Document:

Exhibit 4.1

 

FIRST AMENDED AND RESTATED
RIGHTS AGREEMENT

 

 

UNITED THERAPEUTICS
CORPORATION

 

and

 

THE BANK OF NEW YORK

 

Rights Agent

 

 

Dated as of June 30,
2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Certain Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment of Rights
  Agent

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Issue of Right
  Certificates

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Form of Right
  Certificates

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Countersignature and
  Registration

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 6.

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

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Exercise of Rights;
  Purchase Price; Expiration Date of Rights

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Cancellation and
  Destruction of Right Certificates

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Reservation and
  Availability of Shares of Preferred Stock

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Preferred Stock Record
  Date

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 11.

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

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Certificate of Adjusted
  Purchase Price or Number of Shares

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 13.

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

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional Rights and
  Fractional Shares

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of Action

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of Right Holders

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Right Certificate Holder
  Not Deemed a Stockholder

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the Rights
  Agent

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Merger or Consolidation or
  Change of Name of Rights Agent

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Duties of Rights Agent

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights Agent

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New Right
  Certificates

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption and Termination

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Exchange

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Proposed Actions

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
  34

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Successors

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Determinations and Actions
  by the Board of Directors

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Benefits of This Rights
  Agreement

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Severability

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Governing Law

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Counterparts

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Descriptive Headings

  	
  36

  

 

ii

 

FIRST AMENDED AND RESTATED
RIGHTS AGREEMENT

 

This First Amended and
Restated Rights
Agreement, dated as of June 30, 2008  is entered into
between United Therapeutics Corporation, a Delaware corporation (the “Company”),
and The Bank of New York, a New York banking corporation (the “Rights Agent”).

 

W I T N E S S E T H

 

WHEREAS, on December 17,
2000, upon the terms and subject to the conditions set forth in a Rights
Agreement dated December 17, 2000 between the Company and the Rights Agent
(the “2000 Rights Agreement”), the Board of Directors of the Company authorized
and declared a dividend distribution of one right (hereinafter referred to as a
“Right”) for each share of Common Stock, par value $0.01 per share, of the
Company outstanding at the close of business on December 29, 2000 (the “Record
Date”), (other than shares of such Common Stock held in the Company’s treasury
on such date) and authorized the issuance of one Right in respect of each share
of Common Stock of the Company issued between the Record Date (whether
originally issued or issued from the Company’s treasury) and the Distribution
Date (as such term is defined in Section 3 hereof), each Right
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 (the “Rights”);

 

WHEREAS, the term of
the 2000 Rights Agreement expires on December 29, 2010; and

 

WHEREAS, on June 30,
2008  the Board of Directors authorized and
approved the amendment and restatement in its entirety of the 2000 Rights
Agreement in order to extend the Final Expiration Date until June 26, 2018
and to make other changes and provisions that they have determined are
necessary or desirable and do not adversely affect the interests of the holders
of the Rights; and

 

WHEREAS, in compliance
with the terms of Section 26 of the 2000 Rights Agreement, the Company has
(i) delivered to the Rights Agent a certificate from an appropriate
officer of the Company which states that this Agreement has been approved by
the Company’s Board of Directors and is in compliance with the terms of Section 27
of the 2000 Rights Agreement and (ii) instructed the Rights Agent to
execute this Agreement.

 

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

 

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

 

(a)           “Acquiring Person” shall mean any Person
(as hereinafter defined) who or which, together with all Affiliates (as
hereinafter defined) and Associates (as hereinafter defined) of such Person,
without the Prior Written Approval of the Company (as hereinafter defined),
shall be the Beneficial Owner (as hereinafter defined) of securities of the
Company constituting 15%

 

 

or more of the Voting Power (as hereinafter defined)
of the Company or was such a Beneficial Owner at any time after the date
hereof, whether or not such Person continues to be the Beneficial Owner of
securities representing 15% or more of the Voting Power of the Company, but
shall not include (i) the Company, any Subsidiary of the Company, any
employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company, or any entity holding securities of the Company to
the extent organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such employee benefit plan
or compensation arrangement or (ii) any Person who or which, together with
all Affiliates and Associates of such Person, inadvertently may become the
Beneficial Owner of securities of the Company representing 15% or more of the
Voting Power of the Company or otherwise becomes such a Beneficial Owner
without a plan or intention to acquire control of the Company, so long as such
Person, individually or together with the Affiliates and Associates of such
Person, promptly enters into, and delivers to the Company, an irrevocable
commitment promptly to divest, and thereafter promptly divests (without exercising
or retaining any power, including voting, with respect to such securities),
sufficient securities of the Company so that such Person, together with all
Affiliates and Associates of such Person, ceases to be the Beneficial Owner of
securities of the Company representing 15% or more of the Voting Power of the
Company (or, in the case of shares deemed beneficially owned pursuant to Section 1(c)(iv) hereof,
such Person terminates the subject derivative transaction or transactions or
disposes of the subject derivative security or securities, or establishes to
the satisfaction of the Board of Directors that such shares of Common Stock are
not held with any intention of changing or influencing control of the Company).
Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as
the result of an acquisition of voting securities of the Company by the Company
which, by reducing the amount of such securities outstanding, increases the
proportionate voting power of such securities beneficially owned by such Person
to 15% or more of the Voting Power; provided, however, that if a Person becomes
the Beneficial Owner of securities constituting 15% or more of the Voting Power
of the Company by reason of purchases by the Company and shall, after such purchases
by the Company, become the Beneficial Owner of any additional voting securities
of the Company without the Prior Written Approval of the Company, then such
Person shall be deemed to be an Acquiring Person.

 

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

 

(c)                                  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 beneficially owns, directly or indirectly as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof;

 

(ii)           which such Person or any of such Person’s
Affiliates or Associates has (A) 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), or upon the exercise of conversion rights,
exchange rights,

 

2

 

rights (other than these Rights), warrants or options,
or otherwise, provided, however, that a Person shall not be deemed the “Beneficial
Owner” of 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 payment or exchange; or (B) the
right to vote pursuant to any agreement, arrangement or understanding,
provided, however, that a Person shall not be deemed the “Beneficial Owner” of
any security under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not also then reportable by
such person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

 

(iii)          which
are beneficially owned, directly or indirectly, by any other Person 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) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in clause (B) of
subparagraph (ii) of this paragraph (c)) or disposing of any securities of
the Company.

 

(iv)          which are the subject of a derivative
transaction entered into by a Person to which the Company is not a party, or a
derivative security not issued by the Company acquired by a Person, which gives
such Person the economic equivalent of ownership of shares of Common Stock due
to the fact that the value of the derivative is explicitly determined by
reference to the price or value of such shares of Common Stock, without regard
to whether (A) such derivative conveys any voting rights in shares of
Common Stock to such Person, (B) the derivative is required to be, or
capable of being, settled through delivery of shares of Common Stock, or (C) such
Person may have entered into other transactions that hedge the economic effect
of such derivative, with the number of shares of Common Stock deemed
beneficially owned being the notional or other number of shares of Common Stock
specified in the documentation evidencing the derivative position as being
subject to be acquired upon the exercise or settlement of the applicable right
or as the basis upon which the value or settlement amount of such right, or the
opportunity of the holder of such right to profit or share in any profit, is to
be calculated in whole or in part or, if no such number of shares of Common
Stock is specified in such documentation, as determined by the Board of
Directors in good faith to be the number of shares of Common Stock to which the
derivative position relates.

 

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

 

(d)           “Board of Directors” shall mean the Board
of Directors of the Company as constituted from time to time.

 

3

 

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

 

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

 

(g)           “Common Stock” shall mean the Common
Stock, par value $0.01 per share, of the Company, except that “Common Stock”
when used with reference to any Person other than the Company shall mean the
capital stock with the greatest Voting Power of such Person or the equity
securities or other equity interest having power to control or direct the
management of such Person or, if such Person is a Subsidiary (as hereinafter
defined) of another Person, of the Person which ultimately controls such
first-mentioned Person and which has issued and outstanding such capital stock,
equity securities or equity interests.

 

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

 

(i)            “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

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

 

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

 

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

 

(m)          “Preferred Stock” shall mean the Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the
Company.

 

(n)           “Prior Written Approval of the Company”
shall mean prior express written consent of the Company to the actions in
question, executed on behalf of the Company by a duly authorized officer of the
Company following express approval by action of at least a majority of the
members of the Board of Directors then in office.

 

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

 

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

 

(q)           “Section 1 1(b) Event” shall
have the meaning set forth in Section 1 1(b) hereof.

 

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

 

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

 

4

 

(t)            “Stock Acquisition Date” shall mean the
earlier of (i) the first date of public announcement by the Company or a
Person that an Acquiring Person has become an Acquiring Person, or (ii) the
date on which the Company first has notice, direct or indirect, or otherwise
determines that a Person has become an Acquiring Person.

 

(u)           “Subsidiary” shall mean, with respect to
any Person, any other Person of which securities or other ownership interests
having ordinary Voting Power, in the absence of contingencies, to elect a
majority of the board of directors (or other persons performing similar
functions) of such other Person are at the time directly or indirectly owned by
such Person or one or more of such Person’s Subsidiaries, except that “Subsidiary”
when used with reference to the Company shall mean any Person of which either a
majority of the Voting Power of the voting equity securities or a majority of
the equity interests is owned, directly or indirectly, by the Company.

 

(v)           “Voting Power” shall mean the voting
power of all securities of a Person then outstanding generally entitled to vote
for the election of directors of the Person (or, where appropriate, for the
election of persons performing similar functions).

 

Section 2.              Appointment
of Rights Agent.  The Company
hereby appoints the Rights Agent to act as rights agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. The Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such co-Rights Agent. 
In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agents and any Co-Rights Agents shall be as the
Company shall determine and provide written notice of to the Rights Agent and
any Co-Rights Agent.

 

Section 3.              Issue of Right Certificates.

 

(a)           Until the earlier of (i) the Close
of Business on the tenth Business Day after the Stock Acquisition Date or (ii) the
Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Board of Directors but in no event later than the
tenth Business Day after such time as any Person becomes an Acquiring Person)
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan or
compensation arrangement of the Company or of any Subsidiary of the Company, or
any entity holding securities of the Company to the extent organized, appointed
or established by the Company or any Subsidiary of the Company for or pursuant
to the terms of any such employee benefit plan or compensation arrangement) is
first published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, without the
Prior Written Approval of the Company, which tender or exchange offer would
result in any Person becoming the Beneficial Owner of Voting Power aggregating
15% or more of the outstanding Voting Power (including any such date which is
after the date of this Rights Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the “Distribution
Date”),

 

5

 

(b)           the
Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be Right Certificates) and not by separate Right
Certificates, as more fully set forth below, and (z) the Rights (and the
right to receive certificates therefor) will be transferable only in connection
with the transfer of the underlying shares of Common Stock, as more fully set
forth below. As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested and provided with all
necessary information, send), by first-class, insured, postage prepaid mail, to
each record holder of 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, a right certificate, in substantially the form of Exhibit B
hereto (the “Right Certificate”), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.  The Company shall promptly
notify the Rights Agent in writing upon the occurrence of the Distribution Date
and, if such notification is given orally, the Company shall confirm same in
writing on or prior to the Business Day next following.  Until such notice is received by the Rights
Agent, the Rights Agent may presume conclusively for all purposes that the Distribution
Date has not occurred.

 

(c)           On
the Record Date, the Company sent a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form of Exhibit C hereto (the “Summary
of Rights”), by first-class, postage prepaid mail, to each record holder of 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.  On or about May 9, 2008, the Company
will send a copy of the Amended Summary of Rights to Purchase Preferred Stock,
in substantially the form of Exhibit D hereto (the “Amended Summary of
Rights”), by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on June 30, 2008 at the address
of such holder shown on the records of the Company.  With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), the Rights will
be evidenced by such certificates for the Common Stock registered in the names
of the holders of the Common Stock and the registered holders of the Common
Stock shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates for the Common
Stock outstanding in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.

 

(d)           Certificates
for the Common Stock issued after the Record Date but prior to the earlier of
the Distribution Date or the redemption, expiration or termination of the
Rights shall be deemed also to be certificates for Rights and shall have
impressed, printed or written on, or otherwise affixed to them a legend
substantially to the following effect:

 

This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between United Therapeutics
Corporation (the “Company”) and The Bank of New York, as Rights Agent

 

6

 

(the “Rights Agreement”), as it may from time to time be supplemented
or amended, the terms of which are incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights may
expire or may be redeemed, exchanged or be evidenced by separate certificates
and no longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under certain
circumstances, Rights issued to or held by Acquiring Persons or their Affiliates
or Associates (as defined in the Rights Agreement) and any subsequent holder of
such Rights may become null and void.

 

With
respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates.

 

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

 

Section 4.              Form of Right Certificates.

 

(a)           The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be in substantially the
same form as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate (but which do not affect the rights, duties or
responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Rights Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to customary usage. Subject to the provisions of Section 11 and Section 22
hereof, the Right Certificates, whenever issued, shall be dated as of the
Record Date, and on their face shall entitle the holders thereof to purchase
such number of one one-thousandths of a share of Preferred Stock as shall be
set forth therein at the price per one one-thousandth of a share as set forth
therein (the “Purchase Price”), but the number and identity of such shares and
the Purchase Price shall be and remain subject to adjustment as provided
herein.

 

(b)           Any
Right Certificate issued pursuant hereto that represents Rights beneficially
owned by (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and which receives such Rights pursuant
to either (A) a

 

7

 

transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing plan, agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which a majority of the Board of Directors has determined to be part
of a plan, agreement, arrangement or understanding which has as a primary
purpose or effect the avoidance of Section 7(e), and any Right Certificate
issued pursuant to Section 6 hereof or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent the Rights Agent has
knowledge thereof and to the extent feasible) a legend in substantially the
following form:

 

The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. Accordingly, this Right
Certificate and the Rights represented hereby are null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.

 

The
failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.

 

Section 5.              Countersignature
and Registration.

 

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

 

(b)           Following
the Distribution Date, receipt by the Rights Agent of notice to that effect and
all other relevant information referred to in Section 3(a), the Rights
Agent will keep or cause to be kept, at its office designated for such purpose,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the

 

8

 

respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
certificate number of each of the Right Certificates and the date of each of
the Right Certificates.

 

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

 

(a)           Subject
to the provisions of 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 (as such term is defined in Section 7(a) hereof),
any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of
Preferred Stock as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.  The Right Certificates shall be transferable
only on the registry books of the Rights Agent. 
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have properly 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 or the Rights Agent shall reasonably
request.  Thereupon, the Rights Agent
shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment by the surrendering registered holder 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 Right
Certificates.  The Rights Agent shall
have no duty or obligation under any Section of this Rights Agreement
requiring the payment of taxes and governmental charges unless and until it is
satisfied that all such taxes and/or governmental charges have been paid.

 

(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 Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security
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 Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

 

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

 

(a)           The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase

 

9

 

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 Purchase Price for each one one-thousandth of a
share of Preferred Stock as to which the Rights are exercised, at or prior to
the Close of Business on the Expiration Date. The “Expiration Date”, as used in
this Rights Agreement, shall be the earliest of (i) the Final Expiration
Date (as defined below), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, or (iii) the time at which the Rights
are exchanged as provided in Section 24 hereof. The “Final Expiration Date”,
as used in this Rights Agreement, shall be June 26, 2018.

 

(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 $800.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.

 

(c)           Upon
receipt of a Right Certificate, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for each one
one-thousandth of a share of Preferred Stock to be purchased and an amount
equal to any applicable tax or charge required to be paid by the holder of the
Rights pursuant hereto in accordance with Section 9 hereof by certified
check, bank draft or money order payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) either (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent) certificates for the number of shares of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes any such transfer agent
to comply with all such requests, or (B) if the Company, in its sole
discretion, shall have elected to deposit the shares of Preferred Stock
issuable upon exercise of the Rights hereunder into a depositary, 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 such depositary agent to comply with all such
requests, (ii) promptly after receipt of such certificates or depositary
receipts cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, (iii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iv) after receipt of any such
cash, promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate, (v) when appropriate, requisition from the
Company the amount of cash or securities issuable upon exercise of a Right
pursuant to the adjustment provisions of Section 11 or the exchange
provisions of Section 24, and (vi) after receipt of any such cash or
securities, promptly deliver such cash or securities to or upon the order of
the registered holder of such Right Certificate, of any such cash or
securities.  The payment of the Purchase
Price (as such amount may be adjusted pursuant to Section 11 hereof) shall
be made in cash or by certified bank check or bank draft 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
hereof, the Company will 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 necessary to comply with this Agreement.  The Company reserves the right to require
prior to the occurrence

 

10

 

of a Section 11(b) Event or a Section 13
Event that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock would be issued.

 

(d)           In
case the registered holder of any Right Certificate shall exercise less than all
the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to such holder’s
duly authorized assigns, subject to the provisions of Section 14 hereof.

 

(e)           Notwithstanding
anything in this Rights Agreement to the contrary, upon the first occurrence of
a Section 11(b) Event or a Section 13 Event, any Rights beneficially
owned by (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and which receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or any such Associate or Affiliate) or to
any Person with whom such Acquiring Person (or such Associate or Affiliate) has
any continuing plan, agreement, arrangement or understanding regarding the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which a majority of the Board of Directors has determined to be part
of a plan, agreement, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) are
complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or Section 4(b) with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.

 

(f)            Notwithstanding
anything in this Rights 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 exercise as set forth in
this Section 7 unless the certificate contained in the appropriate form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been properly completed and duly
executed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
or the Rights Agent shall reasonably request.

 

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

 

11

 

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

 

Section 9.              Reservation
and Availability of Shares of Preferred Stock.

 

(a)           The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or its
authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of a Section 11(b) Event
or a Section 13 Event, shall so reserve and keep available a sufficient
number of shares of Preferred Stock, Common Stock and/or other securities which
may be required to permit the exercise in full of the Rights pursuant to this
Rights Agreement.

 

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

 

(c)           The
Company shall use its best efforts to (i) file, as soon as practicable
following the first occurrence of an event which would establish the
Distribution Date, a registration statement under the Securities 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, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under the “blue sky laws” of the various states.

 

(d)           The
Company further covenants and agrees that it will pay when due and payable any
and all taxes and governmental charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares of Preferred
Stock and/or other securities upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or governmental charge which may be
payable in respect of any transfer involved in the transfer or delivery of
Right Certificates or the issuance or delivery of certificates or depositary
receipts for Preferred Stock and/or other securities in a name other than that
of the registered holder of the Right Certificate evidencing Rights surrendered
for exercise, nor shall the Company be required to issue or deliver any
certificates or depositary receipts for shares of Preferred Stock and/or other
securities upon the exercise of any Rights until any such tax or charge shall
have been paid (any such tax or charge being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company’s or the Rights Agent’s reasonable satisfaction that no such tax or
charge is due.

 

12

 

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

 

Section 11.            Adjustment of Purchase Price, Number of
Shares or Number of Rights.  The Purchase
Price, the number and identity 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)           In
the event the Company shall at any time after the date of this Rights Agreement
(i) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (ii) subdivide the outstanding Preferred Stock, (iii) combine
the outstanding Preferred Stock into a smaller number of shares or (iv) 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, the Purchase Price in effect at
the time of the record date for such dividend or the time of the effective date
of such subdivision, combination or reclassification, and the number and kind
of shares of capital stock, including Preferred Stock, issuable upon exercise
of a Right, shall be proportionately adjusted so that the holder of any Right
exercised after such time, upon payment of the aggregate consideration such
holder would have had to pay to exercise such Right prior to such time, shall
be entitled to receive the aggregate number and kind of shares of capital
stock, including Preferred Stock, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.

 

(b)           In
the event any Person becomes an Acquiring Person (“Section 11(b) Event”),
then proper provision shall be made so that each holder of a Right, subject to Section 7(e) and
Section 24 hereof and except as provided below, shall after the later of
the occurrence of such event and the effective date of an appropriate
registration statement pursuant to Section 9 hereof, have a right to
receive, upon exercise thereof at the then current Purchase Price, multiplied
by the then number of one one-thousandths of a share of Preferred Stock for
which a Right is then exercisable, in accordance with the terms of this Rights
Agreement, in lieu of shares of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (y) multiplying
the then current Purchase Price by the then number of one

 

13

 

one-thousandths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (z) 50% of
the current market price per one share of Common Stock (determined pursuant to Section 11
(f) hereof on the date of the occurrence of the Section 11(b) Event)
(such number of shares being referred to as the “number of Adjustment Shares”).  The Company shall give the Rights Agent
written notice of the identity of any such Acquiring Person, Associate or
Affiliate, or the nominee of any of the foregoing, and the Rights Agent may
rely on such notice in carrying out its duties under this Agreement and shall
be deemed not to have any knowledge of the identity of any such Acquiring
Person, Associate or Affiliate, or the nominee of any of the foregoing unless
and until it shall have received such notice.

 

(c)           In
the event that there shall not be sufficient Treasury shares or authorized but
unissued shares of Common Stock to permit the exercise in full of the Rights in
accordance with the foregoing Section 11(b), and the Rights become so
exercisable, notwithstanding any other provision of this Rights Agreement, to
the extent necessary and permitted by applicable law and any agreements in
effect on the date hereof to which the Company is a party, each Right shall
thereafter represent the right to receive, upon exercise thereof at the then
current Purchase Price, multiplied by the then number of one one-thousandths of
a share of Preferred Stock for which a Right is then exercisable, in accordance
with the terms of this Rights Agreement, a number of shares, or units of
shares, of (y) Common Stock, and (z) preferred stock (or other equity
securities) of the Company, including, but not limited to Preferred Stock, equal
in the aggregate to the number of Adjustment Shares where the Board of
Directors shall have in good faith deemed such shares or units, other than the
shares of Common Stock, to have at least the same value and voting rights as
the Common Stock (a “common stock equivalent”); provided, however, if there are
unavailable sufficient shares (or fractions of shares) of Common Stock and/or
common stock equivalents, then the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or common stock
equivalents for issuance upon exercise of the Rights, including the calling of
a meeting of stockholders; and provided, further, that if the Company is unable
to cause sufficient shares of Common Stock and/or common stock equivalents to
be available for issuance upon exercise in full of the Rights, then the
Company, to the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date thereof to which it is a party,
shall make provision to pay an amount in cash equal to twice the Purchase Price
(as adjusted pursuant to this Section 11), in lieu of issuing shares of
Common Stock and/or common stock equivalents. To the extent that the Company
determines that some action needs to be taken pursuant to this Section 11(c),
the Board of Directors by action of at least a majority of its members then in
office may suspend the exercisability of the Rights for a period of up to sixty
(60) days following the date on which the Section 11(b) Event shall
have occurred, in order to decide the appropriate form of distribution to be
made pursuant to this Section 11(c) 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. The Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Stock and common stock
equivalents upon exercise of the Rights among holders of Rights, which such
allocation may be, but is not required to be, pro-rata.

 

(d)           If
the Company shall fix a record date for the issuance of rights or warrants to
all holders of Preferred Stock entitling them (for a period expiring within 90
calendar days after such record date) to subscribe for or purchase Preferred
Stock (or securities having the same or

 

14

 

more favorable rights, privileges and preferences as
the 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 or exercise price per share, as the case may be, less than the current
market price per share of Preferred Stock (as defined in Section 11(f) hereof)
on such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date plus the number of
shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock or equivalent preferred stock 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 in a consideration, part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
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 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.

 

(e)           If
the Company shall fix a record date for the making of a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or convertible securities,
subscription rights or warrants (excluding those referred to in Section 11
(d) 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 for one share of Preferred Stock (as defined in Section 1
(f) hereof) on such record date less the fair market value (as determined
in good faith by a majority of the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants applicable to one share
of Preferred Stock, and the denominator of which shall be such current market
price for one share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.

 

(f)            (i)            For
the purpose of any computation hereunder, the “current market price” of any
security (a “Security” for purposes of this Section 11 (f) (i)) on
any date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive

 

15

 

Trading Days (as hereinafter defined) immediately
prior to (but not including) such date; provided, however, that in the event
that the current market price per share of such Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into shares of such Security or (B) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of 30 Trading Days after (but not including) the ex-dividend date
for such dividend or distribution or the record date for such subdivision,
combination or reclassification, then, and in each such case, the “current
market price” shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or the Nasdaq National Market or, if the Security is not listed
or admitted to trading on the New York Stock Exchange or the Nasdaq National
Market, 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 Security is listed or admitted to
trading or, if the Security is not listed or admitted to trading on any
national securities exchange, as reported by an automated quotation system , or
if the Security is not listed or admitted to trading on any national securities
exchange or included in an automated quotation system, the average of the high
bid and low asked prices in the over-the-counter market, as reported by an
automated quotation system or such other system then in use, or, if on any such
date the Security is 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 Security selected by a majority of the Board of Directors. If
on any such date no market maker is making a market in the Security, the fair
value of such Security on such date as determined in good faith by a majority
of the Board of Directors shall be used. The term “Trading Day” shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange, a Business Day. If the Security is not publicly held or not so listed
or traded, “current market price” shall mean the fair value as determined in
good faith by a majority of the Board of Directors, 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 (or one one-thousandth of a
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 (f) (other
than the last sentence thereof). If the current market price per share (or one
one-thousandth of a 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 (f),
the “current market price” per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 1,000 (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 Rights
Agreement) multiplied by the current market price per share of the Common Stock
and the “current market price” per one one-thousandth of a share of Preferred
Stock shall be equal to the current market price per share of the Common Stock
(as appropriately adjusted). If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or

 

16

 

traded, “current market price” per share shall mean
the fair value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

 

(g)           No adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any adjustments which
by reason of this Section 11(g) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share, as the case may be. Notwithstanding the
first sentence of this Section 11(g), 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.

 

(h)           In the event that at any time, as a
result of an adjustment made pursuant to Section 11(a) or (b) hereof,
the holder of any Right shall be entitled to receive upon exercise of such
Right any shares of capital stock of the Company other than shares of Preferred
Stock, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the shares contained in Section 11(a) through (e) hereof,
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the shares of Preferred Stock shall apply on like terms to any such
other shares.

 

(i)            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 or other capital stock of the
Company purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment of the Purchase Price.

 

(j)            Unless the Company shall have exercised
its election as provided in Section 11(k) hereof, upon each
adjustment of the Purchase Price as a result of the calculations made in Section 11(d) and
(e) hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred
Stock (calculated to the nearest ten-thousandth) obtained by (i) multiplying
(A) the number of one one-thousandths of a share of Preferred Stock
covered by a Right immediately prior to the adjustment by (B) 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.

 

(k)           The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which such 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 ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by

 

17

 

the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public announcement
(with prompt written notice thereof to the Rights Agent) of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(k), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and delivered by the Company and countersigned and delivered by the Rights
Agent in the manner provided for herein (and 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 Right Certificates on the record date specified in the
public announcement.

 

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

 

(m)          Before taking any action that would cause
an adjustment reducing the Purchase Price below the then par value, if any, of
the shares of Common Stock or other securities and below one one-thousandth of
the then par value, if any, of the 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 fully paid and nonassessable shares of such Preferred Stock,
Common Stock or other securities at such adjusted Purchase Price. If upon any
exercise of the Rights, a holder is to receive a combination of Common Stock
and common stock equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of Common Stock of
the Company, shall be allocated as the payment for each share of Common Stock
of the Company so received.

 

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

 

18

 

(o)           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 a
majority of the Board of Directors shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any Preferred Stock at less than the then current market
price, (iii) issuance wholly for cash of Preferred Stock or securities
which by their terms are convertible into or exchangeable for Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to the
holders of its Preferred Stock, shall not be taxable to such stockholders.

 

(p)           In the event that at any time after the
date of this Rights Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Stock payable in
shares of Common Stock or (ii) effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in any such case (y) the number of one
one-thousandths of a share of Preferred Stock purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number of
one one-thousandths of a share of Preferred Stock so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and each share of Common Stock outstanding
immediately after such event shall have issued with respect to it that number
of Rights which each share of Common Stock outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this Section 11
(p) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.

 

(q)           The Company covenants and agrees that it
shall not, at any time after the Distribution Date and so long as the Rights
have not been redeemed pursuant to Section 23 hereof or exchanged pursuant
to Section 24 hereof, (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer, in one or more 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, if at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.

 

(r)            The Company covenants and agrees that,
after the Stock Acquisition Date, it will not, except as permitted by Sections
23 and 27 hereof, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.

 

Section 12.            Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment or any event affecting the Rights or their
exercisability (including without limitation an event which causes Rights to
become null and void) occurs as provided in Sections 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such
adjustment or

 

19

 

describing
such event, and a brief reasonably detailed statement of the facts and
computations accounting for such adjustment, (b) promptly file with the
Rights Agent and with each transfer agent for the Preferred Stock and the
Common Stock a copy of such certificate and (c) include a brief summary
thereof in a mailing to each holder of a Right Certificate in accordance with Section 26
hereof, or prior to the Distribution Date, disclose a brief summary in a filing
under the Exchange Act. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment or statement therein contained and
shall have no duty or liability with respect to, and shall not be deemed to
have knowledge of, any adjustment unless and until it shall have received such
a certificate.

 

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

 

(a)           In the event that, directly or
indirectly, 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, (y) any
Person shall consolidate with or merge with and into the Company, and the
Company shall not be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common Stock shall be
changed into or exchanged for stock or other securities of any other Person (or
the Company) 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 or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than to the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right, subject
to Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price multiplied by the
then number of one one-thousandths of a share of Preferred Stock for which a
Right is then exercisable (or if a Section 11(b) 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(b) Event by
the Purchase Price in effect immediately prior to such first occurrence) in
accordance with the terms of this Rights Agreement, in lieu of Preferred Stock,
such number of shares of freely tradable Common Stock of the Principal Party
(as hereinafter defined), free and clear of liens, rights of call or first
refusal, encumbrances or other adverse claims, as shall be equal to the result
obtained by (A) multiplying the then current Purchase Price by the number
of one one-thousandths of a share of Preferred Stock for which a Right is then
exercisable (or if a Section 11(b) 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(b) Event by the Purchase
Price in effect immediately prior to such first occurrence), and dividing that
product by (B) 50% of the current market price per share of the Common
Stock of such Principal Party (determined in the manner described in Section 11
(f) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of Section 11
hereof shall apply to such Principal Party; and (iv) such Principal Party
shall take such steps (including, but not limited to, the authorization and reservation
of a

 

20

 

sufficient number of shares of its Common Stock to
permit exercise of all outstanding Rights in accordance with this Section 13(a))
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights.

 

(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) hereof,
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, including the Company, that is the other
party to the merger or consolidation; and

 

(ii)           in the case of any transaction described
in clause (z) of the first sentence of Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in any case described in clause (i) or (ii) in
this Section 13(b), (x) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary or Affiliate of another Person, “Principal Party”
shall refer to such other Person; (y) in case such Person is a Subsidiary,
directly or indirectly, or Affiliate of more than one Person, the Common Stocks
of all 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 (z) in case such Person is, or is
owned directly or indirectly by, a partnership or joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (x) and (y) above shall apply to each of
the chains of ownership having an interest in such joint venture as if such
party were a “Subsidiary” of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or indirect interests in
such Person bear to the total of such interests.

 

(c)           The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of shares of its authorized 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 each
Principal Party and each other Person who may become a Principal Party as a
result of such consolidation, merger, sale or transfer 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, sale or transfer of assets mentioned in paragraph (a) of
this Section 13, the Principal Party will:

 

(i)            prepare and file a registration statement
under the Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, will use its
best efforts to cause such registration statement to become effective as soon
as practicable after such filing and will use its best efforts to cause such
registration statement to

 

21

 

remain effective (with a prospectus at all times
meeting the requirements of the Securities 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)          will
deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which 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 any time
after the occurrence of a Section 11(b) Event, the Rights which have
not theretofore been exercised shall thereafter also become exercisable in the
manner described in Section 13(a) hereof.

 

Section 14.            Fractional Rights and
Fractional Shares.

 

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

 

22

 

share of Preferred Stock). Fractions of 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, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Right Certificates 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 (f)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise.

 

(c)           Following the occurrence of one of the
transactions or events specified in Section 11 hereof giving rise to the
right to receive common stock equivalents (other than Preferred Stock) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such common stock equivalents or other
securities upon exercise of the Rights or to distribute certificates which
evidence fractional shares of such common stock equivalents or other
securities. In lieu of fractional shares or units of such common stock
equivalents or other securities, the Company may pay to the registered holders
of Right 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 a
share or unit of such common stock equivalent or other securities. For purposes
of this Section 14(c), the current market value shall be determined in the
manner set forth in Section 11 (f) hereof for the Trading Day
immediately prior to the date of such exercise and, if such common stock
equivalent is not traded, each such common stock equivalent shall have the
value of one one-thousandth of a share of Preferred Stock.

 

(d)           Except as otherwise expressly provided in
this Section 14, the holder of a Right by the acceptance of the Right
expressly waives such holder’s right to receive any fractional Rights or any
fractional share upon exercise of Rights.

 

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

 

Section 15.            Rights of Action.  All rights of action in respect of
this Rights Agreement, except for rights of action given to the Rights Agent
under Section 18 or Section 20 hereof, are

 

23

 

vested
in the respective registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of Common Stock); and any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder’s right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach by the Company of this Rights Agreement and will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations by the Company of, the
obligations of any Person subject to this Rights Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including
attorneys’ fees, incurred by them in any action against the Company to enforce
the provisions of this Rights Agreement.

 

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

 

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

 

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

 

(c)           the Company and the Rights Agent may deem
and treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock Certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificate 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 shall be affected by any notice to the contrary.

 

(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, judgment, decree or
ruling (whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental, regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, that the Company must use its best efforts to have any such
injunction, order, judgment, decree or ruling lifted or otherwise overturned as
soon as possible.

 

24

 

Section 17.            Right Certificate Holder Not Deemed a
Stockholder.  No holder, as such, of any
Right Certificate shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of Preferred Stock, Common 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 Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.

 

Section 18.            Concerning the Rights Agent.

 

(a)           The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Rights Agreement and the exercise and
performance of its duties hereunder, provided however, that if the amount of
counsel fees to be incurred at any one time exceeds $5,000 the Rights Agent
shall notify the Company.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense (including, without limitation, the reasonable fees and
expenses of legal counsel), incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent (which gross negligence, bad
faith, or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction) for any
action taken, suffered or omitted by the Rights Agent in connection with the
acceptance, administration, exercise and performance of its duties under this
Rights Agreement.  The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the
Company. The provisions of this Section 18(a) and Section 20
below shall survive the termination of this Agreement, the exercise or
expiration of the Rights and the resignation, replacement or removal of the
Rights Agent.

 

(b)           The Rights Agent shall be authorized and
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this Rights
Agreement and the exercise and performance of its duties hereunder, in reliance
upon any Right Certificate or certificate for Preferred Stock, 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 on the advice of counsel as set forth
in Section 20 below.

 

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

 

(a)           Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger
or

 

25

 

consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Rights Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.

 

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

 

Section 20.            Duties of Rights Agent.  The Rights Agent
undertakes to perform only the duties and obligations expressly imposed by this
Rights Agreement (and no implied duties) upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

 

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

 

(b)           Whenever
in the performance of its duties under this Rights Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking, suffering or omitting 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, Chief
Executive Officer, President, Chief Operating Officer, any Executive Vice
President, or any Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full and complete
authorization and protection to the Rights Agent, and the Rights Agent shall
incur no liability for or in respect of, any action taken, suffered or omitted
by it absent bad faith under the provisions of this Rights Agreement in
reliance upon such certificate.

 

26

 

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

 

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

 

(e)           The
Rights Agent shall not have any liability for or be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming null and void pursuant to Section 11(a)(ii) hereof)
or any change or adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Section 3, 11, 13, 23 or 24, or
the ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of the certificate described in Section 12
hereof, upon which the Rights Agent may rely); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.

 

(f)            The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Rights 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, Chief Executive Officer, President, Chief Operating Officer, any
Executive Vice President, or any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its
duties, and such instructions shall be full authorization and protection to the
Rights Agent and the Rights Agent shall not be liable for or in respect of any
action taken, suffered or omitted to be taken by it absent bad faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. 
The Rights Agent shall be fully authorized and protected in relying upon
the most recent instructions received by any such officer.

 

27

 

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

 

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

 

(k)           If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been properly
completed or indicates an affirmative response to clause 1, clause 2 and/or, in
the case of the certificate attached to the form of election to purchase,
clause 3 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.

 

Section 21.            Change of Rights Agent.  The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Rights Agreement upon 30 days’ notice in writing mailed to the Company and
to each transfer agent of the Common Stock and Preferred Stock known to the
Rights Agent by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (which holder shall, with such notice, submit such
holder’s Right Certificate for inspection by the Company), then the Rights
Agent or the registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation or other entity organized and doing business
under the laws of

 

28

 

the
United States or of any state, 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, or (b) an
affiliate of a corporation or other entity 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 Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates or, prior to the Distribution Date, through
any filing made by the Company pursuant to the Exchange Act. 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 21.            Issuance
of New Right Certificates.

 

(a)           Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by a majority of the Board of
Directors then in office to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement.

 

(b)           In
addition, in connection with the issuance or sale of Common Stock following the
Distribution Date and prior to the redemption, exchange or expiration of the
Rights, the Company (a) shall with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
benefit plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right
Certificates 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
Right Certificates would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.

 

Section 23.            Redemption
and Termination.

 

(a)           A
majority of the Board of Directors then in office may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date or (ii) the Close of
Business on the Final Expiration Date, elect to redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.01 per Right, as
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 of Directors may be made effective at such

 

29

 

time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.

 

(b)           Immediately
upon the action of a majority of the Board of Directors then in office electing
to redeem the Rights, evidence of which shall be promptly filed with the Rights
Agent, or, when appropriate, immediately upon the time or satisfaction of such
conditions as the Board of Directors may have established, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public disclosure
of any such redemption (with prompt written notice thereof to the Rights
Agent); provided, however, that the failure to give, or any defect in, any such
disclosure shall not affect the legality or validity of such redemption. Within
10 days after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.

 

(c)           Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof and
other than in connection with the purchase of Common Stock prior to the
Distribution Date.

 

Section 24.            Exchange.

 

(a)           The
Board of Directors may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become null and void pursuant
to the provisions of Section 7(e) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect adjustments in the number of Rights pursuant to Section 11 of
this Rights Agreement (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan or
compensation arrangement of the Company or any such Subsidiary, or any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any such Subsidiary for or pursuant to the terms
of any such employee benefit plan or compensation arrangement), together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Voting Power of the Company.

 

(b)           Immediately
upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company

 

30

 

promptly shall give public notice of any such exchange
(with prompt written notice thereof to the Rights Agent); provided, however,
that the failure to give, or any defect in, such notice shall not affect the
legality or validity of such exchange. The Company 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
will state the method by which the exchange of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become null and void pursuant to the
provisions of Section 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(d) hereof) for 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 the terms thereof, so that the fraction of a share
of 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 (or equivalent 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 (or equivalent preferred stock) for issuance upon exchange of the Rights.

 

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

 

Section 25.            Notice
of Proposed Actions.

 

(a)           In
case the Company shall propose at any time after the Distribution Date (a) to
pay any dividend payable in stock of any class to the holders of the Preferred
Stock or to make any other distribution to the holders of the Preferred Stock
(other than a regular periodic cash dividend out of earnings or retained
earnings of the Company), (b) to offer to the holders of the Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any other class or any other
securities, rights or options, (c) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its

 

31

 

Subsidiaries to effect any sales or other transfer),
in one or more transactions, of 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person, (e) to
effect the liquidation, dissolution or winding up of the Company, or (f) to
declare or pay any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right, 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 Common Stock and/or Preferred Stock, if any such
date is to be fixed. Such notice shall be so given in the case of any action
covered by clauses (a) or (b) above at least ten days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least ten days prior to
the date of the taking of such proposed action or the date of participation therein
by the holders of Preferred Stock, whichever shall be the earlier. The failure
to give notice required by this Section 25 or any defect therein shall not
affect the legality or validity of the action taken by the Company or the vote
upon any such action.

 

(b)           In
case a Section 11(b) Event shall occur, then the Company shall as
soon as practicable thereafter give to each holder of a Right Certificate, 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(b) hereof

 

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

 

United Therapeutics
Corporation

1110 Spring Street

Silver Spring, Maryland
20910

Attention:  Chief Executive Officer

 

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

 

The
Bank of New York

101
Barclay Street

Floor
12W

New
York, New York 10286

Attention:  Stock Transfer Administration

 

Notices
or demands authorized by this Rights Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or

 

32

 

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.

 

33

 

Section 27.            Supplements and Amendments.  The Company may from time to time supplement
or amend this Rights Agreement without the approval of any holders of Right
Certificates in order (a) to cure any ambiguity, (b) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (c) to shorten or lengthen any time
period hereunder (including without limitation to extend the Final Expiration
Date), (d) increase or decrease the Purchase Price, or (e) to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable, and such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person, this Rights
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights; provided further that this Rights Agreement
may not be supplemented or amended to lengthen pursuant to clause (c) of this
sentence, (A) the time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of the Rights;
provided further that the Company shall have the right to make any changes
without the approval of any holders of Right Certificates which are necessary
to facilitate the appointment of a successor Rights Agent, which such changes
shall be set forth in a writing by the Company or by the Company and such
successor Rights Agent. Without limiting the foregoing, the Company may at any
time prior to such time as any Person becomes an Acquiring Person amend this
Rights Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereof
from 15% to not less than the greater of (i) any percentage greater than
the largest percentage of the Voting Power of the Company then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, or any employee benefit plan or compensation
arrangement of the Company or any Subsidiary of the Company, and any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any such Subsidiary for or pursuant to the terms
of any such employee benefit plan or compensation arrangement) together with
all Affiliates and Associates of such Person and (ii) 10%. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement
or amendment. Notwithstanding any other provision hereof, the Rights Agent’s
consent must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters or affects the Rights Agent’s rights or duties.

 

Section 18.            Successors.  All the covenants and provisions of this
Rights 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.

 

34

 

Section 29.            Determinations and Actions by the Board
of Directors.  The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power 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 with
respect to the redemption or exchange of the Rights or to amend the
Agreement).  All such actions,
calculations, interpretations and determinations (including, for purpose of clause
(y) below, all omissions with respect to the foregoing) which are done or
made by the Company’s Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other Persons, and (y) not subject the Board to any
liability to the holders of the Rights. 
The Rights Agent is entitled always to assume the Company’s Board of
Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.

 

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

 

Section 31.            Severability.  If any term, provision, covenant or
restriction of this Rights 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 Rights
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 of Directors of the Company determines in its good
faith judgment that severing the invalid 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 of Directors. 
It is the intent of the parties hereto to enforce the remainder of the
terms, provisions, covenants and restrictions of this Rights Agreement to the
maximum extent permitted by law.

 

Section 32.            Governing Law.  This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that the
rights, duties and obligations of the Rights Agent hereunder shall be governed
and construed in accordance with the laws of the State of New York. The parties
hereto waive the right to a jury trial in any action arising out of this
Agreement. Any dispute arising out of this Agreement. Any dispute arising out
of this Agreement shall be litigated in the borough of Manhattan, New York
City, New York, and the parties hereby submit to the jurisdiction of such
courts and acknowledge that such courts are a convenient forum.

 

35

 

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

 

Section 34.            Descriptive Headings.  Descriptive headings of the several Sections
of this Rights 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 Rights Agreement to be
duly executed, all as of the day and year first above written.

 

 

	
  Attest:

  	
   

  	
  UNITED THERAPEUTICS CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Paul A. Mahon

  	
   

  	
  By

  	
  /s/ Martine A. Rothblatt

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   Paul A. Mahon

  	
   

  	
  Name: Martine A. Rothblatt

  
	
  Title:

  	
     EVP & General Counsel

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Kayur Patel

  	
   

  	
  By

  	
    /s/ Eon A. Canzius

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   Kayur Patel

  	
   

  	
  Name:

  	
   Eon A. Canzius

  
	
  Title:

  	
     Assistant Treasurer

  	
   

  	
  Title:

  	
   Vice President

  
									

 

 

EXHIBIT A

 

FORM OF

CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A

JUNIOR PARTICIPATING PREFERRED STOCK

 

OF

 

UNITED THERAPEUTICS
CORPORATION

 

PURSUANT TO SECTION 151(g) OF
THE GENERAL CORPORATION LAW

OF THE STATE OF DELAWARE

 

We,
Paul Mahon, Secretary, and John Ferrari, Treasurer, of United Therapeutics
Corporation, a corporation organized and existing under the General Corporation
Law of the state of Delaware (the “DGCL”), in accordance with the provisions of
Section 151(g) thereof, DO HEREBY CERTIFY:

 

That
pursuant to the authority conferred upon the Board of Directors by the Amended
and Restated Certificate of Incorporation of the Company, the said Board of
Directors on June 30, 2008 adopted the following resolution creating a
series of One Hundred Thousand (100,000) shares of Preferred Stock designated
as Series A Junior Participating Preferred Stock:

 

RESOLVED, that pursuant
to the authority vested in the Board of Directors of the Company in accordance
with the provisions of its Amended and Restated Certificate of Incorporation,
as amended, a series of Preferred Stock of the company be and it hereby is
created, and that the designation and amount thereof and the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:

 

Section 1.              Designation and Amount.

 

There
shall be a series of the Preferred Stock which shall be designated as the “Series A
Junior Participating Preferred Stock,” par value $0.01 per share, and the
number of shares constituting such series shall be 100,000.  Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Junior Participating
Preferred Stock to a number less than that of the shares then outstanding plus
the number of shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the Company.

 

Section 2.              Dividends and Distributions.

 

(A)          Subject to the rights of the holders
of any shares of any series of preferred stock of the Company ranking prior and
superior to the Series A Junior Participating Preferred Stock with respect
to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of Common Stock, par
value $0.01 per share of the Company (the “Common Stock”), and of any other
junior stock, shall be entitled to receive,

 

 

when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on any regular
quarterly dividend payment date as shall be established by the Board of
Directors (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 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 Junior
Participating Preferred Stock.  In the
event the Company shall at any time after December 29, 2000 (the “Rights
Declaration Date”) declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or 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 Junior Participating 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.

 

(B)           The Company 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);
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 $1.00 per share on the Series A Junior Participating 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 Junior Participating
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 Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date.  Accrued but unpaid
dividends shall not bear interest. 
Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.  The Board of Directors may, in accordance
with applicable law, fix a record date for the determination of holders of
shares of Series A Junior

 

2

 

Participating Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more than such
number of days prior to the date fixed for the payment thereof as may be
allowed by applicable law.

 

Section 3.              Voting Rights.

 

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

 

(A)          Each share of Series A Junior
Participating Preferred Stock shall entitle the holder thereof to 1,000 votes
on all matters submitted to a vote of the stockholders of the Company.  In the event the Company shall at any time
after the Rights Declaration Date declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or 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 to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under 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.

 

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

 

(C)           Except as otherwise set forth herein or
in the Company’s Amended and Restated Certificate of Incorporation, and except
as otherwise provided by law, holders of Series A Junior Participating
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.

 

Section 4.              Certain Restrictions.

 

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

 

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

 

3

 

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

 

(iii)          except
as permitted in Section 4(A)(iv) below, redeem or purchase or
otherwise acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, provided that the
Company may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Junior Participating Preferred Stock; and

 

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

 

(B)        The Company shall not
permit any subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company unless the Company 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 Junior Participating Preferred Stock purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof.  The Company shall cause all such shares upon
their cancellation to be authorized but unissued shares of Preferred Stock
which may be reissued as part of a new series of Preferred Stock, subject to
the conditions and restrictions on issuance set forth herein.

 

Section 6.              Liquidation, Dissolution or
Winding Up.

 

(A)          Subject to the rights of the holders
of any shares of any series of Preferred Stock of the Company ranking prior and
superior to the Series A Junior Participating Preferred Stock with respect
to liquidation, upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $1,000.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the “Series A Liquidation
Preference”).  Following the payment of
the full

 

4

 

amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock, unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the “Common Adjustment”)
equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph C below to reflect such events as stock dividends, and
subdivisions, combinations and consolidations with respect to the Common Stock)
(such number in clause (ii) being referred to as the “Adjustment Number”).  Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect
of all outstanding shares of Series A Junior Participating Preferred Stock
and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Series A
Junior Participating Preferred Stock and Common Stock, on a per share basis,
respectively.

 

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

 

(C)           In the event the Company shall at any
time after the Rights Declaration Date declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or 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
Adjustment Number in effect immediately prior to such event shall be adjusted
by multiplying such Adjustment Number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

 

Section 7.              Consolidation, Merger, etc.

 

In
case the Company 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 the shares of Series A Junior Participating Preferred Stock
shall at the same time be similarly exchanged or changed in 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 Company shall at any time after the Rights Declaration Date
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or 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

 

5

 

in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Participating 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 are
outstanding immediately prior to such event.

 

Section 8.              Redemption.

 

The
shares of Series A Junior Participating Preferred Stock shall not be redeemable.

 

Section 9.              Ranking.

 

The
Series A Junior Participating Preferred Stock shall rank junior to all
other series of the Company’s Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such series shall provide
otherwise.

 

Section 10.            Fractional Shares.

 

Series A
Junior Participating 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 to have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.”

 

IN
WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm
the foregoing as true under the penalties of perjury this 30th day of June 2008.

 

 

	
  By:

  	
  /s/
  Paul A. Mahon

  	
   

  
	
  Name:

  	
  Paul
  Mahon

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  John M. Ferrari

  	
   

  
	
  Name:

  	
  John
  Ferrari

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  

 

6

 

Exhibit B

 

[Form of Right
Certificate]

 

Certificate No. R-               Rights

 

NOT
EXERCISABLE AFTER THE EXPIRATION DATE. 
AT THE OPTION OF THE COMPANY, THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$0.01 PER RIGHT OR EXCHANGE FOR COMMON STOCK, UNDER THE CIRCUMSTANCES AND ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. 
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.  [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE
OR AN ASSOCIATE OF AN ACQUIRING PERSON. 
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*

 

Right Certificate

 

UNITED THERAPEUTICS
CORPORATION

 

This
certifies that
                          ,
or registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the First Amended and Restated Rights Agreement
dated as of June 30, 2008 (the “Rights Agreement”) between United
Therapeutics Corporation, a Delaware corporation (the “Company”), and The Bank
of New York, a New York banking corporation (the “Rights Agent”), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 p.m.  Silver Spring, Maryland time, on the
Expiration Date, as that term is defined in the Rights Agreement, at the office
of the Rights Agent designated for such purpose, or its successor as Rights
Agent, one one-thousandth of a fully paid, nonassessable share of the Series A
Junior Participating Preferred Stock, par value $0.01 per share (“Preferred
Stock”), of the Company, at a purchase price of $800.00 per one one-thousandth
of a share (the “Purchase Price”) upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.  The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise of
each Right) and the Purchase Price set forth above, are the number and Purchase
Price as of                                 ,
based on the shares of Preferred Stock of the Company as constituted at such
date.

 

The
Purchase Price and the number of shares of Preferred Stock which may be
purchased upon the exercise of each of the Rights evidenced by this Right
Certificate are subject to

 

*                              The
portion of the legend in brackets shall be inserted only if applicable.

 

 

modification and adjustment upon the happening of certain events as
provided in the Rights Agreement.

 

This
Right Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates.  Copies of the Rights Agreement are on file at
the Company and the above-mentioned office of the Rights Agent and are also
available upon written request to the Company.

 

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

 

Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $0.01 per Right on or prior to the Stock Acquisition Date (as defined in the
Rights Agreement).  In addition, subject
to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be exchanged by the Company at its option for one share of
Common Stock following the Stock Acquisition Date and prior to the time an
Acquiring Person, as that term is defined in the Rights Agreement, owns 50% or
more of the Voting Power, as that term is defined in the Rights Agreement, of
the Company.

 

No
fractional shares of Preferred Stock will be issued upon the exercise of any
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).  In lieu of fractions of a share, a cash
payment will be made, as provided in the Rights Agreement.

 

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

 

2

 

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

 

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

 

	
  Attest:

  	
   

  	
  UNITED THERAPEUTICS CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
									

 

 

Countersigned:

 

THE BANK OF NEW YORK

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  signature

  	
   

  

 

3

 

[Form of
Reverse Side of Right Certificate]

 

FORM OF ASSIGNMENT

 

(To
be executed by the registered holder if such holder desires to transfer the
Right Certificate.)

 

	
  FOR VALUE RECEIVED

  	
   

  	
   hereby sells, assigns and
  transfers unto

  

 

 

 

(Please print name and
address of transferee)

 

 

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

 

	
  Dated:

  	
   

  	
   

  

 

Signature

 

(Signature must conform in
all

respects to name of holder
as

specified on the face of
this Right

Certificate)

 

Signature Guaranteed:

 

Signatures
must be guaranteed by a member or a participant in the Securities Transfer
Agent Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program.

 

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

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

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  this Right Certificate)

  

 

 

FORM OF ELECTION TO
PURCHASE

 

(To be executed if holder
desires to

exercise the Right Certificate.)

 

To UNITED THERAPEUTICS CORPORATION:

 

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

 

	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  

 

Social
security or taxpayer identification number:

 

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

 

	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  this Right Certificate)

  

 

Signature Guaranteed:

 

Signatures
must be guaranteed by a member or a participant in the Securities Transfer
Agent Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program.

 

 

CERTIFICATE

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

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

 

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

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  this Right Certificate)

  

 

 

NOTICE

 

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

 

In
the event the certification set forth above in the form of Assignment or the
form of Election to Purchase, as the case may be, is not properly completed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored as described in Section 7(e) of
the Rights Agreement.

 

 

Exhibit C

 

UNITED THERAPEUTICS
CORPORATION

 

SUMMARY OF PREFERRED STOCK

PURCHASE RIGHTS

 

On
December 17, 2000, the Board of Directors of United Therapeutics
Corporation (the “Company”) declared a dividend of one preferred share purchase
right (a “Right”) for each outstanding share of Common Stock, par value $0.01
per share, of the Company (the “Common Stock”). 
The dividend distribution is payable on December 29, 2000, (the “Record
Date”) to the stockholders of record on that date.  Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”)
of the Company at a price of $129.50 per one one-thousandth of a share of Preferred
Stock (the “Purchase Price”), subject to adjustment.  The description and terms of the Rights are
set forth in a Rights Agreement dated as of December 17, 2000, as the same
may be amended from time to time (the “Rights Agreement”), between the Company
and The Bank of New York, as Rights Agent (the “Rights Agent”).

 

Until
the earlier to occur of (i) the close of business on the tenth business
day following the date of public announcement or the date on which the Company
first has notice or determines that a person or group of affiliated or
associated persons (other than the Company, any subsidiary of the Company or
any employee benefit plan of the Company) (an “Acquiring Person”) has acquired,
or obtained the right to acquire, 15% or more of the outstanding shares of
voting stock of the Company without the prior express written consent of the
Company executed on behalf of the Company by a duly authorized officer of the
Company following express approval by action of at least a majority of the
members of the Board of Directors then in office (the “Stock Acquisition 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 of Directors but not later
than the Stock Acquisition Date) following the commencement of a tender offer
or exchange offer, without the prior written consent of the Company, by a
person (other than the Company, any subsidiary of the Company or an employee
benefit plan of the Company and certain affiliated entities) which, upon
consummation, would result in such party’s control of 15% or more of the
Company’s voting stock (the earlier of the dates in clause or (ii) above
being called the “Distribution Date”), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificates.

 

The
Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Company’s Common Stock. 
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuances of Common Stock will contain a
notation incorporating the Rights Agreement by reference.  Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer
of any certificates for shares of Common Stock outstanding as of the Record
Date, even without such notation or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such 

 

1

 

certificate.  As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (“Right Certificates”) will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will then evidence the Rights.

 

The
Rights are not exercisable until the Distribution Date.  The Rights will expire, if not previously
exercised, on December 29, 2010 (the “Final Expiration Date”), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company.

 

The
Purchase Price payable, and the number of shares 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) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).

 

The
number of outstanding Rights and the number of one one-thousandths of a share
of Preferred Stock issuable upon exercise of each Right are 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 shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.

 

Shares
of Preferred Stock purchasable upon exercise of the Rights will not be
redeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock).  Each share of Preferred Stock will have a
preferential dividend in an amount equal to 1,000 times any dividend declared
on each share of Common Stock.  In the
event of liquidation, the holders of the Preferred Stock will receive a
preferred liquidation payment of equal to the greater of $1,000 and 1,000 times
the payment made per share of Common Stock. 
Each share of Preferred Stock will have 1,000 votes, voting together
with the Common Stock.  In the event of
any merger, consolidation or other transaction in which shares of Common Stock
are converted or exchanged, each share of Preferred Stock will be entitled to
receive 1,000 times the amount and type of consideration received per share of
Common Stock.  The rights of the
Preferred Stock as to dividends, liquidation and voting, and in the event of
mergers and consolidations, are protected by customary antidilution provisions.

 

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

 

If
any person or group (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company) acquires 15% or more of the Company’s
outstanding voting stock without the prior written consent of the Board of
Directors, each Right, except those held by such persons, would entitle each
holder of a Right to acquire such number of shares of 

 

2

 

the Company’s Common Stock as shall equal the result obtained by
multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by 50% of the then current per-share
market price of Company Common Stock.

 

If
any person or group (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company) acquires more than 15% but less than 50%
of the outstanding Company Common Stock without prior written consent of the
Board of Directors, each Right, except those held by such persons, may be
exchanged by the Board of Directors for one share of Company Common Stock.

 

If
the Company were acquired in a merger or other business combination transaction
where the Company is not the surviving corporation or where Company Common
Stock is exchanged or changed or 50% or more of the Company’s assets or
earnings power is sold in one or several transactions without the prior written
consent of the Board of Directors, each Right would entitle the holders thereof
(except for the Acquiring Person) to receive such number of shares of the
acquiring company’s common stock as shall be equal to the result obtained by
multiplying the then current Purchase Price by the number one one-thousandths
of a share of Preferred Stock for which a Right is then exercisable and
dividing that product by 50% of the then current market price per share of the
common stock of the acquiring company on the date of such merger or other
business combination transaction.

 

With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price.  No fractional shares of Preferred
Stock will be issued (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), and in lieu thereof an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.

 

At
any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the “Redemption Price”).  The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. 
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

 

The
terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights, including, but not limited
to, an amendment to lower certain thresholds described above to not less than
the greater of (i) any percentage greater than the largest percentage of
the voting power of all securities of the Company then known to the Company to
be beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%, except that from and after such time as any person
or group of affiliated or associated persons becomes an Acquiring Person no
such amendment may adversely affect the interests of the holders of the Rights.

 

3

 

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.

 

A
copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K dated December 18,
2000.  A copy of the Rights Agreement is
available free of charge from the Company. 
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, as the
same may be amended from time to time, which is hereby incorporated herein by
reference.

 

4

 

Exhibit D

 

UNITED THERAPEUTICS
CORPORATION

 

AMENDED

SUMMARY OF PREFERRED STOCK

PURCHASE RIGHTS

 

On
December 17, 2000, upon the terms and subject to the conditions set forth
in the Rights Agreement dated December 17, 2000 (the “2000 Rights
Agreement”) between United Therapeutics Corporation (the “Company”) and The
Bank of New York, as Rights Agent (the “Rights Agent”), the Board of Directors
of the Company declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of Common Stock, par value $0.01 per share, of the
Company (the “Common Stock”).  The
dividend distribution was payable on December 29, 2000, (the “Record Date”)
to the stockholders of record on that date. 
Each Right entitled the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the “Preferred Stock”) of the Company at a
price of $129.50 per one one-thousandth of a share of Preferred Stock (the “Purchase
Price”), subject to adjustment.  On the
Record Date, the Company sent a copy of a Summary of Rights to Purchase
Preferred Stock (the “2000 Summary of Rights”) 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.

 

On
June 30, 2008 the Board of Directors of the Company authorized and
approved the amendment and restatement of the 2000 Rights Agreement in order to
extend the Final Expiration Date (defined below) until June 26, 2018, to
change the Purchase Price from $129.50 to $800.00 and to make other changes and
provisions that the Board determined were necessary or desirable and did not
adversely affect the interests of the holders of the Rights.  The description and terms of the Rights are
set forth in the First Amended and Restated Rights Agreement dated as of June 30,
2008, as the same may be amended from time
to time (the “Rights Agreement”), between the Company and the Rights
Agent.  The 2000 Summary of Rights is
replaced and superseded in its entirety by this Amended Summary of Preferred
Stock Purchase Rights.

 

Until
the earlier to occur of (i) the close of business on the tenth business
day following the date of public announcement or the date on which the Company
first has notice or determines that a person or group of affiliated or
associated persons (other than the Company, any subsidiary of the Company or
any employee benefit plan of the Company) (an “Acquiring Person”) has acquired,
or obtained the right to acquire, 15% or more of the outstanding shares of
voting stock of the Company without the prior express written consent of the
Company executed on behalf of the Company by a duly authorized officer of the
Company following express approval by action of at least a majority of the
members of the Board of Directors then in office (the “Stock Acquisition 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 of Directors but not later
than the Stock Acquisition Date) following the commencement of a tender offer
or exchange offer, without the prior written consent of the Company, by a
person (other than the Company, any subsidiary of the Company 

 

C-1

 

or an employee benefit plan of the Company and certain affiliated
entities) which, upon consummation, would result in such party’s control of 15%
or more of the Company’s voting stock (the earlier of the dates in clause (i) or
(ii) above being called the “Distribution Date”), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificates.

 

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

 

The
Rights are not exercisable until the Distribution Date.  The Rights will expire, if not previously
exercised, on June 26, 2018 (the “Final Expiration Date”), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company.

 

The
Purchase Price payable, and the number of shares 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) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock, or (iii) upon
the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).

 

The
number of outstanding Rights and the number of one one-thousandths of a share
of Preferred Stock issuable upon exercise of each Right are 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 shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.

 

Shares
of Preferred Stock purchasable upon exercise of the Rights will not be
redeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock).  Each share of Preferred Stock will have a
preferential dividend in an amount equal to 1,000 times any dividend declared
on each share of Common Stock.  In the
event of liquidation, the holders of the Preferred Stock will receive a
preferred liquidation payment equal to the greater of $1,000 and 1,000 times
the payment made per share of Common Stock. 
Each share of Preferred Stock will have 1,000 votes, voting together 

 

C-2

 

with the Common Stock.  In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount and type of consideration received
per share of Common Stock.  The rights of
the Preferred Stock as to dividends, liquidation and voting, and in the event
of mergers and consolidations, are protected by customary antidilution provisions.

 

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

 

If
any person or group (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company) acquires 15% or more of the Company’s
outstanding voting stock without the prior written consent of the Board of
Directors, each Right, except those held by such persons, would entitle each
holder of a Right to acquire such number of shares of the Company’s Common
Stock as shall equal the result obtained by multiplying the then current
Purchase Price by the number of one one-thousandths of a share of Preferred
Stock for which a Right is then exercisable and dividing that product by 50% of
the then current per-share market price of Common Stock.

 

If
any person or group (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company) acquires more than 15% but less than 50%
of the outstanding Common Stock without prior written consent of the Board of
Directors, each Right, except those held by such persons, may be exchanged by
the Board of Directors for one share of Common Stock.

 

If
the Company were acquired in a merger or other business combination transaction
where the Company is not the surviving corporation or where Common Stock is
exchanged or changed or 50% or more of the Company’s assets or earnings power
is sold in one or several transactions without the prior written consent of the
Board of Directors, each Right would entitle the holders thereof, except for
the Acquiring Person, to receive such number of shares of the acquiring company’s
common stock as shall be equal to the result obtained by multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable and dividing that product
by 50% of the then current market price per share of the common stock of the
acquiring company on the date of such merger or other business combination
transaction.

 

With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% of such Purchase
Price.  No fractional shares of Preferred
Stock will be issued (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), and in lieu thereof an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.

 

At
any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the “Redemption Price”).  The redemption of the Rights may be made
effective at such time, on 

 

C-3

 

such basis and with such conditions as the Board of Directors in its
sole discretion may establish. 
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

 

The
terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights, including, but not limited
to, an amendment to lower certain thresholds described above to not less than
the greater of (i) any percentage greater than the largest percentage of
the voting power of all securities of the Company then known to the Company to
be beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%, except that from and after such time as any person
or group of affiliated or associated persons becomes an Acquiring Person no
such amendment may adversely affect the interests of the holders of the Rights.

 

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.

 

A
copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K dated July 3,
2008.   A copy of the Rights Agreement is available
free of charge from the Company.  This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as the same may
be amended from time to time, which is hereby incorporated herein by reference.

 

C-4EXHIBIT 10.1

 

FIRST
AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Amendment”), dated July 1, 2008, between PHILLIPS-VAN HEUSEN
CORPORATION, a Delaware corporation (“PVH” and, together with its affiliates
and subsidiaries, the “Company”), and ALLEN SIRKIN (the “Executive”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, the Company has previously entered into that
certain Amended and Restated Employment Agreement with the Executive, dated as
of June 1, 2007 (the “Employment Agreement”); and

 

WHEREAS, the parties desire
to amend the Employment Agreement to provide for the extension of the term
thereof and establish certain elements of compensation during the extension.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1.             Definitions.  Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed thereto in the Employment Agreement.

 

2.             Consideration.  As
consideration for the Executive’s agreement to extend the Employment Period on
and subject to the terms and conditions of this Amendment, it is hereby agreed
that the Executive shall be entitled to receive grants of restricted stock
units under the Company’s 2006 Stock Incentive Plan (as the same may hereafter
be amended or under any successor plan), each with a fair market value on the
date of grant (as determined in accordance with such plan) of $500,000, as follows:

 

(a)   upon the execution of this Amendment by
both parties;

 

(b)   on the date of the annual meeting of stockholders
of the Company to be held in calendar year 2009; and

 

(c)   on the date of the annual meeting of stockholders
of the Company to be held in calendar year 2010.

 

Such awards (x) shall
be made on substantially the same terms and conditions as the awards of
restricted stock units made to the Executive during the Initial Period, subject
to changes adopted by the Company in connection with any change in applicable
law, rule or regulation, including, without limitation, changes in tax or
accounting treatment, regardless of whether such change is statutory in nature
or effected through other means; provided, however, that
(i) the grant made upon the execution of this Amendment shall vest 50% on
the third anniversary of the date of grant and 50% on the fourth anniversary of
the date of grant; (ii) the grants shall not be subject to 

 

 

accelerated vesting upon
retirement, unless the Executive shall retire on or after the date of the
annual meeting of stockholders of the Company to be held in calendar year 2011;
and (y) are in addition to the annual grants of restricted stock units to
be granted to the Executive pursuant to Section 6 of this Amendment.  Notwithstanding the foregoing, such grants
shall not be made if the Executive is not employed by the Company in his
current position on the date of grant.

 

3.             Extension of Employment Period.  It
is hereby agreed that the Employment Period shall end on the date of the annual
meeting of stockholders of the Company to be held in calendar year 2011,
subject to earlier termination in accordance with the terms of the Employment
Agreement.  In order to effect the
foregoing, Section 1(b) of the Employment Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:

 

(b)           Employment Period.  The Company
agrees to continue to employ the Executive, and the Executive agrees to
continue to be employed by the Company, in accordance with the terms and
conditions hereof, for an initial period commencing on the Effective Date and
ending on the date of the Company’s Annual Meeting of Stockholders of the
Company to be held in calendar year 2009 (the “Initial Period”) and an
extension period commencing on the day immediately following the end of the Initial
Period and ending on the date of the Company’s Annual Meeting of Stockholders
of the Company to be held in calendar year 2011 (the “Renewal Period”), and
subject to earlier termination in accordance with the provision of Section 4
hereof.  The period of time commencing on
the Effective Date and ending on the Executive’s last day of employment,
regardless of the reason for the termination of his employment, is referred to
herein as the “Employment Period.”  Each
of the parties acknowledges and agrees that either party may terminate the
Executive’s employment at any time, for any reason, with or without Cause (as
defined in Section 3(a)).

 

4.             Transition Duties.  It is hereby
agreed that from and after the execution and delivery of this Amendment by the
parties, the Executive’s duties shall specifically include active participation
in the development of a succession plan relating to the Executive’s position
and duties and in the training of, and transition of duties to, the person or
persons who will succeed to such duties. 
In order to effect the foregoing, Section 1(c)(i) of the
Employment Agreement is hereby deleted in its entirety and the following
substituted in lieu thereof:

 

(c)           Position and Duties.   (i) 
During the Employment Period, (A) the Executive shall serve as the
President and Chief Operating Officer of the Company, with such duties and
responsibilities as shall from time to time be assigned to him and as are
consistent and commensurate with his title and position, and (B) the
Executive’s services shall be performed at the Company’s headquarters in New
York, New York as of the Effective Date or such other location as may be
mutually agreed between the Company and the Executive, except for travel, and
visits to Company offices and facilities worldwide, reasonably required to
attend to the Company’s business. 
Without limiting the generality of the foregoing, the Executive shall
actively participate in the development of a succession plan relating to the
Executive’s position and duties and in the training of, and transition of
duties to, the person or persons who will succeed to such duties.

 

2

 

5.             Base Salary Increases.  It is hereby
agreed that the Executive’s Base Salary shall be increased to an annual rate of
$950,000 effective June 1, 2009 and to an annual rate of $1,000,000
effective June 1, 2010.  In order to
effect the foregoing, Section 2(a) of the Employment Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:

 

(a)           Base Salary.  During the
Employment Period, the Company shall pay the Executive a salary at the annual
rate of $900,000, increasing to $910,000 effective June 1, 2007, to
$950,000 effective June 1, 2009 and to $1,000,000 effective June 1,
2010 (“Base Salary”), payable in accordance with the normal payroll procedures
of the Company in effect from time to time. 
The term Base Salary as utilized in this Agreement shall refer to the
Executive’s annual base salary as then in effect.

 

6.             Equity Awards.  It is hereby
agreed that the Executive shall be entitled to receive awards of restricted
stock units under the Company’s 2006 Stock Incentive Plan, each with a fair
market value of $1,250,000, at the same time that annual grants are made to the
other executive officers of the Company in calendar years 2009 and 2010, provided that the Executive is employed in his current position
on each such date.  In order to effect
the foregoing, a new Section 2(e) is hereby added to the Employment
Agreement, reading as follows:

 

(e)           Equity Awards.  Notwithstanding
anything in this Agreement to the contrary, during the Renewal Period the
Executive shall receive awards under the Company’s 2006 Stock Incentive Plan
(as the same may hereafter be amended or under any successor plan), as follows:

 

(i) on
the date in calendar year 2009 that annual grants of equity awards are made to
the other executive officers of the Company, restricted stock units having a
fair market value on the date of grant (as determined in accordance with such
plan) of no less than $1,250,000; and

 

(ii) on
the date in calendar year 2010 that annual grants of equity awards are made to
the other executive officers of the Company, restricted stock units having a
fair market value on the date of grant (as determined in accordance with such
plan) of no less than $1,250,000.

 

For the avoidance of
doubt, such awards (x) shall be made on substantially the same terms and
conditions as the awards of restricted stock units made to the Executive during
the Initial Period, subject to changes adopted by the Company in connection
with any change in applicable law, rule or regulation, including, without
limitation, changes in tax or accounting treatment, regardless of whether such
change is statutory in nature or effected through other means; (y) are in
lieu of, and not in addition to, the annual grants of stock options and
restricted stock units that the Executive might otherwise have been granted
consistent with past practice; provided, however,
that nothing herein shall prohibit the Board from making additional or larger
awards to the Executive under the 2006 Stock Incentive Plan (or successor
plan); and (z) shall not affect any performance-based long term incentive
award that the Board, in its sole discretion, may grant to the Executive in the
form of performance shares under the 2006 Stock Incentive Plan 

 

3

 

(or successor plan) or a
cash award under the Company’s 2005 Long-Term Incentive Plan.

 

7.             Voluntary Retirement.  Section 3(c) is
hereby deleted in its entirety and the following substituted in lieu thereof to
make clear the treatment of equity awards made during the Initial Period as
compared to those made during the Renewal Period in the event of a voluntary
termination, to delete references to the renewal of the Employment Agreement,
to conform the language to defined terms added by this Amendment and to make
certain other ministerial changes:

 

(c)           Termination by Voluntary Resignation (without Good
Reason) by the Executive; Non-Renewal; Retirement. 
The voluntary resignation of employment by the Executive (other than for
Good Reason and which shall not include a resignation in connection with a
termination by the Company for Cause) or the expiration of this Agreement on
the last day of the Renewal Period (if the Executive remains employed through
the end of such period) shall be deemed to be a retirement and shall be treated
as a retirement for purposes of (x) any plan, policy, program or
arrangement of the Company as to which the Executive holds rights as of such
resignation or expiration date, whether as a participant, beneficiary or
otherwise, or (y) any agreement between the Company and the Executive,
except as may otherwise be expressly agreed upon by the Executive.  In addition, the Executive shall be entitled
to (i) the portion of the Base Salary for periods prior to the effective
date of termination accrued but unpaid (if any), (ii) all unreimbursed
expenses (if any), subject to Section 2(d), and (iii) the payment or
provision of any Other Benefits.  Notwithstanding
the foregoing, with respect to any award granted after the Effective Date and
prior to July 1, 2008 under the Company’s 2006 Stock Incentive Plan,
Performance Incentive Bonus Plan or Long-Term Incentive Plan, the termination
of the Executive’s employment by voluntary resignation (other than for Good
Reason and which shall not include a resignation in connection with a
termination by the Company for Cause) shall not be treated as a retirement
under the applicable plan unless such retirement occurs after the last day of
the Initial Period.

 

8.             Restrictive Covenant.  The Executive
acknowledges and agrees that he plans to retire upon the end of the Renewal
Period and, therefore, agrees that the restrictive covenants should apply as of
the end of the Renewal Period.  In order
to give effect to the foregoing, Sections 5(b) and 5(c) of the
employment Agreement are hereby deleted in their entirety and the following
substituted therefore:

 

(b)           Non-Interference.  The Executive
acknowledges that information regarding the Company’s business and financial
relations with its vendors and customers is Confidential Information and
proprietary to the Company and that any interference with such relations based
directly or indirectly on the use of such information would cause irreparable
damage to the Company.  The Executive
acknowledges that by virtue of his employment with the Company, he has gained
or may gain knowledge of such information concerning the Company’s vendors and
customers (respectively “Vendor Information” or “Customer Information”), and
that he would inevitably have to draw on this Vendor Information and Customer
Information and on other Confidential 

 

4

 

Information if he were to solicit or service the
Company’s vendors or customers on behalf of a competing business enterprise. Accordingly,
and subject to the immediately following sentence, the Executive agrees that
during the Employment Period and for a period of 18 months following the
termination thereof, other than by reason of (i) a termination by the
Company without Cause, or (ii) a termination by the Executive for Good
Reason, the Executive shall not, on behalf of himself or any other person,
other than the Company, directly or indirectly do business with, solicit the
business of, or perform any services for any actual vendor or customer of the
Company, any person that has been a vendor or customer of the Company within
the 12-month period preceding such termination or any actively solicited
prospective vendor or customer as to whom or which the Executive provided any
services or as to whom or which the Executive has knowledge of Vendor
Information, Customer Information or Confidential Information. The foregoing
restrictive covenant shall only apply to business activities engaged in by the
Executive on behalf of himself or any other person that are directly
competitive with those of the operating divisions of the Company in which the
Executive has worked or over which he has or has had supervisory
responsibility, in terms of channels of distribution, types of products, gender
for which the products have been designed and similarity of price range.  In addition, the Executive agrees that,
during the Employment Period and such 18-month period thereafter, he will not,
directly or indirectly, seek to encourage or induce any such vendor or customer
to cease doing business with, or lessen its business with, the Company, or
otherwise interfere with or damage (or attempt to interfere with or damage) any
of the Company’s relationships with its vendors and customers, except in the
ordinary course of the Company’s business.

 

(c)           Non-Competition.  The Executive
agrees that, during the Employment Period and for a period of 12 months
following his termination of employment, other than by reason of (i) a
termination by the Company without Cause, or (ii) a termination by the
Executive for Good Reason, the Executive shall not, without the prior written
consent of the Company, directly or indirectly, on the Executive’s behalf or on
behalf of any other person, firm, corporation, association or other entity, as
an employee, director, advisor, partner, consultant or otherwise, engage in any
business of, provide services to, enter the employ of, or have any interest in,
any other person, firm, corporation or other entity that is engaged in a
business that is in competition with the primary businesses or products of the
Company as of the Executive’s date of termination (following a Change in
Control, such businesses or products shall be limited to those in which the
Executive has worked or over which he has or has had supervisory
responsibility, in terms of channels of distribution, types of products, gender
for which the products have been designed and similarity of price range, as of
his date of termination).  Nothing herein
shall restrict the Executive from owning, for personal investment purposes
only, less than 5% of the voting stock of any publicly held corporation or 2%
of the ownership interest in any non-publicly held company, if the Executive
has no other connection or relationship with the issuer of such securities.

 

9.             Continued Effectiveness of the Employment Agreement. 
The Employment Agreement is, and shall continue to be, in full force and
effect, except as otherwise provided in 

 

5

 

this Amendment and except
that all references to the Employment Agreement set forth in the Employment Agreement
and any other agreements to which the parties hereto are parties which have
been executed prior to the date hereof and referring to the Employment
Agreement shall mean the Employment Agreement, as amended by this Amendment.

 

10.           Miscellaneous.

 

(a)           This Amendment shall be effective as of the date first
set forth above.

 

(b)           This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same amendment.

 

(c)           This Amendment shall be construed without regard to
any presumption or other rule requiring construction against the drafting
party.

 

IN WITNESS WHEREOF, the parties have executed this
Amendment on the date first set forth above.

 

 

	
   

  	
  PHILLIPS-VAN HEUSEN CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark D. Fischer

  
	
   

  	
  Name:

  	
   

  	
  Mark D. Fischer

  
	
   

  	
  Title:

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  /s/ Allen Sirkin

  
	
   

  	
  Allen Sirkin

  

 

6

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