Document:

exv10w1

Exhibit 10.1

BEAZER HOMES USA, INC.

and

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

as

Rights Agent

Section 382 Rights Agreement

Dated as of July 31, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	Section 1. Certain Definitions
	 	 	1	 
	Section 2. Appointment of Rights Agent
	 	 	6	 
	Section 3. Issue of Rights Certificates
	 	 	6	 
	Section 4. Form of Rights Certificates
	 	 	8	 
	Section 5. Countersignature and Registration
	 	 	8	 
	Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates
	 	 	9	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8. Cancellation and Destruction of Rights Certificates
	 	 	11	 
	Section 9. Reservation and Availability of Capital Stock
	 	 	12	 
	Section 10. Preferred Stock Record Date
	 	 	13	 
	Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	13	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	20	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
	 	 	20	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	22	 
	Section 15. Rights of Action
	 	 	22	 
	Section 16. Agreement of Rights Holders
	 	 	23	 
	Section 17. Rights Certificate Holder Not Deemed a Stockholder
	 	 	23	 
	Section 18. Concerning the Rights Agent
	 	 	24	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	24	 
	Section 20. Duties of Rights Agent
	 	 	25	 
	Section 21. Change of Rights Agent
	 	 	26	 
	Section 22. Issuance of New Rights Certificates
	 	 	27	 
	Section 23. Redemption and Termination
	 	 	27	 
	Section 24. Notice of Certain Events
	 	 	28	 
	Section 25. Notices
	 	 	28	 
	Section 26. Supplements and Amendments
	 	 	29	 
	Section 27. Exchange
	 	 	29	 
	Section 28. Successors
	 	 	31	 
	Section 29. Determinations and Actions by the Board of Directors, etc.
	 	 	31	 
	Section 30. Benefits of this Agreement
	 	 	31	 
	Section 31. Severability
	 	 	31	 
	Section 32. Governing Law
	 	 	32	 
	Section 33. Counterparts
	 	 	32	 
	Section 34. Descriptive Headings
	 	 	32	 
	 
	Exhibit A —  Form of Designations, Preferences and Rights of Series A Junior Participating
Preferred Stock
	 	 	 	 
	 
	Exhibit B —  Form of Rights Certificate
	 	 	 	 
	 
	Exhibit C —  Summary of Rights to Purchase Series A Junior Participating Preferred Stock
	 	 	 	 

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SECTION 382 RIGHTS AGREEMENT

     SECTION 382 RIGHTS AGREEMENT, dated as of July 31, 2009 (the “Agreement”), between
Beazer Homes USA, Inc., a Delaware corporation (the “Company”), and American Stock Transfer
& Trust Company, LLC, a New York limited liability trust company (the “Rights Agent”).

W I T N E S S E T H :

     WHEREAS, the Company has generated NOLs (as defined in Section 1 hereof) for United States
federal income tax purposes; and such NOLs may potentially provide valuable tax benefits to the
Company; the Company desires to avoid an “ownership change” within the meaning of Section 382 of
the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations
promulgated thereunder, and thereby preserve the ability to utilize fully such NOLs and certain
other tax benefits; and, in furtherance of such objective, the Company desires to enter into this
Agreement; and

     WHEREAS, on July 31, 2009 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company authorized and declared a dividend distribution of one preferred share
purchase right (a “Right”) for each share of common stock, par value $0.001 per share, of
the Company (the “Common Stock”) outstanding at the close of business on August 10, 2009
(the “Record Date”), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of
Common Stock issued between the Record Date (whether originally issued or delivered from the
Company’s treasury) and the earlier of the close of business on the Distribution Date (as defined
in Section 3 hereof) and the Expiration Date (as defined in Section 7(a) hereof), each Right
initially representing the right to purchase one one-thousandth of a share (a “Unit”) of
Series A Junior Participating Preferred Stock (the “Preferred Stock”) of the Company having
the rights, powers and preferences set forth in the form of Designations, Preferences and Rights
attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth.

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

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

     (a) “Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 4.95% or more of
the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan or (iv) any Exempted Person.
Notwithstanding the foregoing, no Person shall become an “Acquiring Person” solely as a
result of an Exempted Transaction.

     (b) “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement (the
“Exchange Act”), and to the extent not included within the foregoing, shall also
include with respect to any Person, any other Person whose shares of Common Stock would be
deemed to be constructively owned by such first Person, owned by a single “entity” as
defined in Section 1.382-3(a)(1) of the Treasury Regulations, or
otherwise aggregated with shares owned by such first Person, pursuant to the

 

 

provisions of the Code, or any successor or replacement provision, and the Treasury
Regulations thereunder.

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

     (ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any
security under this subparagraph (ii) as a result of (A) an agreement, arrangement
or understanding to vote such security if such agreement, arrangement or
understanding: (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 provisions of the General 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 (B) securities issued or
issuable pursuant to any employee benefit plan of the Company or any Subsidiary of
the Company or any employment agreement, arrangement or other understanding between
the Company or any Subsidiary of the Company and any Person or any of such Person’s
Affiliates or Associates;

     (iii) which are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person’s Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in the proviso to subparagraph
(ii) of this paragraph (c)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (c) shall cause a Person engaged
in business as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired

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through such Person’s participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of such
acquisition, and then only if such securities continue to be owned by such Person at
such expiration of forty (40) days; or

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

     (d) “Business Day” shall mean any day other than a Saturday, 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.

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

     (f) “Code” shall have the meaning set forth in the recitals to this Agreement.

     (g) “Common Stock” shall have the meaning set forth in the recitals to this
Agreement, except that “Common Stock” when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or direct the management,
of such Person (or, if such Person is a Subsidiary of another Person, the Person or Persons
that ultimately control such first mentioned Person).

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

     (i) “Current Market Price” shall have the meaning set forth in Sections
11(d)(i) and 11(d)(ii) hereof.

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

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

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

     (m) “Exempted Person” shall mean any Person who, together with all Affiliates
and Associates of such Person,

     (i) is the Beneficial Owner of securities (as disclosed in public filings with
the Securities and Exchange Commission on the Rights Dividend Declaration Date),
representing 4.95% or more of the shares of Common Stock outstanding on the Rights
Dividend Declaration Date, provided, however, that any such Person described in this
clause (i) shall no longer be deemed to be an Exempted Person and shall be deemed an
Acquiring

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Person if such Person, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of securities representing a percentage of
Common Stock that exceeds by one-half of one percent (0.5%) or more the lowest
percentage of Beneficial Ownership of Common Stock that such Person had at any time
since the Rights Dividend Declaration Date, except solely (x) pursuant to equity
compensation awards granted to such Person by the Company or as a result of an
adjustment to the number of shares of Common Stock represented by such equity
compensation award pursuant to the terms thereof or (y) as a result of a redemption
of shares of Common Stock by the Company; or

     (ii) becomes the Beneficial Owner of securities representing 4.95% or more of
the shares of Common Stock then outstanding because of a reduction in the number of
outstanding shares of Common Stock then outstanding as a result of the purchase by
the Company or a Subsidiary of the Company of shares of Common Stock, provided,
however, that any such Person described in this clause (ii) shall no longer be
deemed to be an Exempted Person and shall be deemed an Acquiring Person if such
Person, together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner, at any time after the date such Person became the Beneficial Owner
of 4.95% or more of the then outstanding shares of Common Stock, of securities
representing a percentage of Common Stock that exceeds by one-half of one percent
(0.5%) or more the lowest percentage of Beneficial Ownership of Common Stock that
such Person had at any time since the date such Person first became the Beneficial
Owner of 4.95% or more of the then outstanding shares of Common Stock, except solely
(x) pursuant to equity compensation awards granted to such Person by the Company or
as a result of an adjustment to the number of shares of Common Stock represented by
such equity compensation award pursuant to the terms thereof or (y) as a result of a
redemption of shares of Common Stock by the Company; or

     (iii) who is a Beneficial Owner of 4.95% or more of the shares of Common Stock
outstanding and whose beneficial ownership, as determined by the Board of Directors
in its sole discretion, (x) would not jeopardize or endanger the availability to the
Company of its NOLs or other Tax Benefits or (y) is otherwise in the best interests
of the Company, provided, however, that if a Person is an Exempted Person
solely by reason of this clause (iii), then such Person shall cease to be an
Exempted Person if (A) such Person ceases to beneficially own
4.95% or more of the shares of the then outstanding Common Stock, (B) after the date of such
determination by the Board of Directors, such Person, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of securities
representing a percentage of Common Stock that exceeds by one-half of one percent
(0.5%) or more the lowest percentage of Beneficial Ownership of Common Stock that
such Person had at any time since the date such Person first became the Beneficial
Owner of 4.95% or more of the then outstanding shares of Common Stock, except solely
(I) pursuant to equity compensation awards granted to such Person by the Company or
as a result of an adjustment to the number of shares of Common Stock represented by
such equity compensation award pursuant to the terms thereof or (II) as a result of
a redemption of shares of Common Stock by the Company, or (C) the Board of Directors
of the Company, in its sole discretion, makes a contrary determination with respect
to the effect of such Person’s beneficial ownership (together with all Affiliates
and Associates of such Person) with respect to the availability to the Company of
its NOLs or other Tax Benefits.

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A purchaser, assignee or transferee of the shares of Common Stock (or warrants or options
exercisable for Common Stock) from an Exempted Person shall not thereby become an Exempted
Person, except that a transferee from the estate of an Exempted Person who receives Common
Stock as a bequest or inheritance from an Exempted Person shall be an Exempted Person so
long as such Person continues to be the Beneficial Owner of 4.95% or more of the then
outstanding shares of Common Stock.

     (n) “Exempted Transaction” shall mean any transaction that the Board of
Directors determines, in its sole discretion, is exempt from this Agreement, which
determination shall be made in the sole and absolute discretion of the Board of Directors
prior to the date of such transaction, including, without limitation, if the Board of
Directors determines that (i) neither the Beneficial Ownership of shares of Common Stock by
any Person, directly or indirectly, as a result of such transaction nor any other aspect of
such transaction would jeopardize or endanger the availability to the Company of the Tax
Benefits or (ii) such transaction is otherwise in the best interests of the Company. In
granting an exemption under this definition, the Board of Directors may require any Person
who would otherwise be an Acquiring Person to make certain representations or undertakings
or to agree that any violation or attempted violation of such representations or
undertakings will result in such consequences and subject to such conditions as the Board of
Directors may determine in its sole discretion, including that any such violation shall
result in such Person becoming an Acquiring Person.

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

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

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

     (r) “Person” shall mean any individual, firm, corporation, limited liability
company, partnership or other entity, or a group of Persons making a “coordinated
acquisition” of shares or otherwise treated as an entity within the meaning of Section
1.382-3(a)(1) of the Treasury Regulations, and shall include any successor (by merger or
otherwise) of such individual or entity, but shall not include a Public Group (as such term
is defined in Section 1.382-2T(f)(13) of the Treasury Regulations).

     (s) “Preferred Stock” shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company, and, to the extent that there
are not a sufficient number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other series of Preferred Stock,
par value $0.01 per share, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Participating Preferred Stock.

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

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

     (v) “Record Date” shall have the meaning set forth in the recitals of this
Agreement.

     (w) “Right” shall have the meaning set forth in the recitals of this Agreement.

     (x) “Rights Agent” shall have the meaning set forth in the recitals of this
Agreement.

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

     (z) “Rights Dividend Declaration Date” shall have the meaning set forth in the
recitals of this Agreement.

     (aa) “Section 11(a)(ii) Event” shall mean any event described in Section
11(a)(ii) hereof.

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

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

     (dd) “Subsidiary” shall mean, with reference to any Person, any Person of which
a majority of the voting power of voting equity securities or equity interests is
beneficially owned, directly or indirectly, by such Person or otherwise controlled by such
Person.

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

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

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

     (hh) “Tax Benefits” shall mean the net operating loss carryovers, capital loss
carryovers, general business credit carryovers, alternative minimum tax credit carryovers,
foreign tax credit carryovers, any loss or deduction attributable to a “net unrealized
built-in loss” within the meaning of Section 382 of the Code, and the Treasury Regulations
promulgated thereunder, of the Company or any of its Subsidiaries.

     (ii) “Treasury Regulations” shall mean final, temporary and proposed income tax
regulations promulgated under the Code, as amended.

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

     Section 2. Appointment of Rights Agent . The Company hereby appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint
such co-rights agents as it may deem necessary or desirable.

     Section 3. Issue of Rights Certificates

          (a) Until the earlier of (i) the close of business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the Record Date), or (ii) the close of business on the tenth
Business Day (or such later date as the Board of Directors of the Company shall determine prior to
such time as any Person

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becomes an Acquiring Person) after the date that a tender or exchange offer by any Person
(other than any Exempted Person, the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would become an Acquiring Person
(the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) 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 certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign and the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the “Rights Certificates”), evidencing one
Right for each share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock has been made pursuant
to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are distributed and cash is
paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.

          (b) As promptly as practicable following the Record Date, the Company shall send a copy of a
Summary of Rights, in substantially the form attached hereto as Exhibit C (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. With respect to certificates for the Common Stock outstanding as of the Record Date, or
issued subsequent to the Record Date, unless and until the Distribution Date shall occur, the
Rights will be evidenced by such certificates for the Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the associated Rights. Until the earliest
of the Distribution Date, the Expiration Date (as such term is defined in Section 7 hereof) or the
redemption of the Rights pursuant to Section 23 hereof, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common Stock.

          (c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether
originally issued or from the Company’s treasury) after the Record Date but prior to the earliest
of the Distribution Date, the Expiration Date or the redemption of the Rights pursuant to Section
23 hereof. Certificates representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear a legend substantially in the following form : “This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in the
Rights Agreement between Beazer Homes USA, Inc. (the “Company”) and American Stock Transfer & Trust
Company, LLC (the “Rights Agent”), dated as of July 31, 2009 (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of which is on file at the principal
offices of the Rights Agent. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether currently held by or on

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behalf of such Person or by any subsequent holder, may become null and void.” With respect to
such certificates containing the foregoing legend, until the earlier of the (i) Distribution Date
or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.

     Section 4. Form of Rights Certificates

          (a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date or, in the case of Rights with respect to Common Stock issued
or becoming outstanding after the Record Date, the same date as the date of the share certificate
evidencing such shares, 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 set
forth therein (such exercise price per one one-thousandth of a share, the “Purchase
Price”), but the amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.

          (b) Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof
that represents Rights beneficially owned by any Person known to be: (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) who becomes a transferee after the Acquiring Person becomes such,
(iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is
part of a plan, agreement, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof, or (iv) subsequent transferees of such Persons described in
clause (i), (ii) or (iii) of this sentence , and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible) a legend
substantially in the following form: “The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.” The absence of the foregoing legend on any Rights
Certificate shall in no way affect any of the other provisions of this Agreement, including,
without limitation, the provisions of Section 7(e).

     Section 5. Countersignature and Registration

          (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company’s seal or

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

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

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

          (a) Subject to the provisions of Section 4(b), Section 7(e), Section 14 and Section 27 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 or the redemption of the rights pursuant to Section 23 hereof, any
Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase a like number of
one one-thousandths of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 27 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of Rights Certificates.
The Rights Agent shall promptly forward any such sum collected by it to the Company or to such
Persons as the Company shall specify by written notice.

          (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental

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thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.

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

          (a) Subject to Section 7(e) and Section 27 hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of one one-thousandth of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earliest of (i) the close of business on July 31, 2019
(the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof, (iii) the time at which all of the Rights (other than Rights that have become
void pursuant to the provisions of Section 7(e) hereof) are exchanged for Common Stock or other
assets or securities as provided in Section 27 hereof, (iv) the close of business on the effective
date of the repeal of Section 382 or any successor statute if the Board of Directors of the Company
determines that this Agreement is no longer necessary or desirable for the preservation of Tax
Benefits, (v) the close of business on the first day of a taxable year of the Company to which the
Board of Directors of the Company determines that no Tax Benefits may be carried forward, or (vi)
the first anniversary of adoption of the Agreement if shareholder approval of the Agreement has not
been received by or on such date (the earliest of (i) and (ii) and (iii) and (iv) and (v) and (vi)
being herein referred to as the “Expiration Date”).

          (b) The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to
the exercise of a Right shall initially be $50.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph
(c) below.

          (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-thousandth of a share of Preferred Stock
(or other shares, securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares
of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-thousandths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company shall direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to, or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by such holder, and (iv)
after receipt thereof, deliver such cash

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described in clause (ii) hereof, if any, to or upon the order of the registered holder of such
Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) 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(a) 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 appropriate. The Company reserves the right to require prior to the occurrence of a
Triggering 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 Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

          (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by any Person known to be
(i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, (iii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing plan, agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, agreement, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), or (iv) subsequent transferees of such
Persons described in clause (i), (ii) or (iii) of this sentence, shall become 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 insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring Person or any of
its Affiliates, Associates or transferees hereunder.

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

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

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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 Capital Stock.

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

          (b) So long as the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon such exercise.

          (c) The Company shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Securities Act of 1933 (the
“Act”) with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or “blue sky” laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily suspend, for a period of time
not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension has been rescinded. In addition,
if the Company shall determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration statement shall not have been declared effective.

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

          (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a number of one one-thousandths of
a share

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

     Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate 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 and Kind of Shares or Number of Rights. The Purchase
Price, the number and kind of shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.

     (a) (i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into
a smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof,
the Purchase Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the number and kind
of shares of Preferred Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification;  provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares
of Preferred Stock or capital stock, as the case may be, issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof,

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

     (ii) In the event any Person shall become an Acquiring Person, then, promptly following
the occurrence of such event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to as the
“Purchase Price” for each Right and for all purposes of this Agreement) by 50% of
the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common
Stock on the date of such first occurrence (such number of shares, the “Adjustment
Shares”).

     (iii) In the event that the number of shares of Common Stock which are authorized by
the Company’s Certificate of Incorporation but not outstanding, subscribed for or reserved
for issuance for purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the “Current Value”), and (B) with respect to
each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units of shares, of
preferred stock, such as the Preferred Stock, which the Board of Directors of the Company
has deemed to have essentially the same value or economic rights as shares of Common Stock
(such shares of preferred stock being referred to as “Common Stock Equivalents”)),
(4) debt securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value (less the amount of any
reduction in the Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment banking firm selected by
the Board;  provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. For purposes of the preceding sentence, the term “Spread” shall mean the
excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of
the Company determines in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein called the “Substitution Period”).
To the extent that the Company determines that action should be taken pursuant to the first
and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of the

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Substitution Period in order to seek such stockholder approval for such authorization
of additional shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price
per share of the Common Stock on such date.

     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record date) Preferred
Stock (or shares having the same rights, privileges and preferences as the shares of
Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); 
provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of Preferred Stock or capital stock, as the case may be, issuable
upon exercise of one Right. In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent and the holders of the Rights. 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.

     (c) In case the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of which shall be
the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date,

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

     (d) (i) For the purpose of any computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the ten (10) consecutive Trading
Days immediately following such date; provided, however, that in the event that the Current
Market Price per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification shall
not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the over-the-counter
market or such other system then in use, or, if on any such date the shares of Common Stock
are not so quoted, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a market in the
Common Stock, the fair value of such shares on such date as determined in good faith by the
Board shall be used. The term “Trading Day” shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, Current Market Price per share
shall mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.

-16-

 

     (ii) For the purpose of any computation hereunder, the Current Market Price per share
of Preferred Stock shall be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the
Current Market Price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 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
Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither
the Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current
Market Price per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market Price of a Unit shall be
equal to the Current Market Price of one share of Preferred Stock divided by 1,000.

     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one-thousandth of a share of Common Stock or other
share of capital stock or one-ten millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i) three (3) years from the date
of the transaction which mandates such adjustment, or (ii) the Expiration Date.

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

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

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

     (i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and

-17-

 

     (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

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

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

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

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

-18-

 

bill or other appropriate instrument evidencing such holder’s right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.

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

     (n) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets, cash flow or
earning power aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger
or sale there are any 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 or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who constitutes, or
would constitute, the “Principal Party” for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.

     (o) The Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.

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

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     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock) in accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment
therein contained.

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

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

-20-

 

          (b) “Principal Party” shall mean:

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

     (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of the assets,
cash flow or earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding twelve-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, “Principal Party”
shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which are and have
been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer
of the Common Stock having the greatest aggregate market value.

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

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

     (ii) take all such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but not limited to
the registration or qualification of such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such securities on such exchanges and
trading markets as may be necessary or appropriate; and

     (iii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates 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(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).

-21-

 

     Section 14. Fractional Rights and Fractional Shares.

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

          (b) The Company shall not be required to issue fractions of 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 share
of Preferred Stock). 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 Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one one-thousandth of a
share of Preferred Stock. For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a
share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.

          (c) Following the occurrence of a Triggering Event, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the current market
value of one (1) share of Common Stock. For purposes of this Section 14(c), the current market
value of one (1) share of Common Stock shall be the closing price of one (1) share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.

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

     Section 15. Rights of Action. All rights of action in respect of this Agreement, except the
rights of action that are given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of

-22-

 

the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in 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 Rights Certificate
in the manner provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any Person subject to this
Agreement.

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

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

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

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

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

     Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any
Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the number of one one-thousandths of a share of Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions hereof.

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     Section 18. Concerning the Rights Agent.

          (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. In no case shall the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage.

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

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

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

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

-24-

 

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

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

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of Current Market Price) be
proved or established by the Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the Vice Chairman, the Chief Executive Officer, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such certificate.

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

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

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

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

     (g) The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the Board, the Vice
Chairman, the Chief Executive Officer, the President, any Vice President, the Secretary, any

-25-

 

Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.

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

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

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

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

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in
writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and, if such resignation occurs after the Distribution Date, to
the registered holders of the Rights Certificates by first-class mail. The Company may, in its
sole discretion, remove the Rights Agent or any successor Rights Agent upon thirty (30) days’
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and,
if such resignation occurs after the Distribution Date, to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a legal business entity organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 or (b) an Affiliate

-26-

 

of a legal business 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 the Preferred
Stock, and, if such appointment occurs after the Distribution Date, mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.

     Section 23. Redemption and Termination.

          (a) The Board of Directors of the Company may, at its option, at any time prior to the earlier
of (i) the close of business on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the
twentieth day following the Record Date), or (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.001 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter referred to as the
“Redemption Price”). Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company’s right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the “Current Market
Price,” as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without
any further action and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of Directors ordering the redemption of the
Rights, the Company

-27-

 

shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to all such holders at each holder’s last address as
it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the Redemption Price will
be made.

     Section 24. Notice of Certain Events.

          (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of
related transactions, of more than 50% of the assets, cash flow or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation therein by the holders of
the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days prior to the date of
the taking of such proposed action or the date of participation therein by the holders of the
shares of Preferred Stock, whichever shall be the earlier.

          (b) In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.

     Section 25. Notices. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:

Beazer Homes USA, Inc.

1000 Abernathy Road, Suite 1200

Atlanta, Georgia 30328

Attention: Chief Executive Officer

-28-

 

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

American Stock Transfer & Trust Company, LLC

59 Maiden Lane

New York, NY 10038

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

     Section 26. Supplements and Amendments. Prior to the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the Distribution Date and subject
to the penultimate sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, however, this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. 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 26, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable and following the first occurrence of an event set forth in
clauses (i) and (ii) of the first proviso to Section 23(a) hereof, any supplement or amendment
shall require the concurrence of a majority of the members of the Board of Directors of the
Company. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.

     Section 27. Exchange.

          (a) (i) The Company may, at its option, at any time after the Stock Acquisition Date, upon
resolution by the Board of Directors of the Company, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become 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 any stock split, stock dividend or similar
transaction occurring after the date of this Agreement (such exchange ratio being hereinafter
referred to as the “Section 27(a)(i) Exchange Ratio”). Notwithstanding the foregoing, the
Company may not effect such exchange at any

-29-

 

time after any Acquiring Person, together with all
Affiliates and Associates of such Acquiring Person, becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then outstanding.

          (ii) The Company may, at its option, at any time after the Stock Acquisition Date, upon
resolution by the Board of Directors of the Company, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Stock at an exchange ratio specified in the following
sentence, as appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement. Subject to such adjustment, each Right may
be exchanged for that number of shares of Common Stock obtained by dividing the Adjustment Spread
(as defined below) by the then Current Market Price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the earlier of (i) the date on which any Person becomes an Acquiring
Person or (ii) the date on which a tender or exchange offer by any Person (other than an Exempted
Person, the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-4(a) of the General Rules and Regulations under the Exchange Act, if upon consummation
thereof such Person would be the Beneficial Owner of 4.95% or more of the shares of Common Stock
then outstanding (such exchange ratio being the “Section 27(a)(ii) Exchange Ratio”). The
“Adjustment Spread” shall equal (x) the aggregate market price on the date of such event of
the number of Adjustment Shares determined pursuant to Section 11(a)(ii) minus (y) the Purchase
Price.

          (iii) Notwithstanding anything contained in this Section 27(a) to the contrary, the Company
may not exchange any Rights pursuant to this Section 27(a) unless such exchange is approved by a
majority of the members of the Board of Directors of the Company.

          (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 27 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 Section 27(a)(i) Exchange Ratio or
Section 27(a)(ii) Exchange Ratio, as the case may be. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.

          (c) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 27, the Company shall make adequate provision to substitute, to the
extent that there are insufficient shares of Common Stock available (1) cash, (2) other equity
securities of the Company, (3) debt securities of the Company, (4) other assets or (5) any
combination of the foregoing, having an aggregate value per Right equal to (x) in the case of an
exchange pursuant to Section 27(a)(i), the then current per share market price (determined pursuant
to Section 11(d) hereof) of the Common Stock multiplied by the Section 27(a)(i) Exchange Ratio and
(y) in the case of an exchange pursuant to Section 27(a)(ii), the Adjustment Spread, where such
aggregate value has been determined by a majority

-30-

 

of the members of the Board of Directors of the
Company, after receiving advice from a nationally recognized investment banking firm. To the
extent that the Company determines that any such substitution must be made, the Company shall
provide, subject to Section 7(e) hereof, that such substitution shall apply uniformly to all
outstanding Rights.

          (d) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered holders of the Rights
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 (d), 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(d) hereof) for the Trading Day immediately prior to the date of
the exchange pursuant to this Section 27.

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

     Section 29. Determinations and Actions by the Board of Directors, etc. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company (with, where specifically provided for
herein, the concurrence of a majority of the members of 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 (with, where specifically provided for herein,
the concurrence of a majority of the members of the Board of Directors of the Company) or to the
Company, or as may be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii)
make all determinations deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by the Board (with,
where specifically provided for herein, the concurrence of a majority of the members of the Board
of Directors of the Company) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the
Board to any liability to the holders of the Rights.

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

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

-31-

 

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 twentieth day following the date of such
determination by the Board of Directors.

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

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

     Section 34. Descriptive Headings. Descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof and the words “herein,” “hereof,” “hereby,” “hereto,”
“hereunder” and words of similar import are references to this Agreement as a whole and not to any
particular section or other provision hereof.

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

-32-

 

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

	 	 	 	 	 	 	 
	Attest:	 	BEAZER HOMES USA, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Kenneth Khoury
	 	By:
	 	/s/ Allan P. Merrill
	 

	 	 
	 	 	 	 
	 

	 	Name: Kenneth Khoury
	 	 	 	Name: Allan P. Merrill
	 

	 	Title: Executive Vice
President & General Counsel
	 	 	 	Title: Executive Vice President & CFO
	 
	 	 	 	 	 	 
	Attest:	 	AMERICAN STOCK TRANSFER & TRUST
	 	 	 	 	COMPANY, LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Anthony J. Foti
	 	By:
	 	 /s/ Herbert J. Lemmer
	 

	 	 
	 	 	 	 
	 

	 	Name: Anthony J. Foti
	 	 	 	Name: Herbert J. Lemmer
	 

	 	Title: Asst. V.P.
	 	 	 	Title: Vice President

-33-

 

EXHIBIT A

Form of Designations, Preferences and Rights of Series A Junior Participating

Preferred Stock of Beazer Homes USA, Inc.

     Section 1. Designation and Amount. The shares of such series shall be designated
as “Series A Junior Participating Preferred Stock” and the number of shares constituting such
series shall be 8,000.

     Section 2. Dividends and Distributions.

     (a) The holders of shares of Series A Junior Participating Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $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, par value $0.001 per share, of the Corporation (the “Common Stock”)
since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time
after July 31, 2009 (the “Rights Declaration Date”) (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in each such case the
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 Corporation shall declare a dividend or distribution on the outstanding shares of
Series A Junior Participating Preferred Stock as provided in Paragraph (A) above immediately after
it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares
of Common Stock); 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 outstanding shares
of 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 of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares
of Series A Junior Participating Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated

 

 

pro rata on a share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than thirty (30) days prior to the date fixed
for the payment thereof.

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

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

     (b) Except as otherwise provided herein or by law, the holders of shares of Series A
Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the Corporation.

     (c) (i) If at any time dividends on any Series A Junior Participating Preferred Stock
shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein called a
“default period”) which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Junior Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2) Directors.

     (ii) During any default period, such voting right of the holders of Series A Junior
Participating Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(c) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders, provided that such voting
right shall not be exercised unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the exercise by the holders of Preferred
Stock of such voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they shall have the
right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) Directors or, if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of Directors as shall be necessary
to permit the election by them of the required number. After the holders of the Preferred
Stock shall have exercised their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not be increased or decreased
except by vote of the holders of Preferred

-2-

 

Stock as herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating Preferred Stock.

     (iii) Unless the holders of Preferred Stock shall, during an existing default period,
have previously exercised their right to elect Directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate not less than ten percent (10%)
of the total number of shares of Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this Paragraph (c)(iii) shall be given to each holder
of record of Preferred Stock by mailing a copy of such notice to such holder at such
holder’s last address as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than twenty (20) days and not later than sixty (60)
days after such order or request, or in default of the calling of such meeting within sixty
(60) days after such order or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of
this Paragraph (c)(iii), no such special meeting shall be called during the period within
sixty (60) days immediately preceding the date fixed for the next annual meeting of the
stockholders.

     (iv) In any default period, the holders of Common Stock, and other classes of stock of
the Corporation if applicable, shall continue to be entitled to elect the whole number of
Directors until the holders of Preferred Stock shall have exercised their right to elect two
(2) Directors voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may (except as provided in Paragraph (c)(ii) of
this Section 3) be filled by vote of a majority of the remaining Directors theretofore
elected by the holders of the class of stock which elected the Director whose office shall
have become vacant. References in this Paragraph (c) to Directors elected by the holders of
a particular class of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.

     (v) Immediately upon the expiration of a default period, (x) the right of the holders
of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the certificate of incorporation or
by-laws of the Corporation irrespective of any increase made pursuant to the provisions of
Paragraph (c)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of incorporation or by-laws
of the Corporation). Any vacancies in the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.

     (d) Except as set forth herein, 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 quarterly dividends or other dividends or distributions payable on the Series A
Junior Participating Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and
until all

-3-

 

accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:

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

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

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

     (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 (either as to
dividends or upon liquidation, dissolution or winding up) 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 Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under Paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.

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

     Section 6. Liquidation, Dissolution or Winding Up.

     (a) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received an amount equal to $1,000 per share of Series A
Junior Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such

-4-

 

payment (the “Series A Liquidation Preference”). Following the payment of the full
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 splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), 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 Preferred Stock and Common Stock, on a
per share basis, respectively.

     (b) In the event, however, that there are not sufficient assets available to permit payment in
full of the Series A Liquidation Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity (either as to dividends or upon liquidation,
dissolution or winding up) 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, however, that 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 Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such
event.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or 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 Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth 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 were outstanding immediately prior to such event.

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

     Section 9. Amendment. The certificate of incorporation of the Corporation shall
not be further amended in any manner which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.

-5-

 

     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.

-6-

 

Exhibit B

[Form of Rights Certificate]

	 	 	 
	Certificate No. R-

	 	Rights

NOT EXERCISABLE AFTER [ ] OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]

Rights Certificate

BEAZER HOMES USA, INC.

This certifies that [     ], or registered assigns, is the registered owner of the number
of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of July 31, 2009 (the “Rights
Agreement”), between Beazer Homes USA, Inc., a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC, a New York limited liability company (the
“Rights Agent”), to purchase from the Company at any time prior to 5:00 P.M. (New York City
time) on July 31, 2019 at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series
A Junior Participating Preferred Stock (the “Preferred Stock”) of the Company, at a
purchase price of $50.00 per one one-thousandth of a share (the “Purchase Price”), upon
presentation and surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and
the number of shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as of July 31, 2009
based on the Preferred Stock as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.

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

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

 

 

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

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

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be
redeemed by the Company at its option at a redemption price of $0.001 per Right at any time prior
to the earlier of the close of business on (i) the tenth day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. In addition, the Rights may be exchanged, in whole or in part, for shares of the
Common Stock, or shares of preferred stock of the Company having essentially the same value or
economic rights as such shares. Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further action or any notice, the Rights
(other than Rights which are not subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange. Under certain circumstances set
forth in the Rights Agreement, the decision to redeem the Rights shall require the concurrence of a
majority of the members of the Board of Directors of the Company.

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

No holder of this Rights Certificate 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 consent to or withhold
consent from any corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.

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

-2-

 

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

Dated as of                     

	 	 	 	 	 	 	 
	Attest:	 	BEAZER HOMES USA, INC.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Countersigned:
	 	 	 	 
	 
	 	 	 	 	 	 
	Attest:	 	AMERICAN STOCK TRANSFER & TRUST
	 	 	 	 	COMPANY, LLC
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:

-3-

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED                      hereby sells, assigns and transfers unto
                    
(Please print name and address of transferee) this Rights Certificate,
together with all right, title and interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights Certificate on the books of the within-named Company, with full power of substitution.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Signature Guaranteed:	 	 
	Certificate
	 	 	 	 

The undersigned hereby certifies by checking the appropriate boxes that:

	 	(1)	 	this Rights Certificate [             ] is [             ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are defined
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 Rights
Certificate from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Signature Guaranteed:	 	 
	 
	 	 	 	 
	NOTICE
	 	 	 	 

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

 

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise Rights represented by the Rights Certificate.)

To: BEAZER HOMES USA, INC.:

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

Please
insert social security or other identifying number                     

(Please print name and address):

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

Please insert social security or other identifying number

(Please print name and address):

	 	 	 	 	 
	 

	 	Dated:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 
	 	 	 	 
	Certificate
	 	 	 	 

The undersigned hereby certifies by checking the appropriate boxes that:

	 	(1)	 	the Rights evidenced by this Rights Certificate [            ] are
[             ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate 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 Rights
Certificate from any Person who is, was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.

	 	 	 	 	 
	 

	 	Dated:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Signature Guaranteed:
	 	 	 	 
	 
	 	 	 	 
	NOTICE
	 	 	 	 

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

 

 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE SERIES A JUNIOR

PARTICIPATING PREFERRED STOCK

     On July 31, 2009, the Board of Directors of Beazer Homes USA, Inc. (the “Company”)
approved the execution of a Section 382 Rights Agreement (the “Rights Agreement”) between
the Company and American Stock Transfer & Trust Company, LLC (the “Rights Agent”). The
Rights Agreement provides for a distribution of one preferred stock purchase right (a
“Right”) for each share of Common Stock, par value $0.001 per share, of the Company (the
“Common Stock”) outstanding to stockholders of record at the close of business on August
10, 2009 (the “Record Date”). Each Right entitles the registered holder to purchase from
the Company a unit (a “Unit”) consisting of one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at
a Purchase Price of $50.00 per Unit (the “Purchase Price”), subject to adjustment. The
description and terms of the Rights are set forth in the Rights Agreement.

     The Board of Directors of the Company adopted the Rights Agreement in an effort to protect
stockholder value by attempting to protect against a possible limitation on the Company’s ability
to use its net operating loss carryforwards (the “NOLs”) to reduce potential future federal
income tax obligations. The Company has experienced and continues to experience substantial
operating losses, and under the Internal Revenue Code of 1986, as amended (the “Code”), and
rules promulgated by the Internal Revenue Service, the Company may “carry forward” these losses in
certain circumstances to offset any current and future earnings and thus reduce the Company’s
federal income tax liability, subject to certain requirements and restrictions. To the extent that
the NOLs do not otherwise become limited, the Company believes that it will be able to carry
forward a significant amount of NOLs, and therefore these NOLs could be a substantial asset to the
Company. However, if the Company experiences an “Ownership Change,” as defined in Section 382 of
the Code, its ability to use the NOLs will be substantially limited, and the timing of the usage of
the NOLs could be substantially delayed, which could therefore significantly impair the value of
that asset.

     A copy of the Rights Agreement is being filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights Agreement is available
free of charge from the Company. This Summary of Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by
reference.

     Distribution Date; Acquiring Persons; Transfer of Rights. Initially, the Rights will be
attached to all Common Stock certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. Subject to certain exceptions specified in the Rights
Agreement, the Rights will separate from the Common Stock and a Distribution Date will occur upon
the earlier of (i) ten (10) days following a public announcement that a person or group of
affiliated or associated persons (an “Acquiring Person”) has acquired, or obtained the
right to acquire, beneficial ownership of 4.95% or more of the outstanding shares of Common Stock
(the “Stock Acquisition Date”) or (ii) ten (10) business days following the commencement of
a tender offer or exchange offer that would result in a person or group beneficially owning 4.95%
or more of the outstanding shares of Common Stock. The definition of Acquiring Person excludes any
Exempted Person (as defined below) and any person who would become an Acquiring Person solely as a
result of an Exempted Transaction (as defined below). Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates after the Record Date will contain a
notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.

 

 

     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date.
Thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Directors, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.

     Exempted Persons. The following persons shall be “Exempted Persons” under the Rights
Agreement:

     (i) Any person who, together with all affiliates and associates of such person, is the
beneficial owner of Common Stock, options and/or warrants exercisable for shares of Common
Stock representing 4.95% or more of the shares of Common Stock outstanding on July 31, 2009,
will be an “Exempted Person.” However, any such person will no longer be deemed to be an
Exempted Person and shall be deemed an Acquiring Person if such person, together with all
affiliates and associates of such person, becomes the beneficial owner of securities
representing a percentage of Common Stock that exceeds by one-half of one percent (0.5%) or
more the lowest percentage of Common Stock that such person had at any time since July 31,
2009, except solely (x) pursuant to equity compensation awards granted to such person by the
Company or as a result of an adjustment to the number of shares of Common Stock represented
by such equity compensation award pursuant to the terms thereof or (y) as a result of a
redemption of shares of Common Stock by the Company.

     (ii) In addition, any person who, together with all affiliates and associates of such
person, becomes the beneficial owner of Common Stock, options and/or warrants exercisable
for shares of Common Stock representing 4.95% or more of the shares of Common Stock then
outstanding as a result of a purchase by the Company or any of its subsidiaries of shares of
Common Stock will also be an “Exempted Person.” However, any such person will no longer be
deemed to be an Exempted Person and will be deemed to be an Acquiring Person if such person,
together with all affiliates and associates of such person, becomes the beneficial owner, at
any time after the date such person became the beneficial owner of 4.95% or more of the then
outstanding shares of Common Stock, of securities representing a percentage of Common Stock
that exceeds by one-half of one percent (0.5%) or more the lowest percentage of Beneficial
Ownership of Common Stock that such person had at any time since the date such person first
became the beneficial owner of 4.95% or more of the then outstanding shares of Common Stock,
except solely (x) pursuant to equity compensation awards granted to such person by the
Company or as a result of an adjustment to the number of shares of Common Stock represented
by such equity compensation award pursuant to the terms thereof or (y) as a result of a
redemption of shares of Common Stock by the Company.

     (iii) In addition, any person who, together with all affiliates and associates of such
person, is the beneficial owner of Common Stock, options and/or
warrants exercisable for shares of Common Stock representing 4.95% or more of the shares of Common Stock outstanding,
and whose beneficial ownership, as determined by the Board of Directors of the Company in
its sole discretion, (x) would not jeopardize or endanger the availability of the Company of
its NOLs or (y) is otherwise in the best interests of the Company, will be an Exempted
Person. However, any such person will cease to be an Exempted Person if (A) such person
ceases to beneficially own 4.95% or more of the shares of the then outstanding Common Stock,
or (B) after the date of such determination by the Board of Directors of the Company, such
person, together with all affiliates and associates of such person, becomes the beneficial
owner of securities representing a percentage of Common Stock that exceeds by one-half of
one percent (0.5%) or more the lowest percentage of Beneficial Ownership of Common Stock
that such person had at any time since the date such person first became the beneficial
owner of 4.95% or more of the then outstanding

-2-

 

shares of Common Stock, except solely (I) pursuant to equity compensation awards
granted to such person by the Company or as a result of an adjustment
to the number of shares of Common Stock represented by such equity compensation award pursuant to the terms
thereof or (II) as a result of a redemption of shares of Common Stock by the Company, or (C)
the Board of Directors of the Company, in its sole discretion, makes a contrary
determination with respect to the effect of such person’s beneficial ownership (together
with all affiliates and associates of such person) with respect to the availability to the
Company of its NOLs.

     A purchaser, assignee or transferee of the shares of Common Stock (or options or warrants
exercisable for Common Stock) from an Exempted Person will not thereby become an Exempted Person,
except that a transferee from the estate of an Exempted Person who receives Common Stock as a
bequest or inheritance from an Exempted Person shall be an Exempted Person so long as such
transferee continues to be the beneficial owner of 4.95% or more of the then outstanding shares of
Common Stock.

     Exempted Transactions. The following transactions shall be “Exempted Transactions”
under the Rights Agreement: any transaction that the Board of Directors of the Company determines,
in its sole discretion, is exempt from the Rights Agreement, which determination shall be made in
the sole and absolute discretion of the Board of Directors prior to the date of such transaction,
including, without limitation, if the Board of Directors determines that (i) neither the beneficial
ownership of shares of Common Stock by any person, directly or indirectly, as a result of such
transaction nor any other aspect of such transaction would jeopardize or endanger the availability
to the Company of the Company’s tax benefits or (ii) such transaction is otherwise in the best
interests of the Company. In granting an exemption for an “Exempted Transaction”, the Board of
Directors of the Company may require any person who would otherwise be an Acquiring Person to make
certain representations or undertakings or to agree that any violation or attempted violation of
such representations or undertakings will result in such consequences and subject to such
conditions as the Board of Directors of the Company may determine in its sole discretion, including
that any such violation shall result in such person becoming an Acquiring Person.

     Excercisability; Expiration. The Rights are not exercisable until the Distribution Date and
will expire on the earliest of (i) the close of business on July 31, 2019, (ii) the time at which
the Rights are redeemed pursuant to the Rights Agreement, (iii) the time at which the Rights are
exchanged pursuant to the Rights Agreement, (iv) the repeal of Section 382 of the Code or any
successor statute if the Board of Directors of the Company determines that the Rights Agreement is
no longer necessary or desirable for the preservation of certain tax benefits, (v) the beginning of
a taxable year of the Company to which the Board of Directors of the Company determines that
certain tax benefits may not be carried forward, or (vi) the first anniversary of adoption of the
Rights Agreement if shareholder approval of the Rights Agreement has not been received by or on
such date. At no time will the Rights have any voting power.

     In the event that an Acquiring Person becomes the beneficial owner of 4.95% or more of the
then outstanding shares of Common Stock, each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company), having a value equal to two times the exercise price of the Right. The
exercise price is the Purchase Price times the number of Units associated with each Right
(initially, one). Notwithstanding any of the foregoing, following the occurrence of an Acquiring
Person becoming such (a “Flip-In Event”), all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person
will be null and void. However, Rights are not exercisable following the occurrence of a Flip-In
Event until such time as the Rights are no longer redeemable by the Company as set forth below.

     For example, at an exercise price of $50.00 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the preceding paragraph
would entitle its

-3-

 

holder to purchase $100.00 worth of Common Stock (or other consideration, as noted above) for
$50.00. If the Common Stock at the time of exercise had a market value per share of $5.00, the
holder of each valid Right would be entitled to purchase twenty (20) shares of Common Stock for
$50.00.

     In the event that, at any time following the Stock Acquisition Date, (i) the Company engages
in a merger or other business combination transaction in which the Company is not the surviving
corporation; (ii) the Company engages in a merger or other business combination transaction in
which the Company is the surviving corporation and the Common Stock is changed or exchanged; or
(iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been voided as set forth above) shall
thereafter have the right to receive, upon exercise of the Right, common stock of the acquiring
company having a value equal to two times the exercise price of the Right. The events set forth in
this paragraph (a “Flip-Over Event”) and in the second preceding paragraph are referred to
as the “Triggering Events.”

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

     Anti-Dilution Provisions. The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if holders of the
Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the 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 quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).

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

     Exchange. At any time after the Stock Acquisition Date, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by an Acquiring Person), in whole or in part, at
an exchange ratio equal to (i) a number of shares of Common Stock per Right with a value equal to
the spread between the value of the number of shares of Common Stock for which the Rights may then
be exercised and the Purchase Price or (ii) if prior to the acquisition by the Acquiring Person of
50% or more of the then outstanding shares of Common Stock, one share of Common Stock per Right
(subject to adjustment).

     Redemption. At any time until ten (10) days following the Stock Acquisition Date, the Company
may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $0.001 redemption price.

     Amendments. Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors of
the Company prior to the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes which
do not adversely

-4-

 

affect the interests of holders of Rights (excluding the interests of any Acquiring Person),
or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be made at such time as the Rights
are not redeemable.

-5-exv10w01

Exhibit 10.01

INTUIT INC. PERFORMANCE INCENTIVE PLAN

FOR FISCAL YEAR 2010

	1.	 	Overview: Intuit Inc.’s Performance Incentive Plan (IPI) is a program under which
Intuit Inc. (“Intuit”) pays discretionary cash bonus awards to select employees located in
the United States of America. Bonus awards under the IPI are paid annually. The amount of a
bonus award is based upon the employee’s bonus target and performance during the fiscal
year and the bonus pool made available for payments under the IPI for the applicable fiscal
year. The IPI is intended to provide employees with “performance-based compensation” within
the meaning of Section 409A of the Internal Revenue Code (“Code”).
	 
	2.	 	Purposes: The IPI is a component of Intuit’s overall strategy to pay its employees for
performance. The purposes of IPI are to: (i) attract and retain top performing employees;
(ii) motivate employees by tying compensation to Intuit’s performance; and (iii) reward
exceptional individual performance that supports overall Intuit objectives.
	 
	3.	 	Effective Date: The terms of this IPI document will be applicable to bonuses for
services during Intuit’s 2010 fiscal year that begins August 1, 2009.
	 
	4.	 	Eligibility: All employees of Intuit are eligible to participate in the IPI, except
for employees who (i) are classified as seasonal employees, (ii) are classified as
interns/project employees, (iii) participate in Intuit’s Senior Executive Incentive Plan,
unless such employee is specifically approved by the Compensation and Organizational
Development Committee (“Compensation Committee”) to also participate in the IPI, (iv)
participate in other Intuit incentive compensation plans that specifically exclude an
employee’s participation in the IPI, including, but not limited to, the sales incentive
compensation plans and the contact center incentive compensation plans, (v) participate in
an incentive compensation plan sponsored by Intuit or an Intuit subsidiary for
international employees that was designed to provide a cash incentive benefit to such
employees comparable to or in lieu of the IPI, (vi) work for Intuit on a purely commission
basis, (vii) participate in the Performance Incentive Plan for Employees of International
Subsidiaries of Intuit Inc. or (viii) commence employment pursuant to (AA) an acquisition
which becomes effective following August 1, 2009 and (BB) an offer letter which provides
for participation in future Intuit compensation plan(s) only. Those employees who are
determined to be eligible for bonus awards under the IPI are called “Participants.”
Participants in the IPI (other than Senior Officers, which term means the Chief Financial
Officer, any Executive Vice President or Senior Vice President, the Vice President of
Internal Audit and any other officer who is a Section 16 officer or any other officer who
reports to the President and Chief Executive Officer) are not eligible to simultaneously
participate in any other bonus or cash incentive plan, unless the Vice President
responsible for Total Rewards otherwise specifically approves such participation. Senior
Officers who are Participants in the IPI are not eligible to

 

 

	 	 	simultaneously participate in any other bonus or cash incentive plan, unless the
Compensation Committee otherwise specifically approves such participation. An employee
must commence employment or otherwise become eligible to participate in the IPI no later
than April 1 to be eligible for a bonus award under the IPI for that fiscal year. Being
a Participant does not entitle the individual to receive a bonus award. Bonus awards are
payable to Participants that meet the criteria set forth in Paragraph 6 below.
	 
	5.	 	Plan Year: The IPI operates on a fiscal year basis, August 1 through July 31.
	 
	6.	 	Bonus Awards: Bonus awards are discretionary payments. A Participant must be an active
employee in good standing and on Intuit’s or an approved subsidiary’s payroll on the day
the bonus award is paid to receive any portion of the bonus payment. A Participant who is
not actively employed or on an approved payroll for whatever reason on the date a bonus
award is paid is not entitled to a partial or pro rata bonus award. Intuit may make
exceptions in its sole discretion, provided, however, that exceptions must be made by the
Compensation Committee or its delegate. There is no minimum award or guaranteed payment.
Bonus awards are paid based on the fiscal year. A bonus award is calculated at the
discretion of the Compensation Committee after considering Intuit’s performance, the
Participant’s bonus target and performance for the fiscal year and the bonus pool made
available for bonus awards under the IPI for the fiscal year.

	 	a.	 	Bonus Targets:

	 	i.	 	For each Participant that is paid an annual salary,
his or her bonus target is established as a percentage of the
Participant’s base salary. For each Participant that is paid hourly, his
or her bonus target is established as a percentage of the Participant’s
base pay. In accordance with the Fair Labor Standards Act, for each
Participant that is paid hourly, Intuit will either (a) add overtime
earnings to base pay in the calculation of the IPI award or (b) add the
amount of the IPI award to base pay and recalculate the Participant’s
hourly rate for overtime pay.
	 
	 	ii.	 	When an employee becomes a Participant, he or she
is advised of his or her bonus target for the fiscal year.
	 
	 	iii.	 	Following the beginning of each fiscal year, each
Participant is advised of his or her bonus target by the executive leader
of the Participant’s business or functional unit or the executive
leader’s designee.
	 
	 	iv.	 	The Compensation Committee establishes individual
bonus targets for Senior Officers and other Intuit officers. The
President and Chief Executive Officer may establish individual bonus
targets for officers. Bonus targets for other employees are established
by the Vice President responsible for Total Rewards in consultation with
Intuit’s President and

2

 

	 	 	 	Chief Executive Officer, the employee’s manager and the individual
responsible for the business unit or division thereof or functional unit or
division thereof in which the employee works and that unit or division’s HR
director.
	 
	 	v.	 	Intuit may establish bonus target guidelines for
each fiscal year; provided, however, that bonus targets for Senior
Officers are to be established by the Compensation Committee. A
Participant’s bonus target for a fiscal year may be determined based upon
a variety of factors, including but not limited to, Intuit’s corporate
and financial goals, his or her base salary or base pay, position or
level. A bonus target does not guarantee that a bonus award will be made
or, if a bonus award is made, that it will be made at the target rate.

	 	b.	 	Determination of a Bonus Award Amount

	 	i.	 	The amount of a bonus award to a Participant who is
a Senior Officer is determined by the Compensation Committee, in
consultation with Intuit’s President and Chief Executive Officer. The
amount of a bonus award to a Participant who is not a Senior Officer is
determined by the executive leader of the Participant’s business unit or
functional group and Intuit’s President and Chief Executive Officer in
consultation with the Participant’s direct manager and the Vice President
responsible for Total Rewards.
	 
	 	ii.	 	A Participant’s bonus award is linked to an
assessment of Intuit’s achievement of corporate and financial goals and
the Participant’s total job performance for the fiscal year. Factors that
may be considered, include but are not limited to, what the Participant
does to advance Intuit’s success and how the Participant does it,
especially leadership, balance of short-term actions with long-term
goals, resource allocation and maintenance by the Participant of focus on
Intuit while prioritizing the needs of customers, employees and
stockholders.
	 
	 	iii.	 	There is neither a minimum nor maximum amount of a
bonus award that may be paid to a Participant for a fiscal year. Subject
to the terms and conditions of Section 6, at Intuit’s discretion, a bonus
award amount may be prorated based on the Participant’s service or other
factors, provided, however, that decisions relating to Senior Officers
must be made by the Compensation Committee.
	 
	 	iv.	 	Any bonus award paid to a Participant is subject to
all applicable taxes and withholding.

	 	c.	 	When Bonus Awards are Paid: The timing for payment of a bonus award is
determined by the Vice President responsible for Total Rewards in consultation

3

 

	 	 	 	with Intuit’s President and Chief Executive Officer and other senior management. A
Participant has no right to a bonus award until it is paid. Notwithstanding the
foregoing, in the event of an administrative error in the calculation or payment of
a bonus award to a Participant, Intuit reserves the right to seek recovery from a
Participant of an erroneously paid excessive bonus amount. Once a bonus award is no
longer subject to a “substantial risk of forfeiture” (as determined pursuant to
regulations and/or other guidance promulgated under Section 409A of the Code), then
it shall be paid not later than the later of: (i) 21/2 months after the end of
Intuit’s first taxable year when the bonus award is no longer subject to such
“substantial risk of forfeiture”, or (ii) 21/2 months after the end of such
Participant’s first taxable year when the bonus award is no longer subject to such
“substantial risk of forfeiture”; unless a later date is established by Intuit, or
Intuit permits the Participant to designate a later date, in either case only as
permitted under Section 409A of the Code.

	7.	 	Unfunded: The IPI is not funded. Bonus awards, if any, are made from the general
assets of Intuit. The Compensation Committee determines in its sole discretion the amount
of funds it would like to make available for bonus awards based on Intuit’s performance for
the fiscal year. Intuit’s performance for this purpose may be measured in a number of ways,
including but not limited to: financial measures, such as revenue and operating income;
qualitative measures, such as accomplishments to position Intuit for the future; the year’s
market conditions; stockholder returns; and progress of Intuit’s business model. Intuit is
not obligated to pay any part of such funds in bonus awards.
	 
	8.	 	Amendment: The Compensation Committee has the authority to terminate, change, modify
or amend the provisions of the IPI at any time. Notwithstanding the foregoing, Intuit’s
President and Chief Executive Officer, Chief Financial Officer and Vice President
responsible for Total Rewards, each individually, has the authority to make amendments to
the IPI that do not significantly increase the cost of the IPI and which in such
individual’s determination (i) clarify the terms of the IPI; (ii) assist in the
administration of the IPI; (iii) are necessary or advisable for the IPI to comply with
applicable law; or (iv) are necessary or advisable for the IPI to provide
“performance-based compensation” within the meaning of Code Section 409A for individuals
who participate in the Intuit Inc. Non-Qualified Executive Deferred Compensation Plan.
	 
	9.	 	Administration and Discretion: Except as otherwise required for Senior Officers under
the Charter of the Compensation Committee, Intuit’s President and Chief Executive Officer
and the Vice President responsible for Total Rewards have the sole discretion to: (a) adopt
such rules, regulations, agreements and instruments as it deems necessary to administer the
IPI; (b) interpret the terms of the IPI; (c) determine an employee’s eligibility under the
IPI; (d) determine whether a Participant is to receive a bonus award under the IPI; (e)
determine the amount of any bonus award to a Participant; (f) determine when a bonus award
is to be paid to a Participant and whether any such bonus award should be prorated based on
the Participant’s service or other factors; (g) determine whether a bonus award will be
made in replacement of

4

 

	 	 	or as an alternative to any other incentive or compensation plan of Intuit or of an
acquired business unit or corporation; (h) grant waivers of IPI standard procedures and
policies; (i) correct any defect, supply any omission, or reconcile any inconsistency in
the IPI, any bonus award or any notice to Participants or a Participant regarding bonus
awards; and (j) take any and all other actions it deems necessary or advisable for the
proper administration of the IPI.
	 
	10.	 	Participation Provides No Guarantee of Employment: Employment at Intuit is at-will and
participation in the IPI in no way constitutes an employment contract conferring either a
right or obligation of continued employment.
	 
	11.	 	Governing Law: The IPI will be governed by and construed in accordance with the laws
of the State of California.

Approved by the

Compensation and Organizational Development Committee

On July 28, 2009

5

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