACTION  27      17. AGREEMENT OF RIGHTS HOLDERS  28      18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER  28      19. CONCERNING THE RIGHTS AGENT  29      20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT  29 
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       **PAGE** 21. DUTIES OF RIGHTS AGENT  30      22. CHANGE OF RIGHTS AGENT  32      23. ISSUANCE OF NEW RIGHTS CERTIFICATES  33      24. REDEMPTION, TERMINATION AND EXCHANGE  33      25. NOTICE OF CERTAIN EVENTS  38      26. NOTICES  38      27. SUPPLEMENTS AND AMENDMENTS  39      28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.  39      29. SUCCESSORS  40      30. BENEFITS OF THIS AGREEMENT  40      31. SEVERABILITY  40      32. GOVERNING LAW  40      33. COUNTERPARTS  40      34. DESCRIPTIVE HEADINGS  40      Exhibit A — Form of Rights Certificate  A-1 Exhibit B — Form of Summary of Rights  B-1 
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**RIGHTS AGREEMENT**     THIS RIGHTS AGREEMENT is dated as of February 28, 2008 between LODGENET INTERACTIVECORPORATION, a Delaware corporation (the “Company”), and COMPUTERSHARE INVESTOR SERVICES, LLC, aDelaware Limited Liability Company (the “Rights Agent”).**W I T N E S S E T H:**     WHEREAS, the Board of Directors of the Company (the “Board of Directors”) (a) authorized anddeclared a dividend distribution of one Right (as hereinafter defined) for each share of CommonStock, par value $.01 per share, of the Company (the “Common Stock”) outstanding as of the close ofbusiness on February 28, 2008 (the “Record Date”), and (b) authorized the issuance of one Right(subject to adjustment as provided herein) for each share of Common Stock of the Company issuedbetween the Record Date and the earlier of the Distribution Date and the Expiration Date, as suchterms are hereinafter defined (with Rights also to be issued in connection with certain issuancesof Common Stock after the Distribution Date, as provided more fully herein), each Rightrepresenting the right to purchase one one-thousandth of a share of Series A ParticipatingPreferred Stock, par value $.01 per share, of the Company (“Preferred Stock”) having the rights,powers and preferences set forth in the form of Certificate of Designation previously filed withthe Delaware Secretary of State (“Certificate of Designation”), upon the terms and subject to theconditions hereinafter set forth (the “Rights”);     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein,the parties hereby agree as follows:     1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms have the meaningsindicated:     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who orwhich, together with all Affiliates (as such term is hereinafter defined) and Associates (as suchterm is hereinafter defined) of such Person, shall be the Beneficial Owner (as such term ishereinafter defined) of securities representing twenty percent (20%) or more of the shares ofCommon Stock then outstanding or who was such a Beneficial Owner at any time on or after the datehereof, whether or not such Person continues to be the Beneficial Owner of securities representingtwenty percent (20%) or more of the outstanding shares of Common Stock. Notwithstanding theforegoing,     (i) in no event shall a Person who or which, together with all Affiliates andAssociates of such Person, is the Beneficial Owner of less than twenty percent (20%) of theCompany’s outstanding shares of Common Stock become an Acquiring Person solely as a resultof a reduction of the number of shares of outstanding Common Stock, including repurchases ofoutstanding shares of Common Stock by the Company, which reduction increases the percentageof outstanding shares of Common Stock beneficially owned by such Person (provided that anysubsequent increase in the amount of Common Stock beneficially owned by such Person aftersuch Person becomes aware that such Person is the Beneficial Owner of twenty percent (20%)or more of the then outstanding
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shares of Common Stock, together with all Affiliates and Associates of such Person acquiringbeneficial ownership of additional shares of Common Stock which in the aggregate representmore than one percent (1%) of the shares of Common Stock outstanding, without the priorwritten approval of the Board of Directors shall cause such Person to be an AcquiringPerson);     (ii) the term Acquiring Person shall not mean (A) the Company, (B) any subsidiary (assuch term is hereinafter defined) of the Company, (C) any employee benefit plan of theCompany or any of its subsidiaries, (D) any entity holding securities of the Companyorganized, appointed or established by the Company or any of its subsidiaries for orpursuant to the terms of any such plan, or (E) any underwriter acting in good faith in afirm commitment underwriting of an offering of the Company’s securities pursuant toarrangements with the Company which have been approved by the Board of Directors (HOWEVER,the exception provided by this clause (E) shall no longer be available in the event that anysuch underwriter is otherwise an Acquiring Person on or after the date which is forty (40)days after the date of initial acquisition of the Company’s securities by such underwriterin connection with such offering);     (iii) no Person shall be deemed to be an Acquiring Person if: (A) such Person hasreported or is required to report such ownership (but less than twenty-five percent (25%))on Schedule 13G under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),(or any comparable or successor report), or any Schedule 13D under the Exchange Act (or anycomparable or successor report) and any such report filed (or required to be filed) by suchPerson does not (or would not) state any intention to or reserve the right to control orinfluence the management or policies of the Company or engage in any of the actionsspecified in Item 4 (or any comparable or successor Item) of such Schedule 13D (other thanthe disposition of Common Stock); (B) either (1) within ten (10) Business Days of beingrequested by the Company to advise the Company regarding the same, such Person certifies inwriting to the Company that such Person acquired Beneficial Ownership of securitiesrepresenting shares of Common Stock in excess of twenty percent (20%) inadvertently orwithout knowledge of the terms of the Rights, or (2) the Board of Directors determines ingood faith that such Person has become an Acquiring Person inadvertently; (C) such Persondivests as promptly as practicable a sufficient number of securities representing shares ofCommon Stock so that such Person shall not be deemed to be an Acquiring Person pursuant tothe first sentence of this Section 1(a); and (D) promptly following such Person’sdivestiture of such securities, such Person certifies to the Board of Directors that suchPerson is no longer an Acquiring Person as defined pursuant to the first sentence of thisSection 1(a); and     (iv) the term Acquiring Person shall not mean any Person who or which has entered intoany agreement or arrangement with the Company or any subsidiary of the Company providing foran Acquisition Transaction (as hereinafter defined).     (b) “Acquisition Transaction” shall mean (i) a merger, consolidation or similar transactioninvolving the Company or any of its subsidiaries as a result of which stockholders of the Companywill no longer own a majority of the outstanding shares of (A) Common Stock of the Company or apublicly-traded entity which controls the Company or, (B) if appropriate, the
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entity into which the Company may be merged, consolidated or otherwise combined (based solely onthe shares of Common Stock received or retained by such stockholders, in their capacity asstockholders of the Company, pursuant to such transaction); (ii) a purchase or other acquisition ofall or a substantial portion of the assets of the Company and its subsidiaries; or (iii) a purchaseor other acquisition of securities representing twenty percent (20%) or more of the shares ofCommon Stock then outstanding.     (c) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms inRule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date ofthis Agreement.     (d) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficiallyown,” 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 exercisableimmediately or only after the passage of time) pursuant to any agreement,arrangement or understanding (whether or not in writing) or upon the exercise ofconversion rights, exchange rights, other rights, warrants or options, or otherwise;provided, however, that a Person shall not be deemed the “Beneficial Owner” of, orto “beneficially own,” (A) securities tendered pursuant to a tender or exchangeoffer made by such Person or any of such Person’s Affiliates or Associates untilsuch tendered securities are accepted for payment or exchange; (B) securitiesissuable upon exercise of Rights at any time prior to the occurrence of a TriggeringEvent (as hereinafter defined); or (C) securities issuable upon exercise of Rightsfrom and after the occurrence of a Triggering Event, which Rights were acquired bysuch Person or any of such Person’s Affiliates or Associates prior to theDistribution Date (as hereinafter defined) or pursuant to Section 3(a) or Section 23hereof (the “Original Rights”) or pursuant to Section 11(a)(i) hereof in connectionwith an adjustment made with respect to any Original Rights;     (ii) which such Person or any of such Person’s Affiliates or Associates,directly or indirectly, has the right to vote or dispose of or has “beneficialownership” of (as determined pursuant to Rule 13d-3 of the General Rules andRegulations under the Exchange Act), including pursuant to any agreement,arrangement or understanding, whether or not in writing; provided, however, that aPerson shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” anysecurity under this subparagraph (ii) as the result of an agreement, arrangement orunderstanding to vote such security if such agreement, arrangement or understanding:(A) arises solely from a revocable proxy given in response to a public proxy orconsent solicitation made pursuant to, and in accordance with, the applicableprovisions of the General Rules and Regulations of the Exchange Act, and (B) is notreportable by such Person on Schedule 13D under the Exchange Act (or any comparableor successor report); or
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     (iii) which are beneficially owned, directly or indirectly, by any other Person(or any Affiliate or Associate thereof) with which such Person or any of suchPerson’s Affiliates or Associates has any agreement, arrangement or understanding(whether or not in writing) for the purpose of acquiring, holding, voting (exceptpursuant to a revocable proxy as described in the proviso to subparagraph (ii) ofthis paragraph (d)) or disposing of any voting securities of the Company; provided,however, that nothing in this paragraph (d) shall cause a Person engaged in businessas an underwriter of securities to be the “Beneficial Owner” of, or to “beneficiallyown,” any securities acquired through such Person’s participation in good faith in afirm commitment underwriting until the expiration of forty (40) days after the dateof such acquisition, and then only if such securities continue to be owned by suchPerson at such expiration of forty (40) days; and provided further, however, thatany stockholder of the Company, with affiliate(s), associate(s) or other person(s)who may be deemed representatives of it serving as director(s) of the Company, shallnot be deemed to beneficially own securities held by other Persons as a result of(A) persons affiliated or otherwise associated with such stockholder serving asdirectors or taking any action in connection therewith; (B) discussing the status ofits shares with the Company or other stockholders of the Company similarly situated;or (C) voting or acting in a manner similar to other stockholders similarlysituated, absent a specific finding by the Board of Directors of an expressagreement among such stockholders to act in concert with one another as stockholdersso as to cause, in the good faith judgment of the Board of Directors, each suchstockholder to be the Beneficial Owner of the shares held by the otherstockholder(s).     (e) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which bankinginstitutions in the State of Delaware are authorized or obligated by law or executive order toclose.     (f) The term “close of business” on any given date shall mean 5 P.M., Eastern time, on suchdate; provided, however, that if such date is not a Business Day it shall mean 5 P.M., Easterntime, on the next succeeding Business Day.     (g) “Common Stock” shall mean the Common Stock, par value $.01 per share, of the Company,except that “Common Stock” when used with reference to stock issued by any Person other than theCompany shall mean the capital stock with the greatest voting power, or the equity securities orother equity interest having power to control or direct the management, of such Person or, if suchPerson is a subsidiary of another Person, of the Person which ultimately controls suchfirst-mentioned Person and which has issued and outstanding such capital stock, equity securitiesor equity interests.     (h) “Final Expiration Date” shall mean February 28, 2018; provided, however, that, if aDistribution Date has not occurred prior thereto, the Final Expiration Date shall mean the earliestto occur of any of the following if and to the extent such events occur: (i) February 28, 2009, inthe event this Agreement is not approved by the holders of a majority of shares of Common Stockpresent in person or represented by proxy and entitled to vote on the subject
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matter (excluding the vote of any Acquiring Person) at a duly called meeting of stockholders or anyadjournment or postponement thereof, at which a quorum is present, prior to such date; and (ii) thedate of any Company annual stockholders’ meeting following the meeting in 2008 in the event that atleast three successive such meetings shall have occurred at any time following the meeting in 2008without this Agreement being ratified at least once by the Company’s stockholders, as well as theBoard, during the three-year period represented by such meetings (inclusive in such three-yearperiod, for this purpose, of the date on which the third such meeting takes place).     (i) “Person” shall mean any individual, firm, corporation, partnership, limited liabilitycompany, joint venture, association, trust or other entity.     (j) “Preferred Stock” shall mean the Series A Participating Preferred Stock, par value $.01per share, of the Company, and to the extent that there are not sufficient numbers of shares ofSeries A Participating Preferred Stock authorized to permit the full exercise of the Rights, anyother series of preferred stock of the Company designated for such purpose containing termssubstantially similar to the terms of the Series A Participating Preferred Stock.     (k) “Qualified Offer” shall mean a tender offer for all outstanding shares of Common Stock notalready beneficially owned by the Person making the offer that meets all of the followingrequirements on the date on which the Qualified Offer is commenced (for purposes of thisdefinition, the “date on which the Qualified Offer is commenced” shall be determined within themeaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act) andimmediately prior to the consummation of the Qualified Offer:     (i) the same per share price and consideration is offered for all shares of CommonStock in the Qualified Offer, provided that such per share price and consideration isgreater than the highest reported market price for the Common Stock during the twelve (12)month period immediately preceding the date on which the Qualified Offer is commenced andrepresents a premium above the average of the closing prices (as determined pursuant toSection 11(d)(i) hereof) for the five (5) Trading Days immediately preceding the date onwhich the Qualified Offer is commenced;     (ii) the consideration is at least eighty percent (80%) cash (and any non-cash portionis comprised of shares of common stock of the offering Person that are listed on either theNew York Stock Exchange or The Nasdaq Stock Market LLC, such consideration to be adjusted toreflect any decrease in the value of such shares prior to the consummation of the QualifiedOffer) and is to be paid upon consummation of the Qualified Offer for all shares of CommonStock tendered or exchanged in the Qualified Offer;     (iii) in the case of a Qualified Offer that includes shares of common stock of theoffering Person, (A) the value of such shares for purposes of this definition shall be thelower of (1) the average of the last sale prices (regular way) of such shares reported inthe principal consolidated transaction reporting system with respect to such shares for thefive (5) Trading Days immediately preceding the date of any determination, and (2) thelowest reported market price for common stock of the offering Person during the five (5)
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Trading Days immediately preceding the date on which the offer is commenced, (B) theoffering Person is a publicly owned corporation organized under the federal laws of theUnited States or the state laws of any of the fifty (50) states or the District of Columbia,and its common stock is listed or admitted to trading on a national securities exchange, (C)no stockholder approval of the offering Person is required to issue such common stock, or,if required, has already been obtained, (D) no other class of voting stock of the offeringPerson is outstanding, and (E) the offering Person shall permit a nationally recognizedinvestment banking firm retained by the Board of Directors and legal counsel designated bythe Company to have access to such offering Person’s books, records, management, accountantsand other appropriate outside advisers for the purposes of permitting such investmentbanking firm and such legal counsel to conduct a due diligence review of the offering Personin order to permit such investment banking firm (relying as appropriate on the advice ofsuch legal counsel) to be able to render an opinion to the Board of Directors with respectto whether the consideration being offered to the Company’s stockholders is fair;     (iv) on or prior to the date on which the Qualified Offer is commenced, such offeringPerson:     (A) has on hand cash or cash equivalents for the full amount necessary toconsummate such offer and has irrevocably committed in writing to the Company toutilize such cash or cash equivalents for purposes of such offer if consummated andto set apart and maintain available such cash or cash equivalents for such purposesuntil the offer is consummated or withdrawn; or     (B) has all financing in the full amount necessary to consummate such offer andhas: (1) entered into, and provided to the Company certified copies of, definitivefinancing agreements (including exhibits and related documents) for funds for suchoffer which, when added to the amount of cash and cash equivalents available,committed in writing, set apart and maintained in the same manner as described inclause (A) above, are in an amount not less than the full amount necessary toconsummate such offer, which agreements are with one or more responsible financialinstitutions or other entities having the necessary financial capacity and abilityto provide such funds, constitute firm, unqualified commitments to provide thefunding described above without market or company maximum limitations, and aresubject only to customary terms and conditions (which shall in no event includeconditions requiring access by such financial institutions to non-public informationto be provided by the Company, conditions based on the accuracy of any informationconcerning the Company, or conditions requiring the Company to make anyrepresentations, warranties or covenants in connection with such financing), and (2)provided to the Company copies of all written materials prepared by such Person forsuch financial institutions in connection with entering into such financingagreements; provided that, “the full amount necessary to consummate such offer” ineither clause (A) or (B) above shall be an amount sufficient to pay for all sharesof Common Stock outstanding
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on a fully diluted basis the consideration pursuant to the offer and the second-steptransaction required by clause (viii) below and all related expenses;     (v) such offer is conditioned on receiving a minimum of at least ninety percent (90%)of the outstanding shares of Common Stock (other than those owned by the offering Person andits Affiliates or Associates) being tendered and not withdrawn as of the Qualified Offer’sexpiration date, which condition shall not be waivable;     (vi) prior to or on the date that such offer is commenced, the Company shall havereceived an irrevocable written commitment of the offering Person that the offer will remainopen for at least sixty (60) days and, if a Special Meeting is duly requested in accordancewith Section 24(a)(iii), for at least ten (10) Business Days after the date of the SpecialMeeting or, if no Special Meeting is held within ninety (90) Business Days following receiptof the Special Meeting Notice in accordance with Section 24(a)(iii), for at least ten (10)Business Days following such ninety (90) Business Day period;provided, however, that (x) if there is any increase in the price of such offer, such offermust remain open for at least an additional fifteen (15) Business Days after the last suchincrease, (y) such offer must remain open for at least fifteen (15) Business Days after thedate that any bona fide alternative offer is made which, in the opinion of one or moreinvestment banking firms designated by the Company, provides for consideration per share inexcess of that provided for in such offer, and (z) such offer must remain open for at leastfifteen (15) Business Days after the date, if any, on which such offering Person reduces theper share price offered in accordance with clause (viii)(B) below (provided, in the case ofeach of clauses (x),(y) and (z) above, in no event will such Qualified Offer have beenoutstanding for less than sixty (60) days);provided further, however, that such offer need not remain open, as a result of this clause(vi), beyond (1) the time which any other offer satisfying the criteria for a QualifiedOffer is then required to be kept open under this clause (vi), or (2) the scheduledexpiration date, as such date may be extended by public announcement on or prior to the thenscheduled expiration date, of any other tender offer for shares of Common stock with respectto which the Board of Directors has agreed to redeem the Rights immediately prior toacceptance for payment of shares of Common Stock thereunder (unless such other offer isterminated prior to its expiration without any shares of Common Stock having been purchasedthereunder);     (vii) such offer is accompanied by a written opinion, in customary form, of anationally recognized investment banking firm which is addressed to the Company and theholders of shares of Common Stock (other than such offering Person) and states that theprice to be paid to holders pursuant to the offer is fair from a financial point of view tosuch holders and includes any written presentation of such firm showing the analysis andrange of values underlying such conclusions and such written opinion and any suchpresentation is updated and provided to the Company within two (2) Business Days prior tothe date such offer is consummated;
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     (viii) prior to or on the date that such Qualified Offer is commenced, such offeringPerson makes an irrevocable written commitment to the Company and, with respect to clause(A) to the Company’s stockholders,     (A) to consummate a transaction or transactions promptly upon the completion ofsuch Qualified Offer (and in no event later than five (5) Business Days thereafter),whereby all shares of Common Stock not purchased in such Qualified Offer will beacquired at the same cash price per share paid in such Qualified Offer,     (B) that the offering Person will not make any amendments to the QualifiedOffer to reduce the offer consideration, or otherwise change the terms of theQualified Offer in a way that is adverse to a tendering stockholder (other than areduction to reflect any dividend declared by the Company, other than a regularquarterly dividend, after the commencement of such Qualified Offer or any materialchange in the capital structure of the Company initiated by the Company after thecommencement of such Qualified Offer, whether by way of reclassification,recapitalization, reorganization, repurchase or otherwise), and     (C) if the Qualified Offer is not consummated, that neither such offeringPerson nor any of its Affiliates or Associates will make any offer for or purchaseany equity securities of the Company for a period of one (1) year after thecommencement of the original offer if such original offer does not result in thetender of at least eighty-five percent (85%) of the outstanding shares of CommonStock not owned by such offering Person (including its Affiliates and Associates),unless another tender offer by another party for all outstanding shares of CommonStock is commenced that (a) constitutes a Qualified Offer (in which event, any newoffer by such offering Person or of any Affiliates or Associates must be at a priceno less than that provided for in such original offer) or (b) is approved by theBoard of Directors (in which event, any new offer by such offering Person or of anyof its Affiliates or Associates must be at a price no less than that provided for insuch approved offer); and     (ix) in addition to each of the requirements set forth above, the Qualified Offer issubject only to the conditions required in this definition and other customary terms andconditions, and is not subject to any financing, funding or similar condition, nor anycondition relating to completion of or satisfaction with any due diligence or similarinvestigation.     (l) “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii) hereof.     (m) “Section 13 Event” shall mean any event described in Section 13(a) hereof.     (n) “Stock Acquisition Date” shall mean the first date of public announcement by the Companyor an Acquiring Person that an Acquiring Person has become such.
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     (o) A “subsidiary” of any Person shall mean any corporation or other entity of which amajority of the voting power of the voting equity securities or voting interests is owned, directlyor indirectly, by such Person, or which is otherwise controlled by such Person.     (p) “Trading Day” shall mean a day on which the national securities exchange on which theshares of Common Stock of the Company or shares of stock of another Person, as applicable, areprincipally listed or admitted to trading or quoted is open for the transaction of business or, ifthe shares of Common Stock of the Company or shares of stock of another Person, as applicable, arenot listed or admitted to trading or quoted on any national securities exchange, a Business Day.     (q) “Triggering Event” shall mean any Section 11(a)(ii) Event or Section 13 Event.     (r) “Voting power” shall mean the voting power of all securities of the Company thenoutstanding and generally entitled to vote for the election of directors of the Company.     2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights Agent to act as agentfor the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shallprior to the Distribution Date also be the holders of the Common Stock) in accordance with theterms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company mayfrom time to time appoint such Co-Rights Agents as it may deem necessary or desirable, upon ten(10) days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty tosupervise, and in no event be liable for, the acts or omissions of any such co-Rights Agent. Inthe event the Company appoints one or more Co-Rights Agents, the respective duties of the RightsAgents and any Co-Rights Agents shall be as the Company shall determine.     3. ISSUE OF RIGHTS CERTIFICATES.     (a) Until the earlier of (i) the close of business on the tenth (10th) Business Day after theStock Acquisition Date, or (ii) the close of business on the tenth (10th) Business Day (or suchlater date as the Board of Directors shall determine) after the date of the commencement of atender offer or exchange offer by any Person (other than the Company, any subsidiary of theCompany, any employee benefit plan of the Company or any of its subsidiaries, or any Person orentity organized, appointed or established by the Company or any of its subsidiaries for orpursuant to the terms of any such plan) within the meaning of Rule 14d-2(a) of the General Rulesand Regulations under the Exchange Act, or any successor provision thereto, if upon consummationthereof, such Person would become an Acquiring Person (the earliest of (i) and (ii) being hereinreferred to as the “Distribution Date”), (A) the Rights shall be evidenced (subject to theprovisions of paragraph (b) of this Section 3) by the certificates for Common Stock registered inthe names of the holders of the Common Stock (which certificates for Common Stock shall be deemedalso to be certificates for Rights) and not by separate certificates, and (B) the Rights (and theright to receive certificates therefor) shall be transferable only in connection with the transferof the underlying shares of Common Stock. As soon as practicable after the Distribution Date, theRights Agent shall send, by first-class, insured, postage prepaid mail, to each record holder ofthe Common Stock as of the close of business onthe Distribution Date, at the address of such holder shown on the records of the Company, a
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certificate for Rights, in substantially the form of Exhibit A hereto (the “Rights Certificates”),evidencing one Right for each share of Common Stock so held, subject to adjustment as providedherein. In the event that an adjustment in the number of Rights per share of Common Stock has beenmade pursuant to Section 11(n) hereof, at the time of distribution of the Rights Certificates, theCompany shall make the necessary and appropriate rounding adjustments (in accordance with Section15(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributedand cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, theRights shall be evidenced solely by such Rights Certificates.     The Company will make available, as soon as practicable following the date hereof, a Summaryof Rights, in substantially the form attached hereto as Exhibit B (the “Summary of Rights”), to anyholder of Rights who may so request from time to time prior to the Final Expiration Date. Withrespect to certificates for the Common Stock issued at any time after the Record Date and until theDistribution Date (or earlier redemption, expiration or termination of the Rights), the Rightsshall be evidenced by such certificates for the Common Stock together with the Summary of Rightsand the registered holders of the Common Stock shall also be the registered holders of theassociated Rights. Until the Distribution Date (or earlier redemption, expiration or terminationof the Rights), the surrender for transfer of any of the certificates for the Common Stockoutstanding at any time after the Record Date, even without a copy of the Summary of Rightsattached thereto, shall also constitute the transfer of the Rights associated with the Common Stockrepresented by such certificate.     (b) Certificates issued for Common Stock (including, without limitation, certificates issuedupon transfer or exchange of Common Stock) after the Record Date, but prior to the earlier of theDistribution Date or the Expiration Date (as such term is hereinafter defined), shall be deemedalso to be certificates for Rights, and shall have impressed, printed, stamped, written orotherwise affixed onto them the following legend:     This certificate also evidences and entitles the holder hereof to certainRights as set forth in the Rights Agreement between LodgeNet Interactive Corporation(the “Company”) and the Rights Agent thereunder dated as of February 28, 2008 (the“Rights Agreement”), the terms of which are hereby incorporated herein by referenceand a copy of which is on file at the principal offices of the Company. Undercertain circumstances, as set forth in the Rights Agreement, such Rights may beredeemed, may expire, or may be evidenced by separate Certificates and will nolonger be evidenced by this Certificate. The Company will mail to the holder ofthis certificate a copy of the Rights Agreement without charge within five BusinessDays after receipt of a written request therefor. Under certain circumstances,Rights issued to Acquiring Persons (as defined in the Rights Agreement) or certainrelated Persons and any subsequent holder of such Rights may become null and void.With respect to such certificates containing the foregoing legend, until the Distribution Date (orearlier redemption, expiration or termination of the Rights), the Rights associated with the CommonStock represented by such certificates shall be evidenced by such certificates alone,and the surrender for transfer of any of such certificates shall also constitute the transfer ofthe Rights associated with the Common Stock represented by such certificate.
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     4. FORM OF RIGHTS CERTIFICATES.     (a) The Rights Certificates (and the forms of election to purchase shares and of assignmentand certificates to be printed on the reverse thereof) shall each be substantially in the form setforth in Exhibit A hereto and may have such marks of identification or designation and suchlegends, summaries or endorsements printed thereon as the Company may deem appropriate and as arenot inconsistent with the provisions of this Agreement, or as may be required to comply with anyapplicable law or with any rule or regulation made pursuant thereto or with any rule or regulationof any stock exchange or interdealer quotation system on which the Rights may from time to time belisted or traded, or to conform to usage. Subject to the provisions of Section 11 and Section 23hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date, and ontheir face shall entitle the holders thereof to purchase such number of one one-thousandths of ashare of Preferred Stock as shall be set forth therein at the price per one one-thousandth of ashare set forth therein (the “Purchase Price”), but the number of such shares and the PurchasePrice shall be subject to adjustment as provided herein.     (b) Any Rights Certificate issued pursuant to Section 3(a) hereof that represents Rightsbeneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any RightsCertificate issued at any time upon the transfer of any Rights to such an Acquiring Person or anyAssociate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate,and any Rights Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,replacement or adjustment of any other Rights Certificate referred to in this sentence, shallcontain the following legend:The Rights represented by this Rights Certificate were issued to a Person who was anAcquiring Person or an Affiliate or an Associate of an Acquiring Person, as suchterms are defined in the Rights Agreement. This Rights Certificate and the Rightsrepresented hereby may become void under the circumstances specified in Section 7(e)of the Rights Agreement.The provisions of Section 7(e) of this Rights Agreement shall be operative whether or not theforegoing legend is contained on any such Rights Certificate.     5. COUNTERSIGNATURE AND REGISTRATION. The Rights Certificates shall be executed on behalf ofthe Company by its Chairman of the Board, any Vice Chairman of the Board, its President, ChiefOperating Officer or any Vice President, either manually or by facsimile signature, and shall haveaffixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretaryor an Assistant Secretary of the Company, either manually or by facsimile signature. The RightsCertificates shall be countersigned by the Rights Agent, either manually or by facsimile signature,and shall not be valid for any purpose unless so countersigned. In case any officer of the Companywho shall have signed any of the RightsCertificates shall cease to be such officer of the Company before countersignature by the RightsAgent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may becountersigned by the Rights Agent, and issued and delivered by the Company with the same force andeffect as though the Person who signed such Rights Certificates had not ceased to be such officerof the Company; and any Rights Certificates may be signed on behalf of the
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Company by any Personwho, at the actual date of the execution of such Rights Certificate, shall be a proper officer ofthe Company to sign such Rights Certificate, although at the date of the execution of this RightsAgreement any such Person was not such an officer.     Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its officedesignated for such purpose, books for registration and transfer of the Rights Certificates issuedhereunder. Such books shall show the names and addresses of the respective holders of the RightsCertificates, the number of Rights evidenced on its face by each of the Rights Certificates and thedate of each of the Rights Certificates.     6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,LOST OR STOLEN RIGHTS CERTIFICATES. Subject to the provisions of Sections 7(e), 7(f) and 15hereof, at any time after the close of business on the Distribution Date, and at or prior to theclose of business on the Expiration Date, any Rights Certificate or Certificates may betransferred, split up, combined or exchanged for another Rights Certificate or Rights Certificates,entitling the registered holder to purchase a like number of shares of Preferred Stock as theRights Certificate or Rights Certificates surrendered then entitled such holder to purchase. Anyregistered holder desiring to transfer, split up, combine or exchange any Rights Certificate shallmake such request in writing delivered to the Rights Agent, and shall surrender the RightsCertificate or Rights Certificates to be transferred, split up, combined or exchanged at theprincipal office of the Rights Agent. Thereupon the Rights Agent shall countersign and deliver tothe Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as sorequested. The Company may require payment of a sum sufficient to cover any tax or governmentalcharge that may be imposed in connection with any transfer, split up, combination or exchange ofRights Certificates.     Subject to the provisions of Sections 7(e), 7(f) and 15 hereof, upon receipt by the Companyand the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction ormutilation of a Rights Certificate and such additional evidence of the identity of the BeneficialOwner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shallreasonably request, and, in case of loss, theft or destruction, of indemnity or security reasonablysatisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonableexpenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the RightsCertificate if mutilated, the Company shall execute and deliver a new Rights Certificate of liketenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of theRights Certificate so lost, stolen, destroyed or mutilated.     7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.     (a) The registered holder of any Rights Certificate may exercise the Rights evidenced thereby(except as otherwise provided herein) in whole or in part upon presentation of the RightsCertificate, with the appropriate form of election to purchase on the reverse side thereof dulyexecuted, to the Rights Agent at the principal office of the Rights Agent, together with payment ofthe Purchase Price for each one one-thousandth of a share of Preferred Stock (or such other numberof shares or other securities) as to which the Rights are exercised at any time after the
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Distribution Date, provided that such exercise also occurs at or prior to the earliest of (i) theclose of business on the Final Expiration Date, (ii) the time at which the Rights are redeemed asprovided in Section 24 hereof, (iii) the consummation of a transaction contemplated by Section13(d) hereof, or (iv) the time at which the Rights are exchanged as provided in Section 24(c)hereof (the earliest time of (i), (ii), (iii), or (iv) being the “Expiration Date”).Notwithstanding any other provision of this Agreement, any Person who prior to the DistributionDate becomes a record holder of shares of Common Stock may exercise all of the rights of aregistered holder of a Rights Certificate with respect to the Rights associated with such shares ofCommon Stock in accordance with and subject to the provisions of this Agreement, including theprovisions of Section 7(e) hereof, as of the date such Person becomes a record holder of shares ofCommon Stock.     (b) The Purchase Price for each one one-thousandth share of Preferred Stock pursuant to theexercise of a Right shall initially be $60.00, shall be subject to adjustment from time to time asprovided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States ofAmerica in accordance with paragraph (c) below.     (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the appropriateform of election to purchase duly executed, accompanied by payment of the Purchase Price for theshares (or other securities or property) to be purchased and an amount equal to any applicabletransfer tax (as determined by the Rights Agent) in cash, or by certified check or bank draftpayable to the order of the Company, the Rights Agent shall, subject to Section 21(k), thereuponpromptly (i)(A) requisition from any transfer agent of the shares of Preferred Stock (or makeavailable, if the Rights Agent is the transfer agent) certificates for the number of shares ofPreferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agentto comply with all such requests, or (B) if the Company, in its sole discretion, shall have electedto deposit the shares of Preferred Stock issuable upon exercise of the Rights hereunder into adepositary, requisition from the depositary agent depositary receipts representing such number ofone one-thousandths of a share of Preferred Stock as are to be purchased (in which casecertificates for the shares of Preferred Stock represented by such receipts shall be deposited bythe transfer agent with the depositary agent) and the Company shall direct the depositary agent tocomply with such request, (ii) when appropriate, requisition from the Company the amount of cash,if any, to be paid in lieu of issuance of fractional shares in accordance with Section 15, (iii)promptly after receipt of such certificates or depositary receipts, cause the same to be deliveredto or upon the order of the registered holder of such Rights Certificate, registered in such nameor names as may be designated by such holder, and (iv) when appropriate, after receipt promptlydeliver such cash to or upon the order of theregistered holder of such Rights Certificate. In the event that the Company is obligated to issueother securities of the Company, and/or distribute other property pursuant to Section 11(a), theCompany shall make all arrangements necessary so that such other securities and/or property areavailable for distribution by the Rights Agent, if and when appropriate. In addition, in the caseof an exercise of the Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shallreturn such Rights Certificate to the registered holder thereof after imprinting, stamping orotherwise indicating thereon that the rights represented by such Rights Certificate no longerinclude the rights provided by Section 11(a)(ii) of the Rights Agreement and if less than all theRights represented by such Rights Certificate were so exercised, the Rights Agent shall indicate onthe Rights Certificate the number of Rights represented thereby which continue to include the
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rights provided by Section 11(a)(ii). The Company reserves the right to require prior to theoccurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercisedso that only whole shares of Preferred Stock would be issued.     (d) In case the registered holder of any Rights Certificate shall exercise (except pursuant toSection 11(a)(ii)) less than all the Rights evidenced thereby, a new Rights Certificate evidencingRights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent anddelivered to the registered holder of such Rights Certificate or to such registered holder’s dulyauthorized assigns, subject to the provisions of Section 15 hereof.     (e) Notwithstanding anything in this Agreement to the contrary, if there occurs any TriggeringEvent, then any Rights that are or were on or after the Distribution Date beneficially owned by anAcquiring Person or any Associate or Affiliate of an Acquiring Person shall become null and void,without any further action, and any holder of such Rights shall thereafter have no rightswhatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise.Without limiting the foregoing sentence, Rights held by the following Persons shall be null andvoid without any further action: (i) any direct or indirect transferee of any Rights that are orwere on or after the Distribution Date beneficially owned by an Acquiring Person or any Associateor Affiliate of an Acquiring Person; (ii) any direct or indirect transferee of any Rights that wereon or before the Distribution Date beneficially owned by an Acquiring Person or any Associate orAffiliate of an Acquiring Person if the transferee received such Rights, directly or indirectly,(A) from an Acquiring Person or any Associate or Affiliate of an Acquiring Person (x) as a resultof a distribution by such Acquiring Person or any Associate or Affiliate of an Acquiring Person toholders of its equity securities or similar interests (including, without limitation, partnershipinterests) or (y) pursuant to any continuing agreement, arrangement or understanding with respectto the Rights or (B) in a transfer (or series of transfers) which the Board of Directors determinesis part of a plan, arrangement or understanding which has the purpose or effect of avoiding theprovisions of this Section 7(e); and (iii) subsequent transferees of Persons referred to in theforegoing clauses (i) and (ii) as well as this clause (iii). The Company shall use all reasonableefforts to ensure that the provisions of this Section 7(e) are complied with, but shall have noliability to any holder of Rights or any Rights Certificate or to any other Person as a result ofthe Company’s failure to make any determination with respect to an Acquiring Person or itsAffiliates, Associates or transferees hereunder.     (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent northe Company shall be obligated to undertake any action with respect to a registeredholder upon the occurrence of any purported exercise as set forth in this Section 7 unless thecertificate contained in the appropriate form of election to purchase set forth on the reverse sideof the Rights Certificate surrendered for such exercise shall have been properly completed and dulyexecuted by the registered holder thereof and the Company shall have been provided with suchadditional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) orAffiliates or Associates thereof as the Company shall reasonably request.     8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights Certificates surrenderedfor the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered tothe Company or any of its agents, be delivered to the Rights
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Agent for cancellation or in canceledform, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificatesshall be issued in lieu thereof except as expressly permitted by any of the provisions of thisRights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement,and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquiredby the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver allcanceled Rights Certificates to the Company, or shall, at the written request of the Company,destroy such canceled Rights Certificates, and in such case shall deliver a certificate ofdestruction thereof to the Company.     9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK. The Company covenants and agrees that itshall cause to be reserved and kept available out of its authorized and unissued shares ofPreferred Stock, or any authorized and issued shares of Preferred Stock held in its treasury, thenumber of shares of Preferred Stock that will be sufficient to permit the exercise in full of alloutstanding Rights and, after the occurrence of a Triggering Event, shall so reserve and keepavailable a sufficient number of shares of Common Stock (and/or other securities) which may berequired to permit the exercise in full of the Rights pursuant to this Agreement.     So long as the shares of Preferred Stock (and, after the occurrence of a Triggering Event, anyother securities) issuable upon the exercise of the Rights may be listed on any national securitiesexchange or national quotation system, the Company shall use its best efforts to cause, from andafter such time as the Rights become exercisable, all shares (or other securities) reserved forsuch issuance to be listed on such exchange or system upon official notice of issuance upon suchexercise.     The Company covenants and agrees that it shall take all such action as may be necessary toensure that all shares of Preferred Stock and/or other securities delivered upon exercise of Rightsshall, at the time of delivery of the certificates for such shares or other securities (subject topayment of the Purchase Price), be duly and validly authorized and issued and fully paid andnonassessable shares or securities.     The Company further covenants and agrees that it shall pay when due and payable any and allfederal and state transfer taxes and charges which may be payable in respect of the issuance ordelivery of the Rights Certificates or of any certificates for shares of Preferred Stock and/orother securities upon the exercise of Rights. The Company shall not, however, berequired to (i) pay any transfer tax which may be payable in respect of any transfer or delivery ofRights Certificates to a Person other than, or in respect of the issuance or delivery of the sharesof Preferred Stock and/or other securities in a name other than that of, the registered holder ofthe Rights Certificates evidencing Rights surrendered for exercise or (ii) issue or deliver anycertificates for shares of Preferred Stock and/or other securities in a name other than that of theregistered holder upon the exercise of any Rights until such tax shall have been paid (any such taxbeing payable by the holder of such Rights Certificate at the time of surrender) or until it hasbeen established to the Company’s satisfaction that no such tax is due.     The Company shall use its best efforts to (i) file, as soon as practicable following theearliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration tobe delivered by the Company upon exercise of the Rights has been determined in accordance
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withSection 11(a)(iii) hereof, a registration statement under the Securities Act of 1933, as amended(the “Securities Act”), with respect to the securities purchasable upon exercise of the Rights onan appropriate form, (ii) cause such registration statement to become effective as soon aspracticable after such filing, and (iii) cause such registration statement to remain effective(with a prospectus at all times meeting the requirements of the Securities Act) until the earlierof: (A) the date as of which the Rights are no longer exercisable for such securities, and (B) thedate of the expiration of the Rights. The Company will also take such action as may be appropriateunder, or to ensure compliance with, the securities or “blue sky” laws of the various states inconnection with the exercisability of the Rights. The Company may temporarily suspend, for aperiod of time not to exceed ninety (90) days after the date set forth in clause (i) of the firstsentence of this paragraph, the exercisability of the Rights in order to prepare and file suchregistration statement and permit it to become effective. Upon any such suspension, the Companyshall issue a public announcement stating that the exercisability of the Rights has beentemporarily suspended, as well as a public announcement at such time as the suspension has beenrescinded. In addition, if the Company shall determine that a registration statement is requiredfollowing the Distribution Date, the Company may temporarily suspend the exercisability of theRights until such time as a registration statement has been declared effective. Notwithstandingany provision of this Agreement to the contrary, the Rights shall not be exercisable in anyjurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, theexercise thereof shall not be permitted under applicable law, or a registration statement shall nothave been declared effective.     10. PREFERRED STOCK RECORD DATE. Each Person in whose name any certificate for shares ofPreferred Stock (or other securities) is issued upon the exercise of Rights shall for all purposesbe deemed to have become the holder of record of the shares of Preferred Stock (or othersecurities) represented thereby on, and such certificate shall be dated, the date upon which theRights Certificate evidencing such Rights was duly presented and payment of the Purchase Price (andany applicable transfer taxes) was made; provided, however, that if the date of such presentationand payment is a date upon which the Preferred Stock (or other securities) transfer books of theCompany are closed, such Person shall be deemed to have become the record holder of such shares on,and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock(or other securities) transfer books of the Company are open. Prior to the exercise of the Rightsevidenced thereby, the holder of a Rights Certificate, as such, shall not be entitled to any rightsof a stockholder of the Company with respect to shares for which the Rightsshall be exercisable, including, without limitation, the right to vote, to receive dividends orother distributions or to exercise any preemptive rights, and shall not be entitled to receive anynotice of any proceedings of the Company, except as provided herein.     11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The PurchasePrice, the number of shares covered by each Right and the number of Rights outstanding are subjectto adjustment from time to time as provided in this Section 11.     (a) (i) In the event the Company shall at any time after the date of this Agreement (A)declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock intoa smaller number of shares or (D) issue any shares of its capital
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stock in areclassification of the Preferred Stock (including any such reclassification in connectionwith a consolidation or merger in which the Company is the continuing or survivingcorporation), except as otherwise provided in this Section 11(a) and in Section 7(e), thePurchase Price in effect at the time of the record date for such dividend or of theeffective date of such subdivision, combination or reclassification, and the number and kindof shares of capital stock issuable on such date, shall be proportionately adjusted so thatthe holder of any Right exercised after such time shall be entitled to receive, upon paymentof the Purchase Price then in effect, the aggregate number and kind of shares of capitalstock and other securities which, if such Right had been exercised immediately prior to suchdate and at a time when the Preferred Stock transfer books of the Company were open, suchholder would have owned upon such exercise and been entitled to receive by virtue of suchdividend, subdivision, combination or reclassification. If an event occurs which wouldrequire an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustmentprovided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to,any adjustment required pursuant to Section 11(a)(ii).     (ii) Subject to Section 24 of this Agreement, in the event any Person shall become anAcquiring Person (except pursuant to a tender or exchange offer for all outstanding sharesof Common Stock at a price and on terms determined by at least a majority of the members ofthe Board of Directors who are not officers of the Company and are not representatives ornominees of Acquiring Persons or Affiliates or Associates thereof to be in the bestinterests of the Company and its stockholders (other than the Person or an Affiliate orAssociate thereof on whose behalf the offer is being made) that the price offered is fair tostockholders and not inadequate (taking into account all factors which such members of theBoard of Directors deem relevant, including, without limitation, prices which couldreasonably be achieved if the Company or its assets were sold on an orderly basis designedto realize maximum value), after receiving advice from one or more nationally recognizedinvestment banking firms (a “Permitted Offer”)), unless the event causing such Person tobecome an Acquiring Person is a transaction set forth in Section 13(a) hereof, then,promptly following the first occurrence of an event described in this Section 11(a)(ii),proper provision shall be made so that each holder of a Right, except as provided in Section7(e) hereof, shall have a right to receive, upon exercise thereof at the then currentPurchase Price in accordance with the terms of thisAgreement, in lieu of shares of Preferred Stock, such number of shares of Common Stock ofthe Company as shall equal the result obtained by (x) multiplying the then current PurchasePrice by the then number of one one-thousandths of a share of Preferred Stock for which aRight is then exercisable (prior to any adjustment required pursuant to this Section11(a)(ii)) and (y) dividing that product (which, following such first occurrence, shallthereafter be referred to as the “Purchase Price” for each Right and for all purposes ofthis Agreement) by fifty percent (50%) of the current market price per one share of CommonStock (determined pursuant to Section 11(d)) on the date of the occurrence of the event setforth in this subparagraph (ii) (such shares, as adjusted as provided in this Section11(a)(ii), being referred to as the “Adjustment Shares”).     (iii) In the event that the number of shares of Common Stock which is authorized by theCompany’s Certificate of Incorporation, as amended, but not outstanding or reserved forissuance for purposes other than upon exercise of the Rights,
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is not sufficient to permitthe exercise in full of the Rights in accordance with foregoing subparagraph (ii) of thisSection 11(a), the Company shall (A) determine the value of the Adjustment Shares issuableupon the exercise of a Right (the “Current Value”), and (B) with respect to each Right(subject to Section 7(e) hereof), make adequate provision to substitute for the AdjustmentShares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash,(2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of theCompany (including, without limitation, shares, or units of shares, of preferred stock, suchas the Preferred Stock, which the Board of Directors has deemed to have essentially the samevalue or economic rights as shares of Common Stock (such shares of preferred stock beingreferred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) otherassets, or (6) any combination of the foregoing, having an aggregate value equal to theCurrent Value (less the amount of any reduction in the Purchase Price), where such aggregatevalue has been determined by the Board of Directors based upon the advice of a nationallyrecognized investment banking firm selected by the Board of Directors; provided, however,that if the Company shall not have made adequate provision to deliver value pursuant toclause (B) above within thirty (30) days following the later to occur of (x) the firstoccurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s right ofredemption pursuant to Section 24(a) expires (the later of (x) and (y) being referred toherein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated todeliver, upon the surrender for exercise of a Right and without requiring payment of thePurchase Price, shares of Common Stock (to the extent available) and then, if necessary,cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes ofthe preceding sentence, the term “Spread” shall mean the excess of (i) the Current Valueover (ii) the Purchase Price. If the Board of Directors determines in good faith that it islikely that sufficient additional shares of Common Stock could be authorized for issuanceupon exercise in full of the Rights, the thirty (30) day period set forth above may beextended to the extent necessary, but not more than ninety (90) days after the Section11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for theauthorization of such additional shares (such thirty (30) day period, as it may be extended,is herein called the “Substitution Period”). To the extent the Company determines thataction should be taken pursuant to the first and/or third sentences of this Section11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that suchaction shall apply uniformly to all outstanding Rights, and (2) may suspend theexercisability of the Rights until the expiration of the Substitution Period in order toseek such stockholder approval for such authorization of additional shares and/or to decidethe appropriate form of distribution to be made pursuant to such first sentence and todetermine the value thereof. In the event of any such suspension, the Company shall issue apublic announcement stating that the exercisability of the Rights has been temporarilysuspended, as well as a public announcement at such time as the suspension is no longer ineffect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shallbe the current market price (as determined pursuant to Section 11(d) hereof) per share ofCommon Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value ofany common stock equivalent shall be deemed to equal the current market price per share ofthe Common Stock on such date.
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     (b) If the Company shall fix a record date for the issuance of rights, options or warrants toall holders of Preferred Stock entitling them (for a period expiring within forty-five (45)calendar days after such record date) to subscribe for or purchase Preferred Stock (or shareshaving the same or more favorable rights, privileges and preferences as the Preferred Stock(“equivalent preferred stock”)) or securities convertible into Preferred Stock or equivalentpreferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock(or having a conversion price per share, if a security convertible into Preferred Stock orequivalent preferred stock) less than the current market price (as defined in Section 11(d)) pershare of Preferred Stock on such record date, the Purchase Price to be in effect after such recorddate shall be determined by multiplying the Purchase Price in effect immediately prior to suchrecord date by a fraction, the numerator of which shall be the number of shares of Preferred Stockoutstanding on such record date, plus the number of shares of Preferred Stock which the aggregateoffering price of the total number of shares of Preferred Stock and/or equivalent preferred stockto be offered (and/or the aggregate initial conversion price of the convertible securities so to beoffered) would purchase at such current market price and the denominator of which shall be thenumber of shares of Preferred Stock outstanding on such record date, plus the number of additionalshares of Preferred Stock and/or equivalent preferred stock to be offered for subscription orpurchase (or into which the convertible securities so to be offered are initially convertible). Incase such subscription price may be paid in a consideration part or all of which shall be in a formother than cash, the value of such consideration shall be determined reasonably and with good faithto the holders of Rights by the Board of Directors, whose determination shall be described in astatement filed with the Rights Agent and shall be binding on the Rights Agent and conclusive forall purposes. Shares of Preferred Stock owned by or held for the account of the Company shall notbe deemed outstanding for the purpose of any such computation. Such adjustment shall be madesuccessively whenever such a record date is fixed; and in the event that such rights or warrantsare not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would thenbe in effect if such record date had not been fixed.     (c) If the Company shall fix a record date for the making of a distribution to all holders ofPreferred Stock (including any such distribution made in connection with a consolidation or mergerin which the Company is the continuing corporation) of evidences of indebtedness, cash (other thana regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets(other than a dividend payable in Preferred Stock, but including any dividend payable in stockother than Preferred Stock) or subscription rights or warrants(excluding those referred to in Section 11(b)), the Purchase Price to be in effect after suchrecord date shall be determined by multiplying the Purchase Price in effect immediately prior tosuch record date by a fraction, the numerator of which shall be the current market price (asdefined in Section 11(d)) per share of Preferred Stock on such record date, less the fair marketvalue (as determined reasonably and with good faith to the holders of Rights by the Board ofDirectors, whose determination shall be described in a statement filed with the Rights Agent andshall be binding on the Rights Agent and conclusive for all purposes) of the portion of the cash,assets or evidences of indebtedness so to be distributed or of such subscription rights or warrantsdistributable in respect of one share of Preferred Stock and the denominator of which shall be thecurrent market price (as defined in Section 11(d)) per share of the Preferred Stock. Suchadjustments shall be made successively whenever such a record date is fixed; and in the event thatsuch distribution is not so made, the Purchase Price shall again be adjusted to be the PurchasePrice which would be in effect if such record date had not been fixed.
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     (d) (i) For the purpose of any computation hereunder, other than as provided in Section11(a)(iii), the “current market price” per share of Common Stock on any date shall be deemed to bethe average of the daily closing prices per share of such Common Stock for the thirty (30)consecutive Trading Days immediately prior to such date; provided, however, that in the event thatthe current per share market price of the Common Stock is determined during a period following theannouncement by the issuer of such Common Stock of (A) a dividend or distribution on such CommonStock payable in shares of such Common Stock or securities convertible into shares of such CommonStock (other than the Rights), or (B) any subdivision, combination or reclassification of suchCommon Stock, and prior to the expiration of thirty (30) Trading Days after the ex-dividend datefor such dividend or distribution, or the record date for such subdivision, combination orreclassification, then, and in each such case, the “current market price” shall be properlyadjusted to take into account ex-dividend trading. The closing price for each day shall be thelast sale price, regular way, or, in case no such sale takes place on such day, the average of theclosing bid and asked prices, regular way, in either case as reported in the principal consolidatedtransaction reporting system with respect to securities listed or admitted to trading on the NewYork Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on theNew York Stock Exchange, as reported in the principal consolidated transaction reporting systemwith respect to securities listed on the principal national securities exchange (including TheNasdaq Stock Market LLC) on which the shares of Common Stock are listed or admitted to trading or,if the shares of Common Stock are not listed or quoted on a national securities exchange, the lastquoted price or, if not so quoted, the average of the high bid and low asked prices in theover-the-counter market, as reported by the National Association of Securities Over the CounterBulletin Board or such other system then in use, or, if on any such date the shares of Common Stockare not quoted by any such organization, the average of the closing bid and asked prices asfurnished by a professional market maker making a market in the Common Stock selected by the Boardof Directors. If on any such date no market maker is making a market in the Common Stock, the fairvalue of such shares on such date as determined reasonably and with good faith by the Board ofDirectors shall be used and shall be binding on the Rights Agent. If the Common Stock is notpublicly held or not so listed or traded, “current market price” per share shall mean the fairvalue per share determined reasonably and with good faith to the holders of Rights by the Board ofDirectors, whose determination shall be described in a statement filed with the Rights Agent andshall be binding on the Rights Agent.     (ii) For the purpose of any computation hereunder, the “current market price” per share (orone one-thousandth of a share) of Preferred Stock shall be determined in the same manner as setforth above for the Common Stock in Section 11(d)(i) (other than the last sentence thereof). Ifthe current market price per share (or one one-thousandth of a share) of Preferred Stock cannot bedetermined in the manner provided above or if the Preferred Stock is not publicly held or listed ortraded in a manner described in Section 11(d)(i), the “current market price” per share of PreferredStock shall be conclusively deemed to be an amount equal to 1,000 (as such number may beappropriately adjusted for such events as stock splits, stock dividends and recapitalization withrespect to the Common Stock occurring after the date of this Agreement) multiplied by the currentmarket price per share of the Common Stock and the “current market price” per one one-thousandth ofa share of Preferred Stock shall be equal to the current market price per share of the Common Stock(as appropriately adjusted). If neither the Common Stock nor the Preferred Stock is publicly heldor so listed or traded, “current market
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price” per share shall mean the fair value per share asdetermined in good faith by the Board of Directors, whose determination shall be described in astatement filed with the Rights Agent and shall be conclusive for all purposes.     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shallbe required unless such adjustment would require an increase or decrease of at least one percent(1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section11(e) are not required to be made shall be carried forward and taken into account in any subsequentadjustment. All calculations under this Section 11 shall be made to the nearest cent or to thenearest ten-thousandth of a share of Common Stock or other share or one-millionth of a share ofPreferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), anyadjustment required by this Section 11 shall be made no later than the earlier of (i) three yearsfrom the date of the transaction which mandates such adjustment or (ii) the Expiration Date.     (f) If as a result of any provision of Section 11(a) or Section 13(a), the holder of any Rightthereafter exercised shall become entitled to receive any shares of capital stock of the Companyother than Preferred Stock, thereafter the number of such other shares so receivable upon exerciseof any Right and the Purchase Price thereof shall be subject to adjustment from time to time in amanner and on terms as nearly equivalent as practicable to the provisions with respect to theshares contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and theprovisions of Sections 7, 9, 10, 13 and 15 hereof with respect to the Preferred Stock shall applyon like terms to any such other shares.     (g) All Rights originally issued by the Company subsequent to any adjustment made to thePurchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, thenumber of shares of Preferred Stock purchasable from time to time hereunder upon exercise of theRights, all subject to further adjustment as provided herein.     (h) Unless the Company shall have exercised its election as provided in Section 11(i), uponeach adjustment of the Purchase Price as a result of the calculations made in Section 11(b) and(c), each Right outstanding immediately prior to the making of such adjustment shall thereafterevidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandthsof a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i)multiplying (x) the number of one one-thousandths of a share of Preferred Stock covered by a Rightimmediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to suchadjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price ineffect immediately after such adjustment of the Purchase Price.     (i) The Company may elect on or after the date of any adjustment of the Purchase Price toadjust the number of Rights, in substitution for any adjustment in the number of shares ofPreferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after theadjustment in the number of Rights shall be exercisable for the number of one one-thousandths of ashare of Preferred Stock for which a Right was exercisable immediately prior to such adjustment.Each Right held of record prior to such adjustment of the number of Rights shall become that numberof Rights (calculated to the nearest one millionth) obtained by dividing the Purchase Price ineffect immediately prior to adjustment of the Purchase Price by the
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Purchase Price in effectimmediately after adjustment of the Purchase Price. The Company shall make a public announcementof its election to adjust the number of Rights, indicating the record date for the adjustment, and,if known at the time, the amount of the adjustment to be made. This record date may be the date onwhich the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates havebeen issued, shall be at least ten (10) Business Days later than the date of the publicannouncement. If Rights Certificates have been issued, upon each adjustment of the number ofRights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to bedistributed to holders of record of Rights Certificates on such record date Rights Certificatesevidencing, subject to Section 15 hereof, the additional Rights to which such holders shall beentitled as a result of such adjustment, or, at the option of the Company, shall cause to bedistributed to such holders of record in substitution and replacement for the Rights Certificatesheld by such holders prior to the date of adjustment, and upon surrender thereof, if required bythe Company, new Rights Certificates evidencing all the Rights to which such holders shall beentitled after such adjustment. Rights Certificates so to be distributed shall be issued, executedand countersigned in the manner provided for herein (and may bear, at the option of the Company,the adjusted Purchase Price) and shall be registered in the names of the holders of record ofRights 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 shares ofPreferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore andthereafter issued may continue to express the Purchase Price per share and the number of shareswhich were expressed in the initial Rights Certificates issued hereunder.     (k) Before taking any action that would cause an adjustment reducing the Purchase Price belowthe then par value, if any, of the shares of Preferred Stock, Common Stock or other securitiesissuable upon exercise of the Rights, the Company shall take any corporate action which may, in theopinion of its counsel, be necessary in order that the Company may validly and legally issue fullypaid and nonassessable shares of Preferred Stock, Common Stock or other securities at such adjustedPurchase Price. If upon any exercise of the Rights, a holder is to receive a combination of CommonStock and common stock equivalents, a portion of the consideration paid upon such exercise, equalto at least the then par value of a share of Common Stock of the Company, shall be allocated as thepayment for each share of Common Stock of the Company so received.     (l) In any case in which this Section 11 shall require that an adjustment in the PurchasePrice be made effective as of a record date for a specified event, the Company may elect to deferuntil the occurrence of such event the issuing to the holder of any Right exercised after suchrecord date the shares of Preferred Stock and other capital stock or securities of the Company, ifany, issuable upon such exercise over and above the shares of Preferred Stock and other capitalstock or securities of the Company, if any, issuable upon such exercise on the basis of thePurchase Price in effect prior to such adjustment; provided, however, that the Company shalldeliver to such holder a due bill or other appropriate instrument evidencing such holder’s right toreceive such additional shares upon the occurrence of the event requiring such adjustment.
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     (m) Anything to the contrary in this Section 11 notwithstanding, the Company shall be entitledto make such reductions in the Purchase Price, in addition to those adjustments expressly requiredby this Section 11, as and to the extent that it in its sole discretion shall determine to beadvisable in order that any consolidation or subdivision of the Preferred Stock, issuance whollyfor cash of any shares of Preferred Stock at less than the current market price, issuance whollyfor cash of shares of Preferred Stock or securities which by their terms are convertible into orexchangeable for shares of Preferred Stock, stock dividends or issuance of rights, options orwarrants referred to hereinabove in this Section 11, hereafter made by the Company to holders ofits Preferred Stock shall not be taxable to such stockholders.     (n) Anything in this Agreement to the contrary notwithstanding, in the event that the Companyshall at any time after the date of this Agreement and prior to the Distribution Date (i) declare adividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii)subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smallernumber of shares, or (iv) issue any shares of its capital stock in a reclassification of theoutstanding Common Stock, the number of Rights associated with each share of Common Stock thenoutstanding, or issued or delivered thereafter but prior to the Distribution Date, shall beproportionately adjusted so that the number of Rights thereafter associated with each share ofCommon Stock following any such event shall equal the result obtained by multiplying the number ofRights associated with each share of Common Stock immediately prior to such event by a fraction thenumerator of which shall be the total number of shares of Common Stock outstanding immediatelyprior to the occurrence of the event and the denominator of which shall be the total number ofshares of Common Stock outstanding immediately following the occurrence of such event.     (o) The exercise of Rights under Section 11(a)(ii) shall only result in the loss of rightsunder Section 11(a)(ii) to the extent so exercised and shall not otherwise affect the rightsrepresented by the Rights under this Rights Agreement, including the rights represented by Section13.     12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever an adjustment ismade as provided in Section 11 or 13 hereof, the Company shall (a) promptly prepare a certificatesetting forth such adjustment and a brief statement of the facts accounting for such adjustment,(b) promptly file with the Rights Agent and with each transfer agent for the Preferred Stock andthe Common Stock a copy of suchcertificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate inaccordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on anysuch certificate and on any adjustment therein contained and shall not be deemed to have knowledgeof any adjustment unless and until it shall have received such certificate. Notwithstanding theforegoing provisions of this Section 12, the failure of the Company to make such certification orgive such notice shall not affect the validity of or the force or effect of the requirement forsuch adjustment.
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     13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS, CASH FLOW OR EARNING POWER.     (a) In the event that, following the Stock Acquisition Date, directly or indirectly, (i) theCompany shall consolidate with, or merge with and into, any other Person; (ii) any Person shallconsolidate with the Company, or merge with and into the Company and the Company shall be thecontinuing or surviving corporation of such merger (other than, in the case of either transactiondescribed in (i) or (ii), a merger or consolidation which would result in all of the voting powerrepresented by the securities of the Company outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into securities of the survivingentity) all of the voting power represented by the securities of the Company or such survivingentity outstanding immediately after such merger or consolidation and the holders of suchsecurities not having changed as a result of such merger or consolidation); or (iii) the Companyshall sell or otherwise transfer (or one or more of its subsidiaries shall sell or otherwisetransfer), in one or more transactions, assets, cash flow or earning power aggregating more thanfifty percent (50%) of the assets or earning power of the Company and its subsidiaries (taken as awhole) to any other Person, then, and in each such case, proper provision shall be made so that (A)following the Distribution Date, each holder of a Right (other than as provided in Section 7(e)hereof) shall have the right to receive, upon the exercise thereof at the then current PurchasePrice in accordance with the terms of this Agreement, such number of shares of freely tradableCommon Stock of the Principal Party (as hereinafter defined), free and clear of liens, rights ofcall or first refusal, encumbrances or other adverse claims, as shall be equal to the resultobtained by (x) multiplying the then current Purchase Price by the number of one one-thousandths ofa share of Preferred Stock for which a Right is then exercisable (without taking into account anyadjustment previously made pursuant to Section 11(a)(ii) hereof), and (y) dividing that product byfifty percent (50%) of the current market price per share of the Common Stock of such PrincipalParty (determined pursuant to Section 11(d) hereof) on the date of consummation of suchconsolidation, 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 obligationsand duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter bedeemed to refer to such Principal Party, it being specifically intended that the provisions ofSection 11 hereof shall apply to such Principal Party; and (D) such Principal Party shall take suchsteps (including, but not limited to, the reservation of a sufficient number of shares of itsCommon Stock in accordance with Section 9 hereof) in connection with such consummation as may benecessary to assure that the provisions hereof shall thereafter be applicable, as nearly asreasonably may be, in relation to its shares of Common Stock thereafter deliverable upon theexercise of the Rights.     (b) “Principal Party” shall mean:     (i) in the case of any transaction described in (i) or (ii) of the first sentence ofthis Section 13, the Person that is the issuer of any securities into which shares of CommonStock of the Company are converted in such merger or consolidation, and if no securities areso issued, the Person that is the other party to the merger or consolidation (including, ifapplicable, the Company, if it is the surviving corporation); and     (ii) in the case of any transaction described in (iii) of the first sentence in thisSection 13, the Person that is the party receiving the greatest portion of the assets orearning power transferred pursuant to such transaction or transactions;
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provided, however, that in any such case, (A) if the Common Stock of such Person is not atsuch time and has not been continuously over the preceding twelve (12) month periodregistered under Section 12 of the Exchange Act, and such Person is a direct or indirectsubsidiary or Affiliate of another Person the Common Stock of which is and has been soregistered, “Principal Party” shall refer to such other Person; (B) in case such Person is asubsidiary, directly or indirectly, of more than one Person, the Common Stock of two or moreof which are and have been so registered, “Principal Party” shall refer to whichever of suchPersons is the issuer of the Common Stock having the greatest aggregate market value; and(C) in case such Person is owned, directly or indirectly, by a joint venture formed by twoor more Persons that are not owned, directly or indirectly, by the same Person, the rulesset forth in (A) and (B) above shall apply to each of the chains of ownership having aninterest in such joint venture as if such party were a “Subsidiary” of both or all of suchjoint venturers and the Principal Parties in each such chain shall bear the obligations setforth in this Section 13 in the same ratio as their direct or indirect interests in suchPerson bear to the total of such interests.     (c) The Company shall not consummate any such consolidation, merger, sale or transfer unlessthe Principal Party shall have a sufficient number of authorized shares of its Common Stock thathave not been issued or reserved for issuance to permit the exercise in full of the Rights inaccordance with this Section 13 and unless prior thereto the Company and each Principal Party andeach other Person who may become a Principal Party as a result of such consolidation, merger, saleor transfer shall have executed and delivered to the Rights Agent a supplemental agreementproviding for the terms set forth in paragraphs (a) and (b) of this Section 13 and furtherproviding that, as soon as practicable after the date of any consolidation, merger, sale ortransfer of assets mentioned in paragraph (a) of this Section 13, the Principal Party at its ownexpense shall:     (i) prepare and file a registration statement under the Securities Act with respect tothe Rights and the securities purchasable upon exercise of the Rights on an appropriateform, will use its best efforts to cause such registration statement to become effective assoon as practicable after such filing and will use its best efforts to cause suchregistration statement to remain effective (with a prospectus at all times meeting therequirements of the Securities Act) until the Expiration Date;     (ii) use its best efforts to (A) qualify or register the Rights and the securitiespurchasable upon exercise of the Rights under the blue sky laws of such jurisdictions as maybe necessary or appropriate, and (B) cause the Rights and the securities purchasable uponexercise of the Rights to be listed on any national securities exchange or nationalquotation system upon which its Common Stock is listed, traded or quoted; and     (iii) deliver to holders of the Rights historical financial statements for thePrincipal Party and each of its Affiliates which comply in all material respects with therequirements for registration on Form 10 under the Exchange Act.The provisions of this Section 13 shall similarly apply to successive mergers or consolidations orsales or other transfers. In the event that a Section 13 Event shall occur at any time after the
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occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shallthereafter become exercisable in the manner described in Section 13(a).     (d) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not beapplicable to a transaction described in subparagraphs (i) and (ii) of Section 13(a) if (i) suchtransaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant toa Permitted Offer (or a wholly owned subsidiary of any such Person or Persons); (ii) the price pershare of Common Stock offered in such transaction is not less than the price per share of CommonStock paid to all holders of Common Stock whose shares were purchased pursuant to such PermittedOffer; and (iii) the form of consideration being offered to the remaining holders of Common Stockpursuant to such transaction is the same as the form of consideration paid pursuant to suchPermitted Offer. Upon consummation of any such transaction contemplated by this subsection (d),all Rights hereunder shall expire.     14. ADDITIONAL COVENANTS.     (a) The Company covenants and agrees that after the Distribution Date it shall not (i)consolidate with; (ii) merge with or into; or (iii) sell or transfer, or permit a subsidiary tosell or transfer, to any other Person, in one or more transactions, assets, cash flow or earningpower aggregating more than fifty percent (50%) of the assets or earning power of the Company andits subsidiaries taken as a whole, if at the time of or after such consolidation, merger or salethere are any charter or by-law provisions or any rights, warrants or other instruments outstandingor any other action taken which would diminish or otherwise eliminate the benefits intended to beafforded by the Rights. The Company agrees that the Principal Party shall take all such actions asmay be necessary to enable the Principal Party to issue the securities purchasable upon exercise ofthe Rights.     (b) The Company covenants and agrees that, after the Distribution Date, it will not, except aspermitted by Section 24 or Section 27 hereof, take any action the purpose or effect of which is todiminish or otherwise eliminate the benefits intended to be afforded by the Rights.     15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.     (a) The Company shall not be required to issue fractions of Rights, except prior to theDistribution Date as provided in Section 11(n), or to distribute Rights Certificates which evidencefractional Rights. In lieu of such fractional Rights, there shall be paid to the registeredholders of the Rights Certificates with regard to which such fractional Rights would otherwise beissuable, an amount in cash equal to the same fraction of the current market value of a wholeRight. For the purposes of this Section 15(a), the current market value of a whole Right shall bethe closing price of the Rights for the Trading Day immediately prior to the date on which suchfractional Rights would have been otherwise issuable. The closing price of the Rights for any dayshall be the last sale price, the last quoted price or, if not so quoted, the average of the highbid and low asked prices in the over-the-counter market, as reported by the Nasdaq National Marketor such other system then in use or, if on any such date the Rights are not quoted by any suchorganization, the average of the closing bid and asked prices as furnished by a professional marketmaker making a market in the Rights selected by the Board of Directors. If on any such date nosuch market maker is making a market in the Rights, the fair value of the Rights on such
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date asdetermined reasonably and with good faith to the holders of Rights by the Board of Directors shallbe used and shall be binding on the Rights Agent.     (b) The Company shall not be required to issue fractions of shares of Preferred Stock (otherthan fractions which are integral multiples of one one-thousandth of a share of Preferred Stock)upon exercise of the Rights or to distribute certificates which evidence fractional shares ofPreferred Stock (other than fractions which are integral multiples of one one-thousandth of a shareof Preferred Stock). Fractions of shares of Preferred Stock in integral multiples of oneone-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced bydepositary receipts, pursuant to an appropriate agreement between the Company and a depositaryselected by it, provided that such agreement shall provide that the holders of such depositaryreceipts shall have all the rights, privileges and preferences to which they are entitled asbeneficial owners of the shares of Preferred Stock represented by such depositary receipts. Inlieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandthof a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificatesat the time such Rights are exercised as herein provided an amount in cash equal to the samefraction of the current market value of one one-thousandth of a share of Preferred Stock. Forpurposes of this Section 15(b), the current market value of one one-thousandth of a share ofPreferred Stock shall be one one-thousandth of the closing price of a share of Preferred Stock (asdetermined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the dateof such exercise.     (c) Following the occurrence of one of the transactions or events specified in Section 11 orSection 13 giving rise to the right to receive common stock equivalents (other than PreferredStock) or other securities upon the exercise of a Right, the Company shall not be required to issuefractions of shares or units of such common stock equivalents or other securitiesupon exercise of the Rights or to distribute certificates which evidence fractional shares of suchcommon stock equivalents or other securities. In lieu of fractional shares or units of such commonstock equivalents or other securities, the Company may pay to the registered holders of RightsCertificates at the time such Rights are exercised as herein provided an amount in cash equal tothe same fraction of the current market value of a share or unit of such common stock equivalent orother securities. For purposes of this Section 15(c), the current market value shall be determinedin the manner set forth in Section 11(d) hereof for the Trading Day immediately prior to the dateof such exercise and, if such common stock equivalent is not traded, each such common stockequivalent shall have the value of one one-thousandth of a share of Preferred Stock.     (d) Except as otherwise expressly provided herein, the holder of a Right by the acceptance ofthe Right expressly waives such holder’s right to receive any fractional Rights or any fractionalshares (other than, in the case of Preferred Stock, fractions which are integral multiples of oneone-thousandth of a share of Preferred Stock) upon exercise of a Right.     16. RIGHTS OF ACTION. All rights of action in respect of this Agreement, except those rightsof action vested in the Rights Agent pursuant to Section 21, are vested in the respectiveregistered holders of the Rights Certificates (and, prior to the Distribution Date, the registeredholders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to theDistribution Date, of the Common Stock), without the consent of the Rights Agent or
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of the holderof any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, insuch holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintainany suit, action or proceeding against the Company to enforce, or otherwise act in respect of, suchholder’s right to exercise the Rights evidenced by such Rights Certificate in the manner providedin such Rights Certificate and in this Agreement. Without limiting the foregoing or any remediesavailable to the holders of Rights, it is specifically acknowledged that the holders of Rightswould not have an adequate remedy at law for any breach of this Agreement and shall be entitled tospecific performance of the obligations hereunder and injunctive relief against actual orthreatened violations of the obligations hereunder of any Person subject to this Agreement. Holdersof Rights shall be entitled to recover the reasonable costs and expenses, including attorneys’fees, incurred by them in any action to enforce the provisions of this Agreement.     17. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting the same consents andagrees 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 connectionwith the transfer of Common Stock;     (b) after the Distribution Date, the Rights Certificates are transferable only on theregistry books of the Rights Agent if surrendered at the principal office of the RightsAgent, 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 aRights Certificate (or, prior to the Distribution Date, the associatedCommon Stock certificate) is registered as the absolute owner thereof and of the Rightsevidenced thereby (notwithstanding any notations of ownership or writing on the RightsCertificates or the associated Common Stock certificate made by anyone other than theCompany or the Rights Agent) for all purposes whatsoever, and neither the Company nor theRights Agent shall be affected by any notice to the contrary.     (d) notwithstanding anything in this Agreement to the contrary, neither the Company northe Rights Agent shall have any liability to any holder of a Right or other Person as aresult of its inability to perform any of its obligations under this Agreement by reason ofany preliminary or permanent injunction or other order, decree or ruling issued by a courtof competent jurisdiction or by a governmental, regulatory or administrative agency orcommission, or any statute, rule, regulation or executive order promulgated or enacted by agovernmental authority, prohibiting or otherwise restraining performance of such obligation;provided, however, the Company must use its best efforts to have any such order, decree orruling lifted or otherwise overturned as soon as possible.     18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as such, of any RightsCertificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder ofthe shares of Preferred Stock, Common Stock or any other securities of the Company which may at anytime be issuable upon exercise of the Rights
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represented thereby, nor shall anything containedherein or in any Rights Certificate be construed to confer upon the holder of any RightsCertificate, as such, any of the rights of a stockholder of the Company or any right to vote forthe election of directors or upon any matter submitted to stockholders at any meeting thereof, orto give or withhold consent to any corporate action, or to receive notice of meetings or otheractions affecting stockholders (except as provided in Section 25 hereof), or to receive dividendsor subscription rights, or otherwise, until the Right or Rights evidenced by such RightsCertificate shall have been exercised in accordance with the provisions thereof.     19. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the Rights Agent reasonablecompensation for all services rendered by it hereunder and, from time to time, on demand of theRights Agent, its reasonable expenses and counsel fees and disbursements and other disbursementsincurred in the administration and execution of this Agreement and the exercise and performance ofits duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold itharmless against, any loss, liability, or expense, incurred without gross negligence or willfulmisconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent inconnection with the acceptance and administration of this Agreement, including the costs andexpenses of defending against any claim of liability arising therefrom, directly or indirectly.The indemnification provided for hereunder shall survive the expiration of the Rights and thetermination of this Agreement. The costs and expenses incurred in enforcing this right ofindemnification shall be paid by the Company.     The Rights Agent may conclusively rely upon and shall be protected against and shall incur noliability for or in respect of any action taken, suffered or omitted by it in connectionwith its administration of this Agreement in reliance upon any Rights Certificate or certificatefor 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.     20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any corporation into which theRights Agent or any successor Rights Agent may be merged or with which it may be consolidated, orany corporation resulting from any merger or consolidation to which the Rights Agent or anysuccessor Rights Agent shall be a party, or any corporation succeeding to the corporate trust orstockholder services business of the Rights Agent or any successor Rights Agent, shall be thesuccessor to the Rights Agent under this Agreement without the execution or filing of any paper orany further act on the part of any of the parties hereto, provided that such corporation would beeligible for appointment as a successor Rights Agent under the provisions of Section 22 hereof. Incase at the time such successor Rights Agent shall succeed to the agency created by this Agreement,any of the Rights Certificates shall have been countersigned but not delivered, any such successorRights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such RightsCertificates so countersigned; and in case at that time any of the Rights Certificates shall nothave been countersigned, any successor Rights Agent may countersign such Rights Certificates eitherin the name of the predecessor or in the name of the successor Rights Agent; and in all
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such casessuch Rights Certificates shall have the full force provided in the Rights Certificates and in thisAgreement.     In case at any time the name of the Rights Agent shall be changed and at such time any of theRights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt thecountersignature under its prior name and deliver Rights Certificates so countersigned; and in caseat that time any of the Rights Certificates shall not have been countersigned, the Rights Agent maycountersign such Rights Certificates either in its prior name or in its changed name; and in allsuch cases such Rights Certificates shall have the full force provided in the Rights Certificatesand in this Agreement.     21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and obligations imposed bythis Agreement (and no implied duties or obligations shall be read into this Agreement against theRights Agent) upon the following terms and conditions, by all of which the Company and the holdersof Rights Certificates, by their acceptance thereof, shall be bound:     (a) Before the Rights Agent acts or refrains from acting, it may consult with legalcounsel selected by it (who may be legal counsel for the Company), and the opinion of suchcounsel shall be full and complete authorization and protection to the Rights Agent as toany action taken or omitted by it in good faith and in accordance with such opinion.     (b) Whenever in the performance of its duties under this Agreement the Rights Agentshall deem it necessary or desirable that any fact or matter (including,without limitation, the identity of any Acquiring Person and the determination of “currentmarket price”) be proved or established by the Company prior to taking or suffering anyaction hereunder, such fact or matter (unless other evidence in respect thereof shall beherein specifically prescribed) may be deemed to be conclusively proved and established by acertificate signed by the Chairman of the Board, any Vice Chairman of the Board, thePresident, the Chief Operating Officer, any Vice President, the Treasurer, any AssistantTreasurer, the Secretary or any Assistant Secretary of the Company and delivered to theRights Agent; and such certificate shall be full authorization to the Rights Agent for anyaction taken or suffered in good faith by it under the provisions of this Agreement inreliance upon such certificate.     (c) The Rights Agent shall be liable hereunder only for its own gross negligence orwillful misconduct.     (d) The Rights Agent shall not be liable for or by reason of any of the statements offact or recitals contained in this Agreement or in the Rights Certificates (except as to thefact that it has countersigned the Rights Certificates) or be required to verify the same,but all such statements and recitals are and shall be deemed to have been made by theCompany only.     (e) The Rights Agent shall not be under any responsibility in respect of the validityof this Agreement or the execution and delivery hereof (except the due execution
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     hereof bythe Rights Agent) or in respect of the validity or execution of any Rights Certificate(except its countersignature thereof), nor shall it be responsible for any change in theexercisability of the Rights (including the Rights becoming void pursuant to Section 7(e))except with respect to the exercise of Rights evidenced by Rights Certificates after actualnotice of such change; nor shall it be responsible for any breach by the Company of anycovenant or condition contained in this Agreement or in any Rights Certificate; nor shall itbe responsible for any adjustment required under the provisions of Section 11 or 13 hereofor responsible for the manner, method or amount of any such adjustment or the ascertainingof the existence of facts that would require any such adjustment (except with respect to theexercise of Rights evidenced by Rights Certificates after receipt of a certificate pursuantto Section 12 describing any such adjustment); nor shall it be responsible for anydetermination by the Board of Directors of the current market value of the Rights orPreferred Stock or Common Stock pursuant to the provisions of Section 15 hereof; nor shallit by any act hereunder be deemed to make any representation or warranty as to theauthorization or reservation of any shares of Preferred Stock or other securities to beissued pursuant to this Agreement or any Rights Certificate or as to whether any shares ofPreferred Stock or other securities will, when so issued, be validly authorized and issued,fully paid and nonassessable.     (f) The Company agrees that it will perform, execute, acknowledge and deliver or causeto 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 thecarrying 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 withrespect to the performance of its duties hereunder and certificates delivered pursuant toany provision hereof from the Chairman of the Board, any Vice Chairman of the Board, thePresident, the Chief Operating Officer, any Vice President, the Secretary, any AssistantSecretary, the Treasurer or any Assistant Treasurer of the Company, and is authorized toapply to such officers for advice or instructions in connection with its duties, and itshall not be liable for any action taken or suffered to be taken by it in good faith inaccordance with instructions of any such officer. Any application by the Rights Agent forwritten instructions from the Company may, at the option of the Rights Agent, set forth inwriting any action proposed to be taken or omitted by the Rights Agent with respect to itsduties or obligations under this Rights Agreement and the date on and/or after which suchaction shall be taken or omitted and the Rights Agent shall not be liable for any actiontaken or omitted in accordance with a proposal included in any such application on or afterthe date specified therein (which date shall not be less than five Business Days after thedate any such officer actually receives such application, unless any such officer shall haveconsented in writing to an earlier date) unless, prior to taking or omitting any suchaction, the Rights Agent has received written instructions in response to such applicationspecifying the action to be taken or omitted.     (h) The Rights Agent and any stockholder, director, officer or employee of the RightsAgent may buy, sell or deal in any of the Rights or other securities of the Company orbecome pecuniarily interested in any transaction in which the Company may
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be interested, orcontract with or lend money to the Company or otherwise act as fully and freely as though itwere not the Rights Agent under this Agreement. Nothing herein shall preclude the RightsAgent from acting in any other capacity for the Company or for any other legal entity.     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vestedin it or perform any duty hereunder either itself or by or through its attorneys or agents,and the Rights Agent shall not be answerable or accountable for any act, omission, default,neglect or misconduct of any such attorneys or agents or for any loss to the Company or tothe holders of the Rights resulting from any such act, omission, default, neglect ormisconduct, provided reasonable care was exercised in the selection and continued employmentthereof.     (j) No provision of this Agreement shall require the Rights Agent to expend or risk itsown funds or otherwise incur any financial liability in the performance of any of its dutieshereunder or in the exercise of its rights if there shall be reasonable grounds forbelieving that repayment of such funds or adequate indemnification against such risk orliability is not reasonably assured to it.     (k) If, with respect to any Rights Certificate surrendered to the Rights Agent forexercise or transfer, the Certificate attached to the form of assignment or form of electionto purchase, as the case may be, has either not been completed or indicates an affirmativeresponse to clause 1 and/or 2 thereof, the Rights Agent shall not take any further actionwith respect to such requested exercise of transfer without first consulting with theCompany.     22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may resign and bedischarged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed tothe Company and to each transfer agent of the Common Stock and Preferred Stock by registered orcertified mail, and at the expense of the Company, to the holders of the Rights Certificates byfirst-class mail. In the event the transfer agency relationship in effect between the Company andthe Rights Agent terminates, the Rights Agent will be deemed to resign automatically on theeffective date of such termination; and any required notice will be sent by the Company. TheCompany may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice inwriting, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to eachtransfer agent of the Common Stock and Preferred Stock by registered or certified mail, and to theholders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or beremoved or shall otherwise become incapable of acting, the Company shall appoint a successor to theRights Agent. If the Company shall fail to make such appointment within a period of thirty (30)days after giving notice of such removal or after it has been notified in writing of suchresignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of aRights Certificate (who shall, with such notice, submit such holder’s Rights Certificate forinspection by the Company), then the registered holder of any Rights Certificate may apply to anycourt of competent jurisdiction for the appointment of a new Rights Agent. Any successor RightsAgent, whether appointed by the Company or by such a court, shall be (a) a corporation organizedand doing business under the laws of the United States or of the State of New York or the State ofIllinois (or of any other state of the United States so long as
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such corporation is authorized todo business as a banking institution in the State of New York or the State of Illinois), in goodstanding, having a principal office in the State of New York or the State of Illinois, which isauthorized under such laws to exercise corporate trust or stockholder services powers and issubject to supervision or examination by federal or state authority and which has at the time ofits appointment as Rights Agent a combined capital and surplus of at least $50,000,000.00, or (b)an affiliate of a corporation described in clause (a) of this sentence. After appointment, thesuccessor Rights Agent shall be vested with the same powers, rights, duties and responsibilities asif it had been originally named as Rights Agent without further act or deed; but the predecessorRights Agent shall deliver and transfer to the successor Rights Agent any property at the time heldby it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessaryfor the purpose. Not later than the effective date of any such appointment the Company shall mailnotice thereof in writing to the predecessor Rights Agent and each transfer agent of the CommonStock and Preferred Stock, and mail a notice thereof in writing to the registered holders of theRights Certificates. Failure to give any notice provided for in this Section 22, however, or anydefect therein, shall not affect the legality or validity of the resignation or removal of theRights Agent or the appointment of the successor Rights Agent, as the case may be.     23. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the provisions of thisAgreement or of the Rights to the contrary, the Company may, at its option, issue new RightsCertificates evidencing Rights in such form as may be approved by the Board of Directors to reflectany adjustment or change in the Purchase Price per share and the number or kind or class of sharesor other securities or property purchasable under the Rights Certificates made in accordance withthe provisions of this Agreement. In addition, in connection with the issuance or sale of sharesof Common Stock following the Distribution Date and prior to the redemption or expiration of theRights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant tothe exercise of stock options or otherwise under any employee plan or arrangement, which plan orarrangement is existing as of the Distribution Date, or upon the exercise, conversion or exchangeof any other securities issued by the Company on or prior to the Distribution Date, and (b) may, inany other case, if deemed necessary or appropriate by the Board of Directors, issue RightsCertificates representing the appropriate number of Rights in connection with such issuance orsale; provided, however, that (i) no such Rights Certificates shall be issued if, and to the extentthat, the Company shall be advised by counsel that such issuance would create a significant risk ofmaterial adverse tax consequences to the Company or the Person to whom such Rights Certificateswould be issued, and (ii) no such Rights Certificates shall be issued if, and to the extent thatappropriate adjustment shall otherwise have been made in lieu of the issuance thereof.     24. REDEMPTION, TERMINATION AND EXCHANGE.     (a) (i) The Board of Directors may, at its option, at any time prior to the earlier of (A) theclose of business on the tenth (10th) Business Day following the Stock Acquisition Date, or (B) 5P.M., Central time, on the Final Expiration Date, redeem all but not less than all of the thenoutstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect anystock split, stock dividend or similar transaction occurring after the date hereof (such redemptionprice being hereinafter referred to as the “Redemption Price”). Notwithstanding anything containedin this Agreement to the contrary, the Rights shall not be exercisable after the
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first occurrenceof a Section 11(a)(ii) Event until such time as the Company’s right of redemption hereunder hasexpired.     (ii) In addition, and notwithstanding the provisions of Section 24(a)(i), the Board ofDirectors may redeem all, but not less than all, of the then outstanding Rights at the RedemptionPrice following the Stock Acquisition Date, but prior to a Section 13(a) Event, either (A) inconnection with a Section 13(a) Event in which all holders of Common Stock are treated alike andnot involving (other than as a holder of Common Stock being treated like all other such holders) anAcquiring Person or an Affiliate or Associate thereof or any other Person in which such AcquiringPerson or Affiliate or Associate thereof has any interest, or any other Person acting directly orindirectly on behalf of or in association with any such Acquiring Person or Affiliate or Associatethereof, or (B) following the occurrence of a Section 11(a)(ii) Event, if and for as long as anyAcquiring Person having triggered such event is not thereafter the Beneficial Owner of securitiesrepresenting twenty percent (20%) or more of the outstanding shares of Common Stock, and at thetime of redemption there are no other Persons who are Acquiring Persons.     (iii) (A) In the event the Company, not earlier than sixty (60) Business Days nor later thanninety (90) Business Days following the commencement of a Qualified Offer which has not beenterminated prior thereto and which continues to be a Qualified Offer, receives a written noticecomplying with the terms of this Section 24(a)(iii) (“Special Meeting Notice”) that is properlyexecuted by the holders of record (or their duly authorized proxy) of not less than ten percent(10%) of the shares of Common Stock then outstanding (other than shares of CommonStock held by the offering Person or its Affiliates and Associates), directing the Board ofDirectors to submit to a vote of stockholders at a special meeting of the stockholders of theCompany (“Special Meeting”) a resolution authorizing the redemption of all, but not less than all,of the then outstanding Rights at the Redemption Price (the “Resolution”), then the Board ofDirectors shall take such actions as are necessary or desirable to cause the Resolution to be sosubmitted to a vote of stockholders, by including a proposal relating to adoption of the Resolutionin the proxy materials of the Company for the Special Meeting; provided, however, that in anytwelve (12) month period, the Company shall not be required to submit more than one Resolution to avote of stockholders with respect to Qualified Offers from any given potential Acquiring Person(including any Affiliates or Associates). The Board of Directors shall set a date for determiningthe stockholders of record entitled to notice of and to vote at the Special Meeting in accordancewith the Company’s Certificate of Incorporation, Bylaws and applicable law.        (B) Any Special Meeting Notice must be delivered to the Secretary of the Company at theprincipal executive offices of the Company and must set forth as to the stockholders of recordexecuting the request (1) the name and address of such stockholders, as they appear on theCompany’s books and records, (2) the number of shares of Common Stock which are owned of record byeach such stockholders, and (3) in the case of shares of Common Stock that are owned beneficiallyby another Person, an executed certification by the holder of record that such holder has executedsuch Special Meeting Notice only after obtaining instructions to do so from such beneficial owner.
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     (C) Subject to the requirements of applicable law, the Board of Directors may take a positionin favor of or opposed to the adoption of the Resolution, or no position with respect to theResolution, as it determines to be appropriate in the exercise of its duties. At the request ofthe offering Person, the Company shall include in any proxy soliciting material submitted by it inconnection with the Special Meeting relevant proxy soliciting materials reasonably pertinent andappropriate to the subject matter submitted by the offering Person; provided, however, that theoffering Person, by written agreement with the Company contained in or delivered with such requestshall (1) have indemnified the Company against any and all liabilities resulting from anystatements found to be defamatory, misstatements, misleading statements or omissions contained inor omitted from the proxy soliciting materials from the offering Person, and (2) have agreed to paythe Company’s incremental costs incurred as a result of including such material in the Company’sproxy soliciting material. Notwithstanding anything to the contrary contained in this Agreement,if the Board of Directors determines that it is in the best interests of stockholders to seek analternative transaction so as to obtain greater value for stockholders than that provided by anyQualified Offer, the Company shall be entitled to include in the proxy soliciting material preparedby it in connection with any Special Meeting information relating to such alternative transactionand to recommend that the Resolution not be adopted.     (D) If no Person has become an Acquiring Person prior to the redemption date referred to inthis Section 24(a)(iii), and the Qualified Offer continues to be a Qualified Offer, and either (1)the Special Meeting is not held on or prior to the 90th Business Days following receipt of theSpecial Meeting Notice (unless the failure to hold such meeting is the result of failure to obtainclearance by the Securities and Exchange Commission (“SEC”) of the proxystatement after reasonable efforts by the Company, in which case, such ninety (90) Business Dayperiod shall be extended by the number of Business Days it takes to receive SEC clearance) (the“Outside Date”), or (2) at the Special Meeting, the holders of at least a majority of the shares ofCommon Stock outstanding and entitled to vote on the Resolution at the Special Meeting (not givingeffect to any affirmative votes cast by the offering Person or any of its Affiliates or Associates)shall vote in favor of the Resolution (and the results of the vote are certified as official by theappointed inspector of election for the Special Meeting), then (x) all of the Rights shall bedeemed redeemed by such failure to hold the Special Meeting or as a result of such stockholderaction, as the case may be, at the Redemption Price, or (y) the Board of Directors shall take suchother action as would prevent the existence of the Rights from interfering with the consummation ofthe Qualified Offer, effective immediately prior to the consummation of the Qualified Offer, if,and only if, the Qualified Offer is consummated within sixty (60) Business Days after either theearlier of the date of the Special Meeting or the Outside Date.     (E) Nothing in this subparagraph (iii) shall be construed as limiting or prohibiting theCompany or any offering Person from proposing or engaging in any acquisition, disposition or othertransfer of any securities of the Company, any merger or consolidation involving the Company, anysale or other transfer of assets of the Company, any liquidation, dissolution or winding-up of theCompany, or any other business combination or other transaction, or any other action by the Companyor such offering Person; provided, however, that the holders of Rights shall have the rights setforth in this Agreement with respect to any such acquisition, disposition, transfer, merger,consolidation, sale, liquidation, dissolution, winding-up, business combination, transaction oraction.
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     (b) In the case of a redemption permitted under Section 24(a)(i) or (ii), immediately upon theaction of the Board of Directors ordering the redemption of the Rights, evidence of which shallhave been filed with the Rights Agent and without any further action and without any notice, theright to exercise the Rights will terminate and the only right thereafter of the holders of Rightsshall be to receive the Redemption Price for each Right so held. In the case of a redemptionpermitted under Section 24(a)(iii), upon effectiveness of the redemption of the Rights pursuant tofailure to hold the Special Meeting or stockholder adoption of the Resolution, as the case may be,and without any further action and without any notice, the right to exercise the Rights willterminate and the only right thereafter of the holders of Rights shall be to receive the RedemptionPrice for each Right so held. Within ten (10) Business Days after the action of the Board ofDirectors or stockholders, as applicable, ordering any such redemption of the Rights, the Companyshall give notice of such redemption to the Rights Agent and the holders of the then outstandingRights by mailing such notice to the Rights Agent and to all such holders at their last addressesas they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, onthe registry books of the transfer agent for the Common Stock. Any notice which is mailed in themanner herein provided shall be deemed given, whether or not the holder receives the notice. Eachsuch notice of redemption will state the method by which the payment of the Redemption Price willbe made. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock(based on the current market price, as defined in Section 11(d) hereof, of the Common Stock at thetime of redemption), or any other form of consideration deemed appropriate by the Board ofDirectors.     In the case of a redemption permitted under Section 24(a)(i), (ii) or (iii), the Company may,at its option, discharge all of its obligations with respect to the Rights by (i) issuing a pressrelease announcing the manner of redemption of the Rights, and (ii) mailing payment of theRedemption Price to the registered holders of the Rights at their last addresses as they appear onthe registry books of the Rights Agent or, prior to the Distribution Date, on the registry books ofthe transfer agent of the Common Stock, and upon such action, all outstanding Rights Certificatesshall be null and void without any further action by the Company.     (c) (i) Subject to the limitations of applicable law, the Board of Directors may, at itsoption, at any time after any Person becomes an Acquiring Person, exchange all or part of the thenoutstanding and exercisable Rights (which shall not include Rights that have become void pursuantto the provisions of Section 7(e) hereof) for (A) shares of Common Stock at an exchange ratio ofone share of Common Stock per Right, appropriately adjusted to reflect any stock split, stockdividend or similar transaction occurring after the date hereof (the “Exchange Shares”), or (B)Substitute Consideration (as that term is defined below). The Board of Directors may determine, inits sole discretion, whether to deliver Exchange Shares or Substitute Consideration.Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect suchexchange at any time after any Person (other than the Company, any subsidiary of the Company, anyemployee benefit plan of the Company or any such subsidiary, or any entity holding Common Stock foror pursuant to the terms of any such plan), together with all Affiliates and Associates of suchPerson, becomes the Beneficial Owner of fifty percent (50%) or more of the Common Stock thenoutstanding.     (ii) In the event the Board of Directors shall determine to deliver Substitute Considerationin exchange for Rights, the Company shall (A) determine the value of the
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Exchange Shares (the“Exchange Value”), and (B) with respect to each Right to be exchanged, make adequate provision tosubstitute for Exchange Shares the following (the “Substitute Consideration”): (1) cash, (2) CommonStock or common stock equivalents (as that term is defined in Section 11(a)(iii) hereof) orPreferred Stock or equivalent preferred stock (as that term is defined in Section 11(b) hereof),(3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing,having an aggregate value equal to the Exchange Value, where such aggregate value has beendetermined by the Board of Directors based upon the advice of a nationally recognized investmentbanking firm selected by the Board of Directors. For purposes of this Section 24(c), the value ofa share of Common Stock shall be the current market price (as determined pursuant to Section 11(d)hereof) per share of Common Stock on the day that is the later of (x) the first occurrence of aSection 11(a)(ii) Event, and (y) the date on which the Company’s right of redemption pursuant toSection 24(a) expires; and the value of any common stock equivalent shall be deemed to have thesame value as the Common Stock on such date.     (iii) Immediately upon the action of the Board of Directors ordering the exchange of anyRights pursuant to this Section 24(c), and without any further action and without any notice, theright to exercise such Rights shall terminate and the only right thereafter of a holder of suchRights shall be to receive Exchange Shares or Substitute Consideration for each Right exchanged bysuch holder. The Company shall promptly give public notice of any such exchange; provided,however, that the failure to give, or any defect in, such notice shall not affect the validity ofsuch exchange. The Company promptly shall mail a notice of any such exchange toall of the holders of such Rights at their last address as they appear upon the registry books ofthe 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 methodby which the exchange of Common Stock for Rights will be effected and, in the event of any partialexchange, the number of Rights which will be exchanged. Any partial exchange shall be effected prorata based on the number of Rights (other than Rights which have become void pursuant to theprovisions of Section 7(e) hereof) held by each holder of Rights.     (iv) In the event that there shall not be sufficient shares of Common Stock or Preferred Stockissued but not outstanding or authorized but unissued to permit any exchange of Rights ascontemplated in accordance with this Section 24(c), the Company shall take all such action as maybe necessary to authorize additional shares of Common Stock or Preferred Stock for issuance uponexchange of the Rights.     (v) The Company shall not be required to issue fractions of shares of Common Stock or todistribute certificates which evidence fractional shares of Common Stock. In lieu of suchfractional shares of Common Stock, the Company shall pay to the registered holders of the RightsCertificates with regard to which such fractional shares of Common Stock would otherwise beissuable an amount in cash equal to the same fraction of the current market value of a whole shareof Common Stock. For the purposes of this Section 24(c)(v), the current market value of a wholeshare of Common Stock shall be the closing price of a share of Common Stock (as determined pursuantto Section 11(d) hereof) for the Trading Day immediately prior to the date of exchange pursuant tothis Section 24(c).
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     25. NOTICE OF CERTAIN EVENTS. In case the Company shall propose (a) to pay any dividendpayable in stock of any class to the holders of Preferred Stock or to make any other distributionto the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings orretained earnings of the Company), or (b) to offer to the holders of Preferred Stock rights orwarrants to subscribe for or to purchase any additional shares of Preferred Stock or shares ofstock of any class or any other securities, rights or options, or (c) to effect anyreclassification of its Preferred Stock (other than a reclassification involving only thesubdivision of outstanding shares of Preferred Stock), or (d) to effect any consolidation or mergerinto or with, or to effect any sale or other transfer (or to permit one or more of its subsidiariesto effect any sale or other transfer), in one or more transactions, of more than fifty percent(50%) of the assets, cash flow or earning power of the Company and its subsidiaries (taken as awhole) to, any other Person or Persons, or (e) to effect the liquidation, dissolution or winding upof the Company, then, in each such case, the Company shall give to each holder of a RightsCertificate, in accordance with Section 26 hereof, a notice of such proposed action, which shallspecify the record date for the purposes of such stock dividend, distribution of rights orwarrants, or the date on which such reclassification, consolidation, merger, sale, transfer,liquidation, dissolution, or winding up is to take place and the date of participation therein bythe holders of the shares of Preferred Stock, if any such date is to be fixed, and such noticeshall be so given in the case of any action covered by clause (a) or (b) above at least twenty (20)days prior to the record date for determining holders of the shares of Preferred Stock for purposesof such action, and in the case of any such other action, at least twenty (20) days prior to thedate of the taking of such proposed action or the date ofparticipation therein by the holders of the shares of Preferred Stock whichever shall be theearlier.     In case any Triggering Event shall occur, then, in any such case, the Company or the PrincipalParty, as the case may be, shall as soon as practicable thereafter give to each holder of a RightsCertificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, whichshall specify the event and the consequences of the event to holders of Rights under Sections11(a)(ii) or 13(a) hereof, as the case may be.     The failure to give notice required by this Section 25 or any defect therein shall not affectthe legality or validity of the action taken by the Company or the vote upon any such action.     26. NOTICES. Notices or demands authorized by this Agreement to be given or made by theRights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficientlygiven or made if sent by first-class mail, postage prepaid, addressed (until another address isfiled in writing with the Rights Agent) as follows:LodgeNet Interactive Corporation