Document:

exv4w3

 

Exhibit 4.3

TREEHOUSE FOODS, INC.

and

THE BANK OF NEW YORK, as Rights Agent

FORM OF RIGHTS AGREEMENT

dated as of ________ __, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	Section 1.

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Issue of Right Certificates
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Form of Right Certificates
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Countersignature and Registration
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 7.

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

	 	Cancellation and Destruction of Right Certificates
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Availability of Preferred Shares
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Preferred Shares Record Date
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.

	 	Adjustment of Purchase Price, Number of Shares or Number
of Rights
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 12.

	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	20	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets or
Earning Power
	 	 	20	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Fractional Rights and Fractional Shares
	 	 	24	 
	 
	 	 	 	 	 	 
	Section 15.

	 	Rights of Action
	 	 	25	 
	 
	 	 	 	 	 	 
	Section 16.

	 	Agreement of Right Holders
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 17.

	 	Right Certificate Holder Not Deemed a Stockholder
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 18.

	 	Concerning the Rights Agent
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 19.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 20.

	 	Rights and Duties of Rights Agent
	 	 	27	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	Section 21.

	 	Change of Rights Agent
	 	 	29	 
	 
	 	 	 	 	 	 
	Section 22.

	 	Issuance of New Right Certificates
	 	 	30	 
	 
	 	 	 	 	 	 
	Section 23.

	 	Redemption
	 	 	31	 
	 
	 	 	 	 	 	 
	Section 24.

	 	Exchange
	 	 	31	 
	 
	 	 	 	 	 	 
	Section 25.

	 	Notice of Certain Events
	 	 	32	 
	 
	 	 	 	 	 	 
	Section 26.

	 	Notices
	 	 	33	 
	 
	 	 	 	 	 	 
	Section 27.

	 	Supplements and Amendments
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 28.

	 	Successors
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 29.

	 	Benefits of this Agreement
	 	 	34	 
	 
	 	 	 	 	 	 
	Section 30.

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

	 	Severability
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 32.

	 	Governing Law
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 33.

	 	Counterparts
	 	 	35	 
	 
	 	 	 	 	 	 
	Section 34.

	 	Descriptive Headings
	 	 	35	 

 

 

FORM OF RIGHTS AGREEMENT DATED AS OF ___, 2005 (“AGREEMENT”), BETWEEN TREEHOUSE FOODS, INC., A DELAWARE
CORPORATION (THE “COMPANY”), AND THE BANK OF NEW YORK, AS RIGHTS AGENT (THE “RIGHTS AGENT”).

     The Board of Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a “Right”) for each share of Common Stock (as hereinafter defined) of the
Company outstanding as of the Close of Business (as defined below) on
_________ ___, 2005 (the
“Record Date”), each Right representing the right to purchase one one-hundredth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the Expiration Date in accordance with Section 22.

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

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

     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
shares of Common Stock then outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined); provided, however, that (i) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an “Acquiring Person” became the
Beneficial Owner of a number of shares of Common Stock such that the Person would otherwise qualify
as an “Acquiring Person” inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such
Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of changing or influencing control of the
Company, then such Person shall not be deemed to be or to have become an “Acquiring Person” for any
purposes of this Agreement unless and until such Person shall have failed to divest itself, as soon
as practicable (as determined, in good faith, by the Board of Directors of the Company), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no
longer otherwise qualify as an “Acquiring Person”; (ii) if, as of the date hereof or prior to the
first public announcement of the
adoption of this Agreement, any Person is or becomes the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding, such Person shall not be
deemed to be or to become an “Acquiring Person” unless and until such time as such Person shall,
after the first public announcement of the

1

 

adoption of this Agreement, become the Beneficial Owner
of additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock),
unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person
is not then the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding; and
(iii) no Person shall become an “Acquiring Person” as the result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned by such Person to 15% or more of
the shares of Common Stock then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding by reason of such
share acquisitions by the Company and shall thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made
by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an “Acquiring Person” unless upon
becoming the Beneficial Owner of such additional shares of Common Stock such Person does not
beneficially own 15% or more of the shares of Common Stock then outstanding. 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date
hereof.

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

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

          (i) which such Person or any of such Person’s Affiliates or Associates beneficially owns,
directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under
the Exchange Act as in effect on the date hereof;

          (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of securities),
or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) 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

2

 

are accepted for purchase, (y) securities which such Person has a right to acquire upon
the exercise of Rights at any time prior to the time that any Person becomes an Acquiring
Person or (z) securities issuable upon the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such 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 (“Original Rights”) or pursuant to Section 11(i) or Section 11(n) with respect to
an adjustment to Original Rights; or (B) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security by reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

          (iii) which are beneficially owned, directly or indirectly, by any other Person with which
such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of such securities of the Company;

provided, however, that no Person who is an officer, director or employee of an Exempt Person shall
be deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial
Owner” of, to have “Beneficial Ownership” of or to “beneficially own” any securities that are
“beneficially owned” (as defined in this Section l(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an
Exempt Person.

     (d) “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of Illinois 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., Chicago time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., Chicago time,
on the next succeeding Business Day.

     (f) “Common Stock” when used with reference to the Company shall mean the Common Stock,
presently par value $.01 per share, of the Company. “Common Stock” when used with reference to any
Person other than the Company shall mean the capital stock (or the equivalent equity interest) with
the greatest voting power of such other Person or, if such other Person is a Subsidiary (as such
term is hereinafter defined) of

3

 

another Person, the Person or Persons which ultimately control such
first-mentioned Person.

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

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

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

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

     (k) “Exempt Person” shall mean the Company or any Subsidiary of the Company, in each case
including, without limitation, in its fiduciary capacity, or any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any Subsidiary of the Company.

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

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

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

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

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

     (q) “New York Stock Exchange” shall mean The New York Stock Exchange, Inc.

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

     (s) “Preferred Stock” shall mean the Series A Junior Participating Preferred Stock, par value
$.01 per share, of the Company having the rights and

4

 

preferences set forth in the Form of
Certificate of Designations attached to this Agreement as Exhibit A.

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

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

     (v) “Record Date” shall have the meaning set forth in the first
paragraph hereof.

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

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

     (y) “Right” shall have the meaning set forth in the first paragraph hereof.

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

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

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

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

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

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

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

5

 

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

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

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.

     Section 3. Issue of Right Certificates.

     (a) Until the Close of Business on the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action
of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an Exempt Person) of, or of
the first public announcement of the intention of such Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in any Person (other
than an Exempt Person) becoming the Beneficial Owner of shares of Common Stock aggregating 15% or
more of the Common Stock then outstanding (the earlier of such dates being herein referred to as
the “Distribution Date”, provided, however, that if either of such dates occurs after the date of
this Agreement and on or prior to the Record Date, then the Distribution Date shall be the Record
Date), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the holders thereof and not by separate
Right Certificates, and (y) the Rights will be transferable only in connection with the transfer of
Common Stock. As soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Stock as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such
holder shown on the records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

     (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of
a Summary of Rights to Purchase Shares of Preferred Stock, in substantially the form of Exhibit C
hereto (the “Summary of Rights”), by postage-prepaid mail, to each record holder of Common Stock as
of the Close of Business on the Record Date (other than any Acquiring Person or any Associate or
Affiliate of any Acquiring Person), at the address of such holder shown on the records of the
Company. With respect

6

 

to certificates for Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates registered in the names of
the holders thereof together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a copy of the Summary
of Rights, shall also constitute the transfer of the Rights associated with the Common Stock
represented thereby.

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

This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between TreeHouse
Foods, Inc. and The Bank of New York, as Rights Agent, dated as of
_________ ___, 2005 and as amended from time to time (the “Agreement”),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of TreeHouse
Foods, Inc. Under certain circumstances, as set forth in the Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. TreeHouse Foods, Inc. will
mail to the holder of this certificate a copy of the Agreement without
charge after receipt of a written request therefor. Under certain
circumstances, as set forth in the Agreement, Rights beneficially owned
by or transferred to any Person who is or becomes an Acquiring Person
(as defined in the Agreement) and certain transferees thereof will
become null and void and will no longer be transferable.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate, except as otherwise
provided herein, shall also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or otherwise acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be

7

 

deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer outstanding.

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

     Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate 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 applicable rule or regulation made pursuant
thereto or with any rule or regulation of any applicable stock exchange or interdealer quotation
system on which the Rights may from time to time be listed or quoted, or to conform to usage.
Subject to the provisions of this Agreement, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the Purchase Price, but the number of such one one-hundredths of a share of
Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein.

     Section 5. Countersignature and Registration.

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

     (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at an
office or agency designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

8

 

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

     (a) Subject to the provisions of this Agreement, at any time after the Distribution Date and
prior to the Expiration Date, any Right Certificate or Right Certificates may be transferred, split
up, combined or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share of Preferred Stock as
the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at
the office or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

     (b) Subject to the provisions of this Agreement, at any time after the Distribution Date and
prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s or the Rights Agent’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

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

     (a) Except as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to
Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of
the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the time (the “Expiration Date”) that
is the earliest of (i) the Close of Business on
_________ ___, 2010 (the “Final Expiration Date”),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the

9

 

“Redemption
Date”) or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof.

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

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

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

     (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder of
Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6
hereof or this Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form

10

 

of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such transfer or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof as the Company shall reasonably request.

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

     Section 9. Availability of Shares of Preferred Stock.

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

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

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

11

 

suspended, as well
as a public announcement at such time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and
until a registration statement under the Securities Act shall have been declared effective, unless
an exemption therefrom is available.

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

     (e) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred Stock upon the 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 Right Certificates to a Person other than, or the issuance
or delivery of certificates or depositary receipts for the Preferred Stock in a name other than
that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates or depositary receipts for Preferred Stock upon the
exercise of any Rights until any such tax shall have been paid (any such tax being payable by that
holder of such Right Certificate at the time of surrender) or until it has been established to the
Company’s reasonable satisfaction that no such tax is due.

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

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

12

 

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

     (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter as the “Flip-In Event”),
then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior
to the Flip-In Event multiplied by the number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such
Right was then exercisable, and (B) each holder of a Right, except as otherwise provided in this
Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common
Stock as shall equal the result obtained by dividing the Purchase Price (as so adjusted) by 50% of
the current per share market price of the Common Stock (determined pursuant to Section 11(d)
hereof) on the date of such Flip-In Event; provided, however, that the Purchase Price (as so
adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall,
following the Flip-In Event, be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from
and after the Flip-In Event, any Rights that are beneficially owned by (x) any Acquiring Person (or
any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee
prior to or concurrently with the Flip-In Event pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a
transfer which the Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever

13

 

with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and
after the Flip-In Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6
hereof that represents Rights that are or have become void pursuant to the provisions of this
paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of this paragraph shall be canceled. From and after
the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not
been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii).

     (iii) The Company may at its option substitute for a share of Common Stock issuable upon the
exercise of Rights in accordance with the foregoing subparagraph (ii) a number of shares of
Preferred Stock or fraction thereof such that the current per share market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current per share market
price of one share of Common Stock. In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii), the Board of Directors of the
Company shall, with respect to such deficiency, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, (A) determine the excess (such
excess, the “Spread”) of (1) the value of the shares of Common Stock issuable upon the exercise of
a Right in accordance with the foregoing subparagraph (ii) (the “Current Value”) over (2) the
Purchase Price (as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with
respect to each Right (other than Rights which have become void pursuant to the foregoing
subparagraph (ii)), make adequate provision to substitute for the shares of Common Stock issuable
in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a reduction in such Purchase
Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors of the Company to have substantially the same value
as the shares of Common Stock (such shares of Preferred Stock and shares or fractions of shares of
preferred stock are hereinafter referred to as “Common Stock Equivalents”)), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of any reduction in such Purchase
Price), where such aggregate value has been determined by the Board of Directors of the Company
upon the advice of a nationally recognized investment banking firm selected in good faith by the
Board of Directors of the Company; provided, however, that if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days following the
Flip-In

14

 

Event (the date of the Flip-In Event being the “Section 11(a)(ii) Trigger Date”), then the
Company shall be obligated to deliver, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, upon the surrender for exercise of a
Right and without requiring payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If, upon the occurrence of the Flip-In Event, the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board of
Directors of the Company so elects, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein called the
“Substitution Period”). To the extent that the Company determines that some action need be
taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii)
hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of distribution to be made
pursuant to such second sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the
shares of Common Stock shall be the current per share market price (as determined pursuant to
Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value of
any “Common Stock Equivalent” shall be deemed to equal the current per share market price of the
Common Stock. The Board of Directors of the Company may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).

     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Stock (or shares having the
same rights, privileges and preferences as the Preferred Stock (“Equivalent Preferred Shares”)) or
securities convertible into Preferred Stock or Equivalent Preferred Shares at a price per share of
Preferred Stock or Equivalent Preferred Shares (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or Equivalent Preferred Shares) less than the
then current per share market price of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock and Equivalent
Preferred Shares outstanding on such record date plus the number of shares of

15

 

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

     (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants applicable to one
share of Preferred Stock, and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.

     (d)(i) Except as otherwise provided herein, for the purpose of any computation hereunder, the
“current per share market price” of any security (a “Security” for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of

16

 

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

     (ii) For the purpose of any computation hereunder, if the Preferred Stock is publicly traded,
the “current per share market price” of the Preferred Stock shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly traded but the
Common Stock is publicly traded, the “current per share market price” of the Preferred Stock shall
be conclusively deemed to be the current per share market price of the Common Stock as determined
pursuant to Section 11(d)(i) multiplied by the then applicable Adjustment Number (as defined in and
determined in accordance with the Certificate of Designation for the Preferred Stock). If neither
the Common Stock nor the Preferred Stock is publicly traded, “current per share market price” shall
mean the fair value per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights Agent.

     (e) No adjustment in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent

17

 

adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one hundred-thousandth of a share of
Preferred Stock or one-hundredth of a share of Common Stock or other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.

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

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

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

     (i) The Company may elect on or after the date of any adjustment of the Purchase Price
pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredths 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-hundredth) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its

18

 

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

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

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

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

     (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such adjustments in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or

19

 

subdivision of the Preferred Stock, issuance wholly
for cash of any shares of Preferred Stock at less than the current market price, issuance wholly
for cash of Preferred Stock or securities which by their terms are convertible into or exchangeable
for Preferred Stock, dividends on Preferred Stock payable in shares of Preferred Stock or issuance
of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such holders.

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

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

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Stock and
the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof (if so required under Section 25
hereof). The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.

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

     (a) In the event, directly or indirectly, at any time after the Flip-In Event (i) the Company
shall consolidate with or shall merge into any other Person, (ii) any Person shall merge with and
into the Company and the Company shall be the continuing or

20

 

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

     (b) “Principal Party” shall mean:

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

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

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

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

22

 

hereof and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party will:

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

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

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

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

     (d) In case the Principal Party has a provision in any of its authorized securities or in its
certificate of incorporation or by-laws or any other instrument governing its affairs, which
provision would have the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common Stock or Common
Stock Equivalents of such Principal Party at less than the then current market price per share
thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Stock or Common Stock Equivalents of such Principal Party at less than such then
current market price, or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions
of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the

23

 

applicable provision will have no effect
in connection with, or as a consequence of, the consummation of the proposed transaction.

     (e) The Company covenants and agrees that it shall not, at any time after the Flip-In Event,
enter into any transaction of the type described in clauses (i) through (iii) of Section 13(a)
hereof if (i) at the time of or immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously owned by such Person or any of its Affiliates or
Associates or (iii) the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.

     Section 14. Fractional Rights and Fractional Shares.

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

     (b) The Company shall not be required to issue fractions of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of

24

 

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

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

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

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

25

 

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

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

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

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

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

     Section 18. Concerning the Rights Agent.

     (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the 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,

26

 

including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.

     (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 Right Certificate or certificate for the Preferred Stock or Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

     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 stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties hereto; provided that
such 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 Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.

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

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

27

 

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

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter 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 President and the 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 to the Company and any other Person 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 Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

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

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

28

 

     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person reasonably believed by the Rights Agent to
be one of the President or the Secretary of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance
with a proposal included in any such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date any officer of the Company
actually receives such application unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

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

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

     (j) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the form of election to purchase
set forth on the reverse thereof, as the case may be, has not been completed to certify the holder
is not an Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof, the
Rights Agent shall not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common

29

 

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

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

30

 

the Company, in each
case existing prior to the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale.

     Section 23. Redemption.

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

     (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the
Board of Directors of the Company may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors of the Company ordering the
redemption of the Rights (or such later time as the Board of Directors of the Company may establish
for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption shall state the method by which the payment of the Redemption Price will
be made.

     Section 24. Exchange.

     (a) The Board of Directors of the Company may, at its option, at any time after the Flip-In
Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring in respect of the Common
Stock after the date hereof (such amount per Right being hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall not be
empowered to effect such exchange at any time after an Acquiring Person shall have become the
Beneficial Owner of

31

 

shares of Common Stock aggregating 50% or more of the shares of Common Stock
then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the Rights by the Board of Directors of the Company may be made effective
at such time, on such basis and with such conditions as the Board of Directors of the Company in
its sole discretion may establish.

     (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity of such exchange.
The Company shall promptly mail a notice of any such exchange to all of the holders of the Rights
so exchanged at their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

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

     Section 25. Notice of Certain Events.

     (a) In case the Company shall at any time after the earlier of the Distribution Date or the
Shares Acquisition Date propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Stock or to make any other distribution to the holders of its Preferred
Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any

32

 

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

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

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

TreeHouse Foods, Inc.

_____________________

_____________________

Attention: General Counsel

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

The Bank of New York

101 Barclay Street

New York, New York 10286

Attention: _____________________

33

 

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

     Section 27. Supplements and Amendments. Except as provided in the penultimate sentence of
this Section 27, for so long as the Rights are then redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the penultimate sentence
of this Section 27, the Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holders of Rights, provided that no
such supplement or amendment may (a) adversely affect the interests of the holders of Rights as
such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b)
cause this Agreement again to become amendable other than in accordance with this sentence or (c)
cause the Rights again to become redeemable. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which states that the
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment, provided that any supplement or amendment that does not amend
Sections 18, 19, 20 or 21 hereof or this Section 27 in a manner adverse to the Rights Agent shall
become effective immediately upon execution by the Company, whether or not also executed by the
Rights Agent.

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

     Section 29.
Benefits of this Agreement. Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock).

     Section 30.
Determinations and Actions by the Board of Directors. The Board of Directors of
the Company shall have the exclusive power and authority to administer this Agreement and to
exercise the rights and powers specifically granted to the Board of Directors of the Company or to
the Company, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i)

34

 

interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or not redeem the Rights
or to amend or not amend this Agreement). All such actions, calculations, interpretations and
determinations that are done or made by the Board of Directors of the Company in good faith shall
be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as
such, and all other parties.

     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.

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

     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.

[signature page follows]

35

 

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

TREEHOUSE FOODS, INC.

By:                                                                                   

Name:                                                                              

Title:                                                                                

THE BANK OF NEW YORK,

as Rights Agent

By:                                                                                   

Name:                                                                              

Title:                                                                                

 

 

Exhibit A

FORM OF

CERTIFICATE OF DESIGNATION

of

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

of

TREEHOUSE FOODS, INC.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

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

          That pursuant to the authority vested in the Board of Directors of the Corporation (the “Board
of Directors”) in accordance with the provisions of the Certificate of Incorporation of the said
Corporation, the said Board of Directors on                      ___, 2005 adopted the following resolution
creating a series of 10,000,000 shares of Preferred Stock designated as “Series A Junior
Participating Preferred Stock”:

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

Series A Junior Participating Preferred Stock

          1. Designation and Amount. There shall be a series of Preferred Stock that shall be
designated as “Series A Junior Participating Preferred Stock,” and the number of shares
constituting such series shall be 10,000,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, however, that no decrease shall reduce the
number of shares of Series A Junior Participating Preferred Stock to less than the number of
shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.

A-1

 

          2. Dividends and Distribution.

               (A) Subject to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock, in preference to the holders of shares of any class or series of
stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock in
respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the 1st 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) the Adjustment Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $.01 per share, of the Corporation (the “Common Stock”)
since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 100. In
the event the Corporation shall at any time after
_________ ___, 2005 (i) declare and pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

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

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

A-2

 

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 60 days prior to the date fixed for the payment thereof.

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

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

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

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

A-3

 

shares of Series A Junior Participating Preferred Stock
at the time entitled to cast a majority of the votes entitled to be cast for the election of any
such director at a special meeting of such holders called for that purpose, and any vacancy thereby
created may be filled by the vote of such holders. If and when such default shall cease to exist, the
holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every subsequent like default
in payments of dividends. Upon the termination of the foregoing special voting rights, the terms
of office of all persons who may have been elected directors pursuant to said special voting rights
shall forthwith terminate, and the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating Preferred Stock in this
Section 3.

          4. Certain Restrictions.

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

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

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

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

               (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the

A-4

 

Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.

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

          6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up
of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Participating Preferred Stock shall have received an amount per share (the “Series
A Liquidation Preference”) equal to the greater of (i) $1.00 plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date of such payment,
or (ii) the Adjustment Number times the per share amount of all cash and other property to be
distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the
Corporation.

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

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

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

A-5

 

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

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

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

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

[signature page follows]

A-6

 

          IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation of Series A
Junior Participating Preferred Stock this ___day of ___, 2005.

	 	 	 	 	 
	 	 	TREEHOUSE FOODS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name:

Title:

A-7

 

Exhibit B

Form of Right Certificate

Certificate No. R-______

NOT EXERCISABLE AFTER                                         , 2010 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.

RIGHT CERTIFICATE

TREEHOUSE FOODS, 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                     , 2005, as
the same may be amended from time to time (the “Rights Agreement”), between TreeHouse Foods, Inc.,
a Delaware corporation (the “Company”), and The Bank of New York, as Rights Agent (the “Rights
Agent”), to purchase from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York
City time, on _________ ___, 2010
at the office or agency of the Rights Agent designated for such purpose, or of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the “Preferred Stock”), of the Company at
a purchase price of $                     per one one-hundredth of a share of Preferred Stock (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Rights Certificate (and the number
of one one-hundredths of a share of Preferred Stock which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of
                                        , 2005 based on the Preferred Stock as constituted at such date. As provided in
the Rights Agreement, the Purchase Price, the number of one one-hundredths of a share of Preferred
Stock (or other securities or property) which may be purchased

B-1

 

upon the exercise of the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of certain events.

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

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

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

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

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

affecting stockholders (except as provided in the Rights Agreement) or to receive dividends or
subscription rights, or otherwise, until

B-2

 

the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement.

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

          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of                      ___, 200_.

	 	 	 	 	 
	 	 	TREEHOUSE FOODS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	[Title]

ATTEST:

	 	 	 	 
	 

[Title]

Countersigned:

THE BANK OF NEW YORK, as Rights Agent

	 	 	 	 
	By
	 	 
	

	 	 
	

	 	[Title]

B-3

 

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate)

     FOR VALUE RECEIVED
                                                             hereby sells, assigns                     
and
                    transfers
                    unto
                                                                                                                        

	 	 
	 

(Please print name and address of transferee)

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

	 	 	 	 
	Dated:
	 	 
	

	 	 

	 	 	 
	

	 	 
	

	 	Signature

Signature Guaranteed:

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

	 	 
	 

(To be completed)

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

	 	 	 
	

	 	 
	

	 	 
	

	 	 
	

	 	Signature

B-4

 

Form of Reverse Side of
Right Certificate - continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Rights Certificate)

To XYZ CORPORATION:

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

	 	 	 
	 

(Please print name and address)

	 	 	 
	 

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

Please insert social security

or other identifying number

	 	 	 
	 

(Please print name and address)

	 	 	 
	 

	 	 	 	 
	Dated:
	 	 
	

	 	 

	 	 	 
	

	 	 
	

	 	Signature

          (Signature must conform to holder specified on Right Certificate)

Signature Guaranteed:

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

B-5

 

Form of Reverse Side of
Right Certificate - continued

	 	 	 
	 

(To be completed)

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

	 	 	 
	

	 	 
	

	 	Signature

	 	 	 
	 

NOTICE

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

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

B-6

 

Exhibit C

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

SUMMARY OF RIGHTS TO PURCHASE

SHARES OF PREFERRED STOCK OF

TREEHOUSE FOODS, INC.

          On
                                        , 2005, the Board of Directors of TreeHouse Foods, Inc. (the “Company”)
declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of
common stock, par value $.01 per share, of the Company (the “Common Stock”). The dividend is
payable on _________ ___, 2005 (the “Record Date”) to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company (the
“Preferred Stock”) at a price of $                    per one one-hundredth of a share of Preferred Stock (the
“Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement dated as of                                         , 2005, as the same may be amended from time to
time (the “Rights Agreement”), between the Company and The Bank of New York, as Rights Agent (the
“Rights Agent”).

          Until the earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”) has
acquired beneficial ownership of 15% or more of the outstanding shares of Common Stock or (ii) 10
business days (or such later date as may be determined by action of the Board of Directors of the
Company prior to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding shares of Common Stock (the earlier of such dates being
called the “Distribution Date”), the Rights will be evidenced, with respect to any of the Common
Stock certificates outstanding as of the Record Date, by such Common Stock certificate together
with this Summary of Rights.

          The Rights Agreement provides that, until the Distribution Date (or earlier expiration of the
Rights), the Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier expiration of the Rights), new Common

C-1

 

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

          The Rights are not exercisable until the Distribution Date. The Rights will expire on
                                        , 2010 (the “Final Expiration Date”), unless the Final Expiration Date is
advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company, in each
case as described below.

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

          The number of outstanding Rights is subject to adjustment in the event of a stock dividend on
the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations
of the Common Stock occurring, in any such case, prior to the Distribution Date.

          Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of the greater of (a) $1.00 per share, and (b) an amount equal to 100
times the dividend declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum
preferential payment of the greater of (a) $1.00 per share (plus any accrued but unpaid dividends),
and (b) an amount equal to 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. Finally, in the event
of any merger, consolidation or other transaction in which outstanding shares of Common Stock are
converted or exchanged, each share of Preferred Stock will be entitled to receive 100

C-2

 

times the amount received per share of Common Stock. These rights are protected by customary antidilution
provisions.

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

          In the event that any person or group of affiliated or associated persons becomes an Acquiring
Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereupon become void), will thereafter have the right to receive upon exercise of a Right
that number of shares of Common Stock having a market value of two times the exercise price of the
Right.

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

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

          With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of
Preferred Stock or Common Stock will be issued (other than fractions of Preferred Stock which are
integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election
of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash
will be made based on the current market price of the Preferred Stock or the Common Stock.

          At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of

C-3

 

$.01 per Right (the “Redemption Price”) payable, at the option of the Company, in cash, shares of Common Stock or such
other form of consideration as the Board of Directors of the Company shall determine. The
redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company in
its sole discretion may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.

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

          Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or to receive
dividends.

          A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 10 dated                                         , 2005. A copy of the
Rights Agreement is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby incorporated herein by
reference.

C-4exv10w7

 

Exhibit 10.7

FORM OF TREEHOUSE FOODS, INC.

2005 LONG-TERM STOCK INCENTIVE PLAN

SECTION 1.  PURPOSE

     The purposes of the TreeHouse Foods, Inc. 2005 Long-Term Stock Incentive Plan (the
“Plan”) are to promote the interests of the Company and its shareholders by (i)
attracting and retaining non-employee directors and executive personnel and other key employees of
outstanding ability; (ii) motivating non-employee directors and executive personnel and
other key employees, by means of performance-related incentives, to achieve longer-range
Performance Criteria; and (iii) enabling such non-employee directors and employees to
participate in the long-term growth and financial success of the Company.

SECTION 2.  DEFINITIONS

     (a)       Certain Definitions. Capitalized terms used herein without definition shall have
the respective meanings set forth below:

     “Act” means the Securities Exchange Act of 1934, as amended.

     “Affiliate” means (i) for purposes of Incentive Stock Options, any corporation
that is a “parent corporation” (as defined in Section 424(e) of the Code) or a “subsidiary
corporation” (as defined in Section 424(e) of the Code) of the Company, and (ii) for all
other purposes, with respect to any person, any other person that (directly or indirectly) is
controlled by, controlling or under common control with such person.

     “Award” means any grant or award made pursuant to Sections 5 through 8 of the Plan,
inclusive.

     “Award Agreement” means a written agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award or Awards granted to the
Participant.

     “Board” means the Board of Directors of the Company.

     “Cause” means (i) the willful failure of a Participant to perform
substantially his or her duties; (ii) a Participant’s willful or serious misconduct that
has caused, or could reasonably be expected to result in, material injury to the business or
reputation of an Employer; (iii) a Participant’s conviction of, or entering a plea of
guilty or nolo

 

 

contendere to, a crime constituting a felony; (iv) the breach by a Participant
of any written covenant or agreement with an Employer, any material written policy of any Employer
or any Employer’s “code of conduct”; or (v) the Participant’s failure to cooperate with an Employer
in any internal investigation or administrative, regulatory or judicial proceeding; provided
that if a Participant is a party to an employment or individual severance agreement with an
Employer that defines the term “Cause” then, with respect to any Award made to such Participant,
“Cause” shall have the meaning set forth in such employment or severance agreement. In addition,
the Participant’s Service shall be deemed to have terminated for Cause if, after the Participant’s
Service has terminated (for a reason other than Cause), facts and circumstances are discovered that
would have justified a termination for Cause.

     “Change in Control” means the first occurrence of any of the following events after
the Effective Date:

(i)  any person, entity or “group” (as defined in Section 13(d) of the Act), other than
the Company, a wholly-owned subsidiary of the Company, and any employee benefit plan of the
Company or any wholly-owned subsidiary of the Company, becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Act), of 30% or more of the combined voting power of the
Company’s then outstanding voting securities;

(ii)  the persons who, as of the Effective Date, are serving as the members of the
Board (the “Incumbent Directors”) shall cease for any reason to constitute at least
a majority of the Board (or the board of directors of any successor to the Company),
provided that any director elected to the Board, or nominated for election, by at
least two-thirds of the Incumbent Directors then still in office shall be deemed to be an
Incumbent Director for purposes of this clause (ii);

(iii)  the Company consummates a merger or consolidation with any other corporation,
and as a result of which (A) persons who were shareholders of the Company immediately prior to
such merger or consolidation, do not, immediately thereafter, own, directly or indirectly
and in substantially the same proportions as their ownership of the stock of the Company
immediately prior to the merger or consolidation, more than 50% of the combined voting
power of the voting securities entitled to vote generally in the election of directors of
(x) the Company or the surviving entity or (y) an entity that, directly or
indirectly, owns more than 50% of the combined voting power entitled to vote generally in
the election of directors of the entity described in subclause (x),
and (B), within the 12-month period after such consummation of
the merger or consolidation, the members of the Board as of the
consummation of such merger or consolidation cease to constitute a
majority of the Board or the board of directors of the surviving
entity (or the entity that, directly or indirectly, owns more than
50% of the combined voting power entitled to vote generally in the
election of directors of the Company or such surviving entity);

(iv)  the shareholders of the Company approve a sale, transfer or other disposition of
all or substantially all of the assets of the Company, which is consummated and immediately
following which the persons who were shareholders of the Company immediately prior to such
sale, transfer or

2

 

disposition, do not own, directly or indirectly and in substantially the same
proportions as their ownership of the stock of the Company immediately prior to the sale,
transfer or disposition, more than 50% of the combined voting power of the voting
securities entitled to vote generally in the election of directors of (x) the
entity or entities to which such assets are sold or transferred or (y) an entity
that, directly or indirectly, owns more than 50% of the combined voting power entitled to
vote generally in the election of directors of the entities described in subclause (x);

(v)  the shareholders of the Company approve a plan of complete liquidation of the
Company, or such a plan is commenced; and

(vi)  any
other event described in clauses (i) through (v) above that the
Board, in its discretion, determines to be a Change in Control;

provided that if a Participant is a party to an employment or individual severance
agreement with an Employer that defines the term “Change of Control” then, with respect to any
Award made to such Participant, “Change of Control” shall have the meaning set forth in such
employment or severance agreement.

     “Change in Control Price” means the price per share offered in respect of Stock in
conjunction with any transaction resulting in a Change in Control on a fully-diluted basis (as
determined in good faith by the Committee as constituted before the Change in Control, if any part
of the offered price is payable other than in cash) or, in the case of a Change in Control
occurring solely by reason of a change in the composition of the Board, the highest Fair Market
Value of a share of Stock on any of the 30 trading days immediately preceding the date on which a
Change in Control occurs.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Committee” means the Compensation Committee of the Board or such other committee of
the Board as the Board shall from time to time designate to administer the Plan.

     “Company” means TreeHouse Foods, Inc., a Delaware corporation.

     “Consultant” means any person, including an advisor, engaged by an Employer to render
services to such Employer and who is not a Director or an Employee.

     “Designated Beneficiary” means the beneficiary designated by the Participant, in a
manner determined by the Committee, to receive amounts due the Participant in the event of the
Participant’s death. In the absence of an effective designation by the Participant, Designated
Beneficiary shall mean the Participant’s estate.

     “Director” means any individual who is a member of the Board or the board of directors
of an Affiliate of the Company.

3

 

     “Disability” means, unless another definition is incorporated into the applicable
Award Agreement, disability as specified under the long-term disability plan of the Company or an
Affiliate thereof that covers the Participant, or if there is no such long-term disability plan,
any other termination of a Participant’s Service under such circumstances that the Committee
determines to qualify as a Disability for purposes of this Plan; provided that if a
Participant is a party to an employment or individual severance agreement with an Employer that
defines the term “Disability” then, with respect to any Award made to such Participant,
“Disability” shall have the meaning set forth in such employment or severance agreement.

     “Effective Date” means the date on which the Plan is approved by the Board.

     “Employee” means any officer or employee employed by any Employer in a common-law
employee-employer relationship.

     “Employer” means the Company and any Affiliate thereof.

     “Executive Officer” means any “officer” within the meaning of Rule 16(a)-1(f)
promulgated under the Act or any “covered employee” within the meaning of Section 162(m)(3) of the
Code.

     “Fair Market Value” means the average of the highest and lowest sales prices of the
Stock reported for consolidated trading of issues listed on the New York Stock Exchange or NASDAQ
on the date in question, or, if the Stock shall not have been traded on such date, the average of
such highest and lowest sales prices on the first day prior thereto on which the Stock was so
traded. Notwithstanding the foregoing, the Committee may elect at the time of grant of any Award
to determine the Fair Market Value as of any date for purposes of such Award based on (i)
the average of the averages of the highest and lowest sales prices of the Stock reported for
consolidated trading of issues listed on the New York Stock Exchange or NASDAQ on each trading day
in a period (of not more than 30 trading days) specified by the Committee, (ii) the closing
price of the Stock reported for consolidated trading of issues listed on the New York Stock
Exchange or NASDAQ on the date in question, or (iii) any other reasonable method then
permitted by applicable law.

     “Incentive Stock Option” means a stock option granted under Section 7 of the Plan that
is designated as an Incentive Stock Option that is intended to meet the requirements of Section 422
of the Code.

     “Net Exercised” means the exercise of an Option or any portion thereof by the delivery
of the greatest number of whole shares of Stock having a Fair Market Value on the date of exercise
not in excess of the difference between the aggregate Fair Market Value of the shares of Stock
subject to the Option (or the portion of such Option then being exercised) and the aggregate
exercise price for all such shares of Stock under the

4

 

Option (or the portion thereof then being exercised), with any fractional share that would
result from such equation to be payable in cash.

     “New Employer” means, after a Change in Control, a Participant’s employer, or any
direct or indirect parent or any direct or indirect majority-owned subsidiary of such employer.

     “Non-statutory Stock Option” means a stock option granted under Section 7 of the Plan
that is not intended to be an Incentive Stock Option.

     “Option” means an Incentive Stock Option or a Non-statutory Stock Option.

     “Other Stock-Based Award” means an award of, or related to, shares of Stock other than
Options, Restricted Stock, Performance Shares, Restricted Stock Units or Performance Units, as
granted by the Committee in accordance with the provisions of Section 8 of the Plan.

     “Participant” means an Employee, Director or Consultant who is selected by the
Committee to receive an Award under the Plan.

     “Performance Criteria” means the objectives established by the Committee for a
Performance Period pursuant to Section 5(c) of the Plan for the purpose of determining the extent
to which an Award of Performance Shares or Performance Units has been earned.

     “Performance Period” means the period selected by the Committee during which
performance is measured for the purpose of determining the extent to which an Award of Performance
Shares or Performance Units has been earned.

     “Performance Share” means an Award granted pursuant to Section 5 of the Plan of a
contractual right to receive one share of Stock (or the Fair Market Value thereof in cash or any
combination of cash and Stock, as determined by the Committee), or a fraction or multiple thereof,
upon the achievement, in whole or in part, of the applicable Performance Criteria.

     “Performance Unit” means an Award granted pursuant to Section 5 of the Plan of a
contractual right to receive a fixed or variable dollar denominated unit (or a unit denominated in
the Participant’s local currency), or a fraction or multiple thereof, upon the achievement, in
whole or in part, of the applicable Performance Criteria. The Committee shall determine whether
the earned portion of any such Performance Units shall be payable in cash, Stock or any combination
thereof.

     “Qualifying Termination of Employment” means a termination of a Participant’s Service
with an Employer by reason of the Participant’s death, Disability or Retirement.

5

 

     “Restriction Period” means the period of time selected by the Committee during which
an Award of Restricted Stock and Restricted Stock Units, as the case may be, is subject to
forfeiture and/or restrictions on transfer pursuant to the terms of the Plan.

     “Restricted Stock” means shares of Stock contingently granted to a Participant under
Section 6 of the Plan.

     “Restricted Stock Unit” means a fixed or variable stock denominated unit contingently
awarded to a Participant under Section 6 of the Plan.

     “Retirement” means, unless another definition is incorporated into the applicable
Award Agreement, a termination of the Participant’s Service at or after the Participant’s normal
retirement age or earlier retirement date established under any qualified retirement plan
maintained by the Company; provided that if a Participant is a party to an
employment or individual severance agreement with an Employer that defines the term “Retirement”
then, with respect to any Award made to such Participant, “Retirement” shall have the meaning set
forth in such employment or severance agreement.

     “Service” means the provision of services to the Company or its Affiliates in the
capacity of (i) an Employee, (ii) a Director, or (iii) a Consultant.

     “Special Termination” means a termination of the Participant’s Service due to death or
Disability.

     “Stock” means the common stock of the Company, par value $0.01 per share.

     “Subsidiary” means any business entity in which the Company possesses directly or
indirectly fifty percent (50%) or more of the total combined voting power.

     (b)       Gender and Number. Except when otherwise indicated by the context, words in the
masculine gender used in the Plan shall include the feminine gender, the singular shall include the
plural, and the plural shall include the singular.

SECTION 3.  POWERS OF THE COMMITTEE

     (a)       Eligibility. Each Employee, Director or Consultant who, in the opinion of the
Committee, has the capacity to contribute to the successful performance of the Company is eligible
to be a Participant in the Plan.

     (b)       Power to Grant and Establish Terms of Awards. The Committee shall have the
discretionary authority, subject to the terms of the Plan, to determine which Employees, Directors
or Consultants to whom Awards shall be granted, the type or types of Awards to be granted, and the
terms and conditions of any and all Awards including, without limitation, the number of shares of
Stock subject to an Award, the time or times at which Awards shall be granted, and the terms and
conditions of applicable Award

6

 

Agreements. The Committee may establish different terms and conditions for different types of
Awards, for different Participants receiving the same type of Award, and for the same Participant
for each type of Award such Participant may receive, whether or not granted at the same or
different times.

     (c)       Administration. The Plan shall be administered by the Committee. The Committee
shall have sole and complete authority and discretion to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation of the Plan as it shall from
time to time deem advisable, and to interpret the terms and provisions of the Plan. The
Committee’s decisions (including any failure to make decisions) shall be binding upon all persons,
including the Company, shareholders, Employers, and each Employee, Director, Consultant,
Participant or Designated Beneficiary, and shall be given deference in any proceeding with respect
thereto.

     (d)       Delegation by the Committee. The Committee may delegate to the Company’s Chief
Executive Officer and/or to such other officer(s) of the Company the power and authority to make
and/or administer Awards under the Plan with respect to individuals who are below the position of
Senior Vice President (or any analogous title), pursuant to such conditions and limitations as the
Committee may establish; provided that only the Committee or the Board may select,
and grant Awards to, Executive Officers or exercise any other discretionary authority under the
Plan in respect of Awards granted to such Executive Officers. Unless the Committee shall otherwise
specify, any delegate shall have the authority and right to exercise (within the scope of such
person’s delegated authority) all of the same powers and discretion that would otherwise be
available to the Committee pursuant to the terms hereof. The Committee may also appoint agents
(who may be officers or employees of the Company) to assist in the administration of the Plan and
may grant authority to such persons to execute agreements, including Award Agreements, or other
documents on its behalf. All expenses incurred in the administration of the Plan, including,
without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the
Company.

     (e)       Restrictive Covenants and Other Conditions. Without limiting the generality of
the foregoing, the Committee may condition the grant of any Award under the Plan upon the
Participant to whom such Award would be granted agreeing in writing to certain conditions (such as
restrictions on the ability to transfer the underlying shares of Stock) or covenants in favor of
the Company and/or one or more Affiliates thereof (including, without limitation, covenants not to
compete, not to solicit employees and customers and not to disclose confidential information, that
may have effect following the termination of the Participant’s Service and after the Stock subject
to the Award has been transferred to the Participant), including, without limitation, the
requirement that the Participant disgorge any profit, gain or other benefit received in respect of
the Award prior to any breach of any such covenant.

7

 

     (f)       Participants Based Outside the United States. To conform with the provisions of
local laws and regulations, or with local compensation practices and policies, in foreign countries
in which the Company or any of its Subsidiaries or Affiliates operate, but subject to the
limitations set forth in Section 4 of the Plan regarding the maximum number of shares of Stock
issuable hereunder and the maximum Award to any single Participant, the Committee may (i)
modify the terms and conditions of Awards granted to Participants employed outside the United
States (“Non-US Awards”), (ii) establish, without amending the Plan, subplans with
modified exercise procedures and such other modifications as may be necessary or advisable under
the circumstances (“Subplans”), and (iii) take any action which it deems advisable
to obtain, comply with or otherwise reflect any necessary governmental regulatory procedures,
exemptions or approvals with respect to the Plan. The Committee’s decision to grant Non-US Awards
or to establish Subplans is entirely voluntary and at the complete discretion of the Committee.
The Committee may amend, modify or terminate any Subplans at any time, and such amendment,
modification or termination may be made without prior notice to the Participants. The Company,
Subsidiaries, Affiliates of any of the foregoing and members of the Committee shall not incur any
liability of any kind to any Participant as a result of any change, amendment or termination of any
Subplan at any time. The benefits and rights provided under any Subplan or by any Non-US Award
(i) are wholly discretionary and, although provided by either the Company, a Subsidiary or
Affiliate of any of the foregoing, do not constitute regular or periodic payments and (ii)
are not to be considered part of the Participant’s salary or compensation under the Participant’s
employment with the Participant’s local employer for purposes of calculating any severance,
resignation, redundancy or other end of service payments, vacation, bonuses, long-term service
awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights
of any kind. If a Subplan is terminated, the Committee may direct the payment of Non-US Awards (or
direct the deferral of payments whose amount shall be determined) prior to the dates on which
payments would otherwise have been made, and, in the Committee’s discretion, such payments may be
made in a lump sum or in installments.

SECTION 4.  MAXIMUM AMOUNT AVAILABLE FOR AWARDS

     (a)       Number. Subject in all cases to the provisions of this Section 4, the maximum
number of shares of Stock that are available for Awards shall be [insert number equal to sum of (i)
13% of the total number of shares of Stock outstanding immediately as of the effective date of the
spin-off of the Company to the shareholders of Dean Foods Company plus (ii) number of shares of
Stock issuable pursuant to any stock options granted by Dean Foods Company prior to the date
trading of Stock commences that are converted into the right to purchase Stock in connection with
the spin-off]. Notwithstanding the provisions of Section 4(b) of the Plan, the maximum number of
shares of Stock that may be issued in respect of Incentive Stock Options shall not exceed

8

 

3,000,000 shares. Shares of Stock may be made available from Stock held in treasury or
authorized but unissued shares of the Company not reserved for any other purpose.

     (b)       Canceled, Terminated, or Forfeited Awards, etc. Any shares of Stock subject to an
Award which for any reason expires without having been exercised, is canceled or terminated or
otherwise is settled without the issuance of any Stock shall again be available for grant under the
Plan. In applying the immediately preceding sentence, if (i) shares of Stock otherwise issuable or
issued in respect of, or as part of, any Award are withheld to cover taxes, such shares shall not
be treated as having been issued under the Plan and (ii) any Options are Net Exercised, only the
net number of shares of Stock issued in respect of such Options shall be deemed issued under the
Plan. In addition, shares of Stock tendered to exercise outstanding Options or other Awards or to
cover applicable taxes shall also be available for issuance under the Plan, except and unless such
shares are tendered more than ten years after the Effective Date.

     (c)       Individual Award Limitations. No Participant may be granted under the Plan in any
calendar year more than 1,500,000 shares of Restricted Stock, Restricted Stock Units, Performance
Shares and Performance Units. No Participant may be granted Options on more than 1,500,000 shares
of Stock under the Plan in any calendar year.

     (d)       Adjustment in Capitalization. In the event that the Committee shall determine
that any stock dividend, stock split, share combination, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Stock at a price substantially below Fair Market
Value, or other similar corporate event affects the Stock such that an adjustment is required in
order to preserve, or to prevent the enlargement of, the benefits or potential benefits intended to
be made available under this Plan, then the Committee shall, in its sole discretion, and in such
manner as the Committee may deem equitable, adjust any or all of (i) the number and kind of
shares which thereafter may be awarded or optioned and sold under the Plan, including, without
limitation, the individual limitations described in Section 4(c) above and any limits on the types
of Awards that may be made under the Plan, (ii) the number and kind of shares subject to
outstanding Options and other Awards, and (iii) the grant, exercise or conversion price
with respect to any Award. In addition, the Committee may, if deemed appropriate, make provision
for cash payment to a Participant or a person who has an outstanding Option or other Award. Unless
the Committee shall otherwise determine, following any such adjustment, the number of shares
subject to any Option or other Award shall always be a whole number.

SECTION 5.  PERFORMANCE SHARES AND PERFORMANCE UNITS

     (a)       Generally. The Committee shall have the authority to determine the Participants
who shall receive Performance Shares and Performance Units, the number of Performance Shares and
the number and value of Performance Units each Participant receives for each or any Performance
Period, and the Performance Criteria applicable in

9

 

respect of such Performance Shares and Performance Units for each Performance Period. The
Committee shall determine the duration of each Performance Period (which may differ from each
other), and there may be more than one Performance Period in existence at any one time as to any
Participant or all or any class of Participants. Each grant of Performance Shares and Performance
Units shall be evidenced by an Award Agreement that shall specify the number of Performance Shares
and the number and value of Performance Units awarded to the Participant, the Performance Criteria
applicable thereto, and such other terms and conditions not inconsistent with the Plan as the
Committee shall determine. No shares of Stock will be issued at the time an Award of Performance
Shares is made, and the Company shall not be required to set aside a fund for the payment of
Performance Shares or Performance Units.

     (b)       Earned Performance Shares and Performance Units. Performance Shares and
Performance Units shall become earned, in whole or in part, based upon the attainment of specified
Performance Criteria or the occurrence of any event or events, including a Change in Control, as
the Committee shall determine, either at or after the grant date. In addition to the achievement
of the specified Performance Criteria, the Committee may, at the grant date, condition payment of
Performance Shares and Performance Units on the Participant completing a minimum period of Service
following the grant date or on such other conditions as the Committee shall specify. The Committee
may provide, at the time of any grant of Performance Shares or Performance Units, that if
performance relative to the Performance Criteria exceeds targeted levels, the number of shares
issuable in respect of each Performance Share or the value payable in respect of each Performance
Unit shall be adjusted by such multiple (not in excess of 200%) as the Committee shall specify.

     (c)       Performance Criteria. At the discretion of the Committee, Performance Criteria
may be based on the total return to the Company’s shareholders, inclusive of dividends paid, during
the applicable Performance Period (determined either in absolute terms or relative to the
performance of one or more similarly situated companies or a published index covering the
performance of a number of companies), or upon the relative or comparative attainment of one or
more of the following criteria, whether in absolute terms or relative to the performance of one or
more similarly situated companies or a published index covering the performance of a number of
companies: stock price, operating earnings, net earnings, return on equity, income, market share,
combined ratio, level of expenses, growth in revenue, and, in the case of persons who are not
Executive Officers, such other criteria as may be determined by the Committee. Performance
Criteria may be established on a Company-wide basis or with respect to one or more business units
or divisions or Subsidiaries. When establishing Performance Criteria for a Performance Period, the
Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted
accounting principles including, without limitation, the charges or costs associated with
restructurings of the Company or any Subsidiary, discontinued operations, other unusual or
non-recurring items, and the

10

 

cumulative effects of accounting changes. Except in the case of Awards to Executive Officers
intended to be “other performance-based compensation” under Section 162(m)(4) of the Code, the
Committee may also adjust the Performance Criteria for any Performance Period as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax
laws or accounting principles, or such other factors as the Committee may determine.

     (d)      
Special Rule for Performance Criteria. If, at the time of grant, the Committee
intends an Award of Performance Shares or Performance Units to qualify as “other performance based
compensation” within the meaning of Section 162(m)(4) of the Code, the Committee must establish the
Performance Criteria for the applicable Performance Cycle no later than the 90th day
after the Performance Cycle begins (or by such other date as may be required under Section 162(m)
of the Code).

     (e)       Certification of Attainment of Performance Criteria. As soon as practicable after
the end of a Performance Cycle and prior to any payment in respect of such Performance Cycle, the
Committee shall certify in writing the number of Performance Shares and the number and value of
Performance Units that have been earned on the basis of performance in relation to the established
Performance Criteria.

     (f)       Payment of Awards. Earned Performance Shares and the value of earned Performance
Units shall be distributed to the Participant or, if the Participant has died, to the Participant’s
Designated Beneficiary, as soon as practicable after the expiration of the Performance Period and
the Committee’s certification under Section 5(e) above, provided that (i) earned
Performance Shares and the value of earned Performance Units shall not be distributed to a
Participant until any other conditions on payment of such Awards established by the Committee have
been satisfied, and (ii) any amounts payable in respect of Performance Shares or
Performance Units pursuant to Section 9 of the Plan shall be distributed in accordance with Section
9. The Committee shall determine whether Performance Shares and the value of earned Performance
Units are to be distributed in the form of cash, shares of Stock or in a combination thereof, with
the value or number of shares of Stock payable to be determined based on the Fair Market Value of
Stock on the date of the Committee’s certification under Section 5(e) above.

     (g)       Newly Eligible Participants. Notwithstanding anything in this Section 5 to the
contrary, the Committee shall be entitled to make such rules, determinations and adjustments as it
deems appropriate with respect to any Participant who becomes eligible to receive Performance
Shares or Performance Units after the commencement of a Performance Cycle.

     (h)       Termination of Service.

(i)  Qualifying Termination of Employment. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an

11

 

employment or individual severance agreement between a Participant and an Employer, a
Participant whose Service terminates by reason of a Qualifying Termination of Employment on
or after the first anniversary of the commencement of the relevant Performance Cycle (or
such other period as the Committee shall specify at the time of grant of the Performance
Shares or Performance Units) shall be entitled to a distribution of the same number of
Performance Shares and the value of Performance Units (without pro-ration) that would have
been payable for the Performance Cycle had his or her Service continued until the end of
the applicable Performance Cycle. Any Performance Shares or value of Performance Units
becoming payable in accordance with the preceding sentence shall be paid at the same time
as the Performance Shares and the value of Performance Units are paid to other Participants
(or at such earlier time as the Committee may permit). Any rights that a Participant or
Designated Beneficiary may have in respect of any Performance Shares or Performance Units
outstanding at the date of the Qualifying Termination of Employment that are not available
to be earned or that are not earned in accordance with this Section 5(h)(i) shall be
forfeited and canceled, effective as of the date of the Participant’s termination of
Service.

(ii)  Termination for any Other Reason. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or individual
severance agreement between a Participant and an Employer, if a Participant’s Service is
terminated for any reason other than a Qualifying Termination of Employment during a
Performance Cycle, all of the Participant’s rights to Performance Shares and Performance
Units related to such Performance Cycle shall be immediately forfeited and canceled as of
the date of such termination of Service. Notwithstanding the immediately preceding
sentence, a Participant’s rights in respect of unearned Performance Shares and Performance
Units shall in all events be immediately forfeited and canceled as of the date of the
Participant’s termination of Service for Cause.

(iii)  Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 5(h), Section 9 of the Plan shall determine the
treatment of Performance Shares and Performance Units upon a Change in Control, including
the treatment of such Awards granted to any Participant whose Service is involuntarily
terminated by an Employer other than for Cause or whose Service is terminated due to a
Special Termination, in either case, on or after the date on which the shareholders of the
Company approve the transaction giving rise to the Change in Control, but prior to the
consummation thereof.

12

 

SECTION 6.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     (a)       Grant. Restricted Stock and Restricted Stock Units may be granted to Participants
at such time or times as shall be determined by the Committee. The grant date of any Restricted
Stock or Restricted Stock Units under the Plan will be the date on which such Restricted Stock or
Restricted Stock Units are awarded by the Committee, or such other date as the Committee shall
determine. Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement
that shall specify (i) the number of shares of Restricted Stock and the number of
Restricted Stock Units granted to each Participant, (ii) the Restriction Period(s)
applicable thereto and (iii) such other terms and conditions not inconsistent with the Plan
as the Committee shall determine, including customary representations, warranties and covenants
with respect to securities law matters. Awards of Restricted Stock Units shall be evidenced by a
bookkeeping entry in the Company’s records (or by such other reasonable method as the Company shall
determine from time to time).

     (b)       Vesting. Restricted Stock and Restricted Stock Units granted to Participants
under the Plan shall be subject to a Restriction Period. Except as otherwise determined by the
Committee at or after the grant date, and subject to the Participant’s continued employment with
his or her Employer on such date, the Restriction Period shall lapse upon the third anniversary of
the grant date. The Committee may provide that the Restriction Period on Restricted Stock or
Restricted Stock Units shall lapse, in whole or in part, upon the achievement of performance
criteria (and without regard to the minimum service requirement), which criteria shall be selected
from those available to the Committee under Section 5(c) of the Plan, provided that any
Award of Restricted Stock made to any Executive Officer that is intended to qualify as “other
performance based compensation” under Section 162(m) of the Code shall be subject to the same
restrictions and limitations applicable to Awards of Performance Shares under Section 5(d) of the
Plan and subject to the certification required under Section 5(e) of the Plan. The Restriction
Period shall also lapse, in whole or in part, upon the occurrence of any event or events, including
a Change in Control, specified in the Plan, or specified by the Committee, in its discretion,
either at or after the grant date of the applicable Award.

     (c)       Dividend Equivalents. The Committee shall determine whether and to what extent
dividends payable on Stock will be credited, or paid currently, to a Participant in respect of an
Award of Restricted Stock Units. Unless otherwise determined by the Committee at or after the
grant date, a Participant holding Restricted Stock Units shall not be entitled to exercise any
voting rights and any other rights as a shareholder with respect to shares of Stock underlying such
Award.

     (d)       Settlement of Restricted Stock and Restricted Stock Units. At the expiration of
the Restriction Period for any Restricted Stock, the Company shall remove the restrictions
applicable to the Restricted Stock, and shall, upon request, deliver the stock certificates
evidencing such Restricted Stock to the Participant or the Participant’s

13

 

legal representative (or otherwise evidence the issuance of such shares free of any
restrictions imposed under the Plan). At the expiration of the Restriction Period for any
Restricted Stock Units, for each such Restricted Stock Unit, the Participant shall receive, in the
Committee’s discretion, (i) a cash payment equal to the Fair Market Value of one share of
Stock as of such payment date, (ii) one share of Stock or (iii) any combination of cash and
shares of Stock having an aggregate value equal to the Fair Market Value of one share of Stock.

     (e)       Restrictions on Transfer. Except as provided herein or in an Award Agreement,
shares of Restricted Stock and Restricted Stock Units may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Restriction Period. Any such attempt by the Participant
to sell, assign, transfer, pledge or encumber shares of Restricted Stock and Restricted Stock Units
without complying with the provisions of the Plan shall be void and of no effect.

     (f)       Termination of Service.

(i)  Qualifying Termination of Employment. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or individual
severance agreement between a Participant and an Employer, if a Participant’s Service
terminates by reason of a Qualifying Termination of Employment during the Restriction
Period, a pro rata portion of any Stock related to Restricted Stock or a Restricted Stock
Unit held by such Participant shall become nonforfeitable at the date of such termination,
based on the number of full calendar months of such Participant’s Service relative to the
number of full calendar months in the relevant Restriction Period.

(ii)  Termination for any Other Reason. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or individual
severance agreement between a Participant and an Employer, if a Participant’s Service
terminates for any reason other than a Qualifying Termination of Employment during the
Restriction Period, any Restricted Stock or Restricted Stock Units held by such Participant
shall be forfeited and cancelled as of the date of such termination of Service.
Notwithstanding the immediately preceding sentence, a Participant’s rights in respect of
unvested Restricted Stock or Restricted Stock Units shall in all events be immediately
forfeited and canceled as of the date of the Participant’s termination of Service for
Cause.

(iii)  Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 6(f), Section 9 of the Plan shall determine the
treatment of Restricted Stock and Restricted Stock Units upon a Change in Control,
including the treatment of such Awards granted to any Participant whose Service is
involuntarily terminated by an Employer other than for Cause or whose Service is terminated
due to a Special Termination, in either

14

 

case, on or after the date on which the shareholders of the Company approve the
transaction giving rise to the Change in Control, but prior to the consummation thereof.

SECTION 7.  STOCK OPTIONS

     (a)       Grant. Options may be granted to Participants at such time or times as shall be
determined by the Committee. The Committee shall have the authority to grant Incentive Stock
Options or Non-statutory Stock Options. The grant date of an Option under the Plan will be the
date on which the Option is awarded by the Committee, or such other date as the Committee shall
determine in its sole discretion. Each Option shall be evidenced by an Award Agreement that shall
specify the type of Option granted, the exercise price, the duration of the Option, the number of
shares of Stock to which the Option pertains, the conditions upon which the Option or any portion
thereof shall become vested or exercisable and such other terms and conditions not inconsistent
with the Plan as the Committee shall determine, including customary representations, warranties and
covenants with respect to securities law matters. For the avoidance of doubt, Incentive Stock
Options may only be granted to Employees.

     (b)       Exercise Price. The Committee shall establish the exercise price at the time each
Option is granted, which price shall not be less than 100% of the Fair Market Value of the Stock on
the grant date. Notwithstanding the foregoing, if an Incentive Stock Option is granted to an
Employee who, at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Affiliate thereof, the exercise price
shall be at least 110% of the Fair Market Value of the Stock on the grant date.

     (c)       Vesting and Exercisability. Except as otherwise determined by the Committee at or
after the grant date, and subject to the Participant’s continued employment with his or her
Employer on such date, each Option awarded to a Participant under the Plan shall become vested and
exercisable in three approximately equal installments on each of the first three anniversaries of
the grant date. Options may also become exercisable, in whole or in part, upon the occurrence of
any event or events, including a Change in Control, specified in the Plan, or specified by the
Committee, in its discretion, either at or after the grant date of the applicable Option. In its
discretion, the Committee may also establish performance conditions with respect to the
exercisability of any Option during a performance period selected by the Committee. No Option
shall be exercisable on or after the tenth anniversary of its grant date (the fifth anniversary of
the grant date for an Incentive Stock Option granted to an Employee who, at the time of grant,
owns stock possessing more than 10% of the total combined voting power of all classes of stock of
the Company or any Affiliate thereof). The Committee may impose such conditions with respect to
the exercise of Options, including without limitation, any relating to the application of federal
or state securities laws, as it may deem necessary or advisable.

15

 

     (d)       Payment. No Stock shall be delivered pursuant to any exercise of an Option until
payment in full of the exercise price therefore is received by the Company. Such payment may be
made in cash or its equivalent or, if permitted by the Committee, (i) by exchanging shares
of Stock owned by the Participant for at least six months (or for such greater or lesser period as
the Committee may determine from time to time) and which are not the subject of any pledge or other
security interest, (ii) through an arrangement with a broker approved by the Company
whereby payment of the exercise price is accomplished with the proceeds of the sale of Stock or
(iii) by a combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Stock so tendered to the Company, valued as
of the date of such tender, is at least equal to such exercise price of the portion of the Option
being exercised. Additionally, to the extent authorized by the Committee (whether at or after the
grant date), Options may be Net Exercised subject to such terms and conditions as the Committee may
from time to time impose. The Company may not make a loan to a Participant to facilitate such
Participant’s exercise of any of his or her Options or payment of taxes.

     (e)       Incentive Stock Option Status. Notwithstanding anything in this Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to
disqualify the Plan under Section 422 of the Code.

     (f)       Termination of Service.

(i)  Special Termination. Unless otherwise determined by the Committee at or
after the grant date, or except as provided in an employment or individual severance
agreement between a Participant and an Employer, if the Participant’s Service is terminated
due to a Special Termination, then all Options held by the Participant on the effective
date of such Special Termination shall vest and become exercisable and shall remain
exercisable until the first to occur of (A) the second anniversary of the effective date of
such Special Termination (or, for Incentive Stock Options, the first anniversary of such
Special Termination) or (B) the expiration date of the Option.

(ii)  Termination for any Other Reason. Except as provided in an employment or
individual severance agreement between a Participant and an Employer, (A) if the
Participant’s Service is voluntarily or involuntarily terminated for any reason other than
a Special Termination prior to the expiration date of the Option, any Options that have not
become vested and exercisable on or before the effective date of such termination shall
terminate on such effective date, and (B) if the Participant’s Service is terminated for
any reason other than a Special Termination or for Cause, any vested and exercisable
Options then held by the Participant shall remain exercisable for a period of 90 days
following the effective date of such termination of Service.

16

 

(iii)  Termination
for Cause. Notwithstanding anything to the contrary in this
Section 7(f), if the Participant’s Service is terminated for Cause, then all Options
(whether or not then vested or exercisable) shall terminate and be canceled immediately
upon such termination, regardless of whether then vested or exercisable.

(iv)  Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 7(f), Section 9 of the Plan shall determine the
treatment of Options upon a Change in Control, including the treatment of Options granted
to any Participant whose Service is involuntarily terminated by an Employer other than for
Cause or whose Service is terminated due to a Special Termination, in either case, on or
after the date on which the shareholders of the Company approve the transaction giving rise
to the Change in Control, but prior to the consummation thereof.

SECTION 8.

OTHER STOCK-BASED AWARDS

     (a)       Other Stock Based Awards. The Committee may grant Other Stock-Based Awards,
including, but not limited to, the outright grant of Stock in satisfaction of obligations of the
Company or any Affiliate thereof under another compensatory plan, program or arrangement, modified
Awards intended to comply with or structured in accordance with the provisions of applicable
non-U.S. law or practice, or the sale of Stock, in such amounts and subject to such terms and
conditions as the Committee shall determine, including, but not limited to, the satisfaction of
Performance Criteria. Each Other-Stock Based Award shall be evidenced by an Award Agreement that
shall specify the terms and conditions applicable thereto. Any Other Stock-Based Award may entail
the transfer of actual shares of Stock or the payment of the value of such Award in cash based upon
the value of a specified number of shares of Stock, or any combination of the foregoing, as
determined by the Committee. The terms of any Other Stock-Based Award need not be uniform in
application to all (or any class of) Participants, and each Other Stock-Based Award granted to any
Participant (whether or not at the same time) may have different terms.

     (b)      
Termination of Service. In addition to any other terms and conditions that may be
specified by the Committee, each Other Stock-Based Award shall specify the impact of a termination
of Service upon the rights of a Participant in respect of such Award. At the discretion of the
Committee, such conditions may be the same as apply with respect to Restricted Stock or Restricted
Stock Units, or may contain terms that are more or less favorable to the Participant.

SECTION 9.  CHANGE IN CONTROL

     (a)       Accelerated Vesting and Payment.

17

 

(i)  In General. Except as provided in an employment or individual severance
agreement between a Participant and an Employer, upon a Change in Control (i) all
outstanding Options shall become vested and exercisable immediately and (ii) the
Restriction Period on all outstanding Restricted Stock and Restricted Stock Units shall
lapse immediately. Additionally, the Committee (as constituted prior to the Change in
Control) may provide that in connection with the Change in Control (i) each Option
shall be cancelled in exchange for an amount (payable in accordance with Section 9(a)(iii)
below) equal to the excess, if any, of the Change in Control Price over the exercise price
for such Option and (ii) each share of Restricted Stock and each Restricted Stock
Unit shall be cancelled in exchange for an amount (payable in accordance with Section
9(a)(iii) below) equal to the Change in Control Price, multiplied by the number of shares
of Stock covered by such Award.

(ii)  Performance Shares and Performance Units. In the event of a Change in
Control, (i) each outstanding Performance Share shall be cancelled in exchange for
a payment equal to the payment that would have been payable had each such Performance Share
been deemed equal to 100% (or such greater or lesser percentage as the Committee shall
specify at the grant date or such greater percentage as the Committee shall specify after
the grant date) of the amount earned upon full achievement of applicable Performance
Criteria and (ii) each outstanding Performance Unit shall be cancelled in exchange
for a payment equal to the value that would have been payable had each such Performance
Unit been deemed equal to 100% (or such greater or lesser percentage as the Committee shall
specify at the grant date or such greater percentage as the Committee shall specify after
the grant date) of its initially established dollar or local currency denominated value.

(iii)  Payments. Payment of any amounts calculated in accordance with Sections
9(a)(i) and (ii) shall be made in cash or, if determined by the Committee (as constituted
prior to the Change in Control), in shares of the stock of the New Employer having an
aggregate fair market value equal to such amount or in a combination of such shares of
stock and cash. All amounts payable hereunder shall be payable in full, as soon as
reasonably practicable, but in no event later than 10 business days, following the Change
in Control. For purposes hereof, the fair market value of one share of stock of the New
Employer shall be determined by the Committee (as constituted prior to the consummation of
the transaction constituting the Change in Control), in good faith.

     (b)       Termination of Service Prior to Change in Control. In the event that any Change
in Control occurs as a result of any transaction described in clause (iii) or (iv) of the
definition of such term, any Participant whose Service is involuntarily terminated by an Employer
other than for Cause or is terminated due to a Special Termination, in either

18

 

case, on or after the date on which the shareholders of the Company approve the transaction
giving rise to the Change in Control, but prior to the consummation thereof, shall be treated,
solely for purposes of this Plan (including, without limitation, this Section 9), as continuing in
Service until the occurrence of such Change in Control, and to have been terminated immediately
thereafter.

SECTION 10.  EFFECTIVE DATE, AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN OR AWARDS

     The Plan shall be effective on the Effective Date, and shall continue in effect, unless sooner
terminated pursuant to this Section 10, until the 10th anniversary of the Effective
Date. The Board may at any time in its sole discretion, for any reason whatsoever, terminate or
suspend the Plan, and from time to time may amend or modify the Plan; provided that without the
approval by a majority of the votes cast at a duly constituted meeting of shareholders of the
Company, no amendment or modification to the Plan may (i) materially increase the benefits
accruing to Participants under the Plan, (ii) except as otherwise expressly provided in
Section 4(d) of the Plan, materially increase the number of shares of Stock subject to the Plan or
the individual Award limitations specified in Section 4(c) of the Plan, (iii) materially
modify the requirements for participation in the Plan or (iv) materially modify the Plan in any
other way that would require shareholder approval under any regulatory requirement that the
Committee determines to be applicable. In the event that the Committee shall determine that such
action would, taking into account such factors as it deems relevant, be beneficial to the Company,
the Committee may affirmatively act to amend, modify or terminate any outstanding Award at any time
prior to payment or exercise in any manner not inconsistent with the terms of the Plan, including
without limitation, to change the date or dates as of which (A) an Option becomes
exercisable, (B) a Performance Share or Performance Unit is deemed earned, or (C)
Restricted Stock and Restricted Stock Units becomes nonforfeitable, except that no outstanding
Option may be amended or otherwise modified or exchanged (other than in connection with a
transaction described in Section 4(d) of the Plan) in a manner that would have the effect of
reducing its original exercise price or otherwise constitute repricing. Any such action by the
Committee shall be subject to the Participant’s consent if the Committee determines that such
action would adversely affect in any material way the Participant’s rights under such Award,
whether in whole or it part. No amendment, modification, or termination of the Plan or any Award
shall adversely affect in any material way any Award theretofore granted under the Plan, without
the consent of the Participant.

SECTION 11.  GENERAL PROVISIONS

     (a)       Withholding. The Employer shall have the right to deduct from all amounts paid to
a Participant in cash (whether under this Plan or otherwise) any amount required by law to be
withheld in respect of Awards under this Plan as may be necessary in the opinion of the Employer to
satisfy any applicable tax withholding requirements

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under the laws of any country, state, province, city or other jurisdiction, including but not
limited to income taxes, capital gains taxes, transfer taxes, and social security contributions
that are required by law to be withheld. In the case of payments of Awards in the form of Stock,
at the Committee’s discretion, the Participant shall be required to either pay to the Employer the
amount of any taxes required to be withheld with respect to such Stock or, in lieu thereof, the
Employer shall have the right to retain (or the Participant may be offered the opportunity to elect
to tender) the number of shares of Stock whose Fair Market Value equals such amount required to be
withheld.

     (b)       Nontransferability of Awards. No Award shall be assignable or transferable except
by will or the laws of descent and distribution; provided that the Committee may permit (on such
terms and conditions as it shall establish) a Participant to transfer an Award for no consideration
to the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the
Participant’s household (other than a tenant or employee), a trust in which these persons have all
of the beneficial interest and any other entity in which these persons (or the Participant) own all
of the voting interests (“Permitted Transferees”). Except to the extent required by law,
no right or interest of any Participant shall be subject to any lien, obligation or liability of
the Participant. All rights with respect to Awards granted to a Participant under the Plan shall
be exercisable during the Participant’s lifetime only by such Participant or, if applicable, his or
her Permitted Transferee(s). The rights of a Permitted Transferee shall be limited to the rights
conveyed to such Permitted Transferee, who shall be subject to and bound by the terms of the
agreement or agreements between the Participant and the Company.

     (c)       No Limitation on Compensation. Nothing in the Plan shall be construed to limit
the right of the Company to establish other plans or to pay compensation, in cash or property, in a
manner which is not expressly authorized under the Plan.

     (d)       No Right to Employment. No person shall have any claim or right to be granted an
Award, and the grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Employer. The grant of an Award hereunder, and any future grant of
Awards under the Plan is entirely voluntary, and at the complete discretion of the Company.
Neither the grant of an Award nor any future grant of Awards by the Company shall be deemed to
create any obligation to grant any further Awards, whether or not such a reservation is explicitly
stated at the time of such a grant. The Plan shall not be deemed to constitute, and shall not be
construed by the Participant to constitute, part of the terms and conditions of employment and
participation in the Plan shall not be deemed to constitute, and shall not be deemed by the
Participant to constitute, an employment or labor relationship of any kind with an Employer. Each
Employer expressly reserves the right at any time to dismiss a Participant free from any

20

 

liability, or any claim under the Plan, except as provided herein and in any agreement entered
into with respect to an Award. The Company expressly reserves the right to require, as a condition
of participation in the Plan, that Award recipients agree and acknowledge the above in writing.
Further, the Company expressly reserves the right to require Award recipients, as a condition of
participation, to consent in writing to the collection, transfer from the Employer to the Company
and third parties, storage and use of personal data for purposes of administering the Plan.

     (e)       No Rights as Shareholder. Subject to the provisions of the applicable Award
contained in the Plan and in the Award Agreement, no Participant, Permitted Transferee or
Designated Beneficiary shall have any rights as a shareholder with respect to any shares of Stock
to be distributed under the Plan until he or she has become the holder thereof.

     (f)       Construction of the Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of Illinois (without
reference to the principles of conflicts of law).

     (g)       Compliance with Legal and Exchange Requirements. The Plan, the granting and
exercising of Awards thereunder, and any obligations of the Company under the Plan, shall be
subject to all applicable federal, state, and foreign country laws, rules, and regulations, and to
such approvals by any regulatory or governmental agency as may be required, and to any rules or
regulations of any exchange on which the Stock is listed. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of Stock under any Award
or any other action permitted under the Plan to permit the Company, with reasonable diligence, to
complete such stock exchange listing or registration or qualification of such Stock or other
required action under any federal, state or foreign country law, rule, or regulation and may
require any Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in compliance with
applicable laws, rules, and regulations. The Company shall not be obligated by virtue of any
provision of the Plan to recognize the exercise of any Award or to otherwise sell or issue Stock in
violation of any such laws, rules, or regulations, and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such Awards. Neither the
Company nor its directors or officers shall have any obligation or liability to a Participant with
respect to any Award (or Stock issuable thereunder) that shall lapse because of such postponement.

     (h)       Indemnification. Each person who is or shall have been a member of the Committee
and each delegate of such Committee shall be indemnified and held harmless by the Company against
and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim, action, suit, or proceeding to which he
or she may be made a party or in which

21

 

he or she may be involved in by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him or her in settlement thereof, with the
Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit,
or proceeding against him or her, provided that the Company is given an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and defend it
personally. The foregoing right of indemnification shall not be exclusive and shall be independent
of any other rights of indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or By-laws, by contract, as a matter of law, or otherwise.

     (i)      
Section 409A. Subject
to the requirements of Section 409A of the Code, the Committee
may postpone the exercising of Awards, the issuance or delivery of Stock under, or the payment of
cash in respect of, any Award or any action permitted under the Plan, upon such terms and
conditions as the Committee may establish from time to time. Subject to the requirements of
Section 409A of the Code, a Participant may electively defer receipt of the shares of Stock or cash
otherwise payable in respect of any Award (including, without limitation, any shares of Stock
issuable upon the exercise of an Option other than an Incentive Stock Option) upon such terms and
conditions as the Committee may establish from time to time.
Notwithstanding anything to the contrary contained in the Plan, to
the extent that any term or condition of the Plan would cause an
Award to be subject to Section 409A(a)(1) of the Code (absent
application of this Section 11(i)), it is hereby superseded and
modified to the extent necessary so as not to be subject to Section
409A(a)(1) of the Code (such modification to have the minimum
economic effect necessary and to be determined in good faith by the
Committee).

     (j)       No Impact On Benefits.
Except as may otherwise be specifically stated under any
employee benefit plan, policy or program, no amount payable in respect of any Award shall be
treated as compensation for purposes of calculating a Participant’s right under any such plan,
policy or program.

     (k)       No Constraint on Corporate Action. Nothing in this Plan shall be construed
(i) to limit, impair or otherwise affect the Company’s right or power to make adjustments,
reclassifications, reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets or
(ii) to limit the right or power of the Company, or any Subsidiary, to take any action which such
entity deems to be necessary or appropriate.

     (l)       Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Plan, and shall not be
employed in the construction of this Plan.

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