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                                                                     EXHIBIT 4.2

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                        NATIONAL EQUIPMENT SERVICES, INC.

                                ARTICLE I - NAME

         The name of the corporation is National Equipment Services, Inc.
(hereinafter referred to as the "Corporation").

                         ARTICLE II - REGISTERED OFFICE

         The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle
19805. The name of the registered agent of the Corporation at such address is
The Prentice-Hall Corporation System, Inc.

                              ARTICLE III - PURPOSE

         The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law").

                           ARTICLE IV - CAPITAL STOCK

         Part A. General. The maximum number of shares of capital stock that the
Corporation is authorized to have outstanding at any one time is 110,000,000
shares, consisting of: (i) 10,000,000 shares of Preferred Stock, par value $0.01
per share (the "Preferred Stock") and (ii) 100,000,000 shares of Common Stock,
par value $0.01 per share (the "Common Stock").

         Part B. Preferred Stock. Authority is hereby expressly vested in the
Board of Directors of the Corporation, subject to the provisions of this ARTICLE
IV and to the limitations prescribed by law, to authorize the issuance from time
to time of one or more series of Preferred Stock. The authority of the Board of
Directors with respect to each series shall include, but not be limited to, the
determination or fixing of the following by resolution or resolutions adopted by
the affirmative vote of a majority of the total number of the Directors then in
office:

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                  (1) The designation of such series;

                  (2) The dividend rate of such series, the conditions and dates
upon which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes or series of
the Corporation's capital stock and whether such dividends shall be cumulative
or non-cumulative;

                  (3) Whether the shares of such series shall be subject to
redemption for cash, property or rights, including securities of any other
corporation, by the Corporation or upon the happening of a specified event and,
if made subject to any such redemption, the times or events, prices, rates,
adjustments and other terms and conditions of such redemptions;

                  (4) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series;

                  (5) Whether or not the shares of such series shall be
convertible into, or exchangeable for, at the option of either the holder or the
Corporation or upon the happening of a specified event, shares of any other
class or classes or of any other series of the same class of the Corporation's
capital stock and, if provision be made for conversion or exchange, the times or
events, prices, rates, adjustments and other terms and conditions of such
conversions or exchanges;

                  (6) The restrictions, if any, on the issue or reissue of any
additional Preferred Stock;

                  (7) The rights of the holders of the shares of such series
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; and

                  (8) The provisions as to voting, optional and/or other special
rights and preferences, if any, including, without limitation, the right to
elect one or more Directors.

         Part C. Common Stock. Except as otherwise provided by the Delaware
General Corporation Law or this Restated Certificate of Incorporation (the
"Restated Certificate"), the holders of Common Stock (i) subject to the rights
of holders of any series of Preferred Stock, shall share ratably in all
dividends payable in cash, stock or otherwise and other distributions, whether
in respect of liquidation or dissolution (voluntary or involuntary) or otherwise
and (ii) are subject to all the powers, rights, privileges, preferences and
priorities of any series of Preferred Stock as provided herein or in any
resolution or resolutions adopted by the Board of Directors pursuant to
authority expressly vested in it by the provisions of Part B of this ARTICLE IV.

                  (1) The Common Stock shall not be convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same class of the Corporation's capital stock.

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                  (2) No holder of Common Stock shall have any preemptive,
subscription, redemption, conversion or sinking fund rights with respect to the
Common Stock, or to any obligations convertible (directly or indirectly) into
stock of the Corporation whether now or hereafter authorized.

                  (3) Except as otherwise provided by the Delaware General
Corporation Law or the Restated Certificate and subject to the rights of holders
of any series of Preferred Stock, all of the voting power of the stockholders of
the Corporation shall be vested in the holders of the Common Stock, and each
holder of Common Stock shall have one vote for each share held by such holder on
all matters voted upon by the stockholders of the Corporation.

                              ARTICLE V - EXISTENCE

         The Corporation is to have perpetual existence.

                              ARTICLE VI - BY-LAWS

         In furtherance and not in limitation of the powers conferred by the
Delaware General Corporation Law, the Board of Directors of the Corporation is
expressly authorized to make, alter, amend, change, add to or repeal the By-laws
of the Corporation by the affirmative vote of a majority of the total number of
Directors then in office. Any alteration or repeal of the By-laws of the
Corporation by the stockholders of the Corporation shall require the affirmative
vote of at least a majority of the voting power of the then outstanding shares
of capital stock of the Corporation entitled to vote on such alteration or
repeal, subject to ARTICLE IX hereof and ARTICLE VII of the Corporation's
By-laws.

                    ARTICLE VII - STOCKHOLDERS AND DIRECTORS

         Part A. Stockholder Action. Election of Directors need not be by
written ballot unless the By-laws of the Corporation so provide. Subject to any
rights of holders of any series of Preferred Stock, from and after the date on
which the Common Stock of the Corporation is registered pursuant to the Exchange
Act, (i) any action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of stockholders of
the Corporation and may not be effected in lieu thereof by any consent in
writing by such stockholders, (ii) special meetings of stockholders of the
Corporation may be called only by either the Board of Directors pursuant to a
resolution adopted by the affirmative vote of the majority of the total number
of Directors then in office or by the chief executive officer of the Corporation
and (iii) advance notice of stockholder nominations of persons for election to
the Board of Directors of the Corporation and of business to be brought before
any annual meeting of the stockholders by the stockholders of the Corporation
shall be given in the manner provided in the By-laws of the Corporation.

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         Part B. Number of Directors and Term of Office. Subject to any rights
of holders of any series of Preferred Stock to elect additional Directors under
specified circumstances, the number of Directors which shall constitute the
Board of Directors of the Corporation shall be fixed from time to time in the
manner set forth in the By-laws of the Corporation. The Directors of the
Corporation shall be divided into three classes: Class I, Class II and Class
III. Membership in each class shall be as nearly equal in number as possible.
The term of office of the initial Class I Directors shall expire at the annual
election of Directors by the stockholders of the Corporation in 1999, the term
of office of the initial Class II Directors shall expire at the annual election
of Directors by the stockholders of the Corporation in 2000 and the term of
office of the initial Class III Directors shall expire at the annual election of
Directors by the stockholders of the Corporation in 2001, or thereafter when
their respective successors in each case are elected by the stockholders and
qualified, subject however, to prior death, resignation, retirement,
disqualification or removal from office for cause. At each succeeding annual
election of Directors by the stockholders of the Corporation beginning in 1999,
the Directors chosen to succeed those whose terms then expire shall be
identified as being of the same class as the Directors they succeed and shall be
elected for a term expiring at the third succeeding annual election of Directors
by the stockholders of the Corporation, or thereafter when their respective
successors in each case are elected by the stockholders and qualified. If the
number of Directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number of Directors in each class as
nearly equal as possible, and any additional Director of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
shall a decrease in the number of Directors shorten the term of any incumbent
Director.

         Part C. Removal and Resignation. No Director may be removed from office
without cause and without the affirmative vote of the holders of a majority of
the voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of Directors voting
together as a single class; provided, however, that if the holders of any class
or series of Preferred Stock are entitled by the provisions of this Restated
Certificate (it being understood that any references to this Restated
Certificate shall include any duly authorized certificate of designation) to
elect one or more Directors, such Director or Directors so elected may be
removed without cause only by the vote of the holders of a majority of the
outstanding shares of that class or series entitled to vote. Any Director may
resign at any time upon written notice to the Corporation.

         Part D. Vacancies and Newly Created Directorships. Subject to any
rights of holders of any series of Preferred Stock to fill such newly created
Directorships or vacancies, any newly created Directorships resulting from any
increase in the authorized number of Directors and any vacancies in the Board of
Directors resulting from death, resignation, disqualification or removal from
office for cause shall, unless otherwise provided by law or by resolution
approved by the affirmative vote of a majority of the total number of Directors
then in office, be filled only by resolution approved by the affirmative vote of
a majority of the total number of Directors then in office. Any Director so
chosen shall hold office until the next election of the class for which such
Director shall have been chosen, and until his or her successor shall

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have been duly elected and qualified, unless he or she shall resign, die,
become disqualified or be removed for cause.

                        ARTICLE VIII - GENERAL PROVISIONS

         Part A. Dividends. The Board of Directors shall have authority from
time to time to set apart out of any assets of the Corporation otherwise
available for dividends a reserve or reserves as working capital or for any
other purpose or purposes, and to abolish or add to any such reserve or reserves
from time to time as said Board may deem to be in the interest of the
Corporation; and said Board shall likewise have power to determine in its
discretion, except as herein otherwise provided, what part of the assets of the
Corporation available for dividends in excess of such reserve or reserves shall
be declared in dividends and paid to the stockholders of the Corporation.

         Part B. Issuance of Stock. The shares of all classes of stock of the
Corporation may be issued by the Corporation from time to time for such
consideration as from time to time may be fixed by the Board of Directors of the
Corporation, provided that shares of stock having a par value shall not be
issued for a consideration less than such par value, as determined by the Board.
At any time, or from time to time, the Corporation may grant rights or options
to purchase from the Corporation any shares of its stock of any class or classes
to run for such period of time, for such consideration, upon such terms and
conditions, and in such form as the Board of Directors may determine. The Board
of Directors shall have authority, as provided by law, to determine that only a
part of the consideration which shall be received by the Corporation for the
shares of its stock which it shall issue from time to time, shall be capital;
provided, however, that, if all the shares issued shall be shares having a par
value, the amount of the part of such consideration so determined to be capital
shall be equal to the aggregate par value of such shares. The excess, if any, at
any time, of the total net assets of the Corporation over the amount so
determined to be capital, as aforesaid, shall be surplus. All classes of stock
of the Corporation shall be and remain at all times nonassessable.

         The Board of Directors is hereby expressly authorized, in its
discretion, in connection with the issuance of any obligations or stock of the
Corporation (but without intending hereby to limit its general power so to do in
other cases), to grant rights or options to purchase stock of the Corporation of
any class upon such terms and during such period as the Board of Directors shall
determine, and to cause such rights to be evidenced by such warrants or other
instruments as it may deem advisable.

         Part C. Inspection of Books and Records. The Board of Directors shall
have power from time to time to determine to what extent and at what times and
places and under what conditions and regulations the accounts and books of the
Corporation, or any of them, shall be open to the inspection of the
stockholders; and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by the laws of the
State of Delaware, unless and until authorized so to do by resolution of the
Board of Directors or of the stockholders of the Corporation.

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         Part D. Location of Meetings, Books and Records. Except as otherwise
provided in the By-laws, the stockholders of the Corporation and the Board of
Directors may hold their meetings and have an office or offices outside of the
State of Delaware and, subject to the provisions of the laws of the State of
Delaware, may keep the books of the Corporation outside of the State of Delaware
at such places as may, from time to time, be designated by the Board of
Directors.

                             ARTICLE IX - AMENDMENTS

         The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate in the manner now or
hereinafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation. Notwithstanding anything contained in this Restated Certificate to
the contrary, Parts A, B and C of ARTICLE IV, ARTICLE VII, ARTICLE X, and this
ARTICLE IX of this Restated Certificate shall not be altered, amended or
repealed and no provision inconsistent therewith shall be adopted without the
affirmative vote of the holders of at least 80% of the voting power of the then
outstanding shares of capital stock of the Corporation entitled to vote on such
alteration, amendment or repeal, voting together as a single class (other than
any alteration or amendment to Part A of ARTICLE IV that increases the
authorized number of shares of Preferred Stock or Common Stock).

                              ARTICLE X - LIABILITY

         Part A.    Limitation of Liability.

                  (1) To the fullest extent permitted by the Delaware General
Corporation Law as it now exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), and except as otherwise provided in the Corporation's By-laws, no
Director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages arising from a breach of fiduciary duty owed
to the Corporation or its stockholders.

                  (2) Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation shall not adversely affect any right or
protection of a Director of the Corporation existing at the time of such repeal
or modification.

         Part B. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved (including
involvement as a witness) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the Corporation or, while
a Director or officer of the Corporation, is or was serving at the request of
the Corporation as a Director, officer, employee or agent

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of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan (an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a Director or officer or in any other capacity while
serving as a Director or officer, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than permitted
prior thereto), against all expense, liability and loss (including attorneys'
fees, judgments, fines, excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a Director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in Part C of this ARTICLE X with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The
right to indemnification conferred in this Part B of this ARTICLE X shall be
a contract right and shall include the obligation of the Corporation to pay
the expenses incurred in defending any such proceeding in advance of its
final disposition (an "advance of expenses"); provided, however, that, if and
to the extent that the Delaware General Corporation Law requires, an advance
of expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (an "undertaking"), by or on behalf of such indemnitee, to repay
all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (a "final
adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Part B or otherwise. The Corporation may, by action
of its Board of Directors, provide indemnification to employees and agents of
the Corporation with the same or lesser scope and effect as the foregoing
indemnification of Directors and officers.

         Part C. Procedure for Indemnification. Any indemnification of a
Director or officer of the Corporation or advance of expenses under Part B of
this ARTICLE X shall be made promptly, and in any event within forty-five days
(or, in the case of an advance of expenses, twenty days), upon the written
request of the Director or officer. If a determination by the Corporation that
the Director or officer is entitled to indemnification pursuant to this ARTICLE
X is required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have approved
the request. If the Corporation denies a written request for indemnification or
advance of expenses, in whole or in part, or if payment in full pursuant to such
request is not made within forty-five days (or, in the case of an advance of
expenses, twenty days), the right to indemnification or advances as granted by
this ARTICLE X shall be enforceable by the Director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the Corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for the advance of expenses where the undertaking required pursuant to
Part B of this ARTICLE X, if any, has been tendered

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to the Corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but the burden of
such defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct. The procedure for indemnification of
other employees and agents for whom indemnification is provided pursuant to Part
B of this ARTICLE X shall be the same procedure set forth in this Part C for
Directors or officers, unless otherwise set forth in the action of the Board of
Directors providing indemnification for such employee or agent.

         Part D. Insurance. The Corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation or was serving at the request of the
Corporation as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss asserted against him or her and incurred by him or her in any
such capacity, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the Delaware General
Corporation Law.

         Part E. Service for Subsidiaries. Any person serving as a Director,
officer, employee or agent of another corporation, partnership, limited
liability company, joint venture or other enterprise, at least 50% of whose
equity interests are owned by the Corporation (a "subsidiary" for this ARTICLE
X) shall be conclusively presumed to be serving in such capacity at the request
of the Corporation.

         Part F. Reliance. Persons who after the date of the adoption of this
provision become or remain Directors or officers of the Corporation or who,
while a Director or officer of the Corporation, become or remain a Director,
officer, employee or agent of a subsidiary, shall be conclusively presumed to
have relied on the rights to indemnity, advance of expenses and other rights
contained in this ARTICLE X in entering into or continuing such service. The
rights to indemnification and to the advance of expenses conferred in this
ARTICLE X shall apply to claims made against an indemnitee arising out of acts
or omissions which occurred or occur both prior and subsequent to the adoption
hereof.

         Part G. Non-Exclusivity of Rights. The rights to indemnification and to
the advance of expenses conferred in this ARTICLE X shall not be exclusive of
any other right which any person may have or hereafter acquire under this
Restated Certificate or under any statute, by-law, agreement, vote of
stockholders or disinterested Directors or otherwise.

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         Part H. Merger or Consolidation. For purposes of this ARTICLE X,
references to the "Corporation" shall include, in addition to the resulting
Corporation, any constituent Corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
Directors, officers and employees or agents, so that any person who is or was a
Director, officer, employee or agent of such constituent Corporation, or is or
was serving at the request of such constituent Corporation as a Director,
officer, employee or agent of another Corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this ARTICLE X
with respect to the resulting or surviving Corporation as he or she would have
with respect to such constituent Corporation if its separate existence had
continued.

                       ARTICLE XI - BUSINESS COMBINATIONS

         The Corporation expressly elects to be governed by Section 203 of the
Delaware General Corporation Law.

                                    * * * * *

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                        NATIONAL EQUIPMENT SERVICES, INC.

                          CERTIFICATE OF DESIGNATION OF
                          SENIOR REDEEMABLE CONVERTIBLE
        PREFERRED STOCK, SERIES A, SETTING FORTH THE POWERS, PREFERENCES,
     RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF SUCH SERIES OF
                                 PREFERRED STOCK

         Pursuant to Section 151 of the Delaware General Corporation Law,
National Equipment Services, Inc., a Delaware corporation (the
"Corporation"), DOES HEREBY CERTIFY:

         That pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Certificate of Incorporation of the Corporation
(the "Charter"), the Board of Directors of the Corporation on May 13, 1999
duly adopted the following resolution creating a series of Preferred Stock
designated as Senior Redeemable Convertible Preferred Stock, Series A, and
such resolution has not been modified and is in full force and effect on the
date hereof:

         RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Charter, a series of the class of authorized Preferred Stock, par value $0.01
per share, of the Corporation is hereby created and that the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations and restrictions thereof are as
follows:

Section 1.  DESIGNATION AND NUMBER.

            (a) The shares of such series shall be designated as Senior
Redeemable Convertible Preferred Stock, Series A (the "Preferred Stock"). The
number of shares initially constituting the Preferred Stock shall be 100,000,
which number may be decreased (but not increased) by the Board of Directors
without a vote of stockholders; PROVIDED, HOWEVER, that such number may not
be decreased below the number of then outstanding shares of Preferred Stock.

            (b) The Preferred Stock shall, with respect to rights on
liquidation, dissolution or winding up, rank prior to all other classes and
series of Junior Stock (as defined below) of the Corporation now or hereafter
authorized including, without limitation, the Common Stock.

            (c) Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in Section 11 below.

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Section 2.  DIVIDENDS AND DISTRIBUTIONS.

            Each holder of shares of Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors, dividends and
other distributions (including, without limitation, any options, warrants or
other rights to acquire capital stock of the Corporation whether or not
pursuant to a shareholder rights plan, "poison pill" or similar arrangement,
or other property or assets) on a parity with each holder of Common Stock.
Such dividends and distributions shall be payable on each share of Preferred
Stock in an amount equal to the dividends per share payable on the number of
shares of Common Stock into which such share of Preferred Stock would be
convertible under Section 8 on the record date for determining eligibility to
receive such dividends, or if no record date is established, on the date such
dividends are actually paid.

Section 3.  VOTING RIGHTS.

            In addition to any voting rights provided by law, the holders of
shares of Preferred Stock shall have the following voting rights:

            (a) So long as the Preferred Stock is outstanding, each share of
Preferred Stock shall entitle the holder thereof to vote, in person or by
proxy, at a special or annual meeting of stockholders, on all matters voted
on by holders of Common Stock voting together as a single class with other
shares entitled to vote thereon. With respect to any such vote, each share of
Preferred Stock shall entitle the holder thereof to cast that number of votes
per share as is equal to the number of votes that such holder would be
entitled to cast had such holder converted his shares of Preferred Stock into
Common Stock pursuant to Section 8 on the record date for determining the
stockholders of the Corporation eligible to vote on any such matters.

            (b) Unless the consent or approval of a greater number of shares
shall then be required by law, the affirmative vote of the holders of at
least 51% of the outstanding shares of Preferred Stock, voting separately as
a single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to:

                (i) increase the authorized number of shares of Preferred
Stock; and

                (ii) authorize, adopt or approve an amendment to the Charter
that would increase or decrease the par value of the shares of Preferred
Stock, or alter or change the powers, preferences or special rights of the
shares of Preferred Stock, or otherwise affect the rights of the shares of
the Preferred Stock adversely, including, without limitation, the liquidation
preference provisions.

            (c) (i) At each meeting of stockholders at which the holders of
shares of Preferred Stock shall have the right, voting separately as a single
class, to take any action, the presence in person or

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by proxy of the holders of record of one-third of the total number of shares
of Preferred Stock then outstanding and entitled to vote on the matter shall
be necessary and sufficient to constitute a quorum. At any such meeting or at
any adjournment thereof:

                    (A) the absence of a quorum of the holders of shares of
Preferred Stock shall not prevent the election of directors, and the absence
of a quorum of the holders of shares of any other class or series of capital
stock shall not prevent the taking of any action as provided in this Section
3; and

                    (B) in the absence of a quorum of the holders of shares
of Preferred Stock, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of Preferred Stock from time to
time and place to place without notice other than announcement at the meeting
until a quorum shall be present.

                (ii) For taking of any action as provided in Section 3(b) by
the holders of shares of Preferred Stock, each such holder shall have one
vote for each share of such stock standing in his name on the transfer books
of the Corporation as of any record date fixed for such purpose or, if no
such date be fixed, at the close of business on the Business Day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the Business Day next preceding the day on which the
meeting is held; PROVIDED, HOWEVER, that shares of Preferred Stock held by
the Corporation or any Affiliate of the Corporation shall not be deemed to be
outstanding for purposes of taking any action as provided in this Section 3.

Section 4.  CERTAIN RESTRICTIONS.

            (a) Whenever the Corporation shall not have converted Preferred
Stock at a time required by Section 8 or 10, at such time and thereafter
until all conversion obligations provided in Section 8 or 10 that have come
due shall have been satisfied, or whenever the Corporation shall not have
redeemed shares of Preferred Stock at a time required by Section 5, at such
time and thereafter until all redemption obligations provided in Section 5
that have come due shall have been satisfied or all necessary funds have been
set apart for payment, the Corporation shall not: (A) declare or pay
dividends, or make any other distributions, on any shares of Junior Stock
(other than Common Stock) or (B) declare or pay dividends, or make any other
distributions, on any shares of Parity Stock.

            (b) Whenever the Corporation shall not have converted shares of
Preferred Stock at a time required by Section 8 or 10, at such time and
thereafter until all conversion obligations provided in Section 8 or 10 that
have come due shall have been satisfied, or whenever the Corporation shall
not have redeemed shares of Preferred Stock at a time required by Section 5,
at such time and thereafter until all redemption obligations provided in
Section 5 that have come due shall have been satisfied or all necessary funds
have been set apart for payment, the Corporation shall not redeem, purchase
or otherwise acquire

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for consideration any shares of Junior Stock or Parity Stock; PROVIDED,
HOWEVER, that (A) the Corporation may accept shares of any Senior Stock,
Parity Stock or Junior Stock for conversion into Junior Stock and (B) the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any Parity Stock pursuant to any mandatory redemption, put, sinking fund or
other similar obligation contained in such Parity Stock, pro rata with the
Preferred Stock in proportion to the total amount then required to be applied
by the Corporation to redeem, repurchase, or otherwise acquire shares of
Preferred Stock and shares of such Parity Stock.

            (c) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(b), purchase such shares at such
time and in such manner.

Section 5.  REDEMPTION.

            (a) On April 30, 2009 (the "Redemption Date"), the Corporation
shall redeem all of the shares of Preferred Stock then outstanding, at a
price per share (the "Redemption Price") equal to (A) the Stated Value, plus
(B) an amount per share equal to all declared and unpaid dividends thereon,
to the Redemption Date, in immediately available funds.

            (b) Notice of any redemption of shares of Preferred Stock
pursuant to Section 5(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if
such publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 60, days
prior to the date fixed for redemption. In any case, a similar notice shall
be mailed at least 30, but not more than 60, days prior to the date fixed for
redemption to each holder of shares of Preferred Stock to be redeemed, at
such holder's address as it appears on the transfer books of the Corporation.
In order to facilitate the redemption of shares of Preferred Stock, the Board
of Directors may fix a record date for the determination of shares of
Preferred Stock to be redeemed, or may cause the transfer books of the
Corporation for the Preferred Stock to be closed, not more than 60 days or
less than 30 days prior to the date fixed for such redemption.

            (c) At any time after a notice of redemption shall have been
mailed and before the Redemption Date, the Corporation shall deposit for the
benefit of the holders of shares of Preferred Stock to be redeemed the funds
necessary for such redemption with a bank or trust company in the Borough of
Manhattan, The City of New York, having a capital and surplus of at least
$500,000,000. Any moneys so deposited by the Corporation and unclaimed at the
end of two years from the date designated for such redemption shall revert to
the general funds of the Corporation. After such reversion, any such bank or
trust company, upon demand, shall pay over to the Corporation such unclaimed
amounts and thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of shares of Preferred Stock
to be redeemed shall look only to the Corporation for the payment of the
Redemption Price. In the event that moneys are deposited pursuant to this
Section 5(c) in respect of shares of Preferred

                                  -4-

<PAGE>

Stock that are converted in accordance with the provisions of Section 8, such
moneys shall, upon such conversion, revert to the general funds of the
Corporation and, upon demand, such bank or trust company shall pay over to
the Corporation such moneys and shall be relieved of all responsibilities to
the holders of such converted shares in respect thereof. Any interest accrued
on funds deposited pursuant to this Section 5(c) shall be paid from time to
time to the Corporation for its own account.

            (d) Notice of redemption having been given as aforesaid, upon the
deposit of funds pursuant to Section 5(c) in respect of shares of Preferred
Stock to be redeemed pursuant to Section 5(a), notwithstanding that any
certificates for such shares shall not have been surrendered for
cancellation, from and after the Redemption Date (i) the shares represented
thereby shall no longer be deemed outstanding, (ii) the rights to receive
dividends thereon shall cease to accrue and (iii) all rights of the holders
of shares of Preferred Stock to be redeemed shall cease and terminate,
excepting only the right to receive the Redemption Price therefor and the
right to convert such shares into shares of Common Stock until the close of
business on the Redemption Date, in accordance with Section 8; PROVIDED,
HOWEVER, that if the Corporation shall default in the payment of the
Redemption Price, the shares of Preferred Stock that were to be redeemed
shall thereafter be deemed to be outstanding and the holders thereof shall
have all of the rights of a holder of Preferred Stock until such time as such
default shall no longer be continuing or shall have been waived by holders of
at least 51% of the then outstanding shares of Preferred Stock.

Section 6.  REACQUIRED SHARES.

            Any shares of Preferred Stock converted, exchanged, redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares of Preferred Stock shall upon their cancellation become
authorized but unissued shares of preferred stock, par value $.01 per share,
of the Corporation and, upon the filing of an appropriate Certificate of
Designation with the Secretary of State of the State of Delaware, may be
reissued as part of another series of preferred stock, par value $.01 per
share, of the Corporation, but in any event may not be reissued as shares of
Preferred Stock unless all of the shares of Preferred Stock issued on the
Issue Date shall have already been redeemed or converted.

Section 7.  LIQUIDATION, DISSOLUTION OR WINDING UP.

            (a) If the Corporation shall commence a voluntary case under the
United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due or if a
decree or order for relief in respect of the Corporation shall be entered by
a court having juris diction in the premises in an involuntary case under the
United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law of any other country, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other

                                       -5-

<PAGE>

similar official) of the Corporation or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind
up, or if the Corporation shall otherwise liquidate, dissolve or wind up (any
such event, a "Liquidation"), no distribution shall be made to the holders of
shares of Junior Stock unless, prior thereto, the holders of shares of
Preferred Stock shall have received an amount per share of Preferred Stock
equal to the greater of (A) the Stated Value, plus all declared and unpaid
dividends to the date of distribution, or (B) the proceeds in Liquidation
that the holders of Preferred Stock would have received in respect of all
shares of Common Stock issuable to such holders upon conversion of a share of
Preferred Stock owned by such holders, assuming that such share of Preferred
Stock owned by such holders had been converted into shares of Common Stock in
accordance with Section 8 immediately prior to the Liquidation (such greater
amount being the "Preferred Stock Liquidation Amount").

            (b) Notwithstanding the foregoing, if the assets distributable
upon a Liquidation shall be insufficient to pay in full the Preferred Stock
Liquidation Amount on all shares of Preferred Stock outstanding and any
amount payable to the holders of Parity Stock, then all of the assets
available after payment of any amounts payable on the Senior Stock shall be
distributed among the holders of the Preferred Stock and the Parity Stock
ratably in proportion to the respective amounts of the assets to which they
would otherwise be entitled.

            (c) Neither the consolidation or merger of the Corporation with
or into any other Person nor the sale or other distribution to another Person
of all or substantially all the assets, property or business of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up
of the Corporation for purposes of this Section 7.

Section 8.  VOLUNTARY CONVERSION.

            (a) Any holder of Preferred Stock shall have the right, at its
option, at any time and from time to time, to convert, subject to the terms
and provisions of this Section 8, any or all of such holder's shares of
Preferred Stock into such number of fully paid and non-assessable shares of
Common Stock as is equal, subject to Section 8(g), to the product of the
number of shares of Preferred Stock being so converted multiplied by the
quotient of (i) Stated Value divided by (ii) the Conversion Price (as defined
below) then in effect, except that with respect to any shares which shall be
called for redemption, such right shall terminate at the close of business on
the date of redemption for such shares, unless in any such case the
Corporation shall default in payment due upon redemption thereof. The
Conversion Price shall be $13.00, subject to adjustment as set forth in
Section 8(d). Such conversion right shall be exercised by the surrender of
the shares to be converted to the Corporation at any time during usual
business hours at its principal place of business to be maintained by it,
accompanied by written notice that the holder elects to convert such shares
and specifying the name or names (with address) in which a certificate or
certificates for shares of Common Stock are to be issued and (if so required
by the Corporation) by a written instrument or instruments of transfer in
form reasonably satisfactory to the Corporation duly executed by the holder
or its duly authorized legal representative and transfer tax stamps or funds
therefor, if required

                                       -6-

<PAGE>

pursuant to Section 8(k). All shares of Preferred Stock surrendered for
conversion shall be delivered to the Corporation for cancellation and
canceled by it and no shares of Preferred Stock shall be issued in lieu
thereof.

            (b) As promptly as practicable after the surrender, as herein
provided, of any shares of Preferred Stock for conversion pursuant to Section
8(a), the Corporation shall deliver to or upon the written order of the
holder of such shares so surrendered a certificate or certificates
representing the number of fully paid and non-assessable shares of Common
Stock into which such shares of Preferred Stock may be or have been converted
in accordance with the provisions of this Section 8. Subject to the following
provisions of this paragraph and of Section 8(d), such conversion shall be
deemed to have been made immediately prior to the close of business on the
date that such shares of Preferred Stock shall have been surrendered in
satisfactory form for conversion, and the Person or Persons entitled to
receive the Common Stock deliverable upon conversion of such shares of
Preferred Stock shall be treated for all purposes as having become the record
holder or holders of such Common Stock at such time, and such conversion
shall be at the Conversion Price in effect at such time; PROVIDED, HOWEVER,
that no surrender shall be effective to constitute the Person or Persons
entitled to receive the Common Stock deliverable upon such conversion as the
record holder or holders of such Common Stock while the share transfer books
of the Corporation shall be closed (but not for any period in excess of five
days), but such surrender shall be effective to constitute the Person or
Persons entitled to receive such Common Stock as the record holder or holders
thereof for all purposes immediately prior to the close of business on the
next succeeding day on which such share transfer books are open, and such
conversion shall be deemed to have been made at, and shall be made at the
Conversion Price in effect at, such time on such next succeeding day.

            (c) To the extent permitted by law, when shares of Preferred
Stock are converted, all dividends which have been declared and are unpaid on
the Preferred Stock so converted to the date of conversion shall be
immediately due and payable and must accompany the shares of Common Stock
issued upon such conversion.

            (d) The Conversion Price shall be subject to adjustment as
follows:

                (i) If the Corporation shall at any time or from time to time
(A) pay a dividend or make a distribution (other than a dividend or
distribution paid to holders of Preferred Stock in the manner provided in
Section 2) on the outstanding shares of Common Stock in capital stock (which,
for purposes of this Section 8(d) shall include, without limitation, any
options, warrants or other rights to acquire capital stock) of the
Corporation, (B) subdivide the outstanding shares of Common Stock into a
larger number of shares, (C) combine the outstanding shares of Common Stock
into a smaller number of shares or (D) issue any shares of its capital stock
in a reclassification of the Common Stock,

then, and in each such case, the Conversion Price in effect immediately prior
to such event shall be adjusted (and any other appropriate actions shall be
taken by the Corporation) so that the holder of any share of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number
of shares of

                                       -7-

<PAGE>

Common Stock or other securities of the Corporation that such holder would
have owned or would have been entitled to receive upon or by reason of any of
the events described above, had such share of Preferred Stock been converted
immediately prior to the occurrence of such event. An adjustment made
pursuant to this Section 8(d)(i) shall become effective retroactively (A) in
the case of any such dividend or distribution, to a date immediately
following the close of business on the record date for the determination of
holders of Common Stock entitled to receive such dividend or distribution or
(B) in the case of any such subdivision, combination or reclassification, to
the close of business on the day upon which such corporate action becomes
effective.

                (ii) If the Corporation shall at any time or from time to
time issue shares of Common Stock (or securities convertible into or
exchangeable for Common Stock, or any options, warrants or other rights to
acquire shares of Common Stock) for a consideration per share less than the
Conversion Price per share of Common Stock then in effect at the record date
or issuance date, as the case may be (the "Date"), referred to in the
following sentence (treating the price per share of any security convertible
or exchangeable or exercisable into Common Stock as equal to (A) the sum of
the price for such security convertible, exchangeable or exercisable into
Common Stock plus any additional consideration payable (without regard to any
anti-dilution adjustments) upon the conversion, exchange or exercise of such
security into Common Stock divided by (B) the number of shares of Common
Stock initially underlying such convertible, exchangeable or exercisable
security),

then, and in each such case, the Conversion Price then in effect shall be
adjusted by dividing the Conversion Price in effect on the day immediately
prior to the Date by a fraction (x) the numerator of which shall be the sum
of the number of shares of Common Stock outstanding on the Date plus the
number of additional shares of Common Stock issued or to be issued (or the
maximum number into which such convertible or exchangeable securities
initially may convert or exchange or for which such options, warrants or
other rights initially may be exercised) and (y) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding on the
Date plus the number of shares of Common Stock which the aggregate
consideration for the total number of such additional shares of Common Stock
so issued or be issued upon the conversion, exchange or exercise of such
convertible or exchangeable securities or options, warrants or other rights
(plus the aggregate amount of any additional consideration initially payable
upon such conversion, exchange or exercise of such security) would purchase
at the Conversion Price on the Date.

Such adjustment shall be made whenever such shares, securities, options,
warrants or other rights are issued, and shall become effective retroactively
to a date immediately following the close of business (1) in the case of
issuance to stockholders of the Corporation, as such, on the record date for
the determination of stockholders entitled to receive such shares,
securities, options, warrants or other rights and (2) in all other cases, on
the date ("issuance date") of such issuance; PROVIDED that:

                    (A) the determination as to whether an adjustment is
required to be made pursuant to this Section 8(d)(ii) shall be made upon the
issuance of such shares or such convertible or exchangeable securities,
options, warrants or other rights;

                                       -8-

<PAGE>

                    (B) if any convertible or exchangeable securities,
options, warrants or other rights (or any portions thereof) which shall have
given rise to an adjustment pursuant to this Section 8(d)(ii) shall have
expired or terminated without the exercise thereof and/or if by reason of the
terms of such convertible or exchangeable securities, options, warrants or
other rights there shall have been an increase or increases, with the passage
of time or otherwise, in the price payable upon the exercise or conversion
thereof, then the Conversion Price hereunder shall be readjusted (but to no
greater extent than originally adjusted) on the basis of (x) eliminating from
the computation any additional shares of Common Stock corresponding to such
convertible or exchangeable securities, options, warrants or other rights as
shall have expired or terminated, (y) treating the additional shares of
Common Stock, if any, actually issued or issuable pursuant to the previous
exercise of such convertible or exchangeable securities, options, warrants or
other rights as having been issued for the consideration actually received
and receivable therefor and (z) treating any of such convertible or
exchangeable securities, options, warrants or other rights which remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at this time; and

                    (C) no adjustment in the Conversion Price shall be made
pursuant to this Section 8(d)(ii) as a result of any issuance of securities
by the Corporation in respect of which an adjustment to the Conversion Price
is made pursuant to Section 8(d)(i).

              (iii) If the Corporation shall at any time or from time to time
distribute to all holders of shares of its Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the resulting or surviving corporation and the Common Stock is
not changed or exchanged) cash, evidences of indebtedness of the Corporation
or another issuer, securities of the Corporation or another issuer or other
assets (excluding (A) dividends or distributions paid or made in the manner
provided in Section 2, and (B) dividends payable in shares of Common Stock
for which adjustment is made under Section 8(d)(i)) or rights or warrants to
subscribe for or purchase securities of the Corporation (excluding those
referred to in Section 8(d)(ii) or those in respect of which an adjustment in
the Conversion Price is made pursuant to Section 8(d)(i) or (ii)), then, and
in each such case, the Conversion Price then in effect shall be adjusted by
dividing the Conversion Price in effect immediately prior to the date of such
distribution by a fraction (x) the numerator of which shall be the Market
Price of the Common Stock on the record date referred to below and (y) the
denominator of which shall be such Market Price of the Common Stock less the
then Fair Market Value (as determined by the Board of Directors of the
Corporation) of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock (but such denominator not to
be less than one). Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.

               (iv) If the Corporation, at any time or from time to time,
shall take any action affecting its Common Stock similar to or having an
effect similar to any of the actions described in any of

                                       -9-

<PAGE>

Section 8(d)(i) through Section 8(d)(iii), inclusive, or Section 8(h) (but
not including any action described in any such Section) and the Board of
Directors of the Corporation in good faith determines that it would be
equitable in the circumstances to adjust the Conversion Price as a result of
such action, then, and in each such case, the Conversion Price shall be
adjusted in such manner and at such time as the Board of Directors of the
Corporation in good faith determines would be equitable in the circumstances
(such determination to be evidenced in a resolution, a certified copy of
which shall be mailed to the holders of the Preferred Stock).

                (v) Notwithstanding anything herein to the contrary, no
adjustment under this Section 8(d) need be made to the Conversion Price
unless such adjustment would require an increase or decrease of at least 1%
of the Conversion Price then in effect. Any lesser adjustment shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment, which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least 1% of
such Conversion Price. Any adjustment to the Conver sion Price carried
forward and not theretofore made shall be made immediately prior to the
conversion of any shares of Preferred Stock pursuant hereto.

               (vi) Notwithstanding anything herein to the contrary, no
adjustment under this Section 8(d) shall be made (x) upon the sale or grant
of shares of Common Stock or options with respect to Common Stock in an
aggregate amount not to exceed 3,181,419 shares of Common Stock (assuming the
exercise of all such options) to employees or directors of the Corporation or
to other service providers, or upon the issuance of shares of Common Stock
upon exercise of any such options, if the sales price or exercise price
thereof was not less than the Market Price of the Common Stock on the date
such shares of Common Stock or options were sold or granted; PROVIDED, that
in the case of options, Market Price shall be measured as of the time any
such option was granted, not at the time of exercise, or (y) upon any
adjustment in the Conversion Price itself; PROVIDED, that the number set
forth in clause (x) shall be equitably adjusted for subsequent stock splits,
stock combinations, stock dividends and recapitalizations.

            (e) If the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend
or distribution, then thereafter no adjustment in the Conversion Price then
in effect shall be required by reason of the taking of such record.

            (f) Upon any increase or decrease in the Conversion Price, then,
and in each such case, the Corporation promptly shall deliver to each
registered holder of Preferred Stock at least 5 Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice-President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Corporation, setting forth
in reasonable detail the event requiring the adjustment and the method by
which such adjustment was calculated and specifying the increased or
decreased Conversion Price then in effect following such adjustment.

                                      -10-

<PAGE>

            (g) No fractional shares or scrip representing fractional shares
shall be issued upon the conversion of any shares of Preferred Stock. If more
than one share of Preferred Stock shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock issuable
upon conversion thereof shall be computed on the basis of the aggregate
Stated Value of the shares of Preferred Stock so surrendered. If the
conversion of any share or shares of Preferred Stock results in a fraction,
an amount equal to such fraction multiplied by the Current Market Price of
the Common Stock on the Business Day preceding the day of conversion shall be
paid to such holder in cash by the Corporation.

            (h) In case of any capital reorganization or reclassification or
other change of outstanding shares of Common Stock (other than a change in
par value, or from par value to no par value, or from no par value to par
value), or in case of any consolidation or merger of the Corporation with or
into another Person (other than a consolidation or merger in which the
Corporation is the resulting or surviving Person and which does not result in
any reclassification or change of outstanding Common Stock), (any of the
foregoing, a "Transaction"), the Corporation, or such successor or purchasing
Person, as the case may be, shall execute and deliver to each holder of
Preferred Stock at least 10 Business Days prior to effecting any of the
foregoing Transactions a certificate that the holder of each share of
Preferred Stock then outstanding shall have the right thereafter to convert
such share of Preferred Stock into the kind and amount of shares of stock or
other securities (of the Corporation or another issuer) or property or cash
receivable upon such Transaction by a holder of the number of shares of
Common Stock into which such share of Preferred Stock could have been
converted immediately prior to such Transaction. Such certificate shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 8. If, in the
case of any such Transaction, the stock, other securities, cash or property
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities of a Person other than the successor or purchasing Person
and other than the Corporation, which controls or is controlled by the
successor or purchasing Person or which, in connection with such Transaction,
issues stock, securities, other property or cash to holders of Common Stock,
then such certificate also shall be executed by such Person, and such Person
shall, in such certificate, specifically acknowledge the obligations of such
successor or purchasing Person and acknowledge its obligations to issue such
stock, securities, other property or cash to the holders of Preferred Stock
upon conversion of the shares of Preferred Stock as provided above. The
provisions of this Section 8(h) and any equivalent thereof in any such
certificate similarly shall apply to successive Transactions.

            (i)  In case at any time or from time to time:

                 (i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock;

                 (ii) the Corporation shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights or warrants;

                                      -11-

<PAGE>

                (iii) there shall be any reclassification of the Common
Stock, or any consolidation or merger to which the Corporation is a party and
for which approval of any shareholders of the Corporation is required, or any
sale or other disposition of all or substantially all of the assets of the
Corporation; or

                 (iv) there shall be any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;

then the Corporation shall mail to each holder of shares of Preferred Stock
at such holder's address as it appears on the transfer books of the
Corporation, as promptly as possible but in any event at least 10 days prior
to the applicable date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up is expected to become effective. Such
notice also shall specify the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
shares of stock or other securities or property or cash deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.

            (j) The Corporation shall at all times reserve and keep available
for issuance upon the conversion of the Preferred Stock pursuant to Section
8(a) or 10(a), such number of its authorized but unissued shares of Common
Stock as will from time to time be sufficient to permit the conversion of all
outstanding shares of Preferred Stock, and shall take all action required to
increase the authorized number of shares of Common Stock if at any time there
shall be insufficient authorized but unissued shares of Common Stock to
permit such reservation or to permit the conversion of all outstanding shares
of Preferred Stock.

            (k) The issuance or delivery of certificates for Common Stock
upon the conversion of shares of Preferred Stock pursuant to Section 8(a) or
10(a) shall be made without charge to the converting holder of shares of
Preferred Stock for such certificates or for any tax in respect of the
issuance or delivery of such certificates or the securities represented
thereby, and such certificates shall be issued or delivered in the respective
names of, or (subject to compliance with the applicable provisions of federal
and state securities laws) in such names as may be directed by, the holders
of the shares of Preferred Stock converted; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificate in a name other than that of the holder of the shares of
Preferred Stock converted, and the Corporation shall not be required to issue
or deliver such certificate unless or until the Person or Persons requesting
the issuance or delivery thereof shall have paid to the Corporation the
amount of such tax or shall have established to the reasonable satisfaction
of the Corporation that such tax has been paid.

                                      -12-

<PAGE>

Section 9.  CERTAIN REMEDIES.

            Any registered holder of Preferred Stock shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Certificate of Designation and to enforce specifically the terms and
provisions of this Certificate of Designation in any court of the United
States or any state thereof having jurisdiction, this being in addition to
any other remedy to which such holder may be entitled at law or in equity.

Section 10.  MANDATORY CONVERSION.

             (a) If at any time after one year from the Issue Date, the
arithmetic average of the Market Price of the Common Stock over a 60
consecutive Trading Day period equals or exceeds $20.00 (adjusted for stock
splits, stock dividends or combinations), then on the Business Day specified
by the Corporation occurring no more than 60 days after the end of such 60
Trading Day period (the "Mandatory Conversion Date") the Corporation shall
have the right, at its sole option and election, on not less than 30 days
notice of the Mandatory Conversion Date to require all the holders of
Preferred Stock to covert all (but not less than all) of their shares of
Preferred Stock into such number of fully paid and non-assessable shares of
Common Stock as is equal, subject to Section 8(g), to the product of the
number of shares of Preferred Stock being so converted multiplied by the
quotient of (i) the Stated Value per share divided by (ii) the Conversion
Price in effect on the date of conversion pursuant to this Section 10 (the
"Mandatory Conversion").

            (b) Within 20 Business Days of the Mandatory Conversion Date, the
Corporation shall deliver to each holder of Preferred Stock being converted
(i) an officer's certificate attesting to the satisfaction of the condition
precedent to the Mandatory Conversion and (ii) a certificate or certificates
representing the number of fully paid and non-assessable shares of Common
Stock into which such shares of Preferred Stock may be or have been converted
in accordance with this Section 10. Subject to the following provisions of
this paragraph, such conversion shall be deemed to have been made immediately
prior to the close of business on the Mandatory Conversion Date, and the
Person or Persons entitled to receive the Common Stock deliverable upon
conversion of such shares of Preferred Stock shall be treated for all
purposes as having become the record holder or holders of such Common Stock
at such time, and such conversion shall be at the Conversion Price in effect
at such time; PROVIDED, HOWEVER, that no surrender shall be effective to
constitute the Person or Persons entitled to receive the Common Stock
deliverable upon such conversion as the record holder or holders of such
Common Stock while the share transfer books of the Corporation shall be
closed (but not for any period in excess of five days), but such surrender
shall be effective to constitute the Person or Persons entitled to receive
such Common Stock as the record holder or holders thereof for all purposes
immediately prior to the close of business on the next succeeding day on
which such share transfer books are open, and such conversion shall be deemed
to have been made at, and shall be made at the Conversion Price in effect at,
such time on such next succeeding day.

                                      -13-

<PAGE>

            (c) To the extent permitted by law, when shares of Preferred
Stock are converted, all dividends declared and unpaid on the Preferred Stock
so converted to the date of conversion shall be immediately due and payable
and must accompany the shares of Common Stock issued upon such conversion.

            (d) Notice of a conversion of shares of Preferred Stock pursuant
to Section 10(a) shall be given by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 60, days
prior to the Mandatory Conversion Date and a similar notice shall be mailed
at least 30, but not more than 60 days prior to the Mandatory Conversion Date
to each holder at such holder's address as it appears on the transfer books
of the Corporation. In order to facilitate the conversion of shares of
Preferred Stock hereunder the Board of Directors may fix a record date for
the determination of shares of Preferred Stock to be converted, or may cause
the transfer books of the Corporation for the Preferred Stock to be closed,
not more than 60 or less than 30 days prior to the Mandatory Conversion Date.

            (e) Unless otherwise agreed, on or prior to the Mandatory
Conversion Date, the Corporation shall deposit for the benefit of the holders
of shares of Preferred Stock to be exchanged the shares of Common Stock and
cash in the amount of declared and unpaid dividends (the "Dividends")
necessary for such exchange with a bank or trust company in the Borough of
Manhattan, The City of New York, having a capital and surplus of at least
$500,000,000. Any shares of Common Stock and Dividends so deposited by the
Corporation and unclaimed at the end of two years from the date designated
for such exchange shall revert to the Corporation. After such reversion, any
such bank or trust company shall, upon demand, return to the Corporation such
unclaimed shares of Common Stock and Dividends and thereupon such bank or
trust company shall be relieved of all responsibility in respect thereof and
any holder of shares of Preferred Stock to be converted shall look only to
the Corporation for the delivery of the shares of Common Stock and Dividends.
In the event that shares of Common Stock and Dividends are deposited pursuant
to this Section 10(e) in respect of shares of Preferred Stock that are
converted prior to the Mandatory Conversion Date in accordance with the
provisions of Section 8, such shares of Common Stock and Dividends shall,
upon such conversion, revert to the Corporation and, upon demand, such bank
or trust company shall return to the Corporation such shares of Common Stock
and Dividends and shall be relieved of all responsibilities to the holders of
such converted shares in respect thereof. Any dividends accrued on shares of
Common Stock deposited pursuant to this Section 10(e) shall accrue for the
accounts of, and be payable to, the holders of shares of Preferred Stock to
be exchanged therefor. Any interest accruing on the Dividends shall be for
the benefit and be payable to the Corporation.

            (f) Notice of Mandatory Conversion having been given as
aforesaid, upon the deposit of shares of Common Stock and Dividends pursuant
to Section 10(e) in respect of shares of Preferred Stock to be converted
pursuant to Section 10(a), notwithstanding that any certificates for such
shares shall not have been surrendered for cancellation, from and after the
Mandatory Conversion Date (i) the shares represented thereby shall no longer
be deemed outstanding, (ii) the rights to receive dividends thereon shall

                                      -14-

<PAGE>

cease to accrue, and (iii) all rights of the holders of shares of Preferred
Stock to be converted shall cease and terminate, excepting only the right to
receive the shares of Common Stock and Dividends and the right to convert
such Preferred Stock into shares of Common Stock until the close of business
on the Mandatory Conversion Date, in accordance with Section 8; PROVIDED,
HOWEVER, that if the Corporation shall default in the execution and delivery
of the shares of Common Stock or Dividends, the shares of Preferred Stock
that were to be converted shall thereafter be deemed to be outstanding and
the holders thereof shall have all of the rights of a holder of Preferred
Stock until such time as such default shall no longer be continuing or shall
have been waived by holders of at least 51% of the then outstanding shares of
Preferred Stock.

Section 11. DEFINITIONS.

            For the purposes of this Certificate of Designation of Preferred
Stock, the following terms shall have the meanings indicated:

            "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act; PROVIDED
that "Affiliate" shall not include any purchaser under the Stock Purchase
Agreement or any Affiliate of any such purchaser.

            "Business Day" shall mean any day other than a Saturday, Sunday
or other day on which commercial banks in The City of New York, New York are
authorized or required by law or executive order to close.

            "Common Stock" shall mean the common stock, par value $.01 per
share, and each other class of capital stock, of the Corporation that does
not have a preference over any other class of capital stock of the
Corporation as to dividends or upon liquidation, dissolution or winding up of
the Corporation and, in each case, shall include any other class of capital
stock of the Corporation into which such stock is reclassified or
reconstituted.

            "Current Market Price" per share shall mean, on any date
specified herein for the determination thereof, (a) the average daily Market
Price of the Common Stock for those days during the period of 40 days, ending
on such date, which are Trading Days, and (b) if the Common Stock is not then
listed or admitted to trading on any national securities exchange or quoted
in the over-the- counter market, the Market Price on such date.

            "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.

            "Fair Market Value" shall mean the amount which a willing buyer,
under no compulsion to buy, would pay a willing seller, under no compulsion
to sell, in an arm's-length transaction (assuming in the case of Common Stock
(i) that the Common Stock is valued "as if fully distributed" and (ii) no

                                      -15-

<PAGE>

consideration is given for minority investment discounts, or discounts
related to illiquidity or restrictions on transferability).

            "Issue Date" shall mean the original date of issuance of shares
of Preferred Stock to the holders pursuant to the Stock Purchase Agreement.

            "Junior Stock" shall mean any capital stock of the Corporation
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Preferred Stock including, without limitation, the Common
Stock.

            "Market Price" shall mean, per share of Common Stock on any date
specified herein: (a) the closing price per share of the Common Stock on such
date published in THE WALL STREET JOURNAL or, if no such closing price on
such date is published in THE WALL STREET JOURNAL, the average of the closing
bid and asked prices on such date, as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading; (b) if the Common Stock is not then listed or admitted
to trading on any national securities exchange but is designated as a
national market system security, the last trading price of the Common Stock
on such date; or (c) if there shall have been no trading on such date or if
the Common Stock is not so designated, the average of the reported closing
bid and asked prices of the Common Stock on such date as shown by NASDAQ and
reported by any member firm of the NYSE, selected by the Corporation. If
neither (a), (b) or (c) is applicable, Market Price shall mean the Fair
Market Value per share determined in good faith by the Board of Directors of
the Corporation which shall be deemed to be Fair Market Value unless holders
of at least 51% of the outstanding shares of Preferred Stock request that the
Corporation obtain an opinion of a nationally recognized investment banking
firm chosen by such holders (at the Corporation's expense), in which event
Fair Market Value shall be as determined by such investment banking firm.

            "NASDAQ" shall mean the National Market System of the NASDAQ
Stock Market.

            "NYSE" shall mean the New York Stock Exchange, Inc.

            "Parity Stock" shall mean any capital stock of the Corporation,
including the Preferred Stock, ranking on a par (either as to dividends or
upon liquidation, dissolution or winding up) with the Preferred Stock.

            "Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger) of such entity.

            "Senior Stock" shall mean any capital stock of the Corporation
ranking senior (either as to dividends or upon liquidation, dissolution or
winding up) to the Preferred Stock.

                                      -16-

<PAGE>

            "Stated Value" shall mean $1000 per share of Preferred Stock

            "Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated April 27, 1999 between the Corporation, The 1818 Fund III,
L.P. and the other parties signatory thereto, as the same may be amended from
time to time.

            "Subsidiary" shall mean, with respect to any Person, a
corporation or other entity of which 50% or more of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly,
by such Person.

            "Trading Days" shall mean a day on which the national securities
exchanges are open for trading.

Section 12. MODIFICATION OR AMENDMENT.

            Except as specifically set forth herein, modifications or
amendments to this Certificate of Designation may be made by the Corporation
with the consent of the holders of at least 51% of the outstanding shares of
Preferred Stock.

                                      -17-

<PAGE>

            IN WITNESS WHEREOF, National Equipment Services, Inc. has caused
this Certificate to be duly executed in its corporate name on this 13th day
of May, 1999.

                               NATIONAL EQUIPMENT SERVICES, INC.

                               By: /s/ Kevin Rodgers
                                   ------------------------------------------
                                    Name: Kevin Rodgers
                                    Title: President and Chief Executive Officer

                                      -18-<PAGE>

                                                                     EXHIBIT 4.4

                     FIRST AMENDMENT AND RESTATEMENT OF THE
                        NATIONAL EQUIPMENT SERVICES, INC.
                          1998 LONG TERM INCENTIVE PLAN

         1.   PURPOSE.

         This plan shall be known as the National Equipment Services, Inc. 1998
Long Term Incentive Plan (the "PLAN"). The purpose of this Plan shall be to
promote the long term growth and profitability of National Equipment Services,
Inc. (the "COMPANY") and its Subsidiaries by (i) providing certain directors,
officers and key employees of, and certain other key individuals who perform
services for, the Company and its Subsidiaries with incentives to maximize
stockholder value and otherwise contribute to the success of the Company and
(ii) enabling the Company to attract, retain and reward the best available
persons for positions of substantial responsibility. Grants of incentive or
nonqualified stock options, stock appreciation rights ("SARS"), either alone or
in tandem with options, restricted stock, performance awards, or any combination
of the foregoing may be made under this Plan.

         2.   DEFINITIONS.

         (a)  "BOARD OF DIRECTORS" and "BOARD" mean the board of directors of
the Company.

         (b)  "CAUSE" means the occurrence of one of the following events:
(i) conviction of a felony or any crime or offense lesser than a felony
involving the property of the Company or a Subsidiary; (ii) conduct that has
caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; (iii) willful refusal to perform or substantial
disregard of duties properly assigned, as determined by the Company; or (iv)
breach of duty of loyalty to the Company or a Subsidiary or other act of
fraud or dishonesty with respect to the Company or a Subsidiary.

         (c)  "CHANGE IN CONTROL" means the occurrence of one of the
following events:

              (i)   if any "person" or "group" as those terms are used in
    Sections 13(d) and 14(d) of the Exchange Act is or becomes the
    "beneficial owner" (as defined in Rule 13d- 3 under the Exchange Act),
    directly or indirectly, of securities of the Company representing 50% or
    more of the combined voting power of the Company's then outstanding
    securities;

              (ii)  during any period of two consecutive years, individuals
    who at the beginning of such period constituted the Board and any new
    directors whose election by the Board or nomination for election by the
    Company's stockholders was approved by at least two-thirds of the
    directors then still in office who either were directors at the beginning
    of the period or whose election was previously so approved, cease for any
    reason to constitute a majority thereof;

<PAGE>

              (iii) the stockholders of the Company approve a merger or
    consolidation of the Company with any other corporation, other than a
    merger or consolidation (A) which would result in all or a portion of the
    voting securities of the Company outstanding immediately prior thereto
    continuing to represent (either by remaining outstanding or by being
    converted into voting securities of the surviving entity) more than 50%
    of the combined voting power of the voting securities of the Company or
    such surviving entity outstanding immediately after such merger or
    consolidation or (B) by which the corporate existence of the Company is
    not affected and following which the Company's chief executive officer
    and directors retain their positions with the Company (and constitute at
    least a majority of the Board); or

              (iv)  the stockholders of the Company approve a plan of
    complete liquidation of the Company or an agreement for the sale or
    disposition by the Company of all or substantially all the Company's
    assets.

         (d)  "CODE" means the Internal Revenue Code of 1986, as amended.

         (e)  "COMMITTEE" means the Compensation Committee of the Board. The
membership of the Committee shall be constituted so as to comply at all times
with the applicable requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code.

         (f)  "COMMON STOCK" means the Common Stock, par value $.01 per
share, of the Company, and any other shares into which such stock may be
changed by reason of a recapitalization, reorganization, merger,
consolidation or any other change in the corporate structure or capital stock
of the Company.

         (g)  "COMPETITION" is deemed to occur if a person whose employment
with the Company or its Subsidiaries has terminated obtains a position as a
full-time or part-time employee of, as a member of the board of directors of,
or as a consultant or advisor with or to, or acquires an ownership interest
in excess of 5% of, a corporation, partnership, firm or other entity that
engages in any of the businesses of the Company or any Subsidiary with which
the person was involved in a management role at any time during his or her
last five years of employment with or other service for the Company or any
Subsidiary.

         (h)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (i)  "FAIR MARKET VALUE" of a share of Common Stock of the Company
means, with respect to the date in question, the officially-quoted closing
selling price of the stock (or if no selling price is quoted, the bid price)
on the principal securities exchange on which the Common Stock is then listed
for trading (including for this purpose The Nasdaq Stock Market) (the
"MARKET") for the immediately preceding trading day or, if the Common Stock
is not then listed or quoted in the Market, the Fair Market Value shall be
the fair value of the Common Stock determined in good faith by the Board;
provided, however, that when shares received upon exercise of an option are
immediately sold in the open market, the Committee

                                      - 2 -

<PAGE>

may use the net sale price received to determine the Fair Market Value of any
shares used to pay the exercise price or withholding taxes and to compute the
withholding taxes.

         (j)  "INCENTIVE STOCK OPTION" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.

         (k)  "NON-EMPLOYEE DIRECTOR" has the meaning given to such term in
Rule 16b-3 under the Exchange Act.

         (l)  "NONQUALIFIED STOCK OPTION" means any stock option other than
an Incentive Stock Option.

         (m)  "OTHER COMPANY SECURITIES" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock
units or components thereof, debentures, preferred stock, warrants and
securities convertible into or exchangeable for Common Stock or other
property.

         (p)  "PERSON" means a natural person, partnership (whether general
or limited), limited liability company, trust, estate, association,
corporation, custodian, nominee or any other individual or entity in its own
or any representative capacity.

         (n)  "RETIREMENT" means retirement as defined under any Company
pension plan or retirement program or termination of one's employment on
retirement with the approval of the Committee.

         (o)  "SUBSIDIARY" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect
the management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

         3.   ADMINISTRATION.

         This Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer this Plan, in which case the term "COMMITTEE" shall be deemed to
mean the Board for all purposes herein. The Committee shall consist of at
least two Non-Employee Directors (unless the Committee consists of the entire
Board). Subject to the provisions of this Plan, the Committee shall be
authorized to (i) select persons to participate in this Plan, (ii) determine
the form and substance of grants made under this Plan to each participant,
and the conditions and restrictions, if any, subject to which such grants
will be made, (iii) modify the terms of grants made under this Plan, (iv)
interpret this Plan and grants made thereunder, and (v) adopt, amend, or
rescind such rules and regulations, and make such other determinations, for
carrying out this Plan as it may deem appropriate. Decisions of the Committee
on all matters relating to this Plan shall be in the Committee's sole
discretion and shall be conclusive and binding on all parties. The validity,
construction, and effect of this

                                      - 3 -

<PAGE>

Plan and any rules and regulations relating to this Plan shall be determined
in accordance with applicable federal and state laws and rules and
regulations promulgated pursuant thereto. No member of the Committee and no
officer or other director of the Company shall be liable for any action taken
or omitted to be taken by such member, by any other member of the Committee
or by any officer or other director of the Company in connection with the
performance of duties under this Plan, except for such person's own willful
misconduct or as expressly provided by statute.

         The expenses of this Plan shall be borne by the Company. This Plan
shall not be required to establish any special or separate fund or make any
other segregation of assets to assume the payment of any award under this
Plan, and rights to the payment of such awards shall be no greater than the
rights of the Company's general creditors.

         4.   SHARES AVAILABLE FOR THIS PLAN.

         Subject to adjustments as provided in Section 15, an aggregate of
4,461,191 shares of Common Stock (the "SHARES") may be issued pursuant to
this Plan. Such Shares may be in whole or in part authorized and unissued, or
shares which are held by the Company as treasury shares. If any grant under
this Plan expires or terminates unexercised, becomes unexercisable or is
forfeited as to any Shares, such unpurchased or forfeited Shares shall
thereafter be available for further grants under this Plan unless, in the
case of options granted under this Plan, related SARs are exercised.

         Without limiting the generality of the foregoing provisions of this
Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any
other section of this Plan, the Committee may, at any time or from time to
time, and on such terms and conditions (that are consistent with and not in
contravention of the other provisions of this Plan) as the Committee may, in
its sole discretion, determine, enter into agreements (or take other actions
with respect to the options) for new options containing terms (including
exercise prices) more (or less) favorable than the outstanding options.

         5.   PARTICIPATION.

         Participation in this Plan shall be limited to those directors
(including Non-Employee Directors), officers and key employees of, and other
key individuals performing services for, the Company and its Subsidiaries
selected by the Committee. Nothing in this Plan or in any grant thereunder
shall confer any right on a participant to continue in the employ of or the
performance of services for the Company or shall interfere in any way with
the right of the Company to terminate the employment or performance of
services of a participant at any time. By accepting any award under this
Plan, each participant and each person claiming under or through him or her
shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under this Plan by the
Company, the Board or the Committee.

         Incentive Stock Options or Nonqualified Stock Options, SARs , alone
or in tandem with options, restricted stock awards, performance awards, or
any combination thereof, may be granted to such

                                      - 4 -

<PAGE>

persons and for such number of Shares as the Committee shall determine (such
individuals to whom grants are made being sometimes herein called "OPTIONEES"
or "GRANTEES," as the case may be). Determinations made by the Committee
under this Plan need not be uniform and may be made selectively among
eligible individuals under this Plan, whether or not such individuals are
similarly situated. A grant of any type made hereunder in any one year to an
eligible participant shall neither guarantee nor preclude a further grant of
that or any other type to such participant in that year or subsequent years.

         6.   INCENTIVE AND NONQUALIFIED OPTIONS.

         The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination
thereof; provided that the Committee may grant Incentive Stock Options only
to eligible employees of the Company or its subsidiaries (as defined for this
purpose in Section 424(f) of the Code). In any one calendar year, the
Committee shall not grant to any one participant, options or SARs to purchase
a number of shares of Common Stock in excess of 500,000 (as adjusted from
time to time pursuant to Section 15). The options granted shall take such
form as the Committee shall determine, subject to the following terms and
conditions.

         It is the Company's intent that Nonqualified Stock Options granted
under this Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto,
and that any ambiguities in construction be interpreted in order to
effectuate such intent. If an Incentive Stock Option granted under this Plan
does not qualify as such for any reason, then to the extent of such
nonqualification, the stock option represented thereby shall be regarded as a
Nonqualified Stock Option duly granted under this Plan, provided that such
stock option otherwise meets this Plan's requirements for Nonqualified Stock
Options.

         (a)  PRICE. The price per Share deliverable upon the exercise of
each option ("EXERCISE PRICE") shall be established by the Committee, except
that in the case of the grant of any Incentive Stock Option, the exercise
price may not be less than 100% of the Fair Market Value of a share of Common
Stock as of the date of grant of the option, and in the case of the grant of
any Incentive Stock Option to an employee who, at the time of the grant, owns
more than 10% of the total combined voting power of all classes of stock of
the Company or any of its Subsidiaries, the exercise price may not be less
that 110% of the Fair Market Value of a share of Common Stock as of the date
of grant of the option, in each case unless otherwise permitted by Section
422 of the Code.

         (b)  PAYMENT. Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including
check, bank draft or money order), (ii) by delivery of outstanding shares of
Common Stock with a Fair Market Value on the date of exercise equal to the
aggregate exercise price payable with respect to the options' exercise, (iii)
by simultaneous sale through a broker reasonably acceptable to the Committee
of Shares acquired on exercise, as permitted under Regulation T of the
Federal Reserve Board, (iv) by authorizing the Company to withhold from
issuance a number of Shares

                                      - 5 -

<PAGE>

issuable upon exercise of the options which, when multiplied by the Fair
Market Value of a share of Common Stock on the date of exercise is equal to
the aggregate exercise price payable with respect to the options so exercised
or (v) by any combination of the foregoing. Options may also be exercised
upon payment of the exercise price of the Shares to be acquired by delivery
of the optionee's promissory note, but only to the extent specifically
approved by and in accordance with the policies of the Committee.

         In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (ii) above, (A) only a whole number
of share(s) of Common Stock (and not fractional shares of Common Stock) may
be tendered in payment, (B) such grantee must present evidence acceptable to
the Company that he or she has owned any such shares of Common Stock tendered
in payment of the exercise price (and that such tendered shares of Common
Stock have not been subject to any substantial risk of forfeiture) for at
least six months prior to the date of exercise, and (C) Common Stock must be
delivered to the Company. Delivery for this purpose may, at the election of
the grantee, be made either by (A) physical delivery of the certificate(s)
for all such shares of Common Stock tendered in payment of the price,
accompanied by duly executed instruments of transfer in a form acceptable to
the Company, or (B) direction to the grantee's broker to transfer, by book
entry, such shares of Common Stock from a brokerage account of the grantee to
a brokerage account specified by the Company. When payment of the exercise
price is made by delivery of Common Stock, the difference, if any, between
the aggregate exercise price payable with respect to the option being
exercised and the Fair Market Value of the share(s) of Common Stock tendered
in payment (plus any applicable taxes) shall be paid in cash. No grantee may
tender shares of Common Stock having a Fair Market Value exceeding the
aggregate exercise price payable with respect to the option being exercised
(plus any applicable taxes).

         In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (iv) above, (A) only a whole number
of Share(s) (and not fractional Shares) may be withheld in payment and (B)
such grantee must present evidence acceptable to the Company that he or she
has owned a number of shares of Common Stock at least equal to the number of
Shares to be withheld in payment of the exercise price (and that such owned
shares of Common Stock have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise. When
payment of the exercise price is made by withholding of Shares, the
difference, if any, between the aggregate exercise price payable with respect
to the option being exercised and the Fair Market Value of the Share(s)
withheld in payment (plus any applicable taxes) shall be paid in cash. No
grantee may authorize the withholding of Shares having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option
being exercised (plus any applicable taxes). Any withheld Shares shall no
longer be issuable under such option.

         (c)  TERMS OF OPTIONS. The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in
part (i) in the case of a Nonqualified Stock Option or an Incentive Stock
Option (other than as described below), more than ten years and one day from
the date it is granted or (ii) in the case of an Incentive Stock Option, ten
years from the date it is granted; provided, that, in the case of an
Incentive Stock Option granted to an employee who at the time of the grant
owns more than 10% of the

                                      - 6 -

<PAGE>

total combined voting power of all classes of stock of the Company or any of
its Subsidiaries, in no event shall such option be exercisable, if required
by the Code, more than five years from the date it is granted. All rights to
purchase Shares pursuant to an option shall, unless sooner terminated, expire
at the date designated by the Committee. The Committee shall determine the
date on which each option shall become exercisable and may provide that an
option shall become exercisable in installments. The Shares constituting each
installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise
requirements as may be designated by the Committee. Unless otherwise provided
herein or in the terms of the related grant, an optionee may exercise an
option only if he or she is, and has been continuously since the date the
option was granted, a director, officer or employee of, or performed other
services for, the Company or a Subsidiary. Prior to the exercise of an option
and delivery of the Shares represented thereby, the optionee shall have no
rights as a stockholder with respect to any Shares covered by such
outstanding option (including any dividend or voting rights).

         (d)  LIMITATIONS ON GRANTS. If required by the Code, the aggregate
Fair Market Value (determined as of the grant date) of Shares for which an
Incentive Stock Option is exercisable for the first time during any calendar
year under all equity incentive plans of the Company and its Subsidiaries (as
defined in Section 422 of the Code) may not exceed $100,000.

         (e)  TERMINATION OF EMPLOYMENT.

                (i) If a participant ceases to be a director, officer or
    employee of, or to perform other services for, the Company or any
    Subsidiary upon the occurrence of his or her Retirement, (A) all of the
    participant's options and SARs that were exercisable on the date of
    Retirement shall remain exercisable for, and shall otherwise terminate at
    the end of, a period of up to three years after the date of Retirement,
    but in no event after the expiration date of the options or SARs;
    provided that the participant does not engage in Competition during such
    three-year period unless he or she receives written consent to do so from
    the Board or the Committee, and (B) all of the participant's options and
    SARs that were not exercisable on the date of Retirement shall be
    forfeited immediately upon such cessation. Notwithstanding the foregoing,
    Incentive Stock Options not exercised by such participant within 90 days
    after Retirement will cease to qualify as Incentive Stock Options and
    will be treated as Nonqualified Stock Options under this Plan if required
    to be so treated under the Code.

               (ii) If a participant ceases to be a director, officer or
    employee of, or to perform other services for, the Company or a
    Subsidiary due to Cause, all of the participant's options and SARs shall
    be forfeited immediately upon such cessation, whether or not then
    exercisable.

              (iii) Unless otherwise determined by the Committee, if a
    participant ceases to be a director, officer or employee of, or to
    otherwise perform services for, the Company or a Subsidiary for any
    reason other than Retirement or Cause, (A) all of the participant's
    options and

                                      - 7 -

<PAGE>

    SARs that were exercisable on the date of such cessation shall remain
    exercisable for, and shall otherwise terminate at the end of, a period of
    90 days after the date of such cessation, but in no event after the
    expiration date of the options or SARs; provided that the participant
    does not engage in Competition during such 90-day period unless he or she
    receives written consent to do so from the Board or the Committee, and
    (B) all of the participant's options and SARs that were not exercisable
    on the date of such cessation shall be forfeited immediately upon such
    cessation.

         (f)  GRANT OF RELOAD OPTIONS. The Committee may provide (either at
the time of grant or exercise of an option), in its discretion, for the grant
to a grantee who exercises all or any portion of an option ("EXERCISED
OPTIONS") and who pays all or part of such exercise price with shares of
Common Stock, of an additional option (a "RELOAD OPTION") for a number of
shares of Common Stock equal to the sum (the "RELOAD NUMBER") of the number
of shares of Common Stock tendered or withheld in payment of such exercise
price for the Exercised Options plus, if so provided by the Committee, the
number of shares of Common Stock, if any, tendered or withheld by the grantee
or withheld by the Company in connection with the exercise of the Exercised
Options to satisfy any federal, state or local tax withholding requirements.
The terms of each Reload Option, including the date of its expiration and the
terms and conditions of its exercisability and transferability, shall be the
same as the terms of the Exercised Option to which it relates, except that
(i) the grant date for each Reload Option shall be the date of exercise of
the Exercised Option to which it relates and (ii) the exercise price for each
Reload Option shall be the Fair Market Value of the Common Stock on the grant
date of the Reload Option.

         7.   STOCK APPRECIATION RIGHTS.

         The Committee shall have the authority to grant SARs under this
Plan, either alone or to any optionee in tandem with options (either at the
time of grant of the related option or thereafter by amendment to an
outstanding option). SARs shall be subject to such terms and conditions as
the Committee may specify.

         No SAR may be exercised unless the Fair Market Value of a share of
Common Stock of the Company on the date of exercise exceeds the exercise
price of the SAR or, in the case of SARs granted in tandem with options, any
options to which the SARs correspond. Prior to the exercise of the SAR and
delivery of the cash and/or Shares represented thereby, the participant shall
have no rights as a stockholder with respect to Shares covered by such
outstanding SAR (including any dividend or voting rights).

         SARs granted in tandem with options shall be exercisable only when,
to the extent and on the conditions that any related option is exercisable.
The exercise of an option shall result in an immediate forfeiture of any
related SAR to the extent the option is exercised, and the exercise of an SAR
shall cause an immediate forfeiture of any related option to the extent the
SAR is exercised.

         Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market
Value of a share of Common Stock of the Company on

                                      - 8 -

<PAGE>

the date of exercise and the exercise price of the SAR or, in the case of
SARs granted in tandem with options, any option to which the SAR is related,
multiplied by the number of Shares as to which the SAR is exercised. The
Committee shall decide whether such distribution shall be in cash, in Shares
having a Fair Market Value equal to such amount, in Other Company Securities
having a Fair Market Value equal to such amount or in a combination thereof.

         All SARs will be exercised automatically on the last day prior to
the expiration date of the SAR or, in the case of SARs granted in tandem with
options, any related option, so long as the Fair Market Value of a share of
the Company's Common Stock on that date exceeds the exercise price of the SAR
or any related option, as applicable. An SAR granted in tandem with options
shall expire at the same time as any related option expires and shall be
transferable only when, and under the same conditions as, any related option
is transferable.

         8.   RESTRICTED STOCK.

         The Committee may at any time and from time to time grant Shares of
restricted stock under this Plan to such participants and in such amounts as
it determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall
be at least six months except as otherwise provided in the third paragraph of
this Section 8), and the time or times at which such restrictions shall lapse
with respect to all or a specified number of Shares that are part of the
grant.

         The participant will be required to pay the Company the aggregate
par value of any Shares of restricted stock (or such larger amount as the
Board may determine to constitute capital under Section 154 of the Delaware
General Corporation Law, as amended) within ten days of the date of grant,
unless such Shares of restricted stock are treasury shares. Unless otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under this Plan will be held in escrow by the Company on the
participant's behalf during any period of restriction thereon and will bear
an appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor. Except
as otherwise provided by the Committee, during such period of restriction the
participant shall have all of the rights of a holder of Common Stock,
including but not limited to the rights to receive dividends and to vote, and
any stock or other securities received as a distribution with respect to such
participant's restricted stock shall be subject to the same restrictions as
then in effect for the restricted stock.

         Except as otherwise provided by the Committee, at such time as a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company and its Subsidiaries due to Retirement
during any period of restriction, all restrictions on Shares granted to such
participant shall lapse. At such time as a participant ceases to be a
director, officer or employee of, or to otherwise perform services for, the
Company or its Subsidiaries for any other reason, all Shares of restricted
stock granted to such participant on which the restrictions have not lapsed
shall be immediately forfeited to the Company.

                                      - 9 -

<PAGE>

         9.   PERFORMANCE AWARDS.

         Performance awards may be granted on a contingent basis to
participants at any time and from time to time as determined by the
Committee. The Committee shall have complete discretion in determining the
size and composition of performance awards so granted to a participant and
the appropriate period over which performance is to be measured (a
"PERFORMANCE CYCLE"). Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such
unit being determined by the Committee at the time of issuance, and/or (iii)
performance Shares, the value of each such Share being equal to the Fair
Market Value of a share of the Company's Common Stock.

         The value of each performance award may be fixed or it may be
permitted to fluctuate based on a performance factor (e.g., return on equity)
selected by the Committee.

         The Committee shall establish performance goals and objectives for
each performance cycle on the basis of such criteria and objectives as the
Committee may select from time to time, including, without limitation, the
performance of the participant, the Company, one or more of its Subsidiaries
or divisions or any combination of the foregoing. During any performance
cycle, the Committee shall have the authority to adjust the performance goals
and objectives for such cycle for such reasons as it deems equitable.

         The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance
over the performance cycle in relation to the performance goals for such
cycle. The earned portion of a performance award may be paid out in Shares,
cash, Other Company Securities, or any combination thereof, as the Committee
may determine.

         A participant must be a director, officer or employee of, or
otherwise perform services for, the Company or its Subsidiaries at the end of
the performance cycle in order to be entitled to payment of a performance
award issued in respect of such cycle; provided, however, that, except as
otherwise determined by the Committee, if a participant ceases to be a
director, officer or employee of, or to otherwise perform services for, the
Company and its Subsidiaries upon his or her Retirement prior to the end of
the performance cycle, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company's performance over that portion of such cycle.

         10.  WITHHOLDING TAXES.

         (a)  PARTICIPANT ELECTION. Unless otherwise determined by the
Committee, a participant may elect to deliver shares of Common Stock (or have
the Company withhold shares acquired upon exercise of an option or SAR or
deliverable upon grant or vesting of restricted stock, as the case may be) to
satisfy, in whole or in part, the amount the Company is required to withhold
for taxes in connection with the exercise of an option or SAR or the delivery
of restricted stock upon grant or vesting, as the case may be. Such election
must be made on or before the date the amount of tax to be withheld is
determined.

                                     - 10 -

<PAGE>

Once made, the election shall be irrevocable. The fair market value of the
shares to be withheld or delivered will be the Fair Market Value as of the
date the amount of tax to be withheld is determined. In the event a
participant elects to deliver shares of Common Stock pursuant to this Section
10(a), such delivery must be made subject to the conditions and pursuant to
the procedures set forth in Section 6(b) with respect to the delivery of
Common Stock in payment of the exercise price of options.

         (b)  COMPANY REQUIREMENT. The Company may require, as a condition to
any grant or exercise under this Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to
the Company, either pursuant to Section 10(a) or this Section 10(b), of any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or any delivery of Shares. The Company, to the extent
permitted or required by law, shall have the right to deduct from any payment
of any kind (including salary or bonus) otherwise due to a grantee, an amount
equal to any federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or to the delivery of Shares under this
Plan, or to retain or sell without notice a sufficient number of the Shares
to be issued to such grantee to cover any such taxes, the payment of which
has not otherwise been provided for in accordance with the terms of this
Plan; provided that the Company shall not sell any such Shares if such sale
would be considered a sale by such grantee for purposes of Section 16 of the
Exchange Act that is not exempt from matching thereunder.

         11.  WRITTEN AGREEMENT; VESTING.

         Each employee to whom a grant is made under this Plan shall enter
into a written agreement with the Company that shall contain such provisions,
including without limitation vesting requirements, consistent with the
provisions of this Plan, as may be approved by the Committee. Unless the
Committee determines otherwise, no grant under this Plan may be exercised,
and no restrictions relating thereto may lapse, within six months of the date
such grant is made.

         12.  TRANSFERABILITY.

         Unless the Committee determines otherwise, no option, SAR,
performance award, or restricted stock granted under this Plan shall be
transferable by a participant otherwise than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined by the Code. Unless the Committee determines otherwise, an option,
SAR, or performance award may be exercised only by the optionee or grantee
thereof or his guardian or legal representative; provided that Incentive
Stock Options may be exercised by such guardian or legal representative only
if permitted by the Code and any regulations promulgated thereunder.

         13.  LISTING, REGISTRATION AND QUALIFICATION.

         If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject
to any option, SAR, performance award or restricted stock grant is necessary
or desirable as a condition of, or in connection with, the granting of same
or the issue or

                                     - 11 -

<PAGE>

purchase of Shares thereunder, no such option or SAR may be exercised in
whole or in part, no such performance award may be paid out and no Shares may
be issued unless such listing, registration or qualification is effected free
of any conditions not acceptable to the Committee.

         It is the intent of the Company that this Plan comply in all
respects with Section 162(m) of the Code, that awards made hereunder comply
in all respects with Rule 16b-3 under the Exchange Act, that any ambiguities
or inconsistencies in construction of this Plan be interpreted to give effect
to such intention and that if any provision of this Plan is found not to be
in compliance with Section 162(m), such provision shall be deemed null and
void to the extent required to permit this Plan to comply with Section
162(m), as the case may be.

         14.  TRANSFER OF EMPLOYEE.

         The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a
termination of employment if an employee is placed on military or sick leave
or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.

         15.  ADJUSTMENTS.

         In the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, distribution of
assets, or any other change in the corporate structure or shares of the
Company, the Committee shall make such adjustment as it deems appropriate in
the number and kind of Shares or other property reserved for issuance under
this Plan, in the number and kind of Shares or other property covered by
grants previously made under this Plan, and in the exercise price of
outstanding options and SARs. Any such adjustment shall be final, conclusive
and binding for all purposes of this Plan. In the event of any merger,
consolidation or other reorganization in which the Company is not the
surviving or continuing corporation or in which a Change in Control is to
occur, all of the Company's obligations regarding options, SARs, performance
awards, and restricted stock that were granted hereunder and that are
outstanding on the date of such event shall, on such terms as may be approved
by the Committee prior to such event, be (i) assumed by the surviving or
continuing corporation, (ii) canceled in exchange for property (including
cash), and/or (iii) in the case of options, SARs, performance awards, and
restricted stock which are not vested, either (A) canceled for no
consideration or payment of any kind or (B) vested and canceled in exchange
for property (including cash).

         Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a
Change in Control in Section 2(c), the Committee may, in its discretion, (i)
cancel any or all outstanding options under this Plan in consideration for
payment to the holders thereof of an amount equal to the portion of the
consideration that would have been payable to such holders pursuant to such
transaction if their options had been fully exercised immediately prior to
such transaction, less the aggregate exercise price that would have been
payable therefor, or (ii) if the amount that would

                                     - 12 -

<PAGE>

have been payable to the option holders pursuant to such transaction if their
options had been fully exercised immediately prior thereto would be less than
the aggregate exercise price that would have been payable therefor, cancel
any or all such options for no consideration or payment of any kind. Payment
of any amount payable pursuant to the preceding sentence may be made in cash
or, in the event that the consideration to be received in such transaction
includes securities or other property, in cash and/or securities or other
property in the Committee's discretion.

         16.  TERMINATION AND MODIFICATION OF THIS PLAN.

         The Board of Directors or the Committee, without further approval of
the stockholders, may modify or terminate this Plan, except that no
modification shall become effective without prior approval of the
stockholders of the Company if stockholder approval would be required for
continued compliance with the performance-based compensation exception of
Section 162(m) of the Code or any listing requirement of the principal stock
exchange on which the Common Stock is then listed.

         17.  AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THIS PLAN.

         The terms of any outstanding award under this Plan may be amended
from time to time by the Committee in its discretion in any manner that it
deems appropriate (including, but not limited to, acceleration of the date of
exercise of any award and/or payments thereunder or of the date of lapse of
restrictions on Shares); provided that, except as otherwise provided in
Section 15, no such amendment shall adversely affect in a material manner any
right of a participant under the award without his or her written consent.
The Committee may, in its discretion, permit holders of awards under this
Plan to surrender outstanding awards in order to exercise or realize rights
under other awards, or in exchange for the grant of new awards, or require
holders of awards to surrender outstanding awards as a condition precedent to
the grant of new awards under this Plan.

         18.  COMMENCEMENT DATE; TERMINATION DATE.

         The date of commencement of this Plan shall be April 28, 1998,
subject to approval by the shareholders of the Company. In February 2000, the
Committee approved the first amendment and restatement of this Plan, subject
to stockholder approval. Unless previously terminated upon the adoption of a
resolution of the Board terminating this Plan, this Plan shall terminate at
the close of business on April 28, 2008; provided that the Board may, prior
to such termination, extend the term of this Plan for up to five years for
the grant of awards other than Incentive Stock Options. No termination of
this Plan shall materially and adversely affect any of the rights or
obligations of any person, without his or her consent, under any grant of
options or other incentives theretofore granted under this Plan.

         19.  GOVERNING LAW.

         The corporate laws of the State of Delaware will govern all
questions concerning this Plan to the extent such laws are applicable to this
Plan. All other questions concerning the construction, validity

                                     - 13 -

<PAGE>

and interpretation of this Plan will be governed by and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.

                                  *  *  *  *  *

                                     - 14 -

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