Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 4.1  

 
 

RIGHTS AGREEMENT
  
    by and between
  
    EARTHLINK, INC.
  
    and
  
    AMERICAN STOCK TRANSFER & TRUST CO.
  
    as Rights Agent
  
    Dated as of August 6,
2002.    
  

  

 
 

Table of Contents    
  

	 
	 	Page

	Section 1. Certain Definitions	 	1
	

Section 2. Appointment of Rights Agent	
 	

4
	

Section 3. Issue of Rights Certificates	
 	

4
	

Section 4. Form of Rights Certificates	
 	

5
	

Section 5. Countersignature and Registration	
 	

6
	

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

6
	

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

7
	

Section 8. Cancellation and Destruction of Rights Certificates	
 	

9
	

Section 9. Reservation and Availability of Capital Stock	
 	

9
	

Section 10. Preferred Stock Record Date	
 	

10
	

Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	
 	

10
	

Section 12. Certificate of Adjusted Purchase Price or Number of Shares	
 	

16
	

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

16
	

Section 14. Fractional Rights and Fractional Shares	
 	

18
	

Section 15. Rights of Action	
 	

19
	

Section 16. Agreement of Rights Holders	
 	

19
	

Section 17. Rights Certificate Holder Not Deemed a Stockholder	
 	

20
	

Section 18. Concerning the Rights Agent	
 	

20
	

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

21
	

Section 20. Duties of Rights Agent	
 	

21
	

Section 21. Change of Rights Agent	
 	

23
	

Section 22. Issuance of New Rights Certificates	
 	

23
	

Section 23. Redemption and Termination	
 	

24
	

Section 24. Exchange	
 	

24
	

Section 25. Exempted Holder	
 	

25
	

Section 26. Notice of Certain Events	
 	

26
	

Section 27. Notices	
 	

26
	

Section 28. Supplements and Amendments	
 	

27
	

Section 29. Successors	
 	

28
	

Section 30. Determinations and Actions by the Board of Directors, etc.	
 	

28
	

Section 31. Benefits of this Agreement	
 	

28
	

Section 32. Severability	
 	

28
	
 	
 	

 

i

 

	

Section 33. Governing Law	
 	

28
	

Section 34. Counterparts	
 	

29
	

Section 35. Descriptive Headings	
 	

29
	
Exhibits	
 	

 
	

Exhibit A—Form of Certificate of Designation, Preferences and Rights	
 	

 
	

Exhibit B—Form of Rights Certificate	
 	

 
	

Exhibit C—Form of Summary of Rights	
 	

 

ii

  

 
 

RIGHTS AGREEMENT    
  

        This RIGHTS AGREEMENT, dated as of August 6, 2002 (the "Agreement"), is by and between EarthLink, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Co. (the "Rights Agent"). 

 
 

W I T N E S S E T H    
  

        WHEREAS, on August 6, 2002 (the "Rights Dividend Declaration Date"), the Board of Directors of the Company authorized and declared a dividend distribution
of one preferred share purchase right (a "Right") for each share of common stock, par value $.01 per share, of the Company outstanding immediately prior to August 5, 2002 (the "Record Date"),
and has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of Common Stock (as hereinafter
defined) of the Company issued between the Record Date (whether originally issued or delivered from the Company's treasury) and the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one thousandth of a share of Series D Junior Preferred Stock, $.01 par value per share, of the Company having the rights, powers and preferences set forth in
the form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth; 

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

        Section 1.    Certain Definitions.    

        For
purposes of this Agreement, the following terms have the meanings indicated: 

        (a)  "Acquiring
Person" shall mean any Person who or that, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of fifteen percent (15%)
or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or pursuant to the terms of any such plan, (iv) any Person that became the Beneficial Owner of 15% or more of the outstanding
Common Stock as a result of a decrease in the number of outstanding shares of Common Stock caused by a transaction approved by the Board of Directors of the Company, (v) any Person who has
reported such ownership on Schedule 13G under the Securities and Exchange Act of 1934, as amended and in effect on the date of the Agreement (the "Exchange Act") (or any comparable or successor
report) or on Schedule 13D under the Exchange Act (or any comparable or successor report) which Schedule 13G or Schedule 13D does not state any intention to or reserve the right
to control or influence the management or policies of the Company or engage in any of the actions specified in Item 4 of such schedule (other than the disposition of the Common Stock) and, within 10
Business Days of being requested by the Company to advise it regarding the same, certifies to the Company that such Person acquired shares of Common Stock in excess of 15% inadvertently or without
knowledge of the terms of the Rights and who, together with all Affiliates and Associates, thereafter does not acquire any additional shares of Common Stock while being the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding (the "Ownership Certification"); provided, however, that if the Person requested to so provide an
Ownership Certification fails to do so within 10 Business Days, then such Person shall become an Acquiring Person immediately after such 10-Business-Day period, and
(vi) the Exempted Holder, if and only to the extent such Person qualifies for such exemption as set forth in Section 25 hereof and the Governance Agreement referenced therein. 

        (b)  "Act"
shall mean the Securities Act of 1933. 

1

 

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

        (d)  A
Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own" or have "beneficial ownership" of, any securities: 

          (i)  that
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or
only, after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event; 

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

        or

        (iii)  that
are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any voting securities of the Company; provided, however, that
nothing in this paragraph (d) shall cause a person engaged in business as an underwriter of securities to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through
such person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition. 

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

        (f)    "Close
of business" on any given date shall mean 5:00 P.M., Atlanta, Georgia time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 P.M., Atlanta, Georgia time, on the next succeeding Business Day. 

        (g)  "Common
Stock" shall mean the common stock, par value $.01 per share, of the Company, except that "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting power, or the equity 

2

 

securities or other equity interest having power to control or direct the management, of such Person. 

        (h)  "Common
stock equivalents" shall have the meaning set forth in Section 11 (a)(iii) hereof. 

        (i)    "Company"
shall have the meaning set forth in the parties clause at the beginning of this Agreement. 

        (j)    "Current
market price" shall have the meaning set forth in Section 11 (d)(i) hereof. 

        (k)  "Current
Value" shall have the meaning set forth in Section 11 (a)(iii) hereof. 

        (l)    "Distribution
Date" shall have the meaning set forth in Section 3 (a)(ii) hereof. 

        (m)  "Exchange
Act" shall have the meaning set forth in Section 1 (a) hereof. 

        (n)  "Exempted
Holder" shall mean Sprint Corporation, a Kansas corporation, Sprint Communications Company L.P., a Delaware limited partnership, and their respective
Affiliates. 

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

        (p)  "Final
Expiration Date" shall mean the close of business on August 6, 2012 

        (q)  "Person"
shall mean any individual, firm, corporation, partnership or other entity. 

        (r)  "Preferred
Stock" shall mean shares of Series D Junior Preferred Stock, par value $.01 per share, of the Company, and, to the extent that there are not a
sufficient number of shares of Series D Junior Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock, par value $.01 per share, of the
Company designated for such purpose containing terms substantially similar to the terms of the Series D Junior Preferred Stock. 

        (s)  "Principal
Party" shall have the meaning set forth in Section 13 (b) hereof. 

        (t)    "Purchase
Price" shall have the meaning set forth in Section 4 (a) hereof. 

        (u)  "Record
Date" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 

        (v)  "Redemption
Price" shall have the meaning set forth in Section 23 (a) hereof. 

        (w)  "Rights"
shall have the meaning set forth in the WHEREAS clause at the beginning of the Agreement. 

        (x)  "Rights
Agent" shall have the meaning set forth in the parties clause at the beginning of this Agreement. 

        (y)  "Rights
Certificates" shall have the meaning set forth in Section 3 (a)(ii) hereof. 

        (z)  "Rights
Dividend Declaration Date" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 

        (aa) "Section 11
(a)(ii) Event" shall mean the event described in Section 11 (a)(ii) hereof. 

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

        (cc) "Section 13
Event" shall mean any event described in clauses (x), (y) or (z) of Section 13 (a) hereof. 

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

3

 

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

        (ff)  "Subsidiary"
shall mean, with reference to any Person, any corporation of which an amount of voting securities sufficient to elect at least a majority of the directors
of such corporation is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. 

        (gg) "Substitution
Period" shall have the meaning set forth in Section 11 (a)(iii) hereof. 

        (hh) "Summary
of Rights" shall have the meaning set forth in Section 3(b) hereof. 

        (ii)  "Trading
Day" shall have the meaning set forth in Section 11 (d)(i) hereof. 

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

        Section 2.    Appointment of Rights Agent.    

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

        Section 3.    Issue of Rights Certificates.    

        (a)  Until
the earlier of 

          (i)  the
close of business on the tenth Business Day after the Stock Acquisition Date; or 

        (ii)  the
close of business on the tenth Business Day after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding (the earliest of (i) or (ii) being herein referred to as the "Distribution Date"), the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the Company, one or more right certificates, in substantially the form of Exhibit B  hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Right Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14a)) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. 

4

 

        (b)  The
Company will deliver a copy of the Summary of Rights, in substantially the form attached hereto as Exhibit C  (the "Summary of Rights"), to the record holder of the Common Stock as of the Record
Date. With respect to outstanding certificates for the Common Stock as of the Record Date,
until the Distribution Date the Rights will be evidenced by such certificates together with the Summary of Rights, and, until the earlier of the Distribution Date or the Expiration Date (as such term
is defined in Section 7(a) hereof), the transfer of any such certificate (with or without the Summary of Rights) shall also constitute the transfer of the Rights associated with the shares of
Common Stock represented thereby. 

        (c)  Rights
shall be issued in respect of all shares of Common Stock that are issued (whether originally issued or from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date. Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall also be deemed to be certificates for Rights, and shall bear the following legend: 

        "This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between EarthLink, Inc. (the "Company") and American Stock
Transfer & Trust Co., (the "Rights Agent") dated as of August 6, 2002, as amended from time to time (the "Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associates thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null
and void. " 

With
respect to such certificates bearing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock
represented by such
certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. 

        Section 4.    Form of Rights Certificates.    

        (a)  The
Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of one thousandth of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per one thousandth of a share, the "Purchase Price"), but the amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein. 

5

 

        (b)  Any
Rights Certificate issued pursuant to Section 3 or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after such Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person
has any continuing agreement, arrangement or understanding regarding the transferred Rights and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend modified as applicable to apply to such
Person: 

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

        Section 5.    Countersignature and Registration.    

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

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

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

        (a)  Subject
to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one thousandth of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to 

6

 

purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. 

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

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

        (a)  Subject
to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii), Section 23(a) and Section 24 hereof) in whole or in part at
any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one thousandth of a share
of the Preferred Stock (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earlier of (i) the close of
business on the Final Expiration Date), or (ii) the time at which the Rights are redeemed or exchanged as provided in Section 23 or Section 24 hereof (the earlier of
(i) and (ii) being herein referred to as the "Expiration Date"). 

        (b)  The
Purchase Price for each one thousandth of a share of Preferred Stock acquired pursuant to the exercise of a Right shall initially be $60.00 and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below. 

        (c)  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price per one thousandth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one thousandth of a share of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares
of Preferred Stock 

7

 

issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one thousandth of a share of Preferred
Stock as
are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by check (certified bank check
or money order) payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require prior to the occurrence of a Triggering Event that, upon exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued. 

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

        (e)  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person, or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement, arrangement of understanding regarding the transferred Rights shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 14(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or any of their respective Affiliates, Associates or transferees hereunder. 

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

8

 

        Section 8.    Cancellation and Destruction of Rights Certificates.    

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

        Section 9.    Reservation and Availability of Capital Stock.    

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

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

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

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

9

 

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

        Section 10.    Preferred Stock Record Date.    

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

        Section 11.    Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.    

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

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

10

 

        (ii)  In
the event any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring Person is a transaction set forth in Section 13(a) hereof, then, promptly following the first occurrence of any
Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one thousandth of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then-current Purchase Price by the then-current number of one thousandth
of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the then-current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"). 

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

11

 

shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11 (d) hereof) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date. 

        (b)  In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred
Stock that the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date,
plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that would then be in
effect if such record date had not been fixed. 

        (c)  In
case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall 

12

 

be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price that would have been
in effect if such record date had not been fixed. 

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

        (ii)  For
the purpose of any computation hereunder, the "current market price" per share of Preferred Stock shall be determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11 (d) (other than the last sentence thereof). If the current market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the "current market price" per share
of Preferred 

13

 

Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the Record Date) multiplied by the then-current market price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, "current market price" per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the "current market price" of one thousandth
of a share of Preferred Stock shall be equal to the "current market price" of one share of Preferred Stock divided by 1,000. 

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

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

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

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

        (i)    The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one
thousandth of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of
thousandth of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase 

14

  

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

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

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

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

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

15

 

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

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

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

        Section 12.    Certificate of Adjusted Purchase Price or Number of Shares.    

        Whenever
an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of
such certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 27 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained. 

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

        (a)  In
the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction that complies with Section 11 (o) hereof), and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction that complies with Section 11 (o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such 

16

 

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

        (b)  "Principal
Party" shall mean 

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

        (ii)  in
the case of any transaction described in clause (z) of the first sentence of Section 13 (a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction or transactions; 

provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of
two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value. 

17

 

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

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

        (ii)  deliver
to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act; and 

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

The
provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11 (a)(ii) Event, the Rights that have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13
(a). 

        Section 14.    Fractional Rights and Fractional Shares.    

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

18

 

        (b)  The
Company shall not be required to issue fractions of shares of Preferred Stock (other than, except as provided in Section 7 (c) hereof, fractions that
are integral multiples of one thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence fractional shares of Preferred Stock (other than
fractions that are integral multiples of one thousandth of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one thousandth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one thousandth of a share of Preferred Stock shall be the
current market value of one thousandth of a share of Preferred Stock (as determined pursuant to Section 11 (d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise. 

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

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

        Section 15.    Rights of Action.    

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

        Section 16.    Agreement of Rights Holders.    

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

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

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

19

 

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

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

        Section 17.    Rights Certificate Holder Not Deemed a Stockholder.    

        No
holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one thousandth of a share of Preferred
Stock or any other securities of the Company that may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with
the provisions hereof. 

        Section 18.    Concerning the Rights Agent.    

        (a)  The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the reasonable costs and expenses of
defending against any claim of liability in the premises. 

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

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

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

20

 

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

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

        Section 20.    Duties of Rights Agent.    

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

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

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

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

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

        (e)  The
Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof
by the Rights 

21

 

Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11, Section 13 or
Section 24 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable. 

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

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

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

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

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

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

        Section 21.    Change of Rights Agent.    

        The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Company,
and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the 

22

 

holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be
(a) a corporation organized and doing business under the laws of the United States or of the States of New York, Georgia, California or North Carolina (or of any other state of the United
States so long as such corporation is authorized to do business as a banking institution in any of such states, in good standing, having a principal office in the States of New York, Georgia,
California or North Carolina, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100,000,000 or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be. 

        Section 22.    Issuance of New Rights Certificates.    

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

        Section 23.    Redemption and Termination.    

        (a)  The
Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth Business Day following the
Stock Acquisition Date, 

23

 

or (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the "current market price," as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board of Directors. 

        (b)  Immediately
upon the action of the Board of Directors of the Company ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent
and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such redemption. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the Redemption Price will be made. 

        Section 24.    Exchange.    

        (a)  The
Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, and Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock then outstanding. 

        (b)  Immediately
upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. Promptly after the action of the Board of Directors ordering the exchange of the Rights, the
Company shall give notice of such exchange to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock; provided,
however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the 

24

 

Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 

        (c)  In
any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or equivalent preferred stock as such term is defined in
paragraph (b) of Section 11 hereof) for Common Stock exchangeable for Rights, at the initial rate of one thousandth of a share of Preferred Stock (or equivalent preferred stock) for each
share of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends and other similar transactions after the date hereof. 

        (d)  In
the event that there shall not be sufficient shares of Common Stock authorized but unissued to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. 

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

        Section 25.    Exempted Holder.    

        (a)  The
Company and the Exempted Holder are parties to an Amended and Restated Governance Agreement, dated February 8, 2001 (the "Governance Agreement"), pursuant to
which the Exempted Holder and the Company agreed to certain arrangements regarding the Exempted Holder's permitted Common Stock ownership. As of the date of this Agreement, the Exempted Holder is the
Beneficial Owner of a total of 16.76% (the "Current Percentage") of the Company's issued and outstanding Common Stock, based on and assuming conversion (at applicable conversion rates) on the date of
this Agreement of all the Company's currently outstanding Series A Convertible Preferred Stock, $.01 par value, and all the Company's Series B Convertible Preferred Stock, $.01 par
value, beneficially owned by the Exempted Holder on the date of this Agreement (together, the "Preferred Stock") into Common Stock. For purposes of this Section 25, any capitalized terms not
defined in this Agreement shall have the meanings given thereto in the Governance Agreement. 

        (b)  The
Exempted Holder's beneficial ownership of the Current Percentage of Company's Common Stock and any subsequent levels of Beneficial Ownership of Common Stock by the
Exempted Holder that are permitted by the Governance Agreement, including without limitation the provisions regarding Sprint's Ownership Ceiling, shall not result in the Exempted Holder being deemed
an Acquiring Person. The provisions of this Section 25 shall terminate in full and become inoperative immediately upon termination of the Governance Agreement (except for terminations pursuant
to Section 7.01(ii) of thereof). Upon termination of this Section 25, all other provisions of this Agreement shall be applicable to the Exempted Holder as set forth herein. 

        Section 26.    Notice of Certain Events.    

        (a)  In
case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of 

25

 

earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series
of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 27 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier. 

        (b)  In
case any Section 11(a)(ii) Event hereof shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with Section 27 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common
Stock and/or, if appropriate, other securities. 

        Section 27.    Notices.    

        Notices
or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or
made if sent by first-class or express U.S. Mail, Fed Ex or UPS—postage prepaid and properly addressed (until another address is filed in writing with the Rights Agent) as follows: 

	EarthLink, Inc.

1375 Peachtree Street, N.W.

Atlanta, Georgia 30309

Attention: Chief Executive Officer

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

	American Stock Transfer & Trust Co.

59 Maiden Lane (Plaza Level)

New York, New York 10238

Attention: Corporate Trust Area

26

 

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

All
notices or demands properly sent hereunder shall be deemed received by the addressee thereof three (3) business days after being placed in the applicable delivery system. 

        Section 28.    Supplements and Amendments.    

        Prior
to the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders
of certificates representing shares of Common Stock. From and after the Distribution Date and subject to
the penultimate sentence of this Section 28, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights Certificates; provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 28, the Rights Agent shall execute such supplement or
amendment. 

27

   
        Section 29.    Successors.    

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

        Section 30.    Determinations and Actions by the Board of Directors, etc.    

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

        Section 31.    Benefits of this Agreement.    

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

        Section 32.    Severability.    

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

        Section 33.    Governing Law.    

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

28

 

        Section 34.    Counterparts.    

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

        Section 35.    Descriptive Headings.    

        Descriptive
headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions
hereof. 

29

 

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

	 	 	EARTHLINK, INC.
	

 	
 	

By	
 	

/s/  CHARLES G. BETTY      

	 	 	Name:	 	Charles G. Betty

	 	 	Title:	 	Chief Executive Officer

	

 	
 	
AMERICAN STOCK TRANSFER & TRUST CO.
	

 	
 	

By	
 	

/s/  HERBERT J. LEMMER      

	 	 	Name:	 	Herbert J. Lemmer

	 	 	Title:	 	Vice President

30

  

EXHIBIT A  

 Form of  

  
 

    CERTIFICATE OF DESIGNATIONS,
  PREFERENCES AND RIGHTS OF SERIES D JUNIOR PREFERRED STOCK    
    
    EARTHLINK, INC.    
  

Pursuant
to Section 151 of the General Corporation Law

of the State of Delaware 

        The
undersigned, the Chief Executive Officer of EarthLink, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: 

        That
pursuant to the authority conferred upon the Board of Directors of the Corporation (the "Board of Directors") by the Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation") of the Corporation, the Board of Directors on August 6, 2002, adopted
the following resolution creating a series of preferred stock designated as Series D Junior Preferred Stock, which shall be issued only in connection with the Corporation's Rights Agreement
between the Corporation and American Stock Transfer and Trust Co., dated as of August 6, 2002, as may hereafter be amended from time to time (the "Rights
Agreement"): 

        RESOLVED,
that pursuant to the authority vested in the Board in accordance with the provisions of the Certificate of Incorporation, the Board hereby authorizes and establishes a new
series of the
Company's capital stock, Series D Junior Preferred Stock, with a par value of $0.01 per share, and that the designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as set forth in the Certificate of Designations,
Preferences and Rights, which preferred stock shall be established and issued out of the Company's authorized but unissued and available preferred stock as set forth in the Certificate of
Incorporation; 

        The
designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows: 

        Section 1.    Designation and Amount.    The shares of such series of the Corporation's preferred stock shall
be designated as "Series D Junior Preferred Stock" (the "Junior Preferred Stock"), having a par
value per share equal to $.01, and the number of shares constituting such series of Junior Preferred Stock shall be 300,000 shares, which amount of shares shall be reserved and issued only in
connection with the Rights Agreement. Such number may be increased or decreased by the Board of Directors. 

        Section 2.    Dividends and Distributions.    The shares of Junior Preferred Stock are entitled to an equal and
ratable right to receive dividends, when, as and if, declared by the Board of Directors out of funds legally available therefor and only after payment of, or provision for, full dividends on all
outstanding shares of any senior series of preferred stock and after EarthLink has made provision for any required sinking or purchase funds for any series of preferred stock, on a  pari passu basis with
dividend rights of the Corporation's common stock, $.01 par value (the "Common
Stock"), provided, that for purposes of dividend distributions hereunder, each one one-thousandth (1/1,000) of a
share of Junior Preferred Stock shall be the equivalent of one share of Common Stock. 

        Section 3.    Voting Rights.    Subject to the provision for adjustment hereinafter set forth, each one
one-thousandth (1/1,000) of a share of Junior Preferred Stock shall entitle the holder thereof to one (1) vote on all matters submitted to a vote of the stockholders of the
Corporation, voting together with 

A-1

 

holders of shares of Common Stock as one class on all such matters. Holders of shares of Junior Preferred Stock shall not have the right to cumulate their votes in the election of the Corporation's
directors, and will have the voting rights and limitations applicable to holders of shares of Common Stock as set forth in the Certificate of Incorporation. 

        Section 4.    Reacquired Shares.    Any shares of Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board of Directors, as set forth in the Certificate of Incorporation,
subject to the conditions and restrictions on issuance set forth herein. 

        Section 5.    Liquidation Rights.    In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (a "Liquidation Event"), the Junior Preferred Stock shall be entitled to share equally and ratably in all of the assets remaining, if any, after satisfaction of
(i) all debts and liabilities of the Corporation, and (ii) the preferential rights of any series of preferred stock then outstanding, and before any such Liquidation Event distributions
in respect of Common Stock, provided, that for purposes of Liquidation Event distributions hereunder, each one one-thousandth (1/1,000) of a
share of Junior Preferred Stock shall be the equivalent of one (1) share of Common Stock. 

        Section 6.    Consolidation, Merger.    A consolidation, share exchange, combination or merger of the
Corporation with or into any other entity or entities, or a sale, conveyance or disposition of all or substantially all of the assets of the Corporation, or the effectuation by the Corporation of a
transaction or series of related transactions in which more than 50 percent (50%) of the outstanding voting power of the Corporation is transferred to one or more entities not previously
affiliated with the Corporation (each a "Business Combination"), shall entitle the holder of each share of Junior Preferred Stock to receive the shares of stock, securities, cash, assets (or any
combination thereof) or other consideration as may be issued or payable to the holders of each share of Common Stock pursuant to the terms of any Business Combination on an equal and ratable basis
with the Common Stock, provided, that for purposes of this Section 6, each one one-thousandth (1/1,000) of a share of Junior
Preferred Stock shall be the equivalent of one (1) share of Common Stock. 

        Section 7.    Rank.    Unless provided otherwise in documents creating a series of preferred stock of the
Corporation after the date hereof, the Junior Preferred Stock shall rank junior to the Corporation's Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and all
other series of the Corporation's preferred stock hereafter created that include rights preferential to the terms of the Junior Preferred Stock as set forth herein, and except with respect to
distribution of the Corporation's assets upon a Liquidation Event as set forth in Section 5 hereof, the Junior Preferred Stock shall otherwise rank pari
passu with the Common Stock in all respects including dividend rights and voting rights. Nothing herein shall preclude the Board of Directors from creating or authorizing any
class or series of preferred stock ranking on parity with, senior to or junior to the Junior Preferred Stock as to payment of dividends, distribution of assets or otherwise. 

        Section 8.    No Redemption Rights.    The Junior Preferred Stock shall not be subject to redemption or similar
repurchase rights, either in favor of the Corporation or holders of shares of the Junior Preferred Stock. 

        Section 9.    No Conversion Rights.    The Junior Preferred Stock shall not be subject to conversion into other
security of the Corporation or any other conversion rights, either by the Corporation or holders of shares of the Junior Preferred Stock. 

        Section 10.    No Preemptive Rights.    The Junior Preferred Stock shall not be subject to any preemptive
rights. 

A-2

 

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

        Section 12.    Adjustment; Subdivision; Combination.    In the event that the Corporation shall at any time
after the Record Date effect a subdivision or combination or consolidation of the outstanding shares of Junior Preferred Stock (by stock split, reclassification or otherwise) into a greater or lesser
number of shares of Junior Preferred Stock, then and in each such event, the aggregate amount to which the holder of each share of Junior Preferred Stock was entitled immediately prior to such event
shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Junior Preferred Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Junior Preferred Stock that were outstanding immediately prior to such event. In the event the Corporation shall at any time after the Record Date (i) declare
any dividend on Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by stock split,
reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the rights to which each one thousandth (1/1,000) of a share of Junior Preferred Stock
was entitled prior to such event in Sections 2, 3, 5 and 6 hereof shall be adjusted as applicable by multiplying such number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

[Signature Page Follows]

A-3

 

        IN
WITNESS WHEREOF, this Certificate of Designations, Preferences and Rights of Series D Junior Preferred Stock has been executed on behalf of EarthLink, Inc. as of the
6th day of August, 2002. 

	 	 	EARTHLINK, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Name: Charles G. Betty
	 	 	Title: Chief Executive Officer

A-4

  

EXHIBIT B  

  
 

    Form of Rights Certificate    
  

Certificate
No. D-                        Rights 

        NOT
EXERCISABLE AFTER AUGUST 6, 2012 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION OR TO EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1) 

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

RIGHTS CERTIFICATE  

EARTHLINK, INC. 

        This
certifies that                        , or registered assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of August 6, 2002, as amended from time to time (the "Rights Agreement"), between EarthLink, Inc., a Delaware
corporation (the "Company"), and American Stock Transfer & Trust Co. (the "Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M. (Atlanta, Georgia time) on
                        at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one thousandth of a fully paid, nonassessable share of Series D
Junior Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of $60 per one thousandth of a share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares that may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of August 6, 2002, based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued. 

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

B-1

 

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

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

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

        Subject
to the provisions of the Rights Agreement, at any time prior to the earlier of the close of business on (i) the tenth business day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and (ii) August 6, 2012, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $60 per Right. In addition, at any time after any person becomes an Acquiring Person, the Rights may be exchanged, in whole or in part, for shares of the Common Stock, or shares of
preferred stock of the Company having essentially the same value or economic rights as such shares. Immediately upon the action of the Board of Directors of the Company authorizing any such exchange,
and without any further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange. 

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

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

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

B-2

 

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

        Dated
as of                        , 2002 

	 	 	 	 	EARTHLINK, INC.
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	Countersigned:	 	 
	

    	
 	

 	
 	

 	
 	

 
	 	 	
	 	 
	

By	
 	

 	
 	

 	
 	

 
	 	 	
 Authorized Signature

	 	 	 	 

B-3

 
 
 

Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT    
  

(To
be executed by the registered holder if such

holder desires to transfer the Rights Certificate) 

	FOR VALUE RECEIVED
                                         
                          hereby sells,
	

assigns and transfers unto
                                         
                                          
             

                                         
   (Please print name and address of transferee)
	

                                         
                                          
                                         
this Rights
	

Certificate, together with all right, title and interest therein, and does hereby irrevocably
	

constitute and appoint                        Attorney, to transfer the within Rights Certificate on
	

the books of the within-named Company, with full power of substitution.

Dated:                        ,
2002 

	 	 	Signature:	 	 
	 	 	 	 	

	

Signature Guaranteed:	
 	

 	
 	

 
	

    
	
 	

 	
 	

 
	    
	 	 	 	 
	    
	 	 	 	 

B-4

 
 
 

Certificate    
  

        The undersigned hereby certifies by checking the appropriate boxes that: 

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

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

	Dated:	 	 	, 2002	 	 
	 	 	
	 	 	

	 	 	 	 	 	Signature
	

Signature Guaranteed:	
 	

 
	

    	
 	

 	

 	
 	

 
	
	 	 
	    	 	 	 	 	 
	
	 	 
	    	 	 	 	 	 
	
	 	 

NOTICE  

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

B-5

 
FORM
OF ELECTION TO PURCHASE 

(To
be executed if holder desires

to exercise Rights represented by the

Rights Certificate) 

To:                        :

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

Please
insert social security or other identifying number 

	
 (Please print name and address)
	

    
	

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

Please
insert social security or other identifying number 

	
 (Please print name and address)
	

    
	

	

    
	

	Dated:	 	 	, 20	 	 	 	 
	

 	
 	

 	

 	
 	

Signature:	

 	

 
	 	 	 	 	 	 	

	

 	
 	

 	

 	
 	

Signature Guarantee:	

 
	 	 	 	 	 	 	 	

	 	 	 	 	 	    

	 	 	 	 	 	    

B-6

 
Certificate  

        The undersigned hereby certifies by checking the appropriate boxes that: 

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

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

	Dated:	 	 	, 20    	 	 
	 	 	 	 	 	

	 	 	 	 	 	Signature
	

Signature Guaranteed:	
 	

 
	

    	
 	

 	

 	
 	

 
	
	 	 
	    	 	 	 	 	 
	
	 	 
	    	 	 	 	 	 
	
	 	 

NOTICE  

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

B-7

  

EXHIBIT C  

Form of Summary of Rights Plan  

 
  SUMMARY OF RIGHTS PLAN ADOPTED BY EARTHLINK, INC.    
  

Introduction  

        On August 6, 2002, the Board of Directors (the "Board") of EarthLink, Inc.
("EarthLink") adopted a Shareholder Rights Plan (the "Rights Plan") which is embodied in the Rights
Agreement (as amended from time to time, the "Rights Agreement") entered into between EarthLink and American Stock Transfer and Trust Co. (the
"Rights Agent"), which is the agent that will administer the Rights Plan. On August 6, 2002, in connection with the Rights Plan, the Board also
declared a dividend of one "Right" for each outstanding share of EarthLink's Common Stock, par value $.01 per share (the "Common
Stock"), for stockholders of record at the close of business on August 5, 2002. 

        Each
Right generally the entitles the holder to purchase one one-thousandth (1/1,000) of a share (a "Unit") of EarthLink's
newly created Series D Junior Preferred Stock at a price of $60.00 per Unit upon certain events. Generally, in the event a person or entity acquires, or initiates a tender offer to acquire, at
least 15% of EarthLink's then outstanding Common Stock, the Rights will become exercisable for Common Stock having a value equal to two times the exercise price of the Right, or effectively at
one-half of EarthLink's then-current stock price. The Rights are redeemable under certain circumstances at $0.01 per Right and will expire, unless earlier redeemed, on August 6,
2012. 

        The
complete description and terms of the Rights Plan are set forth in the Rights Agreement. 

Description of Rights; Purchase Price  

        Each Right entitles the registered holder to purchase from EarthLink, under certain circumstances, a unit consisting of one one-thousandth (1/1,000)
of a share of EarthLink's Series D Junior Preferred Stock, par value $.01 per share (the "Preferred Stock"), at a Purchase Price of $60.00 per
Unit. The purchase price is subject to appropriate adjustment for stock splits and other similar events. 

        Voting.    Each Unit shall entitle the holder thereof to one vote on all matters submitted to a vote of EarthLink's
stockholders, voting together with holders of Common Stock as one class on all such matters. Holders of Units shall not have the right to cumulate their votes in the election EarthLink's directors,
and will have the same voting rights and limitations applicable to holders of Common Stock as set forth in EarthLink's Amended and Restated Certificate of Incorporation. 

        Dividends.    Each Unit shall entitle the holder thereof to a right to receive dividends, when, as and if declared by the Board
out of funds legally available therefor and only after payment of, or provision for, full dividends on all outstanding shares of any senior series of preferred stock and after EarthLink has made
provision for any required sinking or purchase funds for any series of preferred stock, on a pari passu basis with dividend rights of the Common Stock. 

        Liquidation.    In the event of EarthLink's voluntary or involuntary liquidation, dissolution or winding up, holders of the
Units shall be entitled to share equally and ratably in all of the assets remaining, if any, after satisfaction of (i) all EarthLink's debts and liabilities, and (ii) the preferential
rights of any senior series of preferred stock, but before any such liquidation distributions are paid in respect of Common Stock. 

        Mergers.    In the event of any merger, consolidation or other transaction in which Common Stock is changed or exchanged, the
holder of each Unit will be entitled to receive the same consideration received per share of Common Stock. These rights are protected by customary antidilution provisions 

C-1

 

(see Adjustments below). Although the Rights are redeemable, Units of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. 

        Because
a Unit is equal to one one-thousandth (1/1,000) of a share of Preferred Stock, a holder of one full share of Preferred Stock generally would be entitled to dividend,
liquidation and voting rights equal to one thousand (1,000) times the dividend, liquidation and voting rights of one share of Common Stock. Because of the nature of the Units' dividend, liquidation
and voting rights, the value of one one-thousandth (1/1,000) of a share of Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of Common
Stock. 

Exercisability of Rights; Expiration Date  

        The Rights are not exercisable until occurrence of certain triggering events, referred to as Distribution Dates (as defined below), and will expire at the close
of business on August 6, 2012 (the "Final Expiration Date"), unless the Rights are earlier redeemed or exchanged by EarthLink, all as described below. 

Triggering Events; Distribution Date  

        The Rights will be exercisable only upon the earlier of: (i) 10 business days following a public announcement (the "Stock
Acquisition Date") that a person or group of affiliated or associated persons (an "Acquiring Person") had acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of EarthLink's outstanding Common Stock, and (ii) 10 business days following the commencement of a tender offer or exchange offer that
would result in an Acquiring Person beneficially owning 15% or more of such outstanding shares of Common Stock (each, a "Flip-In Triggering
Event"). However, Sprint Corporation and its affiliates ("Sprint") generally are exempted from such triggering thresholds based
on Sprint's current ownership of EarthLink stock and Sprint's rights to purchase additional shares, as provided in EarthLink's existing contractual arrangements with Sprint. 

 Flip-In Rights  

        In the event of a Flip-In Triggering Event, each Right will automatically convert into a Right to buy Common Stock rather than Preferred Stock. As
such, each holder of a Right will thereafter have the right to purchase EarthLink's Common Stock (or, in certain circumstances, cash, property or other securities of EarthLink) having a value equal to
two times the exercise price of the Right, or in other words, effectively at one-half of EarthLink's then-current stock price. However, any Rights associated with Common Stock
acquired by an Acquiring Person will be void, and such Acquiring Person will not be able to exercise the Rights to purchase additional Common Stock. Rights are not exercisable following the occurrence
of a Flip-In Event until such time as the Rights are no longer redeemable by EarthLink, described below. 

        Following
is an example of how exercise of the Rights would work, assuming an exercise price of $60.00 per Right and a then-current market price for EarthLink's Common Stock
of $10. 

        Example:    At an exercise price of $60 per Right, each Right (excluding those owned by an Acquiring Person) would be multiplied
by the number of Units of Preferred Stock into which the Right was exercisable—1. That number ($60 × 1 = $60) is then divided by  50% of the then-current market price of
EarthLink's stock (50% of $10 = $5)—thus, $60 divided by 5 equals 12, which is the number of shares of EarthLink Common Stock received for each Right. Thus, for each $60 purchase
price, each holder would receive 12 shares of EarthLink Common Stock, which would have an aggregate worth of $120—twice the $60 purchase price. 

C-2

 

Flip-Over  

        In the event that, at any time following the Flip-In Triggering Event: (i) EarthLink is acquired in a merger or other business combination
transaction, or (ii) more than 50% of EarthLink's assets or earning power is sold or transferred, each holder of a Right (except voided Rights held by the Acquiring Person) shall have the right
to purchase common stock of the Acquiring Person having a value equal to two times the exercise price of the Right. The formula for a Flip-Over purchase is the same as used for a
Flip-In Event, only utilizing the market price of the Acquiring Person's stock. 

Transfer and Detachment of Rights  

        Initially, the Rights will be attached to all Common Stock certificates representing Common Stock then outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Stock upon a "Distribution Date", which generally is the 10th day after a triggering event. Until the Distribution Date:
(i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued
after August 6, 2002 will contain a legend and notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. Except as otherwise determined by the Board, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights. 

        As
soon as practicable after a Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate must make such request in
writing to the Rights Agent, and shall surrender the Rights Certificate to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent. Neither the Rights
Agent nor EarthLink shall be obligated to take any action whatsoever regarding the transfer of any such surrendered Rights Certificate until the registered holder has completed and signed the
certificate contained in the form of assignment (on the reverse side of the Rights Certificate) and has provided such additional information about the identity of the parties involved, as EarthLink
may reasonably request. Thereupon the Rights Agent shall, subject to certain restrictions contained in the Rights Agreement regarding certain entities acquiring 15% or more of EarthLink's Common
Stock, countersign and deliver to the person entitled a Rights Certificate or Rights Certificates, as the case may be, as so requested. EarthLink may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. 

Adjustments  

        The Purchase Price payable, and the number of Units or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred Stock, or shares having the same rights, preferences and privileges as the Preferred Stock, or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above). 

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

C-3

 

Redemption  

        In general, at any time prior to the earlier of (i) the close of business on the 10th business day following the Stock Acquisition Date, or
(ii) the Final Expiration Date, EarthLink may redeem the Rights in whole, but not in part, at a price of $.01 per Right. Immediately upon the action of the Board ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the redemption price. 

Exchange  

        In general, at any time after a Person becomes an Acquiring Person, and prior to the acquisition by such person or group of 50% or more of the outstanding Common
Stock, the Board may exchange all or part of the then outstanding Rights (other than Rights owned by such person or group which have become void) for Common Stock at an exchange ratio of one share of
Common Stock per Right (or in certain circumstances preferred stock), subject to applicable adjustments. 

Rights of Holders  

        Until a Right is exercised, the holder thereof will have no rights as a stockholder of EarthLink relating to the Rights, including without limitation the right to
vote, receive dividends or any distributions upon liquidation. 

Tax Consequences  

        While the distribution of the Rights will not be taxable to stockholders or to EarthLink, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights became exercisable for Common Stock (or other consideration) of EarthLink or for common stock of the acquiring company as set forth above. 

Amendments  

        Other than those provisions relating to the duration of the Rights Agreement and the principal economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement (other than those described in the preceding sentence) may be
amended by the Board in order to cure any ambiguity, to make changes that do not adversely affect the interests of holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. 

Further Information  

        A copy of the Rights Agreement is being filed by EarthLink with the Securities and Exchange Commission as an Exhibit to a Current Report on
Form 8-K. A copy of the Rights Agreement is also available to EarthLink stockholders free of charge from EarthLink. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference. 

*
* * * * * * * 

C-4

QuickLinks

RIGHTS AGREEMENT by and between EARTHLINK, INC. and AMERICAN STOCK TRANSFER & TRUST CO. as Rights Agent Dated as of August 6, 2002.

Table of Contents

RIGHTS AGREEMENT

W I T N E S S E T H

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES D JUNIOR PREFERRED STOCK EARTHLINK, INC.

Form of Rights Certificate

Form of Reverse Side of Rights Certificate FORM OF ASSIGNMENT

Certificate

SUMMARY OF RIGHTS PLAN ADOPTED BY EARTHLINK, INC.QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.2    
  

 
 

CERTIFICATE OF DESIGNATIONS,
  PREFERENCES AND RIGHTS OF SERIES D JUNIOR PREFERRED STOCK    
  

EARTHLINK, INC.  

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware  

        The undersigned, the Chief Executive Officer of EarthLink, Inc., a corporation organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: 

        That
pursuant to the authority conferred upon the Board of Directors of the Corporation (the "Board of Directors") by the Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation") of the Corporation, the Board of Directors on August 6, 2002, adopted
the following resolution creating a series of preferred stock designated as Series D Junior Preferred Stock, which shall be issued only in connection with the Corporation's Rights Agreement
between the Corporation and American Stock Transfer and Trust Co., dated as of August 6, 2002, as may hereafter be amended from time to time (the "Rights
Agreement"): 

        RESOLVED,
that pursuant to the authority vested in the Board in accordance with the provisions of the Certificate of Incorporation, the Board hereby authorizes and establishes a new
series of the Company's capital stock, Series D Junior Preferred Stock, with a par value of $0.01 per share, and that the designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as set forth in the Certificate of Designations, Preferences and Rights, which preferred stock shall be established and issued out of the Company's authorized but unissued and
available preferred stock as set forth in the Certificate of Incorporation; 

        The
designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows: 

        Section 1.    Designation and Amount.    The shares of such series of the Corporation's preferred stock shall
be designated as "Series D Junior Preferred Stock" (the "Junior Preferred Stock"), having a par
value per share equal to $.01, and the number of shares constituting such series of Junior Preferred Stock shall be 300,000 shares, which amount of shares shall be reserved and issued only in
connection with the Rights Agreement. Such number may be increased or decreased by the Board of Directors. 

        Section 2.    Dividends and Distributions.    The shares of Junior Preferred Stock are entitled to an equal and
ratable right to receive dividends, when, as and if, declared by the Board of Directors out of funds legally available therefor and only after payment of, or provision for, full dividends on all
outstanding shares of any senior series of preferred stock and after EarthLink has made provision for any required sinking or purchase funds for any series of preferred stock, on a  pari passu basis with
dividend rights of the Corporation's common stock, $.01 par value (the "Common
Stock"), provided, that for purposes of dividend distributions hereunder, each one one-thousandth (1/1,000) of a
share of Junior Preferred Stock shall be the equivalent of one share of Common Stock. 

        Section 3.    Voting Rights.    Subject to the provision for adjustment hereinafter set forth, each one
one-thousandth (1/1,000) of a share of Junior Preferred Stock shall entitle the holder thereof to one (1) vote on all matters submitted to a vote of the stockholders of the
Corporation, voting together with holders of shares of Common Stock as one class on all such matters. Holders of shares of Junior Preferred Stock shall not have the right to cumulate their votes in
the election of the Corporation's directors, and will have the voting rights and limitations applicable to holders of shares of Common Stock as set forth in the Certificate of Incorporation. 

        Section 4.    Reacquired Shares.    Any shares of Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board of Directors, as set forth in the Certificate of Incorporation,
subject to the conditions and restrictions on issuance set forth herein. 

        Section 5.    Liquidation Rights.    In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (a "Liquidation Event"), the Junior Preferred Stock shall be entitled to share equally and ratably in all of the assets remaining, if any, after satisfaction of
(i) all debts and liabilities of the Corporation, and (ii) the preferential rights of any series of preferred stock then outstanding, and before any such Liquidation Event distributions
in respect of Common Stock, provided, that for purposes of Liquidation Event distributions hereunder, each one one-thousandth (1/1,000) of a
share of Junior Preferred Stock shall be the equivalent of one (1) share of Common Stock. 

        Section 6.    Consolidation, Merger.    A consolidation, share exchange, combination or merger of the
Corporation with or into any other entity or entities, or a sale, conveyance or disposition of all or substantially all of the assets of the Corporation, or the effectuation by the Corporation of a
transaction or series of related transactions in which more than 50 percent (50%) of the outstanding voting power of the Corporation is transferred to one or more entities not previously
affiliated with the Corporation (each a "Business Combination"), shall entitle the holder of each share of Junior Preferred Stock to receive the shares of stock, securities, cash, assets (or any
combination thereof) or other consideration as may be issued or payable to the holders of each share of Common Stock pursuant to the terms of any Business Combination on an equal and ratable basis
with the Common Stock, provided, that for purposes of this Section 6, each one one-thousandth (1/1,000) of a share of Junior
Preferred Stock shall be the equivalent of one (1) share of Common Stock. 

        Section 7.    Rank.    Unless provided otherwise in documents creating a series of preferred stock of the
Corporation after the date hereof, the Junior Preferred Stock shall rank junior to the Corporation's Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and all
other series of the Corporation's preferred stock hereafter created that include rights preferential to the terms of the Junior Preferred Stock as set forth herein, and except with respect to
distribution of the Corporation's assets upon a Liquidation Event as set forth in Section 5 hereof, the Junior Preferred Stock shall otherwise rank pari
passu with the Common Stock in all respects including dividend rights and voting rights. Nothing herein shall preclude the Board of Directors from creating or authorizing any
class or Series of preferred stock ranking on parity with, senior to or junior to the Junior Preferred Stock as to payment of dividends, distribution of assets or otherwise. 

        Section 8.    No Redemption Rights.    The Junior Preferred Stock shall not be subject to redemption or similar
repurchase rights, either in favor of the Corporation or holders of shares of the Junior Preferred Stock. 

        Section 9.    No Conversion Rights.    The Junior Preferred Stock shall not be subject to conversion into other
security of the Corporation or any other conversion rights, either by the Corporation or holders of shares of the Junior Preferred Stock. 

        Section 10.    No Preemptive Rights.    The Junior Preferred Stock shall not be subject to any preemptive
rights. 

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

        Section 12.    Adjustment; Subdivision; Combination.    In the event that the Corporation shall at any time
after the Record Date effect a subdivision or combination or consolidation of the outstanding shares of Junior Preferred Stock (by stock split, reclassification or otherwise) into a greater or lesser 

number of shares of Junior Preferred Stock, then and in each such event, the aggregate amount to which the holder of each share of Junior Preferred Stock was entitled immediately prior to such event
shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Junior Preferred Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Junior Preferred Stock that were outstanding immediately prior to such event. In the event the Corporation shall at any time after the Record Date (i) declare
any dividend on Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by stock split,
reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the rights to which each one thousandth (1/1,000) of a share of Junior Preferred Stock
was entitled prior to such event in Sections 2, 3, 5 and 6 hereof shall be adjusted as applicable by multiplying such number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

[Signature Page Follows]

        IN
WITNESS WHEREOF, this Certificate of Designations, Preferences and Rights of Series D Junior Preferred Stock has been executed on behalf of EarthLink, Inc. as of the
6th day of August, 2002. 

	 	 	EARTHLINK, INC.
	

 	
 	

By:	
 	

/s/  CHARLES G. BETTY      

	 	 	Name: Charles G. Betty

Title: Chief Executive Officer

QuickLinks

Exhibit 4.2

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES D JUNIOR PREFERRED STOCK

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]