Document:

Exhibit 4.1

 

Execution Copy

 

 

 

RIGHTS AGREEMENT

 

 

between

 

MANUGISTICS GROUP, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A.

 

as
Rights Agent

 

 

Dated October 28, 2004

 

 

 

 

Table of Contents

 

	
  Section
  1.

  	
  Certain
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Issuance of
  Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Form of Rights Certificates.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Countersignature and
  Registration.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Cancellation and
  Destruction of Rights Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  9.

  	
  Reservation
  and Availability of Capital Stock.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Preferred Stock Record Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Adjustment of
  Purchase Price, Number and Kind of Shares or Number of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  12.

  	
  Certificate
  of Adjusted Purchase Price or Number of Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional
  Rights and Fractional Shares.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of
  Action

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of Rights Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Rights Certificate
  Holder Not Deemed a Stockholder

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the Rights
  Agent.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  19.

  	
  Merger
  or Consolidation or Change of Name of Rights Agent.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Duties of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New
  Rights Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption;
  Independent Director Review.

  	
   

  

 

i

 

	
  Section 24.

  	
  Exchange.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Certain Events.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  28.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  29.

  	
  Actions by
  the Board, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Benefits of this Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  31.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  32.

  	
  Governing
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  33.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Descriptive Headings

  	
   

  

 

ii

 

RIGHTS
AGREEMENT

 

RIGHTS
AGREEMENT, dated October 28, 2004 (the “Agreement”), between Manugistics Group,
Inc., a Delaware corporation (the “Company”), and EquiServe Trust Company,
N.A., a national banking association, as Rights Agent (the “Rights Agent”).

 

W
I  T  N  E  S  S  E  T  H

 

WHEREAS,
on October 28, 2004 the Board of Directors of the Company (the “Board”)
authorized and declared a dividend distribution of one Right for each share of
Common Stock (as hereinafter defined) of the Company outstanding at the close
of business on November 8, 2004 (the “Record Date”), and authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(i) or Section 11(p) hereof) for each share of Common
Stock of the Company issued between the Record Date (whether originally issued
or delivered from the Company’s treasury) and the earlier of the Distribution
Date or the Expiration Date, each Right initially representing the right to
purchase one one-thousandth of a share of Series A Junior Participating
Preferred Stock of the Company having the rights, powers and preferences set
forth in the form of Certificate of Designations attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the “Rights”);

 

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

 

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

 

(a)           “Acquiring Person” shall mean any
Person who or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 20% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company, or (iv) any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, (x) no Person
shall become an “Acquiring Person” as the result of an acquisition of Common
Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 20% or more of the shares of Common Stock of the Company then outstanding;
provided, however that if a Person shall become the Beneficial Owner of 20% or
more of the shares of Common Stock of the Company then outstanding as the result
of an acquisition of Common Stock by the Company and shall, following written
notice from, or public disclosure by the Company of such share purchases by the
Company become the Beneficial Owner of any additional Common Stock of the
Company and shall then beneficially own 20% or more of the shares of Common
Stock then outstanding, then such Person shall be deemed to be an “Acquiring
Person” and (y) if the Board determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined pursuant to the foregoing
provisions

 

 

of this paragraph
(a), has become such inadvertently, and such Person divests as promptly as
practicable (as determined in good faith by the Board of Directors), but in any
event within 15 Business Days, following receipt of written notice from the
Company of such event, of Beneficial Ownership of a sufficient number of shares
of Common Stock so that such Person would no longer be an “Acquiring Person,”
as defined pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an “Acquiring Person” for any purposes of
this Agreement unless and until such Person shall again become an “Acquiring
Person.”

 

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

 

(c)           “Affiliate” and “Associate” shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) as in effect on the date of this Agreement.

 

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

 

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

 

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

 

(ii)           which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership”
of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act, or any comparable or successor rule), including
pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), whether or not in writing; provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or
to “beneficially own,” any security under this subparagraph (ii) as a result of
an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a revocable
proxy or consent given in response to a public

 

2

 

proxy or consent solicitation
made pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

 

(iii)          which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities)
whether or not in writing, for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any voting securities
of the Company.

 

For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(l)(i) of the
General Rules and Regulations under the Exchange Act.

 

(f)            “Board” shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.

 

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

 

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

 

(i)            “Common Stock” shall mean the common
stock, $.002 par value, of the Company, except that “Common Stock” when used
with reference to any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the management, of
such Person.

 

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

 

(k)           “Company” shall have the meaning set
forth in the introductory paragraph hereof.

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

(s)           “Final Expiration Date” shall mean
the close of business on October 27, 2014.

 

(t)            “Permitted Offer” shall mean a
tender offer or an exchange offer for all outstanding shares of Common Stock at
a price and on terms determined, prior to the consummation of such tender offer
or exchange offer, by directors constituting at least 75% of all of the members
of the Board, after receiving advice from a nationally recognized investment
banking firm selected by the Board, to be (a) at a price that is fair to
stockholders (taking into account all factors which such members of the Board
deem relevant including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the Company
and its stockholders.

 

(u)           “Person” shall mean any individual,
firm, corporation, partnership, trust, association, limited
liability company or other entity.

 

(v)           “Preferred Stock” shall mean shares
of Series A Junior Participating Preferred Stock, $.01 par value, of the
Company having the rights and preferences set forth in the form of Certificate
of Designations attached to this Agreement as Exhibit A and, to the
extent that there is not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, $.01 par value, of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series A Junior Participating Preferred Stock.

 

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

 

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

 

(y)           “Record Date” shall have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.

 

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

 

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

 

(bb)         “Rights”
shall have the meaning set forth in the WHEREAS clause at the beginning of this
Agreement.

 

(cc)         “Rights Agent” shall have the meaning
set forth in the introductory paragraph hereof.

 

4

 

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

 

(ee)         “Section 11(a)(ii) Event” shall mean an acquisition of Common Stock
described in the first sentence of Section 11(a)(ii) hereof.

 

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

 

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

 

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

 

(ii)           “Stock Acquisition Date” shall mean
the later of (i) the first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such or (ii) the first date on which
an executive officer of the Company has actual knowledge that an Acquiring
Person has become such; provided, however that, if such Person is
deemed not to be an Acquiring Person pursuant to clause (y) of Section 1(a)
hereof, no Stock Acquisition Date shall be deemed to have occurred.

 

(jj)           “Subsidiary”
shall mean, with reference to any Person, any corporation or other entity of
which an amount of voting securities sufficient to elect at least a majority of
the directors (or comparable body) of such corporation or other entity is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.

 

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

 

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

 

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

 

Section 2.               Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to
act as agent for the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also be the
holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable upon ten (10) days’
prior written notice to the Rights Agent. 
The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.

 

Section 3.               Issuance
of Rights.

 

(a)           Until the earlier of (i) the
close of business on the tenth Business Day (or such later date as may be
determined by the Board) after the Stock Acquisition Date (or, if the tenth
Business Day after the Stock Acquisition Date occurs before the Record Date,
the close of

 

5

 

business on the
Record Date), or (ii) the close of business on the tenth Business Day (or
such later date as may be determined by action of the Board) after the date
that a tender or exchange offer (other than a Permitted Offer) by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of
Rule 14d-2 of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding, (the earlier of (i) and
(ii) being herein referred to as the “Distribution Date”), (x) the Rights
will be evidenced by the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock (including a
transfer to the Company).  As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit B hereto (the “Rights
Certificates”), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. 
With respect to certificates for the Common Stock outstanding as of the
close of business on the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights.  In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (i) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee benefit plan or
arrangement, or upon the exercise, conversion or exchange of securities granted
or issued by the Company prior to the Distribution Date (including without
limitation upon the conversion of the Company’s 5% Convertible Subordinated Notes
Due 2007 (the 5% Notes”) issued pursuant to an Indenture dated October 20, 2000
with State Street Bank and Trust Company as Trustee (as amended from time to
time, the “Indenture”) to the extent the holders of the 5% Notes would not be
entitled to an adjustment in the conversion price of such 5% Notes pursuant to
Section 4.6 of the Indenture)), and (ii) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (x) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (y)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.  In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant to
Sections 11(i) or 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights.  As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

 

6

 

(b)           As promptly as practicable following
the Record Date, the Company will send a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached hereto as Exhibit C,
by first-class, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company.  The
failure to send a copy of the Summary of Rights shall not affect the
enforceability of any part of this Rights Agreement or the rights of any holder
of the Rights.

 

(c)           Rights shall be issued (i) in respect
of all shares of Common Stock that are issued (either as an original issuance
or from the Company’s treasury) after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date and (ii) in connection with the
issuance or sale of shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights (x) with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee benefit plan or arrangement, or upon the exercise,
conversion or exchange of securities, granted or issued by the Company prior to
the Distribution Date (including without limitation upon the conversion of the
Company’s 5% Notes to the extent the holders of the 5% Notes would not be
entitled to an adjustment in the conversion price of such 5% Notes pursuant to
Section 4.6 of the Indenture) and (y) with respect to shares of Common Stock so
issued or sold in any other case, if deemed necessary or appropriate by the
Board.  Certificates representing such
shares of Common Stock (including, without limitation, certificates issued upon
transfer or exchange of Common Stock) shall also be deemed to be certificates
for Rights, and shall bear the following legend:

 

This certificate also
evidences and entitles the holder hereof to certain Rights as set forth in the
Rights Agreement between Manugistics Group, Inc. (the “Company”) and EquiServe
Trust Company, N.A. (the “Rights Agent”) dated October 28, 2004, as the
same may be amended, restated or renewed from time to time (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal offices of the Company.  Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.  The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor.  Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), whether currently held by
or on behalf of such Person or by any subsequent holder, may become null and
void.

 

With
respect to such certificates containing the foregoing legend, until the earlier
of (i) the Distribution Date and (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights.

 

7

 

Notwithstanding
this Section 3(c), the omission of a legend shall not affect the enforceability
of any part of this Rights Agreement or the rights of any holder of the Rights.

 

(d)           Until the earlier of the Distribution
Date and the Expiration Date, the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.  In the event that the Company
purchases or acquires any shares of Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares of Common Stock
which are no longer outstanding.

 

Section 4.               Form of Rights Certificates.

 

(a)           The Rights Certificates (and the
forms of election to purchase, certification and assignment to be printed on
the reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or over-the-counter market on which the Rights may from time to time
be listed, or to conform to usage. 
Subject to the provisions of Sections 7, 11 and 22 hereof, the
Rights Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share, the “Purchase Price”), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.

 

(b)           Any Rights Certificate issued
pursuant to Section 3, Section 11(i) or Section 22 hereof that
represents Rights beneficially owned by persons known to be: (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan, arrangement or
understanding (whether or not in writing) that has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:

 

The Rights represented by
this Rights Certificate are or were beneficially owned by a Person who was or
became an Acquiring

 

8

 

Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). 
Accordingly, this Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 7(e) of such
Agreement.

 

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

 

Section 5.               Countersignature and
Registration.

 

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

 

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

 

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

 

(a)           Subject to the provisions of
Section 4(b), Section 7(e) and Section 14 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights Certificate or
Certificates (other than Rights Certificates representing Rights that have
become void pursuant to Section 7(e) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share
of Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase.  Any
registered holder desiring to transfer, split up, combine

 

9

 

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

 

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

 

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

 

(a)           Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii)
and Section 23 hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
Final Expiration Date, (ii) the time at which the Rights expire as provided in
Section 13(d) hereof, (iii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the “Redemption Date”) and (iii) (iv) the time
at which such Rights are exchanged as provided in Section 24 hereof (the
earliest of (i), (ii), (iii) and (iv) being herein referred to as the “Expiration
Date”).

 

(b)           The Purchase Price for each one
one-thousandth of a share of Preferred Stock pursuant to the exercise of a
Right shall initially be $19.00 and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.

 

10

 

(c)           Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the case
may be) to be purchased and an amount equal to any applicable transfer tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Preferred Stock
(or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-thousandths of a share of
Preferred Stock to be purchased and the Company hereby authorizes its transfer
agent to comply with such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such requests, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate.  The payment
of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may be made in cash or
by certified bank check or money order payable to the order of the
Company.  In the event that the Company
is obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company shall make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.

 

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

 

(e)           Notwithstanding anything in this Agreement
to the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding (whether or not in
writing) that has as a primary purpose or effect avoidance of this
Section 7(e), shall become null

 

11

 

and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise.  No Rights
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Rights Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled.  The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.

 

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

 

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

 

Section 9.               Reservation and
Availability of Capital Stock.

 

(a)           The Company covenants and agrees that
it will cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.

 

(b)           So long as the shares of Preferred
Stock (and, following the occurrence of a Section 11(a)(ii) Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange or automated quotation

 

12

 

system,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be so
listed upon official notice of issuance upon such exercise.

 

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

 

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

 

(e)           The Company further covenants and
agrees that it will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights.  The Company shall not, however, be required
(i) to pay any transfer tax that may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise or (ii) to issue or deliver any certificates
for a number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in a name other than that of
the registered holder upon the exercise of any Rights until

 

13

 

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

 

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

 

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

 

(a)           (i)            In the event the Company shall at
any time after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.  If an
event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this

 

14

 

Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.

 

(ii)           Subject
to Section 24 of this Agreement, in the event that any Person, alone or
together with its Affiliates or Associates, becomes an Acquiring Person (other
than pursuant to a Permitted Offer), then, promptly following the first
occurrence of such event, proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive (subject to the last sentence of Section
23(a)), upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-thousandths of
a share of Preferred Stock, such number of shares of Common Stock of the
Company that equals the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred
to as the “Purchase Price” for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the “Adjustment Shares”).

 

(iii)          In the event that
the number of shares of Common Stock that the number of shares of Common Stock
that are authorized by the Company’s Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the
Purchase Price (such excess, the “Spread”), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which the
Board has deemed to have the same value as shares of Common Stock (such shares
of preferred stock, “common stock equivalents”)), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company’s right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the “Section 11(a)(ii)
Trigger Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
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.  If the Board shall determine in
good faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such

 

15

 

period, as it may be extended, the “Substitution
Period”).  To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof.  In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and the value of
any “common stock equivalent” shall be deemed to have the same value as the
Common Stock on such date.

 

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

 

(c)           In case the Company shall fix a
record date for a distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained
earnings of the

 

16

 

Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be 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 warrants applicable to a share of Preferred Stock and
the denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date.  Such adjustments shall be
made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to be
the Purchase Price which would have been in effect if such record date had not
been fixed.

 

(d)           (i)            For
the purpose of any computation hereunder, other than computations made pursuant
to Section 11(a)(iii) hereof, the “current market price” per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date, and
for purposes of computations made pursuant to Section 11(a)(iii) hereof,
the “current market price” per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights), or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification occurs, then, and in each such case, the “current
market price” shall be properly adjusted to take into account ex-dividend or
post record date trading.  The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and the low asked prices in the over-the-counter market, as reported by The
Nasdaq Stock Market, Inc. (“Nasdaq”) or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board.  All references in this Section to
closing prices, last quoted prices or other stock prices mean prices during
regular trading hours, without giving effect to any after-hours or extended
hours trading.  If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date shall be as

 

17

 

determined
in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.  The term “Trading Day” shall
mean a day on which Nasdaq or any national securities exchange on which the
shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on Nasdaq or any national securities exchange, a Business
Day.  If the Common Stock is not publicly
held or not so listed or traded, “current market price” per share shall mean
the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

 

(ii)           For
the purpose of any computation hereunder, the “current market price” per share
of Preferred Stock shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (other than
the last sentence thereof).  If the
current market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or listed
or traded in a manner described in clause (i) of this Section 11(d), the “current
market price” per share of Preferred Stock shall be conclusively deemed to be
an amount equal to 1000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this Agreement) multiplied by the
current market price per share of the Common Stock.  If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, “current market price” per share
of the Preferred Stock shall mean the fair value per share as determined in
good faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.  For all purposes of this Agreement, the “current
market price” of one one-thousandth of a share of Preferred Stock shall be
equal to the “current market price” of one share of Preferred Stock divided by
1000.

 

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

 

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

 

18

 

not
be liable for its inability to reserve and keep available for issuance upon
exercise of the Rights pursuant to Section 11(a)(ii) a number of shares of
Common Stock greater than the number then authorized by the Company’s
Certificate of Incorporation but not outstanding or reserved for other
purposes.

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

(n)           The Company covenants and agrees that
it shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger
or sale there are any charter or bylaw provisions or any rights, warrants or
other instruments or securities outstanding or agreements in effect that would
substantially

 

20

 

diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger
or sale, the stockholders of the Person who constitutes, or would constitute,
the “Principal Party” for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates.  The Company
shall not consummate any consolidation, merger, sale or transfer described in clause (i), (ii) or (iii) of the prior sentence unless
prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n).

 

(o)           The Company covenants and agrees
that, after the Distribution Date, it will not, except as permitted by
Section 23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.

 

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

 

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

 

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

 

(a)           In the event that, at any time after
a Person has become an Acquiring Person, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger,

 

21

 

(y) any Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), then, and in each such case and
except as contemplated by Section 13(d) hereof, proper provision shall be
made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), which shall not be
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which a Right
was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the “Purchase
Price” for each Right and for all purposes of this Agreement) by 50% of
the current market price (determined pursuant to Section 11(d)(i) hereof)
per share of the Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term “Company” shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that, subject to clause (v) below, the provisions
of Section 11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13
Event.

 

(b)           “Principal Party” shall mean

 

(i)            in the case of any
transaction described in clause (x) or (y) of the first sentence of
Section 13(a), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation; and

 

22

 

(ii)           in the case of any
transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions;

 

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

 

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

 

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

 

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

 

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

 

The
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. 
In the event that a Section 13 Event shall occur at the same time
as, or at any time after, the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).

 

23

 

(d)           Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons (or a wholly owned
subsidiary of any such Person or Persons) who acquired shares of Common Stock
pursuant to a Permitted Offer, (ii) the price per share of Common Stock paid in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such Permitted Offer, and (iii) the form of consideration paid in such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer.  Upon consummation of
any such transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.

 

Section 14.             Fractional Rights
and Fractional Shares.

 

(a)           The Company shall not be required to
issue fractions of Rights, except prior to the Distribution Date as provided in
Section 11(i) or (p) hereof, or to distribute Rights Certificates that
evidence fractional Rights.  In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right.  For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable.  The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and the low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board.  All references in this Section to closing
prices, last quoted prices or other stock prices means prices during regular
trading hours, without giving effect to any after-hours or extended hours
trading.  If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board shall be used, which
determination shall be described in a statement filed with Rights Agent and
shall be conclusive for all purposes.

 

(b)           The Company shall not be required to
issue fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates that evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock).  Fractional shares of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may, at
the election of the Company, be evidenced by depositary receipts; provided,
however, that holders of such depositary receipts shall have all of the
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions to which they are entitled as beneficial owners of
the shares of Preferred Stock

 

24

 

represented
by such depositary receipts.  In lieu of
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), the Company
shall pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-thousandth of a share of
Preferred Stock.  For purposes of this
Section 14(b), the current market value of one one-thousandth of a share
of Preferred Stock shall be one one-thousandth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise.

 

(c)           Following the occurrence of a
Triggering Event, the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.  In lieu of fractional shares of Common Stock,
the Company shall pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one (1) share of Common Stock
(as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise.

 

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

 

Section 15.             Rights
of Action.  All rights
of action in respect of this Agreement, except the rights of action expressly
given to the Rights Agent in Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. 
Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement.

 

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

 

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

 

(b)           after the
Distribution Date, the Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights
Agent designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates duly
completed and fully executed;

 

25

 

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

 

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

 

Section 17.             Rights Certificate Holder Not Deemed
a Stockholder.  No holder, as such,
of any Rights Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.

 

Section 18.             Concerning the Rights Agent.

 

(a)           The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. 
The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.

 

26

 

(b)           The Rights Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

 

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

 

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

 

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

 

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

 

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

 

(b)           Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation, the

 

27

 

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

 

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

 

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

 

(e)           The Rights Agent shall not be under
any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11, Section 13 or Section 24
hereof or responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate describing any such adjustment,
delivered pursuant to Section 12); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.

 

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

 

(g)           The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.  Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent with respect to its duties or
obligations under this Rights Agreement and the date on and/or after which such
action shall

 

28

 

be taken or omitted and
the Rights Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the
date specified therein (which date shall not be less than five Business Days
after the date any such officer actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking or omitting any such action, the Rights Agent has received written
instructions in response to such application specifying the action to be taken
or omitted.

 

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

 

(i)            The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.

 

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

 

(k)           If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has not been completed, the Company and the Rights Agent
will deem the beneficial owner of the rights evidenced by such Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof and
such assignment or election to purchase will not be honored.

 

Section 21.             Change
of Rights Agent.  The Rights
Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days’ notice in writing mailed to
the Company, and to each transfer agent of the Common Stock and Preferred
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail.  In the
event the transfer agency relationship in effect between the Company and the
Rights Agent terminates, the Rights Agent will be deemed to resign
automatically on the effective date of such termination; and any required
notice will be sent by the Company.  The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
(30) days’ notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. 
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a

 

29

 

successor to the Rights Agent. 
If the Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States (or of any state of the United
States) in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an affiliate of a corporation described in clause (a)
of this sentence.  After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose.  Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates.  Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

 

Section 22.             Issuance of New Rights Certificates.  Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be approved
by the Board to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement.

 

Section 23.             Redemption; Independent Director
Review.

 

(a)           The Board may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth Business
Day (or such later date as may be determined by the Board pursuant to clause
(i) of the first sentence of Section 3(a) with respect to the Distribution
Date) following the Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the close of business on the
tenth Business Day following the Record Date) and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights
at a redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). 
The redemption of the Rights by the Board may be made effective at such
time, on such basis and with such conditions as the Board in its sole
discretion may establish.  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)(i) hereof, of
the Common Stock at the time of redemption) or any other

 

30

 

form of consideration, or
any combination of any of the foregoing, deemed appropriate by the Board.  Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company’s right
of redemption hereunder has expired.

 

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

 

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

 

(d)           At least once every three years a
committee of directors who are independent of the management of the Company and
free from any relationship that, in the opinion of the Board would interfere
with their exercise of independent judgment, shall review and evaluate this
Rights Agreement in order to consider whether the maintenance of this Rights
Agreement continues to be in the interests of the Company and its
stockholders.  Following each such
review, the committee will communicate its conclusions to the full Board,
including any recommendation in light thereof as to whether this Rights Agreement
should be modified or the Rights should be redeemed.

 

Section 24.             Exchange.

 

(a)           The Board may, at its option, at any
time after a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which (i) shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof, and
(ii) shall include, without limitation, any Rights issued after the
Distribution Date) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board
shall not be empowered to effect such exchange at any time after any Person
(other than

 

31

 

the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.

 

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

 

(c)           In any exchange pursuant to this
Section 24, the Company, at its option, may substitute Preferred Stock (or
equivalent preferred stock, as such term is defined in Section 11(b)
hereof) for shares of Common Stock exchangeable for Rights, at the initial rate
of one one-thousandth of a share of Preferred Stock (or equivalent preferred
stock) for each share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to
Section 3(A) of the Certificate of Designations attached hereto as Exhibit A,
so that the fraction of a share of Preferred Stock (or equivalent preferred
stock) delivered in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.

 

(d)           In the event that there shall not be
sufficient shares of Common Stock or Preferred Stock issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as
may be necessary to authorize additional shares of Common Stock or Preferred
Stock for issuance upon exchange of the Rights.

 

(e)           The Company shall not be required to
issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. 
In lieu of such fractional shares of Common Stock, there shall be paid
to the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock.  For the purposes of this
subsection (e), the current market value of a whole share of Common Stock
shall be the closing price per share of Common Stock (as

 

32

 

determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.

 

Section 25.             Notice
of Certain Events.

 

(a)           In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of any
such other action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
shares of Preferred Stock, whichever shall be the earlier.

 

(b)           In case a Section 11(a)(ii)
Event shall occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer also to Common
Stock and/or, if appropriate, other securities; provided that the failure to
give such notice shall not affect the validity of such consent.

 

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

 

33

 

Manugistics
Group, Inc.

9715
Key West Avenue

Rockville,
MD 20850

Attention:
Chief Executive Officer

 

with a
copy to:

 

Wilmer
Cutler Pickering Hale and Dorr LLP

60
State Street

Boston,
MA 02109

Attention:  Jay E. Bothwick, Esq.

 

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

 

EquiServe
Trust Company, N.A.

250
Royall Street

Canton,
MA 02021

Attention:
Client Administration

 

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

 

Section 27.             Supplements
and Amendments.  Except as
provided in the penultimate sentence of this Section 27, for so long as
the Rights are then redeemable, the Company may, in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement in any respect without the approval of
any holders of the Rights.  At any time
when the Rights are no longer redeemable, except as provided in the penultimate
sentence of this Section 27, the Company may, by approval of at least 75%
of the members of the Board, and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights in order (i) to cure any ambiguity or (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, provided that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).  Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment.  Any supplement or amendment that the Rights Agent
is required to sign pursuant to this Section 27 shall be effective upon
execution by the Company (whether or not then executed by the Rights Agent or
the certificate referred to in the immediately preceding sentence has been
delivered).  Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall
be made which changes the

 

34

 

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

 

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

 

Section 29.             Actions by
the Board, etc.  The Board shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this
Agreement).  All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to the holders of
the Rights.

 

Section 30.             Benefits
of this Agreement.  Nothing in
this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock).

 

Section 31.             Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid, void or
unenforceable language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board.

 

Section 32.             Governing
Law.  This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of Delaware applicable to
contracts made and to be performed entirely within Delaware.

 

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

 

35

 

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

 

36

 

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

 

	
  Attest:

  	
  MANUGISTICS GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
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  EQUISERVE TRUST
  COMPANY, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
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  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
											

 

37

 

FORM OF

 

CERTIFICATE OF
DESIGNATIONS

 

OF

 

SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK

 

OF

 

MANUGISTICS GROUP, INC.

 

 

Manugistics Group, Inc., a corporation organized and existing under the
laws of the State of Delaware (hereinafter called the “Corporation”), hereby
certifies that the following resolution was adopted by the Board of Directors
of the Corporation at a meeting duly called and held on October 28, 2004:

 

RESOLVED: That pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (hereinafter called the “Board”) in
accordance with the provisions of the Certificate of Incorporation, as amended,
the Board hereby creates a series of Preferred Stock, $.01 par value per share
(the “Preferred Stock”), of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences and
limitations thereof as follows:

 

Series A Junior Participating
Preferred Stock:

 

Section 1.               Designation
and Amount.  The shares of such
series shall be designated as “Series A Junior Participating Preferred
Stock” (the “Series A Preferred Stock”) and the number of shares
constituting the Series A Preferred Stock shall be Three Hundred Thousand
(300,000).  Such number of shares may be
increased or decreased by resolution of the Board prior to issuance; provided,
that no decrease shall reduce the number of shares of Series A Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Preferred Stock.

 

Section 2.               Dividends
and Distributions.

 

(A)          Subject
to the rights of the holders of any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $.002
per share (the “Common Stock”), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board out
of funds

 

A-1

 

of the Corporation legally available for the payment of dividends,
quarterly dividends payable in cash on the last day of each fiscal quarter of
the Corporation in each year (each such date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $10 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock.  In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. 
In the event the Corporation shall at any time declare or pay any
dividend on the Series A Preferred Stock payable in shares of Series A
Preferred Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Series A Preferred Stock (by reclassification or
otherwise than by payment of a dividend in shares of Series A Preferred Stock)
into a greater or lesser number of shares of Series A Preferred Stock, then in
each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b) of the
first sentence of this Section 2(A) shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Series
A Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

 

(B)           The
Corporation shall declare a dividend or distribution on the Series A
Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) and the Corporation shall pay such
dividend or distribution on the Series A Preferred Stock before the
dividend or distribution declared on the Common Stock is paid or set apart;
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10
per share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

 

(C)           Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares, unless the date of issue of such shares is prior
to the record date for the first

 

A-2

 

Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear
interest.  Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding.  The Board may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.

 

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

 

(A)          Subject
to the provision for adjustment hereinafter set forth, each share of
Series A Preferred Stock shall entitle the holder thereof to 1000 votes on
all matters submitted to a vote of the stockholders of the Corporation.  In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.  In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

 

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

 

(C)           (i)            If at any time dividends on any
Series A Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the holders of the Series A Preferred Stock, voting
as a separate series from all other series of Preferred Stock and classes of
capital

 

A-3

 

stock, shall be entitled to elect two members of the Board in addition
to any Directors elected by any other series, class or classes of securities
and the authorized number of Directors will automatically be increased by
two.  Promptly thereafter, the Board of
the Corporation shall, as soon as may be practicable, call a special meeting of
holders of Series A Preferred Stock for the purpose of electing such members of
the Board.  Such special meeting shall in
any event be held within 45 days of the occurrence of such arrearage.

 

(ii)           During
any period when the holders of Series A Preferred Stock, voting as a separate
series, shall be entitled and shall have exercised their right to elect two
Directors, then, and during such time as such right continues, (a) the
then authorized number of Directors shall be increased by two, and the holders
of Series A Preferred Stock, voting as a separate series, shall be entitled to
elect the additional Directors so provided for, and (b) each such
additional Director shall not be a member of any existing class of the Board,
but shall serve until the next annual meeting of stockholders for the election
of Directors, or until his successor shall be elected and shall qualify, or
until his right to hold such office terminates pursuant to the provisions of
this

Section 3(C).

 

(iii)          A
Director elected pursuant to the terms hereof may be removed with or without
cause by the holders of Series A Preferred Stock entitled to vote in an
election of such Director.

 

(iv)          If,
during any interval between annual meetings of stockholders for the election of
Directors and while the holders of Series A Preferred Stock shall be entitled
to elect two Directors, there is no such Director in office by reason of
resignation, death or removal, then, promptly thereafter, the Board shall call
a special meeting of the holders of Series A Preferred Stock for the purpose of
filling such vacancy and such vacancy shall be filled at such special
meeting.  Such special meeting shall in
any event be held within 45 days of the occurrence of such vacancy.

 

(v)           At
such time as the arrearage is fully cured, and all dividends accumulated and
unpaid on any shares of Series A Preferred Stock outstanding are paid, and, in
addition thereto, at least one regular dividend has been paid subsequent to
curing such arrearage, the term of office of any Director elected pursuant to
this Section 3(C), or his successor, shall automatically terminate, and
the authorized number of Directors shall automatically decrease by two, the
rights of the holders of the shares of the Series A Preferred Stock to vote as
provided in this Section 3(C) shall cease, subject to renewal from time to
time upon the same terms and conditions, and the holders of shares of the
Series A Preferred Stock shall have only the limited voting rights elsewhere
herein set forth.

 

(D)          Except
as set forth herein, or as otherwise provided by law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.

 

A-4

 

Section 4.               Certain
Restrictions.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.               Reacquired
Shares.  Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof.  All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.

 

A-5

 

Section 6.               Liquidation,
Dissolution or Winding Up.

 

(A)          Upon
any liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.

 

(B)           Neither
the consolidation, merger or other business combination of the Corporation with
or into any other corporation nor the sale, lease, exchange or conveyance of
all or any part of the property, assets or business of the Corporation shall be
deemed to be a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 6.

 

(C)           In
the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in
clause (1) of paragraph (A) of this Section 6 shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.  In the
event the Corporation shall at any time declare or pay any dividend on the
Series A Preferred Stock payable in shares of Series A Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of
Series A Preferred Stock (by reclassification or otherwise than by payment of a
dividend in shares of Series A Preferred Stock) into a greater or lesser number
of shares of Series A Preferred Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of paragraph
(A) of this Section 6 shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Series A Preferred
Stock that were outstanding immediately prior to such event and the denominator
of which is the number of shares of Series A Preferred Stock outstanding
immediately after such event.

 

Section 7.               Consolidation,
Merger, etc.  Notwithstanding
anything to the contrary contained herein, in case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of

 

A-6

 

Series A Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.  In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of Series
A Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.  In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the amount set forth in the
first sentence of this Section 7 with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

 

Section 8.               No
Redemption.  The shares of Series A
Preferred Stock shall not be redeemable.

 

Section 9.               Rank.  The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Preferred Stock issued either before or
after the issuance of the Series A Preferred Stock, unless the terms of any
such series shall provide otherwise.

 

Section 10.             Amendment.  At such time as any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation, as amended,
of the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.

 

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

 

A-7

 

IN WITNESS WHEREOF, this
Certificate of Designations is executed on behalf of the Corporation by its
Chief Executive Officer this 28th day of October, 2004.

 

	
   

  	
  MANUGISTICS
  GROUP, INC.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-8

 

[Form of Rights
Certificate]

 

	
  Certificate No. R-     

  	
   

  	
               Rights

  	
   

  

 

NOT EXERCISABLE AFTER
OCTOBER 27, 2014 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.  [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)

 

MANUGISTICS GROUP, INC.

 

Rights Certificate

 

This certifies that                           ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated October 28, 2004 (the “Rights
Agreement”), between Manugistics Group, Inc. a Delaware corporation (the “Company”),
and EquiServe Trust Company, N.A. (the “Rights Agent”), to purchase from the
Company after the Distribution Date (as such term is defined in the Rights
Agreement) and at any time prior to 5:00 p.m. 
(Boston time) on October 27, 2014 at the office of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the “Preferred Stock”) of the Company, $.01 par
value per share, at a purchase price of $19.00 in cash per one one-thousandth
of a share (the “Purchase Price”), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed.  The number of
Rights evidenced by this Rights Certificate (and the number of one
one-thousandth of a share of Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of the close of business on October 28, 2004,
based on the Preferred Stock as constituted at such date.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the Rights
Agreement.

 

Upon the occurrence of a
Section 11(a)(ii) Event, if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any

 

(1)           The portion of the legend in brackets
shall be inserted only if applicable and shall replace the preceding sentence.

 

B-1

 

such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate who becomes a transferee after
the Acquiring Person becomes an Acquiring Person, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who,
concurrently with or after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.

 

As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares of Preferred
Stock or other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events, including Section 11(a)(ii)
Events.

 

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

 

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

 

Subject to the provisions
of the Rights Agreement, the Rights evidenced by this Certificate may be
redeemed by the Company at its option at a redemption price of $.001 per Right
at any time prior to the earlier of (i) the close of business on the tenth
Business Day (or such later date as may be determined by the Board pursuant to
clause (i) of the first sentence of Section 3(a) with respect to the
Distribution Date) following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date) and (ii) the
Final Expiration Date.

 

Subject to the provisions
of the Rights Agreement, the Company may, at its option, at any time after a
Section 11(a)(ii) Event, exchange all or part of the Rights evidenced by
this Certificate for shares of the Company’s Common Stock or for Preferred
Stock (or shares of a class or series of the Company’s preferred stock having
the same rights, privileges and preferences as the Preferred Stock).

 

B-2

 

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

 

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

 

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

 

WITNESS the facsimile
signature of the proper officers of the Company and its corporate seal.

 

	
  Dated as of 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  MANUGISTICS GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Secretary

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  COUNTERSIGNED:

  	
   

  
	
   

  	
   

  
	
  EQUISERVE TRUST COMPANY,
  N. A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Authorized Signature

  	
   

  
										

 

 

B-3

 

[Form of Reverse Side of
Rights Certificate]

 

FORM OF ASSIGNMENT

 

(To be executed by the
registered holder if such

 

holder desires to
transfer the Rights Certificate.)

 

FOR VALUE RECEIVED                                                                                         
hereby sells, assigns and transfers unto                                                                                                                                                             

 

	
   

  
	
  (Please print name and
  address of transferee)

  

 

 

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

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  
	
  Signature Guaranteed:

  
	
   

  	
  Certificate

  
						

 

The undersigned hereby
certifies that the Rights evidenced by this Rights Certificate are not
beneficially owned by, or being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined pursuant to the
Rights Agreement).

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
  Signature Guaranteed:

  
					

 

	
   

  	
  NOTICE

  

 

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

 

B-4

 

FORM OF ELECTION TO
PURCHASE

 

(To be executed if holder
desires to exercise

 

Rights represented by the
Rights Certificate.)

 

To:    EquiServe Trust Company, N.A.

 

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

 

Please insert social
security

 

or other identifying
number                                                                                                                                            

 

	
   

  
	
  (Please print name and
  address)

  

 

 

 

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

 

Please insert social
security

 

or other identifying
number                                                                                                                                       

 

	
   

  
	
  (Please print name and
  address)

  

 

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
  Signature Guaranteed:

  
					

 

B-5

 

Certificate

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1)           the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined pursuant to the Rights Agreement);

 

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

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
  Signature Guaranteed:

  
					

 

NOTICE

 

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

 

B-6

 

SUMMARY OF RIGHTS TO

 

PURCHASE PREFERRED STOCK

 

On October 28, 2004, the
Board of Directors of Manugistics Group, Inc. (the “Company”), declared a
dividend of one Right for each outstanding share of the Company’s Common Stock
to stockholders of record at the close of business on November 8, 2004 (the “Record
Date”).  Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $.01 par value per share (the “Preferred
Stock”), at a Purchase Price of $19.00 in cash, subject to adjustment.  The description and terms of the Rights are
set forth in a Rights Agreement dated October 28, 2004 (the “Rights Agreement”)
between the Company and EquiServe Trust Company, N.A., as Rights Agent.

 

Initially, the Rights are
not exercisable and will be attached to all certificates representing
outstanding shares of Common Stock, and no separate Rights Certificates will be
distributed.  The Rights will separate
from the Common Stock, and the Distribution Date will occur, upon the earlier
of (i) 10 business days following the later of (a) the first date of a public
announcement that a person or group of affiliated or associated persons (an “Acquiring
Person”) has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock or (b) the first date
on which an executive officer of the Company has actual knowledge that an
Acquiring Person has become such (the “Stock Acquisition Date”), or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 20% or more of the
outstanding shares of Common Stock.  The
Distribution Date may be deferred in circumstances determined by the Board of
Directors.  In addition, certain
inadvertent acquisitions will not trigger the occurrence of the Distribution
Date.  Until the Distribution Date (or
earlier redemption or expiration of the Rights), (i) the Rights will be
evidenced by the Common Stock certificates outstanding on the Record Date,
together with this Summary of Rights, or by new Common Stock certificates
issued after the Record Date which contain a notation incorporating the Rights
Agreement by reference, (ii) the Rights will be transferred with and only with
such Common Stock certificates; and (iii) the surrender for transfer of any
certificates for Common Stock outstanding (with or without a copy of this
Summary of Rights or such notation) will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.

 

The Rights are not
exercisable until the Distribution Date and will expire upon the close of
business on October 27, 2014 (the “Final Expiration Date”) unless earlier
redeemed or exchanged as described below. 
As soon as practicable after the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. 
Except as otherwise determined by the Board of Directors, and except for
shares of Common Stock issued upon exercise, conversion or exchange of then
outstanding options, convertible or exchangeable securities or other contingent
obligations to issue shares or pursuant to any employee benefit plan or
arrangement, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.

 

C-1

 

In the event that any
Person becomes an Acquiring Person, unless the event causing the 20% threshold
to be crossed is a Permitted Offer (as defined in the Rights Agreement), then,
promptly following the first occurrence of such event, each holder of a Right
(except as provided below and in Section 7(e) of the Rights Agreement) shall
thereafter have the right to receive, upon exercise, that number of shares of
Common Stock of the Company (or, in certain circumstances, cash, property or
other securities of the Company) which equals the exercise price of the Right
divided by 50% of the current market price (as defined in the Rights Agreement)
per share of Common Stock at the date of the occurrence of such event.  However, Rights are not exercisable following
such event until such time as the Rights are no longer redeemable by the
Company as described below. 
Notwithstanding any of the foregoing, following the occurrence of such
event, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.  The event summarized in this
paragraph is referred to as a “Section 11(a)(ii) Event.”

 

For example, at an
exercise price of $19 per Right, each Right not owned by an Acquiring Person
(or by certain related parties) following a Section 11(a)(ii) Event would
entitle its holder to purchase for $19 such number of shares of Common Stock
(or other consideration, as noted above) as equals $19 divided by one-half of
the current market price (as defined in the Rights Agreement) of the Common
Stock.  Assuming that the Common Stock
had a market price of $9.50 per share at such time, the holder of each valid
Right would be entitled to purchase four shares of Common Stock, having a
market value of 4 x $9.50, or $38, for $19.

 

In the event that, at any
time after any Person becomes an Acquiring Person, (i) the Company is
consolidated with, or merged with and into, another entity and the Company is
not the surviving entity of such consolidation or merger (other than a
consolidation or merger which follows a Permitted Offer) or if the Company is
the surviving entity, but shares of its outstanding Common Stock are changed or
exchanged for stock or securities (of any other person) or cash or any other
property, or (ii) more than 50% of the Company’s assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously
have been voided as set forth above) shall thereafter have the right to
receive, upon exercise, that number of shares of common stock of the acquiring
company which equals the exercise price of the Right divided by 50% of the
current market price (as defined in the Rights Agreement) of such common stock
at the date of the occurrence of the event. 
The events summarized in this paragraph are referred to as “Section 13
Events.” A Section 11(a)(ii) Event and Section 13 Events are collectively
referred to as “Triggering Events.”

 

For example, at an
exercise price of $19 per Right, each valid Right following a Section 13 Event would
entitle its holder to purchase for $19 such number of shares of common stock of
the acquiring company as equals $19 divided by one-half of the current market
price (as defined in the Rights Agreement) of such common stock.  Assuming that such common stock had a market
price of $9.50 per share at such time, the holder of each valid Right would be
entitled to purchase four shares of common stock of the acquiring company,
having a market value of 4 x $9.50, or $38, for $19.

 

At any time after the
occurrence of a Section 11(a)(ii) Event, when no person owns a majority of the
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than

 

C-2

 

Rights owned by such
Acquiring Person which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-thousandth of a share of
Preferred Stock (or of a share of a class or series of the Company’s preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).

 

The Purchase Price
payable, and the number of units of Preferred Stock or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the
then-current market price (as defined in the Rights Agreement) of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings) or of subscription rights or
warrants (other than those referred to above). 
The number of Rights associated with each share of Common Stock is also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.

 

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

 

Preferred Stock
purchasable upon exercise of the Rights will not be redeemable.  Each share of Preferred Stock will be
entitled to receive, when, as and if declared by the Board of Directors, a
minimum preferential quarterly dividend payment of $10 per share or, if
greater, an aggregate dividend of 1000 times the dividend declared per share of
Common Stock.  In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1000 per share, plus an amount equal to
accrued and unpaid dividends, and will be entitled to an aggregate payment of
1000 times the payment made per share of Common Stock.  Each share of Preferred Stock will have 1000
votes, voting together with the Common Stock. 
In the event of any merger, consolidation or other transaction in which
Common Stock is changed or exchanged, each share of Preferred Stock will be
entitled to receive 1000 times the amount received per share of Common
Stock.  These rights are protected by
customary antidilution provisions. 
Because of the nature of the Preferred Stock’s dividend, liquidation and
voting rights, the value of one one-thousandth of a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.

 

At any time prior to the
earlier of the tenth Business Day (or such later date as may be determined by
the Board of Directors of the Company) after the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $0.001
per Right (the “Redemption Price”), payable in cash or stock.  Immediately upon the redemption of the Rights
or such earlier time as established by the Board in the resolution ordering the
redemption of the

 

C-3

 

Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.  The Rights may also be
redeemable following certain other circumstances specified in the Rights
Agreement.

 

At least once every three
years a committee of independent directors will evaluate the Rights Agreement
in order to consider whether the maintenance of the Rights Agreement continues
to be in the interests of the Company and its stockholders.

 

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

 

Any provision of the
Rights Agreement, other than the redemption price, may be amended by the Board
prior to such time as the Rights are no longer redeemable.  Once the Rights are no longer redeemable, the
Board’s authority to amend the Rights is limited to correcting ambiguities or
defective or inconsistent provisions in a manner that does not adversely affect
the interest of holders of Rights.

 

The Rights are intended
to protect the stockholders of the Company in the event of an unfair or
coercive offer to acquire the Company and to provide the Board with adequate
time to evaluate unsolicited offers.  The
Rights may have anti-takeover effects. 
The Rights will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on a substantial
number of Rights being acquired.  The
Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and
its stockholders, as determined by a majority of the Board.  The Rights should not interfere with any
merger or other business combination approved by the Board.

 

A copy of the Rights
Agreement has been filed with the Securities and Exchange Commission as an
Exhibit to the Company’s Current Report on Form 8-K dated October 29,
2004.  A copy of the Rights Agreement is
available free of charge from the Company. 
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.

 

C-4Exhibit 10.22

 

CONFIDENTIAL
TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.

 

AMENDMENT NO. 1 TO DNA DREAMFIELDS COMPANY, LLC

OPERATING AGREEMENT

 

THIS AMENDMENT NO. 1 TO
OPERATING AGREEMENT (the “Amendment No. 1”), dated as of February 9, 2004, is
among B-New, LLC, an Ohio limited liability company (“BNEW”), TechCom Group,
LLC, a Florida limited liability company (“TechCom”), Buhler, Inc., a Minnesota
corporation (“Buhler”), and Dakota Growers Pasta Company, Inc., a North Dakota
corporation (“Dakota”) (each of BNEW, TechCom, Buhler and Dakota may be
referred to herein as a “Member” and collectively as the “Members”).

 

WHEREAS,
the Members are all of the members of DNA Dreamfields Company, LLC, an Ohio
limited liability company (the “Company”), and have entered into a certain
Operating Agreement dated October 31, 2003 (the “Operating Agreement”) in
respect of, among other things, the management and governance of the Company;
and

 

WHEREAS,
in accordance with Section 22 of the Operating Agreement, the Members desire to
amend hereby the Operating Agreement;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the parties agree as follows:

 

1.             The Operating Agreement is hereby
amended by:

 

(a)            deleting in its entirety the first Recital of the
Operating Agreement and replacing it with the following:

 

“WHEREAS, the Members are all of the members
of DNA Dreamfields Company, LLC, an Ohio limited liability company (the “Company”),
as of the date hereof; and”

 

(b)            adding
the following as the last sentence of Section 2(A)(iv) of the Operating
Agreement:

 

“The Members agree the fair market value of the Brand at the time of
contribution to the Company is $*** for both book and tax purposes.”

 

(c)            deleting
the period at the end of the sentence comprising Section 3(E)(i) of the
Operating Agreement and adding the following to the end of the sentence
comprising Section 3(E)(i) of the Operating Agreement:

 

“,
as determined on a monthly basis.”

 

(d)           adding the following
as a new Section 3(E)(iii)(h) of the Operating Agreement:

 

***
- Confidential treatment requested.

 

 

“(h)         Deductions arising from the amortization of “start-up
expenditures” (as defined in Section 195 of the Internal Revenue Code of 1986,
as amended) shall be specially allocated to Buhler and Dakota in proportion to
their respective capital contributions pursuant to Sections 2(A)(ii) and (iii)
hereof to fund such start-up expenditures.”

 

2.             This Amendment No. 1 may be
executed in counterparts which taken together shall constitute one instrument,
notwithstanding the fact that all parties have not executed this Amendment No.
1 on the same date or that all signatures do not appear on the same copy.

 

3.             Except as specifically provided in
this Amendment No. 1, the Operating Agreement remains unchanged and in full
force and effect.

 

*   *   *  
*   *

 

 

IN WITNESS WHEREOF, the
parties have executed this Amendment No. 1 as of the date first set forth
above.

 

	
   

  	
  B-New, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Crowley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Principal

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TechCom Group, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Anfinsen

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   VP of Operations

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Buhler, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Beat Haeni

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Corp. Development

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dakota Growers Pasta Company, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Dodd

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   President/CEO

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