Document:

Exhibit 4.1

Exhibit 4.1

POLYMEDIX, INC.

and

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

Rights Agent

Rights Agreement

Dated As Of May 12, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section 1. Certain Definitions
	 	 	1	 
	Section 2. Appointment of Rights Agent
	 	 	8	 
	Section 3. Issuance of Rights Certificates
	 	 	8	 
	(a) Distribution Date; Rights Certificates
	 	 	8	 
	(b) Common Stock Certificates; Summary of Rights
	 	 	9	 
	(c) Legend
	 	 	9	 
	Section 4. Form of Rights Certificates
	 	 	11	 
	(a) Form; Date
	 	 	11	 
	(b) Acquiring Person Legend
	 	 	11	 
	Section 5. Countersignature and Registration
	 	 	12	 
	(a) Signatures
	 	 	12	 
	(b) Registration and Transfer
	 	 	12	 
	Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
	 	 	12	 
	(a) Procedure
	 	 	12	 
	(b) Issuance of New Rights Certificates
	 	 	13	 
	Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	13	 
	(a) Exercise
	 	 	13	 
	(b) Purchase Price
	 	 	14	 
	(c) Rights Agent Actions
	 	 	14	 
	(d) Partial Exercise
	 	 	14	 
	(e) Termination of Acquiring Person’s Rights
	 	 	14	 
	(f) Surrender of Rights Certificates; Identity of Beneficial Owner
	 	 	15	 
	Section 8. Cancellation and Destruction of Rights Certificates
	 	 	15	 
	Section 9. Reservation and Availability of Capital Stock
	 	 	15	 
	(a) Reservation of Capital Stock
	 	 	15	 
	(b) Listing
	 	 	15	 
	(c) Registration under the Act
	 	 	16	 
	(d) Covenant Regarding Capital Stock
	 	 	16	 
	(e) Transfer Taxes and Charges
	 	 	16	 
	Section 10. Preferred Stock Record Date
	 	 	17	 
	Section 11. Adjustment of Purchase Price;
	 	 	17	 
	(a) Certain Adjustments
	 	 	17	 
	(b) Purchase Price Adjustment — Capital Stock
	 	 	21	 
	(c) Purchase Price Adjustment — Cash, Assets, etc.
	 	 	21	 
	(d) Current Market Price
	 	 	22	 
	(e) Purchase Price Adjustment Threshold
	 	 	23	 
	(f) Equivalent Adjustments
	 	 	23	 
	(g) Post-Adjustment Rights Issuances
	 	 	23	 
	(h) Preferred Stock Anti-Dilution
	 	 	24	 
	(i) Adjustment of Number of Rights
	 	 	24	 
	(j) Rights Certificates
	 	 	24	 
	(k) Adjustment Below Par Value
	 	 	25	 
	(l) Adjustment Effective as of Future Date; Exercise
	 	 	25	 
	(m) Tax Adjustments
	 	 	25	 

 

 

 

	 	 	 	 	 
	(n) Restriction on Certain Transactions
	 	 	25	 
	(o) Restriction Against Diminishing Benefits of the Rights
	 	 	26	 
	(p) Common Stock Adjustments
	 	 	26	 
	Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	26	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	27	 
	(a) Flip-over Event
	 	 	27	 
	(b) Principal Party
	 	 	28	 
	(c) Supplemental Agreement
	 	 	28	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	30	 
	(a) Fractional Rights
	 	 	30	 
	(b) Fractional Shares of Preferred Stock
	 	 	30	 
	(c) Fractional Shares of Common Stock
	 	 	30	 
	(d) Waiver of Fractional Rights and Shares
	 	 	31	 
	Section 15. Rights of Action
	 	 	31	 
	Section 16. Agreement of Rights Holders
	 	 	31	 
	Section 17. Rights Certificate Holder Not Deemed a Stockholder
	 	 	32	 
	Section 18. Concerning the Rights Agent
	 	 	32	 
	(a) Compensation
	 	 	32	 
	(b) Reliance
	 	 	32	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	33	 
	(a) Successor
	 	 	33	 
	(b) Prior Countersignatures
	 	 	33	 
	Section 20. Duties of Rights Agent
	 	 	33	 
	(a) Legal Counsel
	 	 	33	 
	(b) Certification by the Company
	 	 	33	 
	(c) Liability for Negligence, etc.
	 	 	33	 
	(d) Statements of Fact or Recitals
	 	 	34	 
	(e) Agreement; Adjustments
	 	 	34	 
	(f) Further Assurances
	 	 	34	 
	(g) Instructions
	 	 	34	 
	(h) Dealing in Rights
	 	 	34	 
	(i) Agents; Reasonable Care
	 	 	34	 
	(j) Expenses; Repayment Assurances
	 	 	35	 
	(k) Exercise of Rights; Consultation with Company
	 	 	35	 
	Section 21. Change of Rights Agent
	 	 	35	 
	Section 22. Issuance of New Rights Certificates
	 	 	36	 
	Section 23. Redemption and Termination
	 	 	36	 
	(a) Redemption
	 	 	36	 
	(b) Effect of Redemption; Procedure
	 	 	36	 
	Section 24. Exchange
	 	 	37	 
	(a) Right to Exchange
	 	 	37	 
	(b) Effect of Exchange; Procedure
	 	 	37	 
	(c) Common Stock Equivalents
	 	 	37	 
	(d) Insufficient Common Stock
	 	 	38	 
	(e) Fractional Shares
	 	 	38	 

 

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	Section 25. Notice of Certain Events
	 	 	38	 
	(a) Preferred Stock Transactions, etc.
	 	 	38	 
	(b) Other Transactions
	 	 	39	 
	Section 26. Notices
	 	 	39	 
	Section 27. Supplements and Amendments
	 	 	40	 
	Section 28. Successors
	 	 	40	 
	Section 29. Determinations and Actions by the Board of Directors, etc.
	 	 	41	 
	Section 30. Benefits of this Agreement
	 	 	41	 
	Section 31. Severability
	 	 	41	 
	Section 32. Governing Law
	 	 	41	 
	Section 33. Counterparts
	 	 	41	 
	Section 34. Descriptive Headings
	 	 	41	 

 

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RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated as of May 12, 2009, between POLYMEDIX, INC., a Delaware corporation
(the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability
trust company (the “Rights Agent”).

RECITALS

Effective May 12, 2009 (the “Rights Dividend Declaration Date”), the Board of Directors of the
Company (i) authorized and declared a dividend distribution of one preferred share purchase right
(a “Right”) for each share of Common Stock (as hereinafter defined) of the Company outstanding at
the close of business on May 26, 2009 (the “Record Date”), each Right initially representing the
right to purchase one one-thousandth of a share of Series C Preferred Stock, par value $0.001 per
share, of the Company having the rights, powers and preferences set forth in the Certificate of
Designation, Preferences and Rights of Series C Preferred Stock attached hereto as Exhibit 1, upon
the terms and subject to the conditions hereinafter set forth, and (ii) further authorized the
issuance of one Right (as such number may be hereafter adjusted as provided herein) for each share
of Common Stock of the Company issued between the Record Date (whether originally issued or
delivered from the Company’s treasury) and the Distribution Date;

AGREEMENT

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

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

(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates of such Person, 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 (i) an Exempt Person (as such term is hereinafter defined), or
(ii) any Person who becomes an Acquiring Person solely as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company,
unless and until such Person shall purchase or otherwise become (as a result of actions taken by
such Person or its Affiliates or Associates) the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common Stock.  Notwithstanding the
foregoing, if (x) the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently (including, without limitation, because (1) 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 (2) 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, and (y) within ten (10) Business Days of being

 

 

 

requested by the Company to advise it
regarding the same, such Person certifies to the Company that such Person acquired and/or otherwise beneficially owned shares
of Common Stock in excess of 14.99% inadvertently or without knowledge of the terms of the Rights
and who, together with all Affiliates and Associates, thereafter does not acquire or otherwise
beneficially own additional shares of Common Stock and within ten (10) Business Days of being
requested by the Company to do so disposes of the portion of such shares of Common Stock or, in the
case of any Synthetic Long Position (as hereinafter defined) underlying a transaction entered into
by such Person or otherwise acquired by such Person or any of such Person’s Affiliates or
Associates, such Person disposes of the portion of such Synthetic Long Position, in either case
which results in such Person’s beneficial ownership not to exceed 14.99%, then such Person shall
not be deemed to be or to have become an Acquiring Person for any purposes of this Agreement;
provided, however, that if the Person requested to so certify fails to do so within
ten (10) Business Days of the Company’s request or such Person fails to dispose of such shares of
Common Stock and/or such Synthetic Long Position in excess of 14.99% within ten (10) Business Days
of the Company’s request, then such Person shall become an Acquiring Person immediately after such
ten (10) Business Day period.  The phrase “then outstanding,” when used with reference to a
Person’s Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

(b) “Act” shall mean the Securities Act of 1933, as amended and in effect from time to time.

(c) “Adjustment Shares” shall have the meaning set forth in Section 11. (a)(ii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Certain Adjustments)

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

(e) “Agreement” shall mean this Rights Agreement as originally executed or as it may from time
to time be supplemented or amended pursuant to the applicable provisions hereof.

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

(i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or understanding (whether
or not in writing, but 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, for
purposes of this paragraph (i), be deemed the “Beneficial Owner” of or to “beneficially
own,” (A) securities tendered pursuant to a tender or exchange offer made by such Person or
any of such Person’s Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3. (a)(Issuance of Rights
Certificates — Distribution Date; Rights Certificates) or Section 22.
(Issuance of New Rights Certificates) (the “Original Rights”) or pursuant to Section
11. (i) (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights
— Adjustment of Number of Rights) in connection with an adjustment made with respect
to any Original Rights;

 

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(ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or understanding, whether or not in
writing other than a Synthetic Long Position; provided, however, that a
Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security
under this subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such Person on a Schedule 13D
under the Exchange Act (or any comparable or successor report);

(iii) which are “beneficially owned,” directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in
writing, but other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to subparagraph (ii) of this paragraph (f)) or disposing of any voting
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 Section 1(f)), including, without limitation, in a fiduciary capacity, by an
Exempt Person or by any other such officer, director, or employee of an Exempt Person;

(iv) in respect to which such Person or any such Person’s Affiliates or Associates has
a Synthetic Long Position; provided, however, that a Person will not be deemed the
Beneficial Owner of, or to beneficially own, any security if such beneficial ownership
arises solely as a result of such Person’s status as a “clearing agency” as defined in
Section 3(a)(23) of the Exchange Act;

provided, however, that nothing in this Section 1.(f) will cause a Person engaged
in business as an underwriter of securities to be the “Beneficial Owner” of or to “beneficially
own,” any securities acquired through such Person’s participation in good faith in a firm
commitment underwriting until the expiration of forty (40) calendar days after the date of such
acquisition, or such later date as the Board of Directors of the Company may determine in any
specific case.

 

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(g) “Board” means the Board of Directors of the Company.

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

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

(j) “Common Stock” shall mean the common stock, par value $0.001 per share, of the Company,
except that “Common Stock” when used with reference to any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such Person.

(k) “Common Stock Equivalents” shall have the meaning set forth in Section 11. (a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).

(l) “Company” shall mean the Person named as the “Company” in the first paragraph of this
Agreement until a successor corporation shall have become such, or until a Principal Party shall
assume, and thereafter be liable for, all obligations and duties of the Company hereunder, pursuant
to the applicable provisions of this Agreement, and thereafter “Company” shall mean such successor
corporation or Principal Party.

(m) “Current Market Price” shall have the meaning set forth in Section 11. (d) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Current Market Price).

(n) “Current Value” shall have the meaning set forth in Section 11. (a)(iii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Certain Adjustments).

(o) “Distribution Date” shall have the meaning set forth in Section 3. (a) (Issuance of
Rights Certificates — Distribution Date; Rights Certificates).

(p) “Equivalent Preferred Stock” shall have the meaning set forth in Section 11. (b)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Purchase Price
Adjustment — Capital Stock).

 

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(q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect on
the date of this Agreement.

(r) “Exchange Number” shall mean one-half of the number of shares of Common Stock or one
one-thousandths of a share of Series C Preferred Stock, or shares or other units of other property
for which a Right is exercisable immediately prior to the time of the action of the Board to
exchange the Rights.

(s) “Exempt Person” shall mean: (i) the Company, (ii) any Subsidiary of the Company, or (iii)
any employee benefit plan, employee stock plan or director stock plan of the Company or of any
Subsidiary of the Company, or any Person, organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan or any Person funding other employee benefits for
employees of the Company or any Subsidiary of the Company.

(t) “Expiration Date” shall have the meaning set forth in Section 7. (a) (Exercise of
Rights; Purchase Price; Expiration Date of Rights — Exercise).

(u) “Final Expiration Date” shall mean the Close of Business on May 12, 2019.

(v) “Flip-in Event” shall mean any event described in Section 11. (a)(ii)(A) or
(B) (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).

(w) “Flip-in Trigger Date” shall have the meaning set forth in Section 11. (a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).

(x) “Flip-over Event” shall mean any event described in clauses (x), (y) or (z) of Section 13.
(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power — Flip-over
Event).

(y) “Original Rights” shall have the meaning set forth in Section 1 (f)(i) (Certain
Definitions).

(z) “Person” shall mean any individual, firm, corporation, partnership or other entity.

(aa) “Preferred Stock” shall mean shares of Series C Preferred Stock, par value $0.001 per
share, of the Company, and, to the extent that there is not a sufficient number of shares of Series
C Preferred Stock authorized to permit the full exercise of the Rights, any other series of
Preferred Stock, par value $0.001 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series C Preferred Stock.

(bb) “Principal Party” shall have the meaning set forth in Section 13. (b) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power — Principal Party).

 

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(cc) “Purchase Price” shall have the meaning set forth in Section 4. (a) (Form of Rights
Certificates — Form; Date).

(dd) “Record Date” shall have the meaning set forth in the Recital at the beginning of the
Agreement.

(ee) “Redemption Date” shall have the meaning set forth in Section 23. (a) (Redemption and
Termination — Redemption).

(ff) “Redemption Price” shall have the meaning set forth in Section 23. (a) (Redemption
and Termination — Redemption).

(gg) “Rights” shall have the meaning set forth in the Recital at the beginning of the
Agreement.

(hh) “Rights Agent” shall mean the Person named as the “Rights Agent” in the first paragraph
of this Agreement until a successor Rights Agent shall have become such pursuant to the applicable
provisions hereof and thereafter “Rights Agent” shall mean such successor Rights Agent. If at any
time there is more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, “Rights Agent” shall mean and include each such Person.

(ii) “Rights Certificates” shall have the meaning set forth in Section 3. (a) (Issuance of
Rights Certificates — Distribution Date; Rights Certificates).

(jj) “Rights Dividend Declaration Date” shall have the meaning set forth in the Recital at the
beginning of the Agreement.

(kk) “Spread” shall have the meaning set forth in Section 11. (a)(iii) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights — Certain Adjustments).

(ll) “Stock Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed or amended pursuant
to Section 13(d) under 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 becomes aware
of the existence of an Acquiring Person.

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

(nn) “Substitution Period” shall have the meaning set forth in Section 11. (a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).

 

-6-

 

(oo) “Synthetic Long Position”  shall mean:

(i) securities underlying a derivative transaction entered into by a Person, or
derivative securities acquired by a Person, which give such Person the economic equivalent
of ownership of an amount of securities in the Company due to the fact that the value of the
derivative transaction is determined by reference to the price or value of securities in the
Company, without regard to whether (a) such derivative securities convey any voting rights
in securities in the Company to such Person, (b) such derivative securities are required to
be, or capable of being, settled through delivery of securities in the Company, or (c) such
Person may have entered into other transactions that hedge the economic effect of such
derivative securities;

(ii) any derivative, swap or other transaction or series of transactions engaged in,
directly or indirectly, by such Person, the purpose or effect of which is to give such
Person economic risk similar to ownership of shares of any class or series of the Company,
including due to the fact that the value of such derivative, swap or other transactions are
determined by reference to the price, value or volatility of any shares of any class or
series of the Company, or which derivative, swap or other transactions provide, directly or
indirectly, the opportunity to profit from any increase in the price or value of shares of
any class or series of the Company, without regard to whether (x) the derivative, swap or
other transactions convey any voting rights in such shares to such Person, (y) the
derivative, swap or other transactions are required to be, or are capable of being, settled
through delivery of such shares or (z) such Person may have entered into other transactions
that hedge or mitigate the economic effect of such derivative, swap or other transactions;

(iii) any proxy (other than a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable provisions of
the General Rules and Regulations under the Exchange Act), agreement, arrangement,
understanding or relationship pursuant to which such Person has or shares a right to vote
any shares of any class or series of the Company; or

(iv) any agreement, arrangement, understanding or relationship, including any
repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in,
directly or indirectly, by such Person, the purpose or effect of which is to mitigate loss
to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of
the Company by, manage the risk of share price changes for, or increase or decrease the
voting power of, such Person with respect to the shares of any class or series of the
Company, or which provides, directly or indirectly, the opportunity to profit from any
decrease in the price or value of the shares of any class or series of the Company,

The shares of Common Stock in respect of which a Person has a Synthetic Long Position shall be
the notional or other number of shares of Common Stock specified in a filing by such Person or any
of such Person’s Affiliates or Associates with the Securities and Exchange Commission in respect of
which shares of Common Stock are the “subject security” or in the documentation evidencing the
Synthetic Long Position as being subject to be acquired upon the exercise or settlement of the
applicable right or as the basis upon which the value or settlement amount of such right, or the
opportunity of the holder of such right to profit or share in any profit, is to be calculated in
whole or in part or, if no such number of shares of Common Stock is specified in any filing or
documentation, as determined by the Board of Directors of the Company in good faith to be the
number of shares of Common Stock to which the Synthetic Long Position relates.

 

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(pp) “Trading Day” shall have the meaning set forth in Section 11. (d)(i) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Current Market Price).

(qq) “Triggering Event” shall mean any Flip-in Event or any Flip-over Event.

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. Issuance of Rights Certificates.

(a) Distribution Date; Rights Certificates.  Until the earlier of (i) the Close of Business
on the tenth Business Day after the Stock Acquisition Date (or, if the tenth Business Day after the
Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date), or
(ii) the Close of Business on the tenth Business Day (or such later date as the Board shall
determine prior to such time as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any Person (other than an Exempt Person) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if upon consummation thereof such Person would be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding (the earlier of (i) and (ii) being herein referred to as
the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the shares of Common Stock registered in the names of the holders thereof
(whether or not represented by certificates for shares of Common Stock issued to any such holder)
and not by separate certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to the Company, except
pursuant to the provision of Section 23. (Redemption and Termination)). As soon as
practicable after the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit 2 hereto (the “Rights Certificates”),
evidencing one Right for each share of Common Stock so held, subject to adjustment as provided
herein.  In the event that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11. (p) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights — Common Stock Adjustments) at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14. (a) (Fractional Rights and Fractional Shares — Fractional
Rights)) so that Rights Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates. In the event that the Company
purchases, or acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any rights associated with such shares of Common Stock shall be deemed canceled
and retired so that the Company shall not be entitled to exercise any Rights associated with shares
of Common Stock which are no longer outstanding.

 

-8-

 

(b) Common Stock Certificates; Summary of Rights. With respect to certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights associated with the Common Stock represented by such certificates
will be evidenced by such certificates alone and the registered holders of such Common Stock shall
also be the registered holders of the associated Rights. Until the earlier of the Distribution Date
or the Expiration Date, the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.  On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form of Exhibit 3 hereto (the “Summary of Rights”), by first-class,
postage-prepaid mail, to each record holder of shares of Common Stock as of the close of business
of the Record Date, at the address of such holder shown on the records of the Company.

(c) Legends.  Rights shall be issued in respect of, and attached to, all shares of Common
Stock which are issued (whether originally issued or from the Company’s treasury) after the Record
Date but prior to the earliest of the (i) Distribution Date, (ii) the Expiration Date, or (iii) the
Redemption Date, or, in certain circumstances provided in Section 22. (Issuance of New Rights
Certificates) after the Distribution Date. From and after the Record Date until the earliest to
occur of the (x) Distribution Date, (y) the Expiration Date, or (z) the Redemption Date, all
outstanding shares of Common Stock shall include the following legends:

(i) Shares of Common Stock registered in the name of the holder thereof in the records
of the transfer agent for the Company’s shares of Common Stock, whether so registered in
certificated or uncertificated form, and confirmation and account statements sent to holders
of the Company’s shares of Common Stock held in book-entry or uncertificated form shall bear
the following legend:

The shares of Common Stock, par value $0.001 per share, of
PolyMedix, Inc. (the “Company”) entitle the holder thereof to
certain Rights as set forth in the Rights Agreement dated as of
May 12, 2009, by and between the Company and American Stock
Transfer & Trust Company, LLC, as Rights Agent (the “Rights
Agreement”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by the shares to which this
statement relates. The Company will mail (or cause the Rights Agent
to mail) to the holder of shares to which this statement relates a
copy of the Rights Agreement without charge promptly after receipt
of a written request therefor.  Under certain circumstances set
forth in the Rights Agreement, Rights issued to an Acquiring Person
or any Associate or Affiliate thereof (as such terms are defined in
the Rights Agreement) may be null and void.  The Rights shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite
qualification for the issuance to such holder, or the exercise by
such holder of the Rights in such jurisdiction, shall not have been
obtained or be obtainable.

 

-9-

 

As set forth in Section 3(a), with respect to shares of Common Stock in book-entry form, until the
earliest of the Distribution Date, the Redemption Date or the Final Expiration Date, the Rights
associated with such shares of Common Stock shall be evidenced by such shares alone and registered
holders of such shares of Common Stock shall also be the registered holders of the associated
Rights, and the transfer of any of such shares of Common Stock shall also constitute the transfer
of the Rights associated with such shares of Common Stock.

(ii) In the case of certificated shares, certificates for shares of Common Stock which
are issued after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on
or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to
certain rights as set forth in the Rights Agreement dated as of
May 12, 2009, by and between PolyMedix, Inc. (the “Company”) and
American Stock Transfer & Trust Company, LLC, as Rights Agent (the
“Rights 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 the Company.  Under certain circumstances, as
set forth in the Rights Agreement, such Rights (as defined in the
Rights Agreement) will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will
mail (or cause the Rights Agent to mail) to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor.  As set forth in the Rights
Agreement, Rights beneficially owned by any Person (as defined in
the Agreement) who becomes an Acquiring Person (as defined in the
Agreement) become null and void.

With respect to such certificates containing the foregoing legend, until the earliest of (i) the
Distribution Date, (ii) the Expiration Date, and (iii) the Redemption Date, (x) the Rights
associated with the Common Stock represented by such certificates shall be evidenced by such
certificates alone, (y) the registered holders of such Common Stock shall also be the registered
holders of the associated Rights, and (z) the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with such shares of Common Stock. 

 

-10-

 

Section 4. Form of Rights Certificates.

(a) Form; Date.  The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in the form set forth
in Exhibit 2 hereto and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed or any securities association on whose interdealer quotation
system the Rights may be from time to time authorized for quotation, or to conform to usage.
Subject to the provisions of Section 11. (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) and Section 22. (Issuance of New Rights Certificates), the
Rights Certificates, whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share is referred to herein as the “Purchase Price”), but the amount
and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.

(b) Acquiring Person Legend.  Any Rights Certificate issued pursuant to Section 3. (a)
(Issuance of Rights Certificates — Distribution Date; Rights Certificates) or
Section 22. (Issuance of New Rights Certificates) that represents Rights beneficially owned
by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance of Section 7. (e)
(Exercise of Rights; Purchase Price; Expiration Date of Rights — Termination of
Acquiring Person’s Rights) and any Rights Certificate issued pursuant to Section 6.
(Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates), Section 11. (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights) or Section 22. (Issuance of New Rights
Certificates) upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible) the following
legend:

The Rights represented by this Rights Certificate are or were beneficially owned by a Person
who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement dated as of May 12, 2009, by and between PolyMedix, Inc.
and American Stock Transfer & Trust Company, LLC, as Rights Agent).  Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void in the circumstances
specified in Section 7. (e) (Exercise of Rights; Purchase Price; Expiration Date of Rights
— Termination of Acquiring Person’s Rights) of such Agreement.

 

-11-

 

Section 5. Countersignature and Registration.

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

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

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

(a) Procedure.  Subject to the provisions of Section 4. (b) (Form of Rights Certificates —
Acquiring Person Legend), Section 7. (e) (Exercise of Rights; Purchase Price; Expiration Date of
Rights — Termination of Acquiring Person’s Rights) and Section 14. (Fractional Rights and
Fractional Shares), at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitle such
holder (or former holder in the case of a transfer) to purchase.  Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably request.  Thereupon, the
Rights Agent shall, subject to Section 4. (b), Section 7. (e), and Section 14. countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.

 

-12-

 

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

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

(a) Exercise.  Subject to Section 7 (e) (Exercise of Rights; Purchase Price; Expiration
Date of Rights — Termination of Acquiring Person’s Rights), the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided
herein, including, without limitation, the restrictions on exercisability set forth in Section 9.
(c) (Reservation and Availability of Capital Stock — Registration under the Act),
Section 11. (a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights — Certain Adjustments), Section 23. (a) (Redemption and Termination —
Redemption), and Section 24. (b) (Exchange — Effect of Exchange;
Procedure)) in whole or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then exercisable and an
amount equal to any applicable transfer tax, at or prior to the earlier of (i) the Final Expiration
Date, and (ii) the Redemption Date (the earlier of (i) and (ii) being herein referred to as the
“Expiration Date”).  The payment of the Purchase Price and the applicable transfer tax, if any (as
such amount may be reduced pursuant to Section 11. (a)(iii) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights — Certain Adjustments)), may be made
(x) in cash, (y) by certified check, cashier’s check or money order payable to the order of the
Company, or (z) by delivery of a certificate or certificates (with appropriate stock powers
executed in blank attached thereto) evidencing a number of shares of Common Stock equal to the then
Purchase Price divided by the closing price (as determined pursuant to Section 11. (d)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights —
Current Market Price)) per share of Common Stock on the Trading Day immediately preceding
the date of such exercise.  In the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11. (a) the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the occurrence of a Triggering
Event that upon any exercise of Rights, a number of Rights be exercised so that only whole shares
of Preferred Stock would be issued.

 

-13-

 

(b) Purchase Price.  The Purchase Price for each one one-thousandth of a share of Preferred
Stock purchasable upon the exercise of a Right shall initially be $15.00, and shall be subject to
adjustment from time to time as provided in Section 11. (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights) and Section 13. (a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power — Flip-over Event) and shall be payable in accordance with
paragraph (a) of this Section 7.

(c) Rights Agent Actions.  Upon receipt of a Rights Certificate representing exercisable
Rights and the compliance by the holder of such Rights Certificate with paragraph (a) of this
Section 7, the Rights Agent shall, subject to Section 20. (k) (Duties of Rights Agent —
Exercise of Rights; Consultation with Company), thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one one-thousandths of a share
of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the depositary agent to
comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid
in lieu of fractional shares in accordance with Section 14. (Fractional Rights and Fractional
Shares), (iii) after receipt thereof, deliver such certificates or depositary receipts to or
upon the order of the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.

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

(e) Termination of Acquiring Person’s Rights.  Notwithstanding anything in this Agreement
to the contrary, from and after the first occurrence of a Flip-in Event, any Rights beneficially
owned by (i) an Acquiring Person, or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee
after such Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) and Section 4. (b) (Form of Rights Certificates — Acquiring
Person Legend) are complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any determinations with respect to
an Acquiring Person or any of its respective Affiliates, Associates or transferees hereunder.

 

-14-

 

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

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

Section 9. Reservation and Availability of Capital Stock.

(a) Reservation of Capital Stock.  The Company will use its best efforts to reserve and
keep available out of its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or
other securities or out of its authorized and issued shares of Common Stock held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) that, as provided in this Agreement, including the rights of
the Company under Section 11. (a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights — Certain Adjustments) to otherwise fulfill its obligations, will
be sufficient to permit the exercise in full of all outstanding Rights.

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

 

-15-

 

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

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

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

 

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

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

(a) Certain Adjustments.

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

 

-17-

 

(ii) In the event:

(A) (1) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at
any time after the date of this Agreement, directly or indirectly, shall merge into the
Company or otherwise combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Stock shall remain
outstanding and unchanged, or (2) subject to Section 23. (Redemption and
Termination), any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person to become an Acquiring
Person is a Flip-over Event; or

(B) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or recapitalization of
the Company, or any merger or consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving the Company or any of its
Subsidiaries, other than a transaction or transactions to which the provisions of Section
13. (a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power —
Flip-over Event) apply (whether or not with or into or otherwise involving an
Acquiring Person) which has the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any class of equity securities of
the Company or any of its subsidiaries, which is directly or indirectly beneficially owned
by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then,
promptly following the occurrence of any such Flip-in Event (whether described in
Section 11(a)(ii)(A) or (B)), proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7. (e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights — Termination of Acquiring Person’s Rights)) shall
thereafter have the right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of the number of one
one-thousandths of a share of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Flip-in Event, and (y) dividing
that product (which, following such first occurrence, shall thereafter be referred to as the
“Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price per share of Common Stock on the date of such first occurrence (such
number of shares being referred to as the “Adjustment Shares”).

 

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(iii) In the event that the number of shares of Common Stock that are authorized by the
Company’s Amended and Restated Certificate of Incorporation, as amended, but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current
Value”) over (2) the Purchase Price (such excess, the “Spread”), and (B) with respect to
each Right, subject to Section 7. (e) (Exercise of Rights; Purchase Price; Expiration
Date of Rights — Termination of Acquiring Person’s Rights), make adequate
provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board has deemed to have substantially the same dividend, voting
and liquidation rights as shares of Common Stock and are deemed in good faith by the Board
of Directors to have substantially the same value as the shares of Common Stock (such shares
of preferred stock being referred to as “Common Stock Equivalents”)), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by the Board; provided,
however, that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) calendar days following the first occurrence
of a Flip-in Event (the date of such Flip-in Event being referred to herein as the “Flip-in
Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If the Board shall determine in good faith that it
is likely that sufficient additional shares of Common Stock or other equity securities could
be authorized for issuance upon exercise in full of the Rights, the thirty (30) calendar day
period set forth above may be extended to the extent necessary, but not more than ninety
(90) calendar days after the Flip-in Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such period, the
“Substitution Period”). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7. (e), that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of additional
 shares and/or to decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof.  In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the suspension
is no longer in effect.  For purposes of this Section 11(a)(iii), the value of the shares of
Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in
Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date.

 

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(iv) If the rules of the national securities exchange, registered as such pursuant to
Section 6 of the Exchange Act, or of the national securities association, registered as such
pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded
or quoted would prohibit such exchange or association from listing or continuing to list, or
from authorizing for or continuing quotation and/or transaction reporting through an
inter-dealer quotation system, the Common Stock or other equity securities of the Company if
the Rights were to be exercised for shares of Common Stock in accordance with subparagraph
(ii) of this Section 11(a) because such issuance would nullify, restrict or disparately
reduce the per share voting rights of holders of Common Stock, the Company shall:
(A) determine the Spread, and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) equity securities of the Company,
including, without limitation, Common Stock Equivalents, other than securities which would
have the effect of nullifying, restricting or disparately reducing the per share voting
rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based upon the advice of a
recognized investment banking firm selected by the Board; provided, however,
if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within thirty (30)
calendar days following the Flip-in Trigger Date, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring payment of the
Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the
Company determines that some action need be taken pursuant to the first sentence of this
Section 11(a)(iv), the Company (x) shall provide, subject to Section 7. (e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights — Termination of Acquiring
Person’s Rights), that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar
days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iv), the value of the shares of Common Stock shall be the Current Market Price
per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such date.

 

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

(c) Purchase Price Adjustment — Cash, Assets, etc.  In case the Company shall fix a record
date for a distribution to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings
or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights Purchase Price Adjustment — Capital Stock)), the
Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants applicable to a share
of Preferred Stock and the denominator of which shall be such Current Market Price per share of
Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be
the Purchase Price which would have been in effect if such record date had not been fixed.

 

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(d) Current Market Price.

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

 

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

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

(f) Equivalent Adjustments.  If as a result of an adjustment made pursuant to
Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights —
Certain Adjustments) or Section 13. (a) (Consolidation Merger or Sale or Transfer of Assets or
Earning Power — Flip-over Event) the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock other than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Stock shall apply on like terms to any such other shares.

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

 

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(h) Preferred Stock Anti-Dilution.  Unless the Company shall have exercised its election as
provided in Section 11(i) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights — Adjustment of Number of Rights), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights — Purchase Price Adjustment — Capital Stock) and Section 11(c) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Purchase Price Adjustment — Cash,
Assets, etc.), each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the nearest one-hundred-thousandth)
obtained by (i) multiplying (x) the number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of such Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of such Purchase Price.

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

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

 

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

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

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

(n) Restriction on Certain Transactions.  The Company shall not, at any time after the
earlier of the Stock Acquisition Date or the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights
— Restriction Against Diminishing Benefits of the Rights)), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), (iii) enter into a statutory share exchange or similar transaction with any other
Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o)),
or (iv) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets, cash flow or earning power aggregating more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if (x) at the time of or immediately after
such consolidation, merger, statutory share exchange or similar transaction, or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately after such consolidation, merger, statutory share
exchange or similar transaction, or sale, the stockholders of the Person who constitutes, or would
constitute, the “Principal Party” for purposes of Section 13. (a) (Consolidation, Merger or
Sale or Transfer of Assets or Earning Power — Flip-over Event) shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates and Associates.

 

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(o) Restriction Against Diminishing Benefits of the Rights.
  The Company covenants and agrees that, after the earlier of the Stock Acquisition Date or
the Distribution Date, it will not, except as permitted by Section 23. (Redemption and
Termination) or Section 27. (Supplements and Amendments) take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.

(p) Common Stock Adjustments.  Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend Declaration Date and
prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide or split the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number
of Rights thereafter associated with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated with each share of Common
Stock immediately prior to such event by a fraction, the numerator of which shall be the 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.  The adjustments provided for in this
Section 11(p) shall be made successively to the Common Stock whenever such a dividend is declared
or paid or such subdivision, combination or consolidation is effected on such Common Stock.

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11. (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) and Section 13. (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) the Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of
such certificate, and (c) mail or cause the Rights Agent to mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26 (Notices). The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment
therein contained.

 

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

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

 

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(b) Principal Party.  “Principal Party” shall mean

(i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power — Flip-over Event), the Person that is the issuer of any securities into
which the shares of Common Stock are converted in such consolidation, merger or statutory
share exchange or similar transaction, or, if there is more than one such issuer, the issuer
of the shares of Common Stock of which have the greatest aggregate market value of shares
outstanding and if no securities are so issued, (x) the Person that is the other party to
such consolidation, merger or statutory share exchange or similar transaction if the Person
survives the 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 or (z) the Person resulting from the consolidation, and

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

(c) Supplemental Agreement.  The Company shall not consummate a Flip-over Event unless the
Principal Party shall have a sufficient number of authorized shares of its Common Stock which have
not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13. (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power) and unless prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of
this Section 13. and further providing that, as soon as practicable after the date of such
Flip-over Event, the Principal Party will

 

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(i) prepare and file a registration statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date and take all such other
action as may be necessary to enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the registration or qualification
of such securities under all requisite securities laws or jurisdictions of the various
states and the listing of such securities on such exchange and trading markets as may be
necessary or appropriate;

(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 reported by
such other system then in use;

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

The provisions of this Section 13. (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) shall similarly apply to successive consolidations, mergers or statutory share
exchanges or similar transactions or sales or other transfers. In the event that a Flip-over Event
shall occur at any time after the occurrence of a Flip-in Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner described in
Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power —
Flip-over Event).

 

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Section 14. Fractional Rights and Fractional Shares.

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

(b) Fractional Shares of Preferred Stock.  The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock which may at the option of the Company, be evidenced
by depositary receipts) upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock).  Interests in fractions of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, however, 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-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one one-thousandth of a
share of Preferred Stock.  For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a
share of Preferred Stock (as determined pursuant to Section 11. (d)(ii) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights — Current Market Price) for the
Trading Day immediately prior to the date of such exercise.

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

 

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

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

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

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

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

(c) subject to Section 6. (a) (Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates — Procedure) and
Section 7. (f) (Exercise of Rights; Purchase Price; Expiration Date of Rights — Surrender of
Rights Certificates; Identity of Beneficial Owner), the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates
or the associated Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7. (e) (Exercise of Rights; Purchase Price; Expiration Date of Rights —
Termination of Acquiring Person’s Rights), shall be required to be affected by any notice to the
contrary; and

 

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

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

Section 18. Concerning the Rights Agent.

(a) Compensation.  The Company shall 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
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 to be done by the Rights Agent in connection with the
acceptance and
administration of this Agreement, including the costs and expenses of defending against or
investigating any claim of liability in the premises.

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

 

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

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

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

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

(a) Legal Counsel.  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 to be taken by it in good
faith and in accordance with such opinion.

(b) Certification by the Company.  Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and the determination of Current Market
Price) be proved or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed by the President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer 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) Liability for Negligence, etc.  The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.

 

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

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

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

(g) Instructions.  The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company and to apply to such persons for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in good faith in
accordance with the instructions of any such person.

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

 

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

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

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

 

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

Section 23. Redemption and Termination.

(a) Redemption.  The Company may, at its option, at any time prior to the earliest of
(i) the Stock Acquisition Date, (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 of, or first public announcement of
the intent to commence, by any Person (other than an Exempt Person) a tender offer or exchange
offer the consummation of which would result in any Person becoming an Acquiring Person (including
any such date which is after the date of this Agreement and prior to the issuance of the Rights),
or (iii) the Final Expiration Date, redeem (the date of such redemption being referred to herein as
the “Redemption Date”) all but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the “Redemption Price”).  The redemption of the Rights by the Company
may be made effective at such time, on such basis and with such conditions as the Board in its sole
discretion may establish. The Company may, at its option, pay the Redemption Price in cash, shares
of Common Stock (based on the Current Market Price of the Common Stock at the time of redemption)
or any other form of consideration deemed appropriate by Board.

(b) Effect of Redemption; Procedure.  Immediately upon the action of the Company ordering
the redemption of the Rights and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price for each Right so held.  Promptly after the Redemption Date, the
Company shall (i) give notice of such redemption to the Rights Agent, (ii) give public notice of
such redemption; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such redemption, and (iii) mail notice of such
redemption to 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 will state the method by which the
payment of the Redemption Price will be made. Amounts payable shall be rounded down to the nearest
$0.01.

 

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Section 24. Exchange.

(a) Right to Exchange.  The Company may, at its option, at any time and from time to time
after the first occurrence of a Flip-in Event, exchange all or part of the then outstanding and
exercisable Rights (other than Rights which have become void as provided in Section 7. (e)
(Exercise of Rights; Purchase Price;  Expiration Date of Rights — Termination of
Acquiring Person’s Rights)) for the Exchange Number of shares of Common Stock, shares or units
of Preferred Stock which the Board has determined to be a Common Stock Equivalent, units of other
property or any combination thereof as determined by the Board. Notwithstanding the foregoing, the
Company shall not be empowered to effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the shares of Common Stock then outstanding.  The exchange of the Rights by
the Company may be made effective at such time, on such basis and with such conditions as the Board
in its sole discretion may establish.

(b) Effect of Exchange; Procedure.  Immediately upon the action of the Company ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 24., evidence of which shall have
been filed with the Rights Agent and without any further action and without any notice, the right
to exercise such Rights will terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock, Common Stock Equivalents or units of
other property equal to the number of such Rights held by such holder multiplied by the Exchange
Number. Promptly after the action of the Company ordering the exchange of the Rights, the Company
shall (i) file evidence of such action with the Rights Agent, (ii) give public notice of such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange, and (iii) mail notice of such exchange to
the holders of such Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will state the method
by which the exchange will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange of Rights shall be effected pro rata based on
the number of Rights (other than Rights which have become void as provided in Section 7. (e)
(Exercise of Rights; Purchase Price;  Expiration Date of Rights — Termination of
Acquiring Person’s Rights)) held by each holder of Rights.

(c) Common Stock Equivalents.  In any exchange pursuant to this Section 24. the Company, at
its option, may substitute Common Stock Equivalents for Common Stock exchangeable for Rights, at
the initial rate of one
share of Common Stock Equivalent for each share of Common Stock, as appropriately adjusted to
reflect adjustments in the voting rights of the Common Stock pursuant to the Company’s Amended and
Restated Certificate of Incorporation, as amended, so that the share of Common Stock Equivalent
delivered in lieu of each share of Common Stock shall have the same voting rights as one share of
Common Stock.

 

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(d) Insufficient Common Stock.  In the event that the number of shares of Common Stock
which are authorized by the Company’s Amended and Restated Certificate of Incorporation, as
amended, but not outstanding or reserved for issuance for purposes other than upon exercise of the
Rights is not sufficient to permit any exchange of such Rights for Common Stock in accordance with
this Section 24., the Company may, at its option, take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon such exchange.

(e) Fractional Shares.  Upon the action of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24., the Company shall not be required to issue fractions
of shares or to distribute certificates which evidence fractional shares. In lieu of such
fractional shares, the Company may pay to the registered holders of the Rights Certificates with
regard to which such fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of one share of Common Stock. For purposes of this
Section 24. the current market value of one share of Common Stock shall be the closing price of one
share of Common Stock (as determined pursuant to Section 11. (d)(i) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights — Current Market Price)) for the
Trading Day immediately prior to the date of exchange pursuant to this Section 24. and the value of
any Common Stock Equivalent shall be deemed to have the same current market value as the Common
Stock on such date.

Section 25. Notice of Certain Events.

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

 

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(b) Other Transactions.  In case any of the events set forth in Section 11. (a)(ii)
 (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments) shall occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26. (Notices), a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section 11. (a)(ii), and
(ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.

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

	 	 	 
	 

	 	PolyMedix, Inc.
	 

	 	170 N. Radnor Chester Road, Suite 300
	 

	 	Radnor, PA 19087
	 

	 	Attention:  Chief Executive Officer
	 

	 	Fax:  (484) 598-2401
	 

	 	Email:
	with a copy to:
	 	 
	 

	 	Pepper Hamilton, LLP
	 

	 	400 Berwyn Park
	 

	 	899 Cassatt Road
	 

	 	Berwyn, PA 19312
	 

	 	Attn:  Jeffrey P. Libson
	 

	 	Fax:  (610) 640-7835
	 

	 	Email: libsonj@pepperlaw.com

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

	 	 	 
	 

	 	American Stock Transfer and Trust Company, LLC
	 

	 	59 Maiden Lane
	 

	 	Plaza Level
	 

	 	New York, NY 10038
	 

	 	Attention:  Corporate Trust
	 

	 	Fax: (718) 331-1852
	 

	 	Email:

 

-39-

 

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

Section 27. Supplements and Amendments.  For so long as the Rights are redeemable, and
subject to the penultimate sentence of this Section 27. the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this Agreement without the
approval of any holders of shares of Common Stock or, on and after the Distribution Date, the
holders of Rights Certificates.  At any time when the Rights are no longer redeemable and subject
to the penultimate sentence of this Section 27. the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights Certificates; provided, however, that no such supplement or amendment may
(i) adversely affect the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of any such Person) or, prior to the Distribution Date, holders
of certificates representing shares of Common Stock; (ii) cause this Agreement again to become
amendable other than in accordance with this sentence; or (iii) cause the Rights again to become
redeemable.  Upon the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms of this Section
27. the Rights Agent shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase Price, or the number of one
one-thousandths of a share of Preferred Stock for which a right is exercisable; provided,
however, that at any time prior to (i) a
Stock Acquisition Date or (ii) the date that a tender or exchange offer by any Person (other than
an Exempt Person) is first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding the
Board may amend this Agreement to increase the Purchase Price or extend the Final Expiration Date. 
Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.

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

 

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

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

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

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

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.

 

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

	 	 	 	 	 
	 	POLYMEDIX, INC.

 	 
	 	By:  	/s/ Nicholas Landekic
 	 
	 	 	Name:  	Nicholas Landekic 	 
	 	 	Title:  	President and CEO 	 
	 
	 	AMERICAN STOCK TRANSFER & TRUST

COMPANY, LLC

 	 
	 	By:  	/s/
Herbert J. Lemmer
 	 
	 	 	Name:  	Herbert J. Lemmer	 
	 	 	Title:  	Vice President	 

 

-42-

 

Exhibit 1

CERTIFICATE OF

DESIGNATION,
PREFERENCES AND RIGHTS OF

SERIES C PREFERRED STOCK

of

POLYMEDIX, INC.

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

I, Edward F. Smith, Secretary of PolyMedix, Inc. (the “Corporation”), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the “GCL”), in accordance
with the provisions of Section 103 of the GCL, DO HEREBY CERTIFY

That pursuant to the authority conferred upon the Board of Directors (the “Board”) by the
Amended and Restated Certificate of Incorporation of the Corporation, as amended, the said Board on
May 12, 2009 adopted the following resolutions creating a series of 250,000 shares of Preferred
Stock, par value $0.001 per share, designated as Series C Preferred Stock:

RESOLVED, that, pursuant to the authority vested in the Board in accordance with the
provisions of its Amended and Restated Certificate of Incorporation, as amended, the Board does
hereby create, authorize and provide for the issuance upon the exercise of the Corporation’s
Preferred Stock Purchase Rights, of a series of Preferred Stock of the Corporation, and does hereby
fix and state that the designations, amounts, powers, preferences and relative and other special
rights and the qualifications, limitations or restrictions thereof are as follows:

Series C Preferred Stock

Section 1. Designation and Amount.  The shares of such series shall be designated as
Series C Preferred Stock and the number of shares constituting such series shall be 250,000.

Section 2. Dividends and Distributions.

(a) Subject to the prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series C Preferred Stock with respect
to dividends, the holders of shares of Series C Preferred Stock in preference to the holders of
Common Stock, par value $0.001 per share (the “Common Stock”), and of any other stock of the
Corporation ranking junior to the Series C Preferred Stock with respect to dividends shall be
entitled to receive, when, as and if declared by the Board out of funds legally available for that
purpose, quarterly dividends payable in cash on the 1st day of March, June, September and
December (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 C Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $0.001 or (b) subject to the

 

 

 

provision
for adjustment hereinafter
set forth, one thousand (1,000) times the aggregate per share amount of all cash dividends, and one
thousand (1,000) times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series C Preferred Stock. In the event the
Corporation shall at any time after May 12, 2009 (the “Rights Declaration Date”) (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series C Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.

(b) The Corporation shall declare a dividend or distribution on the Series C Preferred Stock
as provided in paragraph (A) above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event
no dividend or distribution shall have been declared on the Common Stock during the period between
any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $0.001 per share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series C Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares
of Series C 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 C Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding. The Board may fix a record
date for the determination of holders of shares of Series C Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall be no more than
sixty (60) days prior to the date fixed for the payment thereof.

 

-2-

 

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

(a) Subject to the provision for adjustment hereinafter set forth, each share of Series C
Preferred Stock shall entitle the holder thereof to one thousand (1,000) votes which each share of
Common Stock is entitled to vote. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of votes per share to
which holders of shares of Series C Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.

(b) Except as otherwise provided herein or by law, the holders of shares of Series C Preferred
Stock and the holders of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.  Except as otherwise provided herein or by
law, the holders of the shares of Series C Preferred Stock shall not be entitled to vote as a
separate class on any matters submitted to a vote of the stockholders.

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

Section 4. Certain Restrictions.

(a) Whenever quarterly dividends or other dividends or distributions payable on the Series C
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 C 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 C 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 C Preferred Stock, except dividends paid ratably on the Series C
Preferred Stock and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then entitled;

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

 

-3-

 

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

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

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

Section 6. Liquidation, Dissolution or Winding Up.   Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of Common Stock or of shares of any other stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock unless, prior thereto, the holders of shares of Series C Preferred Stock
shall have received an amount equal to the greater of (i) $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of
such payment and (ii) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to
holders of shares of Common Stock (the “Series C Liquidation Preference”) or (2) to the holders of
shares of stock ranking on a parity upon liquidation, dissolution or winding up with the Series C
Preferred Stock, except distributions made ratably on the Series C Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.  In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case the aggregate
amount to which holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.

 

-4-

 

Section 7. Consolidation, Merger, etc.   In case the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed into other stock,
securities, cash or any other property, then in any such case the shares of Series C Preferred
Stock shall at the same time be similarly exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to one thousand (1,000) times
the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or exchanged.  In the
event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(ii) combine the outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or change of shares of
Series C Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

Section 8. Redemption.   The outstanding shares of Series C Preferred Stock may be redeemed at the option of the Board as a
whole, but not in part, at any time, or from to time to time, at a cash price per share equal to
one hundred five percent (105%) of (i) the product of the Adjustment Number (as such term is
hereinafter defined) times the Average Market Value (as such term is hereinafter defined) of the
Common Stock, plus (ii) all dividends which on the redemption date have accrued on the shares to be
redeemed and have not been paid, or declared and a sum sufficient for the payment thereof set
apart, without interest. The “Adjustment Number” is one thousand (1,000) (as appropriately adjusted
as set forth in the last sentence of Section 6. to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock).  The “Average Market Value” is
the average closing price for each trading day during the thirty (30) day period immediately
preceding the date before the redemption date, and the closing price for each trading day shall be
the last sale price, regular way, or, in case no such sale takes place on such trading day, the
average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if on any such date the shares of
Common Stock are not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common Stock selected by
the Board. If on any such date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board shall be used.

Section 9. Ranking.   The Series C Preferred Stock shall rank (a) senior to all Common Stock and (b) junior to all other
series of preferred stock with respect to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.

 

-5-

 

Section 10. Amendment.   The Amended and Restated Certificate of Incorporation of the Corporation, as amended, shall not be
further amended in any manner which would materially alter or change the powers, preferences or
special rights of the Series C Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares of Series C
Preferred Stock, voting separately as a class.

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

********

IN WITNESS WHEREOF, I have executed and subscribed this Certificate of Designation and do affirm
the foregoing as true as of May 12, 2009.

	 	 	 	 	 
	 	POLYMEDIX, INC.

 	 
	 	By:  	 	 
	 	 	Edward F. Smith, Secretary 	 

 

-6-

 

Exhibit 2

Form of Rights Certificate

Certificate No. R          Rights

NOT EXERCISABLE AFTER THE EARLIER OF MAY 12, 2019, OR SUCH DATE AS THE RIGHTS REPRESENTED HEREBY
ARE REDEEMED BY POLYMEDIX, INC. (THE “CORPORATION”).  THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.001 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT DATED AS OF MAY 12, 2009, BY AND BETWEEN THE CORPORATION
AND AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS RIGHTS AGENT (THE “RIGHTS AGREEMENT”). UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) (EXERCISE OF
RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS — TERMINATION OF ACQUIRING PERSON’S
RIGHTS) OF SUCH AGREEMENT.]1

Rights Certificate

POLYMEDIX, INC.

This
certifies that
                                                        , or its, his or
her 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 May 12, 2009 (the “Rights Agreement”), between PolyMedix, Inc., a Delaware
corporation (the “Corporation”), and American Stock Transfer & Trust Company, LLC (the “Rights
Agent”), to purchase from the Corporation at any time prior to 5:00 P.M. (New York, New York time)
on May 12, 2019 at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth (1/1,000) of a fully paid, nonassessable share of
Series C Preferred Stock (the “Series C Preferred Stock”) of the Corporation, at a purchase price
of $15.00 per one one-thousandth (1/1,000) of a share (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate
duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of May 12, 2009 based
on the Series C Preferred Stock as constituted at such date. The Corporation reserves the
right to require prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Series C Preferred Stock would be issued.

 

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

 

 

 

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

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

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

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

 

-2-

 

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(i) may be redeemed by the Corporation at its option at a redemption price of $0.001 per Right at
any time prior to the earlier of (a) the Stock Acquisition Date (as such term is defined in the
Rights Agreement), (b) the tenth business day (or such later date as may be determined by action of
the Board of Directors of the Corporation prior to such time as any
person becomes an Acquiring Person) after the date of the commencement of, or first public
announcement of the intent to commence, by any person (other than an Exempt Person) a tender offer
or exchange offer the consummation of which would result in any person becoming an Acquiring Person
(including any such date which is after the date of the Rights Agreement and prior to the issuance
of the Rights), or (c) the Final Expiration Date (as such term is defined in the Rights Agreement)
and (ii) may be exchanged in whole or in part for Series C Preferred Stock, shares of the
Corporation’s Common Stock, par value $0.001 per share, other property or any combination thereof.

In addition, the Rights may be exchanged, in whole or in part, for shares of the Common Stock,
or shares of Common Stock equivalents of the Corporation having substantially the same dividend,
voting and liquidation rights as shares of Common Stock and are deemed in good faith by the Board
of Directors to have substantially the same value as the shares of Common Stock.  Immediately upon
the action of the Board of Directors of the Corporation authorizing any such exchange, and without
any further action or any notice, the Rights (other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable holders to receive the shares issuable
upon such exchange.

No fractional shares of Series C Preferred Stock will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth
(1/1,000) of a share of Series C Preferred Stock, which may, at the election of the Corporation, be
evidenced by depositary receipts), but a cash payment will be made in lieu thereof, as provided in
the Rights Agreement.

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

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

 

-3-

 

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

	 	 	 	 	 	 	 	 	 
	Dated as of
	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	ATTEST:	 	POLYMEDIX, INC.
	 
	 	 	 	 	 	 	 	 
	By: 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 
	 

	Secretary
	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

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

	 

Authorized Signature
	 	 	 	 	 	 

 

-4-

 

Form of Reverse Side of Rights Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED,

hereby sells, assigns and transfers unto

(Please print name and address of transferee)

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

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

Signature Guaranteed:

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

Signature Guaranteed:

NOTICE

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

 

 

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Rights Certificate.)

To:     POLYMEDIX, INC.

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

Please insert social security or other identifying number

(Please print name and address)

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

Please insert social security or other identifying number

(Please print name and address)

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

Signature Guaranteed:

 

 

 

CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

Signature Guaranteed:

NOTICE

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

 

 

 

Exhibit 3

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED STOCK

Effective May 12, 2009, the Board of Directors (the “Board”) of PolyMedix, Inc. (“PolyMedix”)
declared a dividend distribution to its stockholders of record at the close of business on May 26,
2009, of one preferred stock purchase right (a “Right”) for each outstanding share of Common Stock,
par value $0.001 per share (the “Common Stock”), that will entitle the registered holder to
purchase from PolyMedix one one-thousandth (1/1,000) of a share of Series C Preferred Stock, par
value $0.001 per share (the “Preferred Stock”), at a purchase price of $15.00 per one
one-thousandth (1/1,000) of a share, subject to adjustment.  The description and terms of the
Rights are set forth in a Rights Agreement (the “Rights Agreement”) between PolyMedix and American
Stock Transfer& Trust Company, LLC, as Rights Agent (the “Rights Agent”).  Initially capitalized
terms used but not defined herein have the meanings set forth in the Rights Agreement.

In general terms, the Rights Agreement would impose a significant penalty upon any Acquiring
Person (as defined below) that acquires 15% or more of PolyMedix’s outstanding Common Stock
(including, for this purpose, Common Stock involved in derivative transactions and securities)
without the approval of the Board. While PolyMedix does not currently expect any such event to
occur, the Rights Agreement should not interfere with any merger or other business combination
approved by the Board.

Separation and Distribution of Rights; Exercisablility.  Initially, the Rights will be
attached to all shares of Common Stock then outstanding, whether or not certificated, and no
separate Rights certificates will be distributed.  The Rights will separate from the Common Stock
upon the earlier of:

	 	•	 	ten (10) business days following a public announcement that a person or group of
affiliated or associated persons has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the shares of Common Stock then outstanding
(subject to certain exceptions set forth in the Rights Agreement) (such person is
referred to as an “Acquiring Person”), or such earlier date as the Board becomes aware
of the Acquiring Person’s existence; or
	 
	 	•	 	ten (10) business days (or some later date as determined by the Board) following the
commencement of a tender or exchange offer that would result in a person or group
beneficially owning 15% or more of the shares of Common Stock then outstanding (subject
to exceptions as set forth in the Rights Agreement).

The date the Rights separate from the Common Stock is referred to as the “Distribution Date.”

Until the Distribution Date, (i) the Rights will be evidenced by and transferred with, and
only with, shares of Common Stock, (ii) new shares of Common Stock, whether or not certificated,
issued after May 26, 2009 will contain a notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any shares for Common Stock outstanding will also
constitute the transfer of the Rights associated with the such shares of Common Stock.  Pursuant to
the Rights Agreement, PolyMedix reserves the right to require prior
to the occurrence of a Triggering Event (as hereinafter defined) that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be
issued.

 

 

 

The Rights are not exercisable until the Distribution Date and will expire at the close of
business on May 12, 2019, unless earlier redeemed by PolyMedix as described below.

As soon as practicable after the Distribution Date, Rights certificates will be mailed to the
holders of record of Common Stock as of the close of business on the Distribution Date and, after
that, the separate Rights certificates will represent the Rights.  Except in connection with shares
of Common Stock issued or sold pursuant to the exercise of stock options under any employee plan or
arrangements, or upon the exercise, conversion or exchange of securities issued by PolyMedix in the
future, or as otherwise determined by the Board, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.

Flip-in Events.  Each holder of a Right (other than the Acquiring Person and any associate or
affiliate thereof) will have the right to receive, upon exercise, Common Stock (or, in some
circumstances, cash, property or other securities of PolyMedix) having a value equal to two times
the purchase price of the Right, as the case may be, if:

	 	•	 	any person becomes an Acquiring Person (except pursuant to specified exceptions);
	 
	 	•	 	PolyMedix is the surviving corporation in a merger with an Acquiring Person and the
Common Stock is not changed or exchanged; or
	 
	 	•	 	during the time that there is an Acquiring Person, a merger, reclassifications or
other similar event occurs that results in increasing the Acquiring Person’s beneficial
ownership of shares of Common Stock by more than 1%.

Notwithstanding any of the foregoing, following the occurrence of any of the events described in
this paragraph, all Rights that are, or (under some circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and void.  The events
described in this paragraph are referred to as “Flip-in Events.”

For example, at a purchase price of $15.00 per Right, each Right not owned by an Acquiring
Person (or by some related parties or transferees) following an event set forth in the preceding
paragraph would entitle its holder to purchase $30.00 worth of Common Stock (or other
consideration, as noted above) for $15.00.

Flip-over events.  At any time following the earlier of a public announcement that a person
has become an Acquiring Person or the date that a majority of the Board becomes aware of the
existence of an Acquiring Person (in either case, the “Stock Acquisition Date”), each holder of a
Right (except Rights which previously have been voided as set forth above) will have the right to
receive, upon exercise, common stock of an acquiring company having a value equal to two times the
purchase price of the Right if any of the following occur:

	 	•	 	PolyMedix enters into a merger in which PolyMedix is not the surviving corporation;
	 
	 	•	 	PolyMedix is the surviving corporation in a merger pursuant to which all or part of
the outstanding shares of Common Stock are changed into or exchanged for stock or other
securities of any other person or cash or any other property; or
	 
	 	•	 	more than 50% of the combined assets, cash flow or earning power of PolyMedix and
its subsidiaries is sold or transferred (in each case other than some consolidations
with, mergers with and into, or sales of assets, cash flow or earning power by or to
subsidiaries of PolyMedix as specified in the Rights Agreement).

 

-2-

 

The events described in this paragraph are referred to as “Flip-over Events.” Flip-in events and
Flip-over events are referred to collectively as “Triggering Events.”

Anti-dilution Adjustments; Fractional Shares.  The applicable purchase price payable, the
number of shares of Preferred Stock or other securities or property issuable upon the exercise of
the Rights, and the number of applicable Rights outstanding are subject to adjustment from time to
time to prevent dilution:

	 	•	 	in the event of a stock dividend on, or a subdivision, combination or
reclassification of, Preferred Stock;
	 
	 	•	 	if the holders of Preferred Stock are granted rights, options or warrants to
subscribe for the applicable Preferred Stock or securities convertible into the
applicable Preferred Stock at less than the current market price of the applicable
Preferred Stock; or
	 
	 	•	 	upon the distribution to holders of Preferred Stock of evidences of indebtedness,
cash (excluding regular quarterly cash dividends), assets (other than dividends payable
in Preferred Stock) or subscription rights or warrants (other than those referred to in
the bullet point immediately above).

The number of outstanding Rights are also subject to adjustment in the event of a stock dividend
on, or a subdivision or combination of Common Stock.  With some exceptions, no adjustment in the
purchase price relating to a Right will be required until cumulative adjustments amount to at least
one percent (1%) of the purchase price relating to the Right.

No fractional shares of Preferred Stock are required to be issued (other than fractions which
are integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock) and, in lieu
of the issuance of fractional shares, PolyMedix may make an adjustment in cash based on the market
price of the Preferred Stock on the trading date immediately prior to the date of exercise.

Dividend, Liquidation and Redemption Rights of the Preferred Stock.  Each share of Preferred
Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment equal to the greater of $0.001 per share and an aggregate amount of 1,000 times the
dividend declared per share of Common Stock (other than stock dividends payable in Common Stock). 
Upon liquidation, the holders of Preferred Stock will be entitled to the greater of (1) a minimum
preferential liquidation payment of $1,000 per share (plus any accrued but
unpaid dividends) and (2) an aggregate payment equal to 1,000 times the payment to be made per
share of Common Stock.  Each share of Preferred Stock will have 1,000 times the number of votes
each share of the Common Stock has on matters the respective class is entitled to vote on, which
will be voted together with Common Stock.  Upon any merger, consolidation or other transaction in
which shares of Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.

 

-3-

 

At any time, or from time to time, the Board may redeem the outstanding shares of Preferred
Stock, in whole but not in part, at a cash price per share equal to one hundred five percent (105%)
of (i) 1,000 (subject to adjustment) times the average market value of Common Stock plus (ii) all
accrued and unpaid dividends of the Preferred Stock as of the redemption date.

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

Exchange of the Rights.  At any time after the occurrence of a Flip-in Event and prior to the
acquisition by a person or group of 50% or more of the shares of Common Stock then outstanding, the
Board may, without payment of the purchase price by the holder, exchange the Rights, in whole or in
part, as follows:

	 	•	 	one Right (other than the Rights owned by the Acquiring Person or group, which will
become void) for one-half the number of shares of Common Stock, one one-thousandths of
a share of Preferred Stock or shares or other units of other property for which a Right
is exercisable immediately prior to the time of the action of the Board to exchange the
Rights.

Redemption of the Rights.  At any time prior to the earliest of (i) the Stock Acquisition
Date, (ii) the tenth business day (or such later date as may be determined by action of the Board
of Directors prior to such time as any person or group of affiliated or associated persons becomes
an Acquiring Person) after the commencement of, or announcement of an intention to commence, a
tender offer or exchange offer the consummation of which would result in any person becoming an
Acquiring Person, or (iii) May 12, 2019, PolyMedix may redeem all, but not less than all, of the
Rights at a price of $0.001 per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board and subject to adjustment).  Immediately upon the
action of the Board ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of these Rights will be to receive the $0.001 redemption price.

No Rights as Stockholder.  Until a Right is exercised, the holder will have no rights as a
stockholder of PolyMedix, including, without limitation, the right to vote or to receive dividends.

 

-4-

 

Amendment of the Rights Agreement.  Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the
Board at any time during the period in which the Rights are redeemable. At any
time when the Rights are no longer redeemable, the provisions of the Rights Agreement may be
amended by the Board only if the amendment does not adversely affect the interest of holders of
Rights (excluding the interest of any Acquiring Person) or cause the Rights to become redeemable
again.

A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A filed on
May 14, 2009. A copy of the Rights
Agreement is available free of charge from the Rights Agent.  This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.

 

-5-ex10-07.htm

    
      Exhibit 10.07

       

       

       

       

       

       

       

       

       

       

      
        

        

        

        __________________________________________________________________

        

        DOUBLE-TAKE
SOFTWARE

        

        2006
OMNIBUS INCENTIVE PLAN

        

        AS
AMENDED AND RESTATED, EFFECTIVE APRIL 1, 2009

        __________________________________________________________________

        

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
 

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        TABLE
OF CONTENTS

         

        

        
          
            
              	 
      	 
      	
                      Page

                    
	
                      1.

                    	
                      PURPOSE

                    	
                      1

                    
	
                      2.

                    	
                      DEFINITIONS

                    	
                      1

                    
	
                      3.

                    	
                      ADMINISTRATION
      OF THE PLAN

                    	
                      3

                    
	 
      	
                      3.1    Board

                    	
                      3

                    
	 
      	
                      3.2    Committee

                    	
                      4

                    
	 
      	
                      3.3    Terms
      of Awards

                    	
                      4

                    
	 
      	
                      3.4    No
      Repricing

                    	
                      5

                    
	 
      	
                      3.5    Deferral
      Arrangement

                    	
                      5

                    
	 
      	
                      3.6    No
      Liability

                    	
                      5

                    
	 
      	
                      3.7    Share
      Issuance/Book-Entry

                    	
                      5

                    
	
                      4.

                    	
                      STOCK
      SUBJECT TO THE PLAN

                    	
                      6

                    
	 
      	
                      4.1    Number
      of Shares Available for Awards

                    	
                      6

                    
	 
      	
                      4.2    Adjustments
      in Authorized Shares

                    	
                      6

                    
	 
      	
                      4.3    Share
      Usage

                    	
                      6

                    
	
                      5.

                    	
                      EFFECTIVE
      DATE, DURATION AND AMENDMENTS

                    	
                      6

                    
	 
      	
                      5.1    Effective
      Date

                    	
                      6

                    
	 
      	
                      5.2    Term

                    	
                      7

                    
	 
      	
                      5.3    Amendment
      and Termination of the Plan

                    	
                      7

                    
	
                      6.

                    	
                      AWARD
      ELIGIBILITY AND LIMITATIONS

                    	
                      7

                    
	 
      	
                      6.1    Service
      Providers and Other Persons

                    	
                      7

                    
	 
      	
                      6.2    Successive
      Awards and Substitute Awards

                    	
                      7

                    
	 
      	
                      6.3    Limitation
      on Shares of Stock Subject to Awards and Cash Awards

                    	
                      7

                    
	
                      7.

                    	
                      AWARD
      AGREEMENT

                    	
                      8

                    
	
                      8.

                    	
                      TERMS
      AND CONDITIONS OF OPTIONS

                    	
                      8

                    
	 
      	
                      8.1    Option
      Price

                    	
                      8

                    
	 	8.2    Vesting	
                      
                        8

                      

                    
	 
      	
                      8.3    Term

                    	
                      8

                    
	 
      	
                      8.4    Termination
      of Service

                    	
                      8

                    
	 
      	
                      8.5    Limitations
      on Exercise of Option

                    	
                      8

                    
	 
      	
                      8.6    Method
      of Exercise

                    	
                      8

                    
	 
      	
                      8.7    Rights
      of Holders of Options

                    	
                      9

                    
	 
      	
                      8.8    Delivery
      f Stock Certificates

                    	
                      9

                    
	 
      	
                      8.9   
      Transferability of Options

                    	
                      9

                    
	 
      	
                      8.10  Family
      Transfers

                    	
                      9

                    
	 
      	
                      8.11  Limitations
      on Incentive Stock Options

                    	
                      9

                    
	 
      	
                      8.12  Notice
      of Disqualifying Disposition

                    	
                      9

                    
	
                      9.

                    	
                      TERMS
      AND CONDITIONS OF STOCK APPRECIATION RIGHTS

                    	
                      10

                    
	 
      	
                      9.1    Right
      to Payment and Grant Price

                    	
                      10

                    
	 
      	
                      9.2    Other
      Terms

                    	
                      10

                    
	 
      	
                      9.3    Term

                    	
                      10

                    
	 
      	
                      9.4    Transferability
      of SARs

                    	
                      10

                    
	 
      	
                      9.5    Family
      Transfers

                    	
                      10

                    

            

          

        

      

    

    
       

       

      

      
        
          
             

          

          
            i

            
              

            

          

          
             

          

        

      

       

      
        	 
      	 
      	
                Page

              
	
                10.

              	
                TERMS
      AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

              	
                10

              
	 
      	
                10.1    Grant
      of Restricted Stock or Stock Units

              	
                10

              
	 
      	
                10.2    Restrictions

              	
                11

              
	 
      	
                10.3    Restricted
      Stock Certificates

              	
                11

              
	 
      	
                10.4    Rights
      of Holders of Restricted Stock

              	
                11

              
	 
      	
                10.5    Rights
      of Holders of Stock Units

              	
                11

              
	 
      	
                          
      10.5.1    Voting and Dividend Rights

              	
                11

              
	 
      	
                          
      10.5.2    Creditor’s Rights

              	
                11

              
	 
      	
                10.6    Termination
      of Service

              	
                11

              
	 
      	
                10.7    Purchase
      of Restricted Stock and Shares Subject to Stock Units

              	
                12

              
	 
      	
                10.8    Delivery
      of Stock

              	
                12

              
	
                11.

              	
                TERMS
      AND CONDITIONS OF UNRESTRICTED STOCK AWARDS

              	
                12

              
	
                12.

              	
                FORM
      OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

              	
                12

              
	 
      	
                12.1    General
      Rule

              	
                12

              
	 
      	
                12.2    Surrender
      of Stock

              	
                12

              
	 
      	
                12.3    Cashless
      Exercise

              	
                12

              
	 
      	
                12.4    Other
      Forms of Payment

              	
                13

              
	
                13.

              	
                TERMS
      AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

              	
                13

              
	 
      	
                13.1    Dividend
      Equivalent Rights

              	
                13

              
	 
      	
                13.2    Termination
      of Service

              	
                13

              
	
                14.

              	
                TERMS
      AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS

              	
                13

              
	 
      	
                14.1    Performance
      Conditions

              	
                13

              
	 
      	
                14.2    Performance
      Awards or Annual Incentive Awards Granted to Designated Covered
      Employees

              	
                13

              
	 
      	
                          
      14.2.1    Performance Goals Generally

              	
                13

              
	 
      	
                          
      14.2.2    Business Criteria

              	
                14

              
	 
      	
                          
      14.2.3    Timing For Establishing Performance
      Goals

              	
                14

              
	 
      	
                          
      14.2.4    Settlement of Awards; Other
      Terms

              	
                14

              
	 
      	
                          
      14.2.5    Evaluation of Performance

              	
                14

              
	 
      	
                14.3    Written
      Determinations

              	
                15

              
	 
      	
                14.4    Status
      of Section 14.2 Awards Under Code Section 162(m)

              	
                15

              
	
                15.

              	
                PARACHUTE
      LIMITATIONS

              	
                15

              
	
                16.

              	
                REQUIREMENTS
      OF LAW

              	
                16

              
	 
      	
                16.1    General

              	
                16

              
	 
      	
                16.2    Rule
      16b-3

              	
                16

              
	
                17.

              	
                EFFECT
      OF CHANGES IN CAPITALIZATION

              	
                16

              
	 
      	
                17.1    Changes
      in Stock

              	
                16

              
	 
      	
                17.2    Reorganization
      in Which the Company is the Surviving Entity Which does not Constitute a
      Corporate Transaction

              	
                17

              
	 
      	
                17.3    Corporate
      Transaction

              	
                17

              
	 
      	
                17.4    Adjustments

              	
                18

              
	 
      	
                17.5    No
      Limitations on Company

              	
                18

              

      

      

      
        
          
             

          

          
            ii

            
              

            

          

          
             

          

        

      

      

      
        	 
      	 
      	
                Page

              
	
                18.

              	
                GENERAL
      PROVISIONS

              	
                18

              
	 
      	
                18.1    Disclaimer
      of Rights

              	
                18

              
	 
      	
                18.2    Nonexclusivity
      of the Plan

              	
                18

              
	 
      	
                18.3    Withholding
      Taxes

              	
                18

              
	 
      	
                18.4    Captions

              	
                19

              
	 
      	
                18.5    Other
      Provisions

              	
                19

              
	 
      	
                18.6    Number
      and Gender

              	
                19

              
	 
      	
                18.7    Severability

              	
                19

              
	 
      	
                18.8    Governing
      Law

              	
                19

              
	 
      	
                18.9    Section
      409A of the Code

              	
                19

              

      

      

      
        
          
             

          

          
            iii

            
              

            

          

          
             

          

        

      

      

      

      DOUBLE-TAKE
SOFTWARE

      

      2006
OMNIBUS INCENTIVE PLAN

      

      

      

      

      Double-Take Software, Inc., a Delaware
corporation (the “Company”), sets forth herein the terms of its 2006 Omnibus
Incentive Plan, as amended and restated effective April 1, 2009 (the “Plan”), as
follows:

       

      
        	
                1.  

              	
                PURPOSE

              

      

       

      The Plan is intended to enhance the
Company’s and its Affiliates’ (as defined herein) ability to attract and retain
highly qualified officers, directors, key employees, and other persons, and to
motivate such persons to serve the Company and its Affiliates and to expend
maximum effort to improve the business results and earnings of the Company, by
providing to such persons an opportunity to acquire or increase a direct
proprietary interest in the operations and future success of the Company. To this end,
the Plan provides for the grant of stock options, stock appreciation rights,
restricted stock, stock units, unrestricted stock, dividend equivalent rights
and cash awards.  Any of these awards may, but need not, be made as
performance incentives to reward attainment of annual or long-term performance
goals in accordance with the terms hereof.  Stock options granted
under the Plan may be non-qualified stock options or incentive stock options, as
provided herein, except
that stock options granted to outside directors and any consultants or advisers
providing services to the Company or an Affiliate shall in all cases be
non-qualified stock options.

       

      
        	
                2.  

              	
                DEFINITIONS

              

      

       

      For purposes of interpreting the Plan
and related documents (including Award Agreements), the following definitions
shall apply:

      

      2.1 “Affiliate” means, with respect to
the Company, any company or other trade or business that controls, is controlled
by or is under common control with the Company within the meaning of Rule 405 of
Regulation C under the Securities Act, including, without limitation, any
Subsidiary.  For purposes of granting stock options or stock
appreciation rights, an entity may not be considered an Affiliate unless the
Company holds a “controlling interest” in such entity, where the term
“controlling interest” has the same meaning as provided in Treasury Regulation
1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used
instead of “at least 80 percent” and, provided further, that where granting of
stock options or stock appreciation rights is based upon a legitimate business
criteria, the language “at least 20 percent” is used instead of “at least 80
percent” each place it appears in Treasury Regulation
1.414(c)-2(b)(2)(i).

      

      2.2 “Annual Incentive Award” means
an Award made subject to attainment of performance goals (as described in Section
14) over a performance period of up to one year (the
Company’s fiscal year, unless otherwise specified by the
Committee).

      

      2.3 “Award” means a grant of an
Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Stock
Unit, Dividend Equivalent Rights, or cash award under the
Plan.

      

      2.4 “Award Agreement” means the
written agreement between the Company and a Grantee that evidences and sets out
the terms and conditions of an Award.

      

      2.5 “Benefit Arrangement” shall
have the meaning set forth in Section 15 hereof.

      

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

      

      2.7 “Cause” means, as determined by
the Board and unless otherwise provided in an applicable agreement with the
Company or an Affiliate, (i) gross negligence or willful misconduct in
connection with the performance of duties; (ii) plea of a felony or
conviction of a criminal offense (other than minor traffic offenses); or
(iii) material breach of any term of any employment, consulting or other
services, confidentiality, intellectual property or non-competition agreements,
if any, between the Service Provider and the Company or an
Affiliate.

      

      2.8 “Code” means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.

      

      2.9 “Committee” means a committee
of, and designated from time to time by resolution of, the Board, which shall be
constituted as provided in Section 3.2.

      

      
        
          
             

          

          
            1

            
              

            

          

          
             

          

        

      

      

      2.10 “Company” means Double-Take
Software, Inc.

      

      2.11 “Corporate Transaction” means
(i) the dissolution or liquidation of the Company or a merger, consolidation, or
reorganization of the Company with one or more other entities in which the
Company is not the surviving entity, (ii) a sale of substantially all of the
assets of the Company to another person or entity, or (iii) any transaction
(including without limitation a merger or reorganization in which the Company is
the surviving entity) which results in any person or entity (other than persons
who are stockholders or Affiliates immediately prior to the transaction) owning
80% or more of the combined voting power of all classes of stock of the
Company.

       

      2.12 “Covered Employee” means a
Grantee who is a covered employee within the meaning of Section 162(m)(3) of the
Code.

       

      2.13 “Disability” means the Grantee
is unable to perform each of the essential duties of such Grantee's position by
reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a
continuous period of not less than 12 months; provided, however, that, with
respect to rules regarding expiration of an Incentive Stock Option following
termination of the Grantee's Service, Disability shall mean the Grantee is
unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.

       

      2.14 “Dividend Equivalent Right”
means a right, granted to a Grantee under Section 13 hereof, to receive cash,
Stock, other Awards or other property equal in value to dividends paid with
respect to a specified number of shares of Stock, or other periodic
payments.

       

      2.15 “Effective Date” means
September 14, 2006, the date the Plan was originally approved by the
Board.

      

      2.16 “Exchange Act” means the
Securities Exchange Act of 1934, as now in effect or as hereafter
amended.

      

      2.17 “Fair
Market Value” means the value of a share of Stock, determined as
follows:  if on the Grant Date or other determination date the Stock
is listed on an established national or regional stock exchange, or is publicly
traded on an established securities market, the Fair Market Value of a share of
Stock shall be the closing price of the Stock on such exchange or in such market
(if there is more than one such exchange or market the Board shall determine the
appropriate exchange or market) on the Grant Date or such other determination
date (or if there is no such reported closing price, the Fair Market Value shall
be the mean between the highest bid and lowest asked prices or between the high
and low sale prices on such trading day) or, if no sale of Stock is reported for
such trading day, on the next preceding day on which any sale shall have been
reported. If the Stock is not listed on such an exchange or traded on such a
market, Fair Market Value shall be the value of the Stock as determined by the
Board by the reasonable application of a reasonable valuation method, in a
manner consistent with Code Section 409A.

       

      2.18 “Family Member” means a person
who is a spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the Grantee, any person sharing the
Grantee’s household (other than a tenant or employee), a trust in which any one
or more of these persons have more than fifty percent of the beneficial
interest, a foundation in which any one or more of these persons (or the
Grantee) control the management of assets, and any other entity in which one or
more of these persons (or the Grantee) own more than fifty percent of the voting
interests.

      

      2.19 “Grant Date” means, as
determined by the Board, the latest to occur of (i) the date as of which
the Board approves an Award, (ii) the date on which the recipient of an Award
first becomes eligible to receive an Award under Section 6 hereof, or (iii) such other
date as may be specified by the Board.

      

      2.20 “Grantee” means a person who
receives or holds an Award under the Plan.

      

      2.21 “Incentive Stock Option” means
an “incentive stock option” within the meaning of Section 422 of the Code, or
the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.

      

      2.22 “Non-qualified Stock Option”
means an Option that is not an Incentive Stock Option.

      

      2.23 “Option” means an option to
purchase one or more shares of Stock pursuant to the Plan.

      

      
        
          
             

          

          
            2

            
              

            

          

          
             

          

        

      

      

      

      2.24 “Option Price” means the
exercise price for each share of Stock subject to an Option.

      

      2.25 “Other Agreement” shall have
the meaning set forth in Section 15 hereof.

      

      2.26 “Outside Director” means a
member of the Board who is not an officer or employee of the
Company.

      

      2.27 “Performance Award” means an
Award made subject to the attainment of performance goals (as described in Section 14) over a performance period
of up to ten (10) years.

       

      2.28 “Plan” means this Double-Take
Software 2006 Omnibus Incentive Plan, as amended and restated effective April 1,
2009.

      

      2.29 “Purchase Price” means the
purchase price for each share of Stock pursuant to a grant of Restricted Stock,
Unrestricted Stock or Stock Unit.

      

      2.30 “Reporting Person” means a
person who is required to file reports under Section 16(a) of the Exchange
Act.

      

      2.31 “Restricted Stock” means
shares of Stock, awarded to a Grantee pursuant to Section 10 hereof.

      

      2.32 “SAR Exercise Price” means the
per share exercise price of an SAR granted to a Grantee under Section 9 hereof.

      

      2.33 “Securities Act” means the
Securities Act of 1933, as now in effect or as hereafter amended.

      

      2.34 “Service” means service as a
Service Provider to the Company or an Affiliate.  Unless otherwise
stated in the applicable Award Agreement, a Grantee's change in position or
duties shall not result in interrupted or terminated Service, so long as such
Grantee continues to be a Service Provider to the Company or an
Affiliate.  Subject to the preceding sentence, whether a termination
of Service shall have occurred for purposes of the Plan shall be determined by
the Board, which determination shall be final, binding and
conclusive.

      

      2.35 “Service Provider” means an
employee, officer or director of the Company or an Affiliate, or a consultant or
adviser (who is a natural person) currently providing services to the Company or
an Affiliate.

      

      2.36 “Stock” means the common
stock, par value $0.001 per share, of the Company.

      

      2.37 “Stock Appreciation Right” or
“SAR” means a right
granted to a Grantee under Section 9 hereof.

      

      2.38 “Stock Unit” means a
bookkeeping entry representing the equivalent of one share of Stock awarded to a
Grantee pursuant to Section
10
hereof.

      

      2.39 “Subsidiary” means any
“subsidiary corporation” of the Company within the meaning of Section 424(f) of
the Code.

      

      2.40 “Substitute Awards” means
Awards granted upon assumption of, or in substitution for, outstanding awards
previously granted by a company or other entity acquired by the Company or any
Affiliate or with which the Company or any Affiliate combines.

      

      2.41 “Ten Percent Stockholder”
means an individual who owns more than ten percent (10%) of the total combined
voting power of all classes of outstanding stock of the Company, its parent or
any of its Subsidiaries.  In determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be applied.

       

      2.42  “Unrestricted Stock”
means an Award pursuant to Section 11 hereof.

       

       

      
        	
                3.  

              	
                ADMINISTRATION
      OF THE PLAN

              

      

       

       

      
        	
                3.1.       

              	
                Board.

              

      

       

      The Board shall have such powers and
authorities related to the administration of the Plan as are consistent with the
Company’s certificate of incorporation and by-laws and applicable
law.  The Board shall have full power and authority to take all
actions and to make all determinations required or provided for under the Plan,
any Award or any Award Agreement, and shall have full power and authority to
take all such other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan that the Board
deems to be

      

      
        
          
             

          

          
            3

            
              

            

          

          
             

          

        

      

      

      necessary
or appropriate to the administration of the Plan, any Award or any Award
Agreement.  All such actions and determinations shall be by the
affirmative vote of a majority of the members of the Board present at a meeting
or by unanimous consent of the Board executed in writing in accordance with the
Company’s certificate of incorporation and by-laws and applicable
law.  The interpretation and construction by the Board of any
provision of the Plan, any Award or any Award Agreement shall be final, binding
and conclusive.

       

      
        	
                3.2.   
         

              	
                Committee.

              

      

       

      The Board from time to time may
delegate to the Committee such powers and authorities related to the
administration and implementation of the Plan, as set forth in Section 3.1 above and other applicable
provisions, as the Board shall determine, consistent with the certificate of incorporation and
by-laws of the Company and applicable law.

      

      (i)        Except
as provided in Subsection (ii) and except as the Board may otherwise determine,
the Committee, if any, appointed by the Board to administer the Plan shall
consist of two or more Outside Directors of the Company who: (a) qualify as
“outside directors” within the meaning of Section 162(m) of the Code; (b) meet
such other requirements as may be established from time to time by the
Securities and Exchange Commission for plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the Exchange Act; and (c) comply with
the independence requirements of the stock exchange on which the Common Stock is
listed.

      

      (ii)        The
Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not be Outside
Directors, who may administer the Plan with respect to employees or other
Service Providers who are not officers or directors of the Company, may grant
Awards under the Plan to such employees or other Service Providers, and may
determine all terms of such Awards.

      

      In the
event that the Plan, any Award or any Award Agreement entered into hereunder
provides for any action to be taken by or determination to be made by the Board,
such action may be taken or such determination may be made by the Committee if
the power and authority to do so has been delegated to the Committee by the
Board as provided for in this Section.  Unless otherwise expressly
determined by the Board, any such action or determination by the Committee shall
be final, binding and conclusive.  To the extent permitted by law, the
Committee may delegate its authority under the Plan to a member of the
Board.

       

      
        	
                3.3.    
        

              	
                Terms
      of Awards.

              

      

       

      Subject to the other terms and
conditions of the Plan, the Board shall have full and final authority
to:

      

      (i)          designate
Grantees,

       

      (ii)         determine
the type or types of Awards to be made to a Grantee,

       

      (iii)        determine
the number of shares of Stock to be subject to an Award,

       

      (iv)        establish
the terms and conditions of each Award (including, but not limited to, the
exercise price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, the
treatment of an Award in the event of a change of control, and any terms or
conditions that may be necessary to qualify Options as Incentive Stock
Options),

       

      (v)         prescribe
the form of each Award Agreement evidencing an Award, and

       

      (vi)        amend,
modify, or supplement the terms of any outstanding Award.  Such
authority specifically includes the authority, in order to effectuate the
purposes of the Plan but without amending the Plan, to make or modify Awards to
eligible individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in local law,
tax policy, or custom.  Notwithstanding the foregoing, no amendment,
modification or supplement of any Award shall, without the consent of the
Grantee, impair the Grantee’s rights under such Award.

       

      The
Company may retain the right in an Award Agreement to cause a forfeiture of the
gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any employment

       

      

      
        
          
             

          

          
            4

            
              

            

          

          
             

          

        

      

      

      agreement,
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any
confidentiality obligation with respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee.  Furthermore, the
Company may terminate and cause the forfeiture of an Award if the Grantee is an
employee of the Company or an Affiliate thereof and is terminated for Cause as
defined in the applicable Award Agreement or the Plan, as
applicable.

       

      Furthermore,
if the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, the individuals
subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002 and any Grantee who knowingly engaged in the misconduct, was grossly
negligent in engaging in the misconduct, knowingly failed to prevent the
misconduct or was grossly negligent in failing to prevent the misconduct, shall
reimburse the Company the amount of any payment in settlement of an Award earned
or accrued during the 12-month period following the first public issuance or
filing with the United States Securities and Exchange Commission (whichever
first occurred) of the financial document that contained such material
noncompliance.

       

      Notwithstanding
any other provision of this Plan or any provision of any Award Agreement, if the
Company is required to prepare an accounting restatement, then Grantees shall
forfeit any cash or Stock received in connection with an Award with a Grant Date
on or after May  14,
2009 (or an amount equal to the fair market value of such Stock on the
date of delivery if the Grantee no longer holds the shares of Stock) if pursuant
to the terms of the Award Agreement for such Award, the amount of the Award
earned or the vesting in the Award was explicitly based on the achievement of
pre-established performance goals set forth in the Award Agreement (including
earnings, gains, or other criteria) that are later determined, as a result of
the accounting restatement, not to have been achieved.

       

       

      3.4        No
Repricing.

       

      Other
than pursuant to Section 17
and except in connection with a Corporate Transaction involving the
Company and/or any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, or exchange of shares, notwithstanding any other provision in the
Plan to the contrary, the terms of outstanding Options or SARs may not be
amended without stockholder approval to (i) reduce their Option Price or SAR
Exercise Price, as applicable or (ii) cancel, exchange, substitute, buyout or
surrender such outstanding Options or SARs in exchange for cash, other Awards or
Options or SARs with an Option Price or SAR Exercise Price, as applicable, that
is less than the Option Price or SAR Exercise Price, as applicable, of the
original Options or SARs.

       

       

      3.5        Deferral
Arrangement.

       

      The Board
may permit or require the deferral of any award payment into a deferred
compensation arrangement, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of interest
or dividend equivalents, including converting such credits into deferred Stock
equivalents.  Any such deferrals shall be made in a manner that
complies with Code Section 409A.

       

       

      
        	
                                3.6  

              	
                No
      Liability.

              

      

       

      No member of the Board or of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Award or Award Agreement.

       

      
        	
                                3.7  

              	
                Share
      Issuance/Book-Entry.

              

      

       

      Notwithstanding any provision of this
Plan to the contrary, the issuance of the Stock under the Plan may be evidenced
in such a manner as the Board, in its discretion, deems appropriate, including,
without limitation, book-entry registration or issuance of one or more Stock
certificates.

      

      
        
          
             

          

          
            5

            
              

            

          

          
             

          

        

      

      

      

       

      
        	
                4.  

              	
                STOCK
      SUBJECT TO THE PLAN

              

      

       

       

      4.1        Number
of Shares Available for Awards.

       

      Subject to adjustment as provided in
Section 17 hereof, the number of
shares of Stock available for issuance under the Plan shall be 4,553,061;
provided however, that such number shall be increased by a number of shares of
Stock equal to the number of Shares of Stock subject to option awards that were
previously granted pursuant to the Company’s 2003 Employee Stock Option Plan
that after the effectiveness of the Company’s initial public offering are either
forfeited or not purchased pursuant to the terms of the applicable option award
agreement.  Notwithstanding the preceding sentence and also subject to
adjustment as provided in Section 17 hereof, the aggregate
number of shares of Stock that may be issued as Incentive Stock Options shall
not exceed 4,553,061.  Stock issued or to be issued under the Plan
shall be authorized but unissued shares; or, to the extent permitted by
applicable law, issued shares that have been reacquired by the
Company.

      

       

      4.2        Adjustments
in Authorized Shares.

       

      The Board shall have the right to
substitute or assume Awards in connection with mergers, reorganizations,
separations, or other transactions to which Section 424(a) of the Code applies.
The number of shares of Stock reserved pursuant to Section 4 shall be increased
by the corresponding number of Awards assumed and, in the case of a
substitution, by the net increase in the number of shares of Stock subject to
Awards before and after the substitution.

      

       

      4.3        Share
Usage.

       

      Shares of Stock covered by an Award
shall be counted as used as of the Grant Date.  Any shares of Stock
that are subject to Awards as of the Amendment and Restatement Date shall be
counted against the limit set forth in Section 4.1 as one share of
Stock for every one share of Stock subject to the Award.  Any shares
of Stock that are subject to Awards of Options made on or after the Amendment
and Restatement Date shall be counted against the limit set forth in Section 4.1 as one share of
Stock for every one share of Stock subject to an award of
Options.  With respect to SARs, the number of shares of Stock subject
to an award of SARs will be counted against the aggregate number of shares of
Stock available for issuance under the Plan regardless of the number of shares
of Stock actually issued to settle the SAR upon exercise.  Any shares
of Stock that are subject to Awards other than Options or SARs made after the
Amendment and Restatement Date shall be counted against the limit set forth in
Section 4.1 as 1.29
shares of Stock for every one share of Stock granted.  If any shares
covered by an Award are not purchased or are forfeited or expire, or if an Award
otherwise terminates without delivery of any Stock subject thereto or is settled
in cash in lieu of shares, then the number of shares of Stock counted against
the aggregate number of shares available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, termination or expiration,
again be available for making Awards under the Plan in the same amount as such
shares of Stock were counted against the limit set forth in Section 4.1, provided that any
shares of Stock covered by an Award granted under the Company’s 2003 Employee
Stock Option Plan will again be available for making Awards under the Plan in
the same amount as such shares of Stock were counted against the limits set
forth in such plan.  The number of shares of Stock available for
issuance under the Plan shall not be increased by (i) any shares of Stock
tendered or withheld or Award surrendered in connection with the purchase of
shares of Stock upon exercise of an Option, or (ii) any shares of Stock deducted
or delivered from an Award payment in connection with the Company’s tax
withholding obligations.

       

      
        	
                5.  

              	
                EFFECTIVE
      DATE, DURATION AND AMENDMENTS

              

      

       

       

      
        	
                               
      5.1.  

              	
                Effective
      Date.

              

      

       

      The Plan was originally effective as
of the Effective Date and was approved by the Company’s stockholders on November
2, 2006. The Plan as herein amended and restated shall be effective as of April
1, 2009 (the “Amendment and Restatement Date”), subject to approval of the Plan
by the Company’s stockholders within one year of that date.  Upon
approval of the Plan by the stockholders of the Company as set forth above, all
Awards made under the Plan on or after the Amendment and Restatement Date shall
be fully effective as if the stockholders of the Company had approved the Plan
on the Amendment and Restatement Date.  If the stockholders fail to
approve the

      

      
        
          
             

          

          
            6

            
              

            

          

          
             

          

        

      

      

      Plan
within one year of the Amendment and Restatement Date, any Awards made hereunder
in excess of the number of shares available for Awards under the Plan prior to
its amendment and restatement shall be null and void and of no effect, and the
applicable terms of the Plan shall be the terms in effect immediately prior to
the Amendment and Restatement Date.

      

       

      
        	
                5.2.       

              	
                Term.

              

      

       

      The Plan shall terminate
automatically ten (10) years after May 14, 2009, the date the stockholders
of the Company have approved the amendment and restatement of the plan, and may
be terminated on any earlier date as provided in Section 5.3.

       

      
        	
                5.3.     
       

              	
                Amendment
      and Termination of the Plan.

              

      

       

      The Board may, at any time and from
time to time, amend, suspend, or terminate the Plan as to any shares of Stock as
to which Awards have not been made.  An amendment shall be contingent
on approval of the Company’s stockholders to the extent stated by the Board,
required by applicable law or required by applicable stock exchange listing
requirements.  In addition, an amendment will be contingent on
approval of the Company’s stockholders if the amendment would: (i) materially
increase the benefits accruing to participants under the Plan, (ii) materially
increase the aggregate number of shares of Stock that may be issued under the
Plan, or (iii) materially modify the requirements as to eligibility for
participation in the Plan.  No Awards shall be made after termination
of the Plan.  No amendment, suspension, or termination of the Plan
shall, without the consent of the Grantee, impair rights or obligations under
any Award theretofore awarded under the Plan.

      

       

      
        	
                6.  

              	
                AWARD
      ELIGIBILITY AND LIMITATIONS

              

      

       

       

      
        	
                6.1.     
       

              	
                Service
      Providers and Other Persons.

              

      

       

      Subject to this Section 6, Awards may be made under
the Plan to: (i)  any Service Provider to the Company or of any
Affiliate, including any Service Provider who is an officer or director of the
Company, or of any Affiliate, as the Board shall determine and designate from
time to time and (ii) any other individual whose participation in the Plan is
determined to be in the best interests of the Company by the Board.

       

      
        	
                6.2.     
       

              	
                Successive
      Awards and Substitute Awards.

              

      

       

      An eligible person may receive more
than one Award, subject to such restrictions as are provided
herein.  Notwithstanding Sections 8.1 and 9.1, the Option Price of an
Option or the SAR Exercise Price of a SAR that is a Substitute Award may be less
than 100% of the Fair Market Value of a share of Common Stock on the original
date of grant; provided, that, the Option Price or SAR Exercise Price is
determined in accordance with the principles of Code Section 424 and the
regulations thereunder.

       

      
        	
                6.3.     
       

              	
                Limitation
      on Shares of Stock Subject to Awards and Cash
  Awards.

              

      

       

      During any time when the Company has
a class of equity security registered under Section 12 of the Exchange
Act:

      

        (i) the maximum number of
shares of Stock subject to Options or SARs that can be awarded under the Plan to
any person eligible for an Award under Section 6 hereof is 1,061,224 per
calendar year;

      

        (ii) the maximum number
of shares that can be awarded under the Plan, other than pursuant to an Option
or SAR, to any person eligible for an Award under Section 6 hereof is 1,061,224 per
calendar year; and

      

        (iii) the maximum amount
that may be earned as an Annual Incentive Award or other cash Award in any
calendar year by any one Grantee shall be $3 million and the maximum amount that
may be earned as a Performance Award or other cash Award in respect of a
performance period greater than one year by any one Grantee shall be $6
million.

      

      The preceding limitations in this
Section 6.3 are subject to adjustment
as provided in Section
17
hereof.

      

      
        
          
             

          

          
            7

            
              

            

          

          
             

          

        

      

      

      

       

      
        	
                7.  

              	
                AWARD
      AGREEMENT

              

      

       

      Each Award granted pursuant to the
Plan shall be evidenced by an Award Agreement, in such form or forms as the
Board shall from time to time determine.  Award Agreements granted
from time to time or at the same time need not contain similar provisions but
shall be consistent with the terms of the Plan.  Each Award Agreement
evidencing an Award of Options shall specify whether such Options are intended
to be Non-qualified Stock Options or Incentive Stock Options, and in the absence
of such specification such Options shall be deemed Non-qualified Stock
Options.

       

      
        	
                8.  

              	
                TERMS
      AND CONDITIONS OF OPTIONS

              

      

       

       

      
        	
                8.1.    
        

              	
                Option
      Price.

              

      

       

      The Option Price of each Option shall
be fixed by the Board and stated in the Award Agreement evidencing such
Option.  Except in the case of Substitute Awards, the Option Price of
each Option shall be at least the Fair Market Value on the Grant Date of a share
of Stock; provided, however, that in the
event that a Grantee is a Ten Percent Stockholder, the Option Price of an Option
granted to such Grantee that is intended to be an Incentive Stock Option shall
be not less than 110 percent of the Fair Market Value of a share of Stock on the
Grant Date.   In no case shall the Option Price of any Option be
less than the par value of a share of Stock.

      

       

      
        	
                8.2.     
       

              	
                Vesting.

              

      

       

      Subject to Sections 8.3 and 17.3 hereof, each Option
granted under the Plan shall become exercisable at such times and under such
conditions as shall be determined by the Board and stated in the Award
Agreement.  For purposes of this Section 8.2, fractional numbers of
shares of Stock subject to an Option shall be rounded down to the next nearest
whole number.

       

       

      
        	
                8.3.    
        

              	
                Term.

              

      

       

      Each Option granted under the Plan
shall terminate, and all rights to purchase shares of Stock thereunder shall
cease, (i) upon the expiration of ten years from the date such Option is
granted, (ii) upon the expiration of eleven years from the date such Option is
granted if the Grantee terminates Service due to death in the tenth year of the
Option’s term, or
(iii) under such circumstances and on such date prior thereto as is set forth in
the Plan or as may be fixed by the Board and stated in the Award Agreement
relating to such Option; provided, however, that in the
event that the Grantee is a Ten Percent Stockholder, an Option granted to such
Grantee that is intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five years from its Grant Date.

       

      
        	
                8.4.     
       

              	
                Termination
      of Service.

              

      

       

      Each
Award Agreement shall set forth the extent to which the Grantee shall have the
right to exercise the Option following termination of the Grantee’s
Service.  Such provisions shall be determined in the sole discretion
of the Board, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of
Service.

       

       

      
        	
                8.5.     
       

              	
                Limitations
      on Exercise of Option.

              

      

       

      Notwithstanding any other provision
of the Plan, in no event may any Option be exercised, in whole or in part, prior
to the date the Plan is approved by the stockholders of the Company as provided
herein or after the occurrence of an event referred to in Section 17 hereof which results in
termination of the Option.

       

      
        	
                8.6.     
       

              	
                Method
      of Exercise.

              

      

       

      Subject to the terms of Article 12 and Section 18.3, an Option that
is exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal
office, on the form specified by the Company.  Such notice shall
specify the number of shares of Stock with respect to which the Option is being
exercised and shall be accompanied by payment in full of the Option Price of the
shares for which the Option is being exercised plus the amount (if any) of
federal and/or other taxes which the Company may, in its judgment, be required
to withhold with respect to an Award.

      

      
        
          
             

          

          
            8

            
              

            

          

          
             

          

        

      

      

       

      
        	
                8.7.     
       

              	
                Rights
      of Holders of Options.

              

      

       

      Unless otherwise stated in the
applicable Award Agreement, an individual holding or exercising an Option shall
have none of the rights of a stockholder (for example, the right to receive cash
or dividend payments or distributions attributable to the subject shares of
Stock or to direct the voting of the subject shares of Stock ) until the shares
of Stock covered thereby are fully paid and issued to him.  Except as
provided in Section 17 hereof, no adjustment shall
be made for dividends, distributions or other rights for which the record date
is prior to the date of such issuance.

       

      
        	
                8.8.    
        

              	
                Delivery
      of Stock Certificates.

              

      

       

      Promptly after the exercise of an
Option by a Grantee and the payment in full of the Option Price, such Grantee
shall be entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject to the
Option.

       

      
        	
                8.9.    
        

              	
                Transferability
      of Options.

              

      

       

      Except as provided in Section 8.10, during the lifetime of a
Grantee, only the Grantee (or, in the event of legal incapacity or incompetency,
the Grantee's guardian or legal representative) may exercise an
Option.  Except as provided in Section 8.10, no Option shall be
assignable or transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.

       

      
        	
                8.10.   
       

              	
                Family
      Transfers.

              

      

       

      If authorized in the applicable Award
Agreement, a Grantee may transfer, not for value, all or part of an Option which
is not an Incentive Stock Option to any Family Member.  For the
purpose of this Section
8.10, a “not for
value” transfer is a transfer which is (i) a gift, (ii) a transfer under a
domestic relations order in settlement of marital property rights; or (iii) a
transfer to an entity in which more than fifty percent of the voting interests
are owned by Family Members (or the Grantee) in exchange for an interest in that
entity.  Following a transfer under this Section 8.10, any such Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer.  Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Grantee in
accordance with this Section 8.10 or by will or the laws of
descent and distribution.  The events of termination of Service of
Section 8.4 hereof shall continue to
be applied with respect to the original Grantee, following which the Option
shall be exercisable by the transferee only to the extent, and for the periods
specified, in Section
8.4.

      

       

      
        	
                8.11.   
       

              	
                Limitations
      on Incentive Stock Options.

              

      

       

      An Option shall constitute an
Incentive Stock Option only (i) if the Grantee of such Option is an employee of
the Company or any Subsidiary of the Company; (ii) to the extent specifically
provided in the related Award Agreement; and (iii) to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted) of
the shares of Stock with respect to which all Incentive Stock Options held by
such Grantee become exercisable for the first time during any calendar year
(under the Plan and all other plans of the Grantee’s employer and its
Affiliates) does not exceed $100,000.  This limitation shall be
applied by taking Options into account in the order in which they were
granted.

      

       

      
        	
                8.12.   
       

              	
                Notice
      of Disqualifying Disposition.

              

      

       

      If any Grantee shall make any
disposition of shares of Stock issued pursuant to the exercise of an Incentive
Stock Option under the circumstances described in Code Section 421(b) (relating
to certain disqualifying dispositions), such Grantee shall notify the Company of
such disposition within ten days thereof.

      

      
        
          
             

          

          
            9

            
              

            

          

          
             

          

        

      

      

       

      
        	
                9.  

              	
                TERMS
      AND CONDITIONS OF STOCK APPRECIATION
RIGHTS

              

      

       

       

      
        	
                9.1.     
       

              	
                Right
      to Payment and Grant Price.

              

      

       

      A SAR shall confer on the Grantee to
whom it is granted a right to receive, upon exercise thereof, the excess of (i)
the Fair Market Value of one share of Stock on the date of exercise over (ii)
the SAR Exercise Price as determined by the Board.  The Award
Agreement for a SAR shall specify the SAR Exercise Price, which shall be at
least the  Fair Market Value of a share of Stock on the date of
grant.  SARs may be granted in conjunction with all or part of an
Option granted under the Plan or at any subsequent time during the term of such
Option, in conjunction with all or part of any other Award or without regard to
any Option or other Award; provided that a SAR that is granted subsequent to the
Grant Date of a related Option must have a SAR Exercise Price that is no less
than the Fair Market Value of one share of Stock on the Option Grant
Date.

       

      
        	
                9.2.     
       

              	
                Other
      Terms.

              

      

       

      The Board shall determine at the date
of grant or thereafter, the time or times at which and the circumstances under
which a SAR may be exercised in whole or in part (including based on achievement
of performance goals and/or future service requirements), the time or times at
which SARs shall cease to be or become exercisable following termination of
Service or upon other conditions, the method of exercise, method of settlement,
form of consideration payable in settlement, method by or forms in which Stock
will be delivered or deemed to be delivered to Grantees, whether or not a SAR
shall be in tandem or in combination with any other Award, and any other terms
and conditions of any SAR.

      

       

                      
9.3       Term.

       

      Each SAR granted under the Plan shall
terminate, and all rights thereunder shall cease, (i) upon the expiration of ten
years from the date such SAR is granted, (ii) upon the expiration of eleven
years from the date such SAR is granted if the Grantee terminates Service due to
death in the tenth year of the SAR’s term, or (iii) under such circumstances and
on such date prior thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such SAR.

      

       

                      
9.4       Transferability of
SARs.

       

      Except as provided in Section 9.5, during the
lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetency, the Grantee's guardian or legal representative) may exercise a
SAR. Except as provided in Section 9.5, no SAR shall be
assignable or transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.

      

       

      
        	
                 
      

              	
                9.5      
      

              	
                Family
      Transfers.

              

      

       

      If authorized in the applicable Award
Agreement, a Grantee may transfer, not for value, all or part of a SAR to any
Family Member. For the purpose of this Section 9.5, a “not for value”
transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic
relations order in settlement of marital property rights; or (iii) a transfer to
an entity in which more than fifty percent of the voting interests are owned by
Family Members (or the Grantee) in exchange for an interest in that entity.
Following a transfer under this Section 9.5, any such SAR
shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer. Subsequent transfers of transferred SARs are
prohibited except to Family Members of the original Grantee in accordance with
this Section 9.5 or by will or the laws of
descent and distribution.

      

       

      
        	
                10.  

              	
                TERMS
      AND CONDITIONS OF RESTRICTED STOCK AND STOCK
  UNITS

              

      

       

       

      
        	
                10.1.   
       

              	
                Grant
      of Restricted Stock or Stock Units.

              

      

       

      Awards of Restricted Stock or Stock
Units may be made for no consideration (other than par value of the shares which
is deemed paid by Services already rendered).

      

      
        
          
             

          

          
            10

            
              

            

          

          
             

          

        

      

      

      

       

      
        	
                10.2.  
        

              	
                Restrictions.

              

      

       

      At the time a grant of Restricted
Stock or Stock Units is made, the Board may, in its sole discretion, establish a
period of time (a “restricted period”) applicable to such Restricted Stock or
Stock Units.  Each Award of Restricted Stock or Stock Units may be
subject to a different restricted period.  The Board may, in its sole
discretion, at the time a grant of Restricted Stock or Stock Units is made,
prescribe restrictions in addition to or other than the expiration of the
restricted period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any portion of the
Restricted Stock or Stock Units in accordance with Section 14.1 and 14.2.  Neither
Restricted Stock nor Stock Units may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the restricted period or prior to the
satisfaction of any other restrictions prescribed by the Board with respect to
such Restricted Stock or Stock Units.

      

       

      
        	
                10.3.   
       

              	
                Restricted
      Stock Certificates.

              

      

       

      The Company shall issue, in the name
of each Grantee to whom Restricted Stock has been granted, stock certificates
representing the total number of shares of Restricted Stock granted to the
Grantee, as soon as reasonably practicable after the Grant Date.  The
Board may provide in an Award Agreement that either (i)  the Secretary
of the Company shall hold such certificates for the Grantee’s benefit until such
time as the Restricted Stock is forfeited to the Company or the restrictions
lapse, or (ii)  such certificates shall be delivered to the Grantee,
provided, however, that such
certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement.

       

      
        	
                10.4.  
        

              	
                Rights
      of Holders of Restricted Stock.

              

      

       

      Holders of Restricted Stock shall
have the right to vote such Stock and the right to receive any dividends
declared or paid with respect to such Stock.  The Board may provide
that any dividends paid on Restricted Stock must be reinvested in shares of
Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock, or may be held in escrow until
such time, if at all, that the vesting conditions applicable to such Restricted
Stock have been satisfied.  All distributions, if any, received by a
Grantee with respect to Restricted Stock as a result of any stock split, stock
dividend, combination of shares, or other similar transaction shall be subject
to the restrictions applicable to the original Grant.

       

      
        	
                10.5.   
       

              	
                Rights
      of Holders of Stock Units.

              

      

       

      
        	
                10.5.1.  

              	
                  Voting
      and Dividend Rights.

              

      

       

      Holders of Stock Units shall have no
rights as stockholders of the Company.  The Board may provide in an
Award Agreement evidencing a grant of Stock Units that the holder of such Stock
Units shall be entitled to receive, upon the Company’s payment of a cash
dividend on its outstanding Stock, a cash payment for each Stock Unit held equal
to the per-share dividend paid on the Stock.  Such Award Agreement may
also provide that such cash payment will be deemed reinvested in additional
Stock Units at a price per unit equal to the Fair Market Value of a share of
Stock on the date that such dividend is paid.

      

      
        	
                10.5.2.  

              	
                  Creditor’s
      Rights.

              

      

       

      A holder of Stock Units shall have no
rights other than those of a general creditor of the Company.  Stock
Units represent an unfunded and unsecured obligation of the Company, subject to
the terms and conditions of the applicable Award Agreement.

       

      
        	
                10.6.  
        

              	
                Termination
      of Service.

              

      

       

      Unless the Board otherwise provides
in an Award Agreement or in writing after the Award Agreement is issued, upon
the termination of a Grantee’s Service, any Restricted Stock or Stock Units held
by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed
forfeited.  Upon forfeiture of Restricted Stock or Stock Units, the
Grantee shall have

      

      
        
          
             

          

          
            11

            
              

            

          

          
             

          

        

      

      

      no
further rights with respect to such Award, including but not limited to any
right to vote Restricted Stock or any right to receive dividends with respect to
shares of Restricted Stock or Stock Units.

      

       

      
        	
                10.7.   
       

              	
                Purchase
      of Restricted Stock and Shares Subject to Stock
  Units.

              

      

       

      The
Grantee shall be required, to the extent required by applicable law, to purchase
the Restricted Stock or shares of Stock subject to vested Stock Units from the
Company at a Purchase Price equal to the greater of (i) the aggregate par value
of the shares of Stock represented by such Restricted Stock or Stock Units or
(ii) the Purchase Price, if any, specified in the Award Agreement relating to
such Restricted Stock or Stock Units.  The Purchase Price shall be
payable in a form described in Section 12 or, in the discretion of
the Board, in consideration for past Services rendered to the Company or an
Affiliate.

       

       

      
        	
                10.8.   
       

              	
                Delivery
      of Stock.

              

      

       

      Upon the expiration or termination of
any restricted period and the satisfaction of any other conditions prescribed by
the Board, the restrictions applicable to shares of Restricted Stock or Stock
Units settled in Stock shall lapse, and, unless otherwise provided in the Award
Agreement, a stock certificate for such shares shall be delivered, free of all
such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the
case may be.  Neither the Grantee, nor the Grantee’s beneficiary or
estate, shall have any further rights with regard to a Stock Unit once the share
of Stock represented by the Stock Unit has been delivered.

      

       

      
        	
                11.  

              	
                TERMS
      AND CONDITIONS OF UNRESTRICTED STOCK
AWARDS

              

      

       

      The Board may, in its sole discretion,
grant (or sell at par value or such other higher Purchase Price determined by
the Board) an Unrestricted Stock Award to any Grantee pursuant to which such
Grantee may receive shares of Stock free of any restrictions (“Unrestricted
Stock”) under the Plan.  Unrestricted Stock Awards may be granted or
sold as described in the preceding sentence in respect of past services and
other valid consideration, or in lieu of, or in addition to, any cash
compensation due to such Grantee.

       

       

      
        	
                12.  

              	
                FORM
      OF PAYMENT FOR OPTIONS AND RESTRICTED
STOCK

              

      

       

       

      
        	
                12.1.   
       

              	
                General
      Rule.

              

      

       

      Payment
of the Option Price for the shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company.

       

       

      
        	
                12.2.   
       

              	
                Surrender
      of Stock.

              

      

       

      To the
extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender or attestation to
the Company of shares of Stock, which shall be valued, for purposes of
determining the extent to which the Option Price or Purchase Price has been paid
thereby, at their Fair Market Value on the date of exercise or
surrender.

       

       

      
        	
                12.3.   
       

              	
                Cashless
      Exercise.

              

      

       

      With
respect to an Option only (and not with respect to Restricted Stock), to the
extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price for shares purchased pursuant to the exercise of an
Option may be made all or in part by delivery (on a form acceptable to the
Board) of an irrevocable direction to a licensed securities broker acceptable to
the Company to sell shares of Stock and to deliver all or part of the sales
proceeds to the Company in payment of the Option Price and any withholding taxes
described in Section 18.3.

       

      

      
        
          
             

          

          
            12

            
              

            

          

          
             

          

        

      

      

      

       

       

      
        	
                12.4.   
       

              	
                Other
      Forms of Payment.

              

      

       

      To the
extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to exercise of an Option or the Purchase Price for Restricted
Stock may be made in any other form that is consistent with applicable laws,
regulations and rules, including, without limitation, Service.

       

       

      
        	
                13.  

              	
                TERMS
      AND CONDITIONS OF DIVIDEND EQUIVALENT
RIGHTS

              

      

       

       

      
        	
                13.1.   
       

              	
                Dividend
      Equivalent Rights.

              

      

       

      A Dividend Equivalent Right is an Award
entitling the recipient to receive credits based on cash distributions that
would have been paid on the shares of Stock specified in the Dividend Equivalent
Right (or other award to which it relates) if such shares had been issued to and
held by the recipient.  A Dividend Equivalent Right may be granted
hereunder to any Grantee.  The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant.  Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid
currently, may be held in escrow until such time that any vesting conditions on
such Dividend Equivalent Right lapses, or may be deemed to be reinvested in
additional shares of Stock, which may thereafter accrue additional
equivalents.  Any such reinvestment shall be at Fair Market Value on
the date of reinvestment.  Dividend Equivalent Rights may be settled
in cash or Stock or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the Board.  A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award.  A Dividend Equivalent Right
granted as a component of another Award may also contain terms and conditions
different from such other award.

       

       

      
        	
                13.2.   
       

              	
                Termination
      of Service.

              

      

       

      Except as may otherwise be provided by
the Board either in the Award Agreement or in writing after the Award Agreement
is issued, a Grantee’s rights in all Dividend Equivalent Rights or interest
equivalents shall automatically terminate upon the Grantee’s termination of
Service for any reason.

       

       

      
        	
                14.  

              	
                TERMS
      AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE
  AWARDS

              

      

       

       

      
        	
                14.1.   
       

              	
                Performance
      Conditions.

              

      

       

      The right
of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be
specified by the Board.  The Board may use such business criteria and
other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to determine the amounts
payable under any Award subject to performance conditions, except as limited
under Sections 14.2 hereof in the case of a
Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m).  If and to the extent required under Code Section
162(m), any power or authority relating to a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m), shall be
exercised by the Committee and not the Board.

       

       

      
        	
                14.2.   
       

              	
                Performance
      Awards or Annual Incentive Awards Granted to Designated Covered
      Employees.

              

      

       

      Subject
to the terms and conditions of this Plan, the Committee, at any time and from
time to time, may grant Performance Awards, Annual Incentive Awards or other
cash awards.  If and to the extent that the Committee determines that
any Award to be granted to a Grantee who is designated by the Committee as
likely to be a Covered Employee should qualify as “performance-based
compensation” for purposes of Code Section 162(m), the grant, exercise and/or
settlement of such Award shall be contingent upon achievement of pre-established
performance goals and other terms set forth in this Section 14.2.

       

      
        	
                14.2.1.  

              	
                Performance
      Goals Generally.

              

      

       

      The performance goals for such Awards
shall consist of one or more business criteria and a targeted level or levels of
performance with respect to each of such criteria, as specified by the Committee
consistent with this

      

      
        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

      

      Section 14.2.  Performance
goals shall be objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the requirement that the
level or levels of performance targeted by the Committee result in the
achievement of performance goals being “substantially uncertain.”  The
Committee may determine that such Awards shall be granted, exercised and/or
settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant, exercise and/or
settlement of such Awards.  Performance goals may differ for Awards
granted to any one Grantee or to different Grantees.

      

      
        	
                14.2.2.  

              	
                  Business
      Criteria.

              

      

       

      One or more of the following business
criteria for the Company, on a consolidated basis, and/or with respect to
specified subsidiaries or business units of the Company (except with respect to
the total stockholder return and earnings per share criteria), shall be used
exclusively by the Committee in establishing performance goals for such Awards:
(1) total stockholder return; (2) such total stockholder return as compared to
total return (on a comparable basis) of a publicly available index such as, but
not limited to, the Standard & Poor’s 500 Stock Index; (3) net income; (4)
pretax earnings; (5) earnings, on a consolidated basis or operating basis,
before any, all or none of the following: interest expense, taxes, depreciation,
amortization bonuses, service fees, and extraordinary or special items; (6)
operating margin; (7) earnings per share; (8) return on equity; (9) return on
capital; (10) operating earnings; (11) working capital; (12) ratio of debt to
stockholders’ equity; (13) growth in assets; (14) market share; (15) stock
price; (16) cash flow; (17) sales growth (in general, by type of product and by
type of customer); (18) retained earnings; (19) product development goals; (20)
completion of acquisitions; (21) completion of divestitures and asset sales;
(22) cost or expense reductions; (23) introduction or conversion of product
brands; and (24) achievement of specified management information systems
objectives.  Business criteria may be measured on an absolute basis or
on a relative basis (i.e., performance relative to peer companies) and on a GAAP
or non-GAAP basis.

      

      
        	
                14.2.3.  

              	
                Timing
      For Establishing Performance Goals.

              

      

       

      Performance goals shall be
established not later than the earlier of (i) 90 days after the beginning of any
performance period applicable to such Awards, and (ii) the day on which 25% of
any performance period applicable to such Awards has expired, or at such other
date as may be required or permitted for “performance-based compensation” under
Code Section 162(m).

      

      
        	
                14.2.4.  

              	
                Settlement
      of Awards; Other Terms.

              

      

       

      Settlement of such Awards shall be in
cash, Stock, other Awards or other property, in the discretion of the
Committee.  The Committee may, in its discretion, reduce the amount of
a settlement otherwise to be made in connection with such Awards.  The
Committee shall specify the circumstances in which such Awards shall be paid or
forfeited in the event of termination of Service by the Grantee prior to the end
of a performance period or settlement of Awards.

       

                     
14.2.5.  Evaluation of Performance

       

                 The
Committee may provide in any such Award that any evaluation of performance may
include or exclude any of the following events that occur during a performance
period: (a) asset write-downs; (b) litigation or claim judgments or
settlements; (c) the effect of changes in tax laws, accounting principles,
or other laws or provisions affecting reported results; (d) any
reorganization and restructuring programs; (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30, in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual or quarterly report filed with the
SEC, or in the Company’s press release announcing its annual or quarterly
results of operations filed with the SEC on Form 8-K; (f) acquisitions or
divestitures; and (g) foreign exchange gains and losses. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.

      

      
        
          
             

          

          
            14

            
              

            

          

          
             

          

        

      

      

      

       

      
        	
                14.3.  
        

              	
                Written
      Determinations.

              

      

       

      All
determinations by the Committee as to the establishment of performance goals,
the amount of any potential Performance Awards and as to the achievement of
performance goals relating to Performance Awards, and the amount of any
potential individual Annual Incentive Awards and the amount of final Annual
Incentive Awards, shall be made in writing in the case of any Award intended to
qualify under Code Section 162(m).  To the extent permitted by Section
162(m), the Committee may delegate any responsibility relating to such
Performance Awards or Annual Incentive Awards.

       

       

      
        	
                14.4.   
       

              	
                Status
      of Section 14.2 Awards Under Code Section
  162(m).

              

      

       

      It is the
intent of the Company that Awards under Section 14.2 hereof granted to persons
who are designated by the Committee as likely to be Covered Employees within the
meaning of Code Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute “qualified performance-based
compensation” within the meaning of Code Section 162(m) and regulations
thereunder.  Accordingly, the terms of Section 14.2, including the
definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder.  The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Grantee will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee, at the time of grant of an Award, as likely to be a Covered Employee
with respect to that fiscal year.  If any provision of the Plan or any
agreement relating to such Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements.

       

       

      
        	
                15.  

              	
                PARACHUTE
      LIMITATIONS

              

      

       

      Notwithstanding any other provision of
this Plan or of any other agreement, contract, or understanding heretofore or
hereafter entered into by a Grantee with the Company or any Affiliate, except an
agreement, contract, or understanding that expressly addresses Section 280G or
Section 4999 of the Code (an “Other Agreement”), and notwithstanding any formal
or informal plan or other arrangement for the direct or indirect provision of
compensation to the Grantee (including groups or classes of Grantees or
beneficiaries of which the Grantee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for
the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified
individual,” as defined in Section 280G(c) of the Code, any Option, SAR,
Restricted Stock or Stock Unit held by that Grantee and any right to receive any
payment or other benefit under this Plan shall not become exercisable or vested
(i) to the extent that such right to exercise, vesting, payment, or
benefit, taking into account all other rights, payments, or benefits to or for
the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements,
would cause any payment or benefit to the Grantee under this Plan to be
considered a “parachute payment” within the meaning of Section 280G(b)(2)
of the Code as then in effect (a “Parachute Payment”) and (ii) if, as
a result of receiving a Parachute Payment, the aggregate after-tax amounts
received by the Grantee from the Company under this Plan, all Other Agreements,
and all Benefit Arrangements would be less than the maximum after-tax amount
that could be received by the Grantee without causing any such payment or
benefit to be considered a Parachute Payment.  In the event that the
receipt of any such right to exercise, vesting, payment, or benefit under this
Plan, in conjunction with all other rights, payments, or benefits to or for the
Grantee under any Other Agreement or any Benefit Arrangement would cause the
Grantee to be considered to have received a Parachute Payment under this Plan
that would have the effect of decreasing the after-tax amount received by the
Grantee as described in clause (ii) of the preceding sentence, then those
rights, payments, or benefits under this Plan, any Other Agreements, and any
Benefit Arrangements shall be reduced or eliminated so as to avoid having the
payment or benefit to the Grantee under this Plan be deemed to be a Parachute
Payment.  The Company shall reduce or eliminate the Parachute Payments
by first reducing or eliminating any cash payments benefits (with the payments
to be made furthest in the future being reduced first), then by reducing or
eliminating any accelerated vesting of Options or SARs, then by reducing or
eliminating any accelerated vesting of Restricted Stock or Stock Units, then by
reducing or eliminating any other remaining Parachute Payments.

       

      

      
        
          
             

          

          
            15

            
              

            

          

          
             

          

        

      

      

      

       

       

      
        	
                16.  

              	
                REQUIREMENTS
      OF LAW

              

      

       

       

      
        	
                16.1.  
        

              	
                General.

              

      

       

      The Company shall not be required to
sell or issue any shares of Stock under any Award if the sale or issuance of
such shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation
of any governmental authority, including without limitation any federal or state
securities laws or regulations.  If at any time the Company shall
determine, in its discretion, that the listing, registration or qualification of
any shares  subject to an Award upon any securities exchange or under
any governmental regulatory body is necessary or desirable as a condition of, or
in connection with, the issuance or purchase of shares hereunder, no shares of
Stock may be issued or sold to the Grantee or any other individual exercising an
Option pursuant to such Award unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company, and any delay caused thereby shall in no way
affect the date of termination of the Award.  Without limiting the
generality of the foregoing, in connection with the Securities Act, upon the
exercise of any Option or any SAR that may be settled in shares of Stock or the
delivery of any shares of Stock underlying an Award, unless a registration
statement under such Act is in effect with respect to the shares of Stock
covered by such Award, the Company shall not be required to sell or issue such
shares unless the Board has received evidence satisfactory to it that the
Grantee or any other individual exercising an Option may acquire such
shares  pursuant to an exemption from registration under the
Securities Act.  Any determination in this connection by the Board
shall be final, binding, and conclusive.  The Company may, but shall
in no event be obligated to, register any securities covered hereby pursuant to
the Securities Act.  The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or a SAR or the
issuance of shares of Stock pursuant to the Plan to comply with any law or
regulation of any governmental authority.  As to any jurisdiction that
expressly imposes the requirement that an Option (or SAR that may be settled in
shares of Stock) shall not be exercisable until the shares of Stock covered by
such Option (or SAR) are registered or are exempt from registration, the
exercise of such Option (or SAR) under circumstances in which the laws of such
jurisdiction apply shall be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption.

       

      
        	
                16.2.  
        

              	
                Rule
      16b-3.

              

      

       

      During any time when the Company has
a class of equity security registered under Section 12 of the Exchange Act, it
is the intent of the Company that Awards pursuant to the Plan and the exercise
of Options and SARs granted hereunder will qualify for the exemption provided by
Rule 16b-3 under the Exchange Act.  To the extent that any provision
of the Plan or action by the Board does not comply with the requirements of Rule
16b-3, it shall be deemed inoperative to the extent permitted by law and deemed
advisable by the Board, and shall not affect the validity of the
Plan.  In the event that Rule 16b-3 is revised or replaced, the Board
may exercise its discretion to modify this Plan in any respect necessary to
satisfy the requirements of, or to take advantage of any features of, the
revised exemption or its replacement.

      

       

      
        	
                17.  

              	
                EFFECT
      OF CHANGES IN CAPITALIZATION 

              

      

       

       

      
        	
                17.1.   
       

              	
                Changes
      in Stock.

              

      

       

      If the number of outstanding shares
of Stock is increased or decreased or the shares of Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split,
reverse split, combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring
after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan shall be adjusted
proportionately and accordingly by the Company.   In addition,
the number and kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent practicable, be
the same as immediately before such event.  Any such adjustment in
outstanding Options or SARs shall not change the aggregate Option Price or SAR
Exercise Price payable with respect to shares that are subject to the
unexercised portion of an outstanding Option or SAR, as applicable, but shall
include a corresponding proportionate adjustment in the Option Price or SAR
Exercise Price per share.  The

      

      
        
          
             

          

          
            16

            
              

            

          

          
             

          

        

      

      

      conversion
of any convertible securities of the Company shall not be treated as an increase
in shares effected without receipt of
consideration.   Notwithstanding the foregoing, in the event of
any distribution to the Company's stockholders of securities of any other entity
or other assets (including an extraordinary dividend but excluding a
non-extraordinary dividend of the Company) without receipt of consideration by
the Company, the Company shall, in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards and/or
(ii) the exercise price of outstanding Options and Stock Appreciation Rights to
reflect such distribution.  Notwithstanding the preceding, the Company
may also make provision for the payment of cash or other property in respect of
any outstanding Award.

       

      
        	
                17.2.  
        

              	
                Reorganization
      in Which the Company Is the Surviving Entity Which does not Constitute a
      Corporate Transaction.

              

      

       

      Subject to Section 17.3 hereof, if the Company
shall be the surviving entity in any reorganization, merger, or consolidation of
the Company with one or more other entities which does not constitute a
Corporate Transaction, any Option or SAR theretofore granted pursuant to the
Plan shall pertain to and apply to the securities to which a holder of the
number of shares of Stock subject to such Option or SAR would have been entitled
immediately following such reorganization, merger, or consolidation, with a
corresponding proportionate adjustment of the Option Price or SAR Exercise Price
per share so that the aggregate Option Price or SAR Exercise Price thereafter
shall be the same as the aggregate Option Price or SAR Exercise Price of the
shares remaining subject to the Option or SAR immediately prior to such
reorganization, merger, or consolidation.  Subject to any contrary
language in an Award Agreement evidencing an Award, any restrictions applicable
to such Award shall apply as well to any replacement shares received by the
Grantee as a result of the reorganization, merger or
consolidation.  In the event of a transaction described in this Section 17.2, Stock Units shall be
adjusted so as to apply to the securities that a holder of the number of shares
of Stock subject to the Stock Units would have been entitled to receive
immediately following such transaction.

       

      
        	
                17.3.  
        

              	
                Corporate
      Transaction.

              

      

       

      Subject to the exceptions set forth
in the last sentence of this Section 17.3 and the last sentence of
Section 17.4, upon the occurrence of a
Corporate Transaction:

      

      (i)  all outstanding shares
of Restricted Stock shall be deemed to have vested, and all Stock Units shall be
deemed to have vested and the shares of Stock subject thereto shall be
delivered, immediately prior to the occurrence of such Corporate Transaction,
and

      

      (ii) either of the following two
actions shall be taken:

      

      (A) fifteen days prior to the
scheduled consummation of a Corporate Transaction, all Options and SARs
outstanding hereunder shall become immediately exercisable and shall remain
exercisable for a period of fifteen days, or

      

      (B) the Board may elect, in its sole
discretion, to cancel any outstanding Awards of Options, Restricted Stock, Stock
Units, and/or SARs and pay or deliver, or cause to be paid or delivered, to the
holder thereof an amount in cash or securities having a value (as determined by
the Board acting in good faith), in the case of Restricted Stock or Stock Units,
equal to the formula or fixed price per share paid to holders of shares of Stock
and, in the case of Options or SARs, equal to the product of the number of
shares of Stock subject to the Option or SAR (the “Award Shares”) multiplied by
the amount, if any, by which (I) the formula or fixed price per share paid to
holders of shares of Stock pursuant to such transaction exceeds (II) the Option
Price or SAR Exercise Price applicable to such Award Shares.

      

      With respect to the Company's
establishment of an exercise window, (i) any exercise of an Option or SAR during
such fifteen-day period shall be conditioned upon the consummation of the event
and shall be effective only immediately before the consummation of the event,
and (ii) upon consummation of any Corporate Transaction the Plan, and all
outstanding but unexercised Options and SARs shall terminate.  The
Board shall send written notice of an event that will result in such a
termination to all individuals who hold Options and SARs not later than the time
at which the Company gives notice thereof to its stockholders.  This
Section 17.3 shall not apply to any
Corporate

      

      
        
          
             

          

          
            17

            
              

            

          

          
             

          

        

      

      

      Transaction
to the extent that provision is made in writing in connection with such
Corporate Transaction for the assumption or continuation of the Options, SARs,
Stock Units and Restricted Stock theretofore granted, or for the substitution
for such Options, SARs, Stock Units and Restricted Stock for new common stock
options and stock appreciation rights and new common stock stock units and
restricted stock relating to the stock of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number of shares
(disregarding any consideration that is not common stock) and option and stock
appreciation right exercise prices, in which event the Plan, Options, SARs,
Stock Units and Restricted Stock theretofore granted shall continue in the
manner and under the terms so provided.

       

      
        	
                17.4.   
       

              	
                Adjustments.

              

      

       

      Adjustments under this Section 17 related to shares of Stock
or securities of the Company shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.  No fractional
shares or other securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be eliminated in each
case by rounding downward to the nearest whole share. The Board shall determine
the effect of a Corporate Transaction upon Awards other than Options, SARs,
Stock Units and Restricted Stock, and such effect shall be set forth in the
appropriate Award Agreement.  The Board may provide in the Award
Agreements at the time of grant, or any time thereafter with the consent of the
Grantee, for different provisions to apply to an Award in place of those
described in Sections
17.1, 17.2 and 17.3.

       

      
        	
                17.5.  
        

              	
                No
      Limitations on Company.

              

      

       

      The making of Awards pursuant to the
Plan shall not affect or limit in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations, or changes of its capital
or business structure or to merge, consolidate, dissolve, or liquidate, or to
sell or transfer all or any part of its business or assets.

      

       

      
        	
                18.  

              	
                GENERAL
      PROVISIONS

              

      

       

       

      
        	
                18.1.  
        

              	
                Disclaimer
      of Rights.

              

      

       

      No provision in the Plan or in any
Award or Award Agreement shall be construed to confer upon any individual the
right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the
Company either to increase or decrease the compensation or other payments to any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company.  In addition, notwithstanding
anything contained in the Plan to the contrary, unless otherwise stated in the
applicable Award Agreement, no Award granted under the Plan shall be affected by
any change of duties or position of the Grantee, so long as such Grantee
continues to be a director, officer, consultant or employee of the Company or an
Affiliate.  The obligation of the Company to pay any benefits pursuant
to this Plan shall be interpreted as a contractual obligation to pay only those
amounts described herein, in the manner and under the conditions prescribed
herein.  The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any Grantee or beneficiary under the
terms of the Plan.

       

      
        	
                18.2.  
        

              	
                Nonexclusivity
      of the Plan.

              

      

       

      Neither the adoption of the Plan nor
the submission of the Plan to the stockholders of the Company for approval shall
be construed as creating any limitations upon the right and authority of the
Board to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or particular
individuals) as the Board in its discretion determines desirable, including,
without limitation, the granting of stock options otherwise than under the
Plan.

       

      
        	
                18.3.   
       

              	
                Withholding
      Taxes.

              

      

       

      The Company or an Affiliate, as the
case may be, shall have the right to deduct from payments of any kind otherwise
due to a Grantee any federal, state, or local taxes of any kind required by law
to be withheld with respect to the vesting of or other lapse of restrictions
applicable to an Award or upon the issuance of any shares of Stock
upon

      

      
        
          
             

          

          
            18

            
              

            

          

          
             

          

        

      

      

      the
exercise of an Option or otherwise pursuant to any Award.  In
furtherance of the foregoing, the Company may provide in an Award Agreement that
the Grantee shall, as a condition of accepting the Award, direct a bank or
broker, upon vesting, exercise or otherwise, to sell a portion of the Shares
underlying such Award that represent the amount, reasonably determined by the
Company it its discretion, necessary to cover the Company’s withholding
obligation related to the Award and remit the appropriate cash amount to the
Company.  If not otherwise provided in an Award Agreement, at the time
of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the
Affiliate, as the case may be, any amount that the Company or the Affiliate may
reasonably determine to be necessary to satisfy such withholding
obligation.  Subject to the prior approval of the Company or the
Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company or the
Affiliate to withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Affiliate shares of Stock already
owned by the Grantee.  The shares of Stock so delivered or withheld
shall have an aggregate Fair Market Value equal to such withholding
obligations.  The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the
Affiliate as of the date that the amount of tax to be withheld is to be
determined.  A Grantee who has made an election pursuant to this Section 18.3 may satisfy his or her
withholding obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.  The maximum number of shares of Stock that may be
withheld from any Award to satisfy any federal, state or local tax withholding
requirements upon the exercise, vesting, lapse of restrictions applicable to
such Award or payment of shares pursuant to such Award, as applicable, cannot
exceed such number of shares having a Fair Market Value equal to the minimum
statutory amount required by the Company to be withheld and paid to any such
federal, state or local taxing authority with respect to such exercise, vesting,
lapse of restrictions or payment of shares.

       

      
        	
                18.4.  
        

              	
                Captions.

              

      

       

      The use of captions in this Plan or
any Award Agreement is for the convenience of reference only and shall not
affect the meaning of any provision of the Plan or such Award
Agreement.

       

      
        	
                18.5.   
       

              	
                Other
      Provisions.

              

      

       

      Each Award granted under the Plan may
contain such other terms and conditions not inconsistent with the Plan as may be
determined by the Board, in its sole discretion.

       

      
        	
                18.6.  
        

              	
                Number
      and Gender.

              

      

       

      With respect to words used in this
Plan, the singular form shall include the plural form, the masculine gender
shall include the feminine gender, etc., as the context requires.

       

      
        	
                18.7.   
       

              	
                Severability.

              

      

       

      If any provision of the Plan or any
Award Agreement shall be determined to be illegal or unenforceable by any court
of law in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.

       

      
        	
                18.8.  
        

              	
                Governing
      Law.

              

      

       

      The
validity and construction of this Plan and the instruments evidencing the Awards
hereunder shall be governed by the laws of the State of Delaware, other than any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.

       

       

      
        	
                18.9.   
       

              	
                Section
      409A of the Code.

              

      

       

      The Board
intends to comply with Section 409A of the Code ("Section 409A"), or an
exemption to Section 409A, with regard to Awards hereunder that constitute
nonqualified deferred compensation within the meaning of Section
409A.  To the extent that the Board determines that a Grantee would be
subject to the additional

       

      

      
        
          
             

          

          
            19

            
              

            

          

          
             

          

        

      

      

      20% tax
imposed on certain nonqualified deferred compensation plans pursuant to Section
409A as a result of any provision of any Award granted under this Plan, such
provision shall be deemed amended to the minimum extent necessary to avoid
application of such additional tax.  The nature of any such amendment
shall be determined by the Board.

       

      

      *    *    *

      

      To record
adoption of the Plan by the Board as of September 14, 2006, approval of the
Plan by the stockholders on September 14, 2006, the amendment of the Plan
by the Board as of November 2, 2006 (effective as of the first closing of the
Company’s public offering), approval of the amendment of the Plan by the
stockholders on November 2, 2006 (effective as of the first closing of the
Company’s public offering), approval of the amendment and restatement of the
Plan by the Board as of April 1, 2009 and the approval of the amendment and
restatement of the Plan by the stockholders on May 14, 2009, the Company has
caused its authorized officer to execute the Plan.

       

      

      

      DOUBLE-TAKE
SOFTWARE, INC.

      

      

      By:           /s/ S. Craig Huke         

      Title:        Chief Financial Officer  
     

    

     

    
      

      
        
          
             

          

          
            20

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