Document:

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                                                                     EXHIBIT 4.1

                           AGILENT TECHNOLOGIES, INC.

                                 1999 STOCK PLAN

               (Amendment and Restatement, Effective May 21, 2002)

        1. Purposes of the Plan. The purpose of this 1999 Stock Plan is to
encourage ownership in the Company by key personnel whose long-term employment
is considered essential to the Company's continued progress and, thereby,
encourage recipients to act in the stockholder's interest and share in the
Company's success.

        2. Definitions. As used herein, the following definitions shall apply:

               (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

               (b) "Affiliate" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
ownership interest as determined by the Administrator.

               (c) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. federal and state laws, any
stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign jurisdiction where Awards are, or will
be, granted under the Plan.

               (d) "Award" means a Cash Award, Stock Award, SAR, or Option
granted in accordance with the terms of the Plan.

               (e) "Awardee" means the holder of an outstanding Award.

               (f) "Award Agreement" means a written or electronic agreement
between the Company and an Awardee evidencing the terms and conditions of an
individual Award. The Award Agreement is subject to the terms and conditions of
the Plan.

               (g) "Board" means the Board of Directors of the Company.

               (h) "Cash Awards" means cash awards granted pursuant to Section
13 of the Plan.

               (i) "Code" means the United States Internal Revenue Code of 1986,
as amended.

               (j) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

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               (k) "Common Stock" means the common stock of the Company.

               (l) "Company" means Agilent Technologies, Inc., a Delaware
corporation.

               (m) "Consultant" means any person, including an advisor, engaged
by the Company or a Subsidiary to render services to such entity or any person
who is an employee, advisor, director or consultant of an Affiliate.

               (n) "Director" means a member of the Board.

               (o) "Employee" means a regular employee of the Company or any
Subsidiary, including Officers and Directors, who is treated as an employee in
the personnel records of the Company or its Subsidiary for the relevant period,
but shall exclude individuals who are classified by the Company or its
Subsidiary as (A) leased from or otherwise employed by a third party, (B)
independent contractors, or (C) intermittent or temporary, even if any such
classification is changed retroactively as a result of an audit, litigation or
otherwise. An Awardee shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or its Subsidiary or (ii) transfers
between locations of the Company or between the Company, any Subsidiary, or any
successor. Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.

               (p) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               (q) "Fair Market Value" means, as of any date, the average of the
highest and lowest quoted sales prices for such Common Stock as of such date (or
if no sales were reported on such date, the average on the last preceding day a
sale was made) as quoted on the stock exchange or a national market system, with
the highest trading volume, as reported in such source as the Administrator
shall determine.

               (r) "Grant Date" means the date selected by the Administrator,
from time to time, upon which Awards are granted to Participants pursuant to
this Plan.

               (s) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

               (t) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

               (u) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

               (v) "Option" means a stock option granted pursuant to the Plan.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options.

               (w) "Participant" means an Employee, Director or Consultant.

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               (x) "Plan" means this 1999 Stock Plan, as amended and restated
effective May 21, 2002.

               (y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Award under Section 12 of the Plan.

               (z) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.

               (aa) "SAR" means a stock appreciation right granted pursuant to
Section 11 of the Plan.

               (bb) "Stock Awards" means right to purchase or receive Common
Stock pursuant to Section 12 of the Plan.

               (cc) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

        3. Stock Subject to the Plan. Subject to the provisions of Section 15 of
the Plan, the maximum aggregate number of Shares that may be issued under the
Plan is 112,800,000 Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock. Preferred stock may be issued in lieu of Common Stock
for Awards.

               If an Award expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto, if any,
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Award, shall not be returned to the
Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

        4. Administration of the Plan.

               (a) Procedure.

                          (i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of
Participants.

                          (ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Awards granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                          (iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3 promulgated under the Exchange
Act ("Rule 16b-3"), the transactions contemplated hereunder shall be structured
to satisfy the requirements for exemption under Rule 16b-3.

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                          (iv) Other Administration. The Board may delegate to
the Executive Committee of the Board (the "Executive Committee") the power to
approve Awards to Participants who are not (A) subject to Section 16 of the
Exchange Act or (B) at the time of such approval, "covered employees" under
Section 162(m) of the Code.

               (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                          (i) to select the Participants to whom Awards may be
granted hereunder;

                          (ii) to determine the number of shares of Common Stock
to be covered by each Award granted hereunder;

                          (iii) to approve forms of agreement for use under the
Plan;

                          (iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when an Award may be exercised (which may or may not be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the
Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

                          (v) to construe and interpret the terms of the Plan
and Awards granted pursuant to the Plan;

                          (vi) to adopt rules and procedures relating to the
operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality of
the foregoing, the Administrator is specifically authorized (A) to adopt the
rules and procedures regarding the conversion of local currency, withholding
procedures and handling of stock certificates which vary with local
requirements, (B) to adopt sub-plans and Plan addenda as the Administrator deems
desirable, to accommodate foreign tax laws, regulations and practice;

                          (vii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans and Plan addenda;

                          (viii) to modify or amend each Award, including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan, provided, however,
that any such amendment is subject to Section 16(c) of the Plan and may not
impair any outstanding Award unless agreed to in writing by the Awardee;

                          (ix) to allow Awardees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Award that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Awardee to have Shares
withheld for this purpose

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shall be made in such form and under such conditions as the Administrator may
deem necessary or advisable;

                          (x) to authorize conversion or substitution under the
Plan of any or all outstanding stock options held by optionees of an entity
acquired by the Company (the "Conversion Options"). Any conversion or
substitution shall be effective as of the close of the merger or acquisition.
The Conversion Options may be Nonstatutory Stock Options or Incentive Stock
Options, as determined by the Administrator. Unless otherwise determined by the
Administrator at the time of conversion or substitution, all Conversion Options
shall have the same terms and conditions as Options generally granted by the
Company under the Plan;

                          (xi) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Award previously
granted by the Administrator;

                          (xii) to make all other determinations deemed
necessary or advisable for administering the Plan and any Award granted
hereunder.

               (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Awardees.

        5. Eligibility. Awards may be granted to Participants, provided,
however, that Incentive Stock Options may be granted only to Employees.

        6. Limitations.

               (a) Each Option shall be designated in the Award Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Awardee during any calendar year (under
all plans of the Company and any Subsidiary) exceeds $100,000, such Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section
6(a), Incentive Stock Options shall be taken into account in the order in which
they were granted. The Fair Market Value of the Shares shall be determined as of
the time the Option with respect to such Shares is granted.

               (b) For purposes of Incentive Stock Options, no leave of absence
may exceed ninety (90) days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract. If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, on the 91st day of such
leave an Awardee's employment with the Company shall be deemed terminated for
Incentive Stock Option purposes and any Incentive Stock Option held by the
Awardee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option three (3) months
thereafter.

               (c) No Participant shall have any claim or right to be granted an
Award and the grant of any Award shall not be construed as giving a Participant
the right to continue in the employ of the Company, its Subsidiaries or
Affiliates. Further, the Company, its Subsidiaries and Affiliates expressly
reserve the right, at any time, to dismiss a Participant at any time without
liability or any claim under the Plan, except as provided herein or in any Award
Agreement entered into hereunder.

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               (d) The following limitations shall apply to grants of Options
and SARs:

                          (i) No Participant shall be granted, in any fiscal
year of the Company, Options to purchase or SARs for more than 1,000,000 Shares.

                          (ii) In connection with his or her initial service, a
Participant may be granted Options to purchase or SARs for up to an additional
1,000,000 Shares which shall not count against the limit set forth in subsection
(i) above.

                          (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 15.

                          (iv) If an Option or SAR is cancelled in the same
fiscal year of the Company in which it was granted (other than in connection
with a transaction described in Section 15), the cancelled Option or SAR will be
counted against the limits set forth in subsections (i) and (ii) above.

                          (v) SARs to be granted under this Plan shall not
exceed 5% of the total shares reserved for issuance under the Plan;

                          (vi) No more than 10% of the total shares reserved for
issuance under the Plan will constitute Stock Awards granted under this Plan;

                          (vii) No more than 20% of the total shares reserved
for issuance under the Plan will constitute Nonstatutory Stock Options, with an
exercise price less than Fair Market Value on the Grant Date, granted under this
Plan; and

                          (viii) Nonstatutory Stock Option with an exercise
price less than Fair Market Value on the Grant Date shall not be granted to any
Officer.

        7. Term of Plan. Subject to Section 21 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 16 of the Plan.

        8. Term of Award. The term of each Award shall be determined by the
Administrator and stated in the Award Agreement. In the case of an Incentive
Stock Option, the term shall be ten (10) years from the Grant Date or such
shorter term as may be provided in the Award Agreement.

        9. Option Exercise Price and Consideration.

               (a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                          (i)In the case of an Incentive Stock Option the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the Grant Date.

                          (ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be no less than seventy-five per cent (75%) of
the Fair Market Value per Share on the

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Grant Date. In the case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the Grant Date.

                          (iii) Notwithstanding the foregoing, at the
Administrator's discretion, Conversion Options (as defined in Section 4(b)(x))
may be granted with a per Share exercise price of less than 75% of the Fair
Market Value per Share on the Grant Date.

                          (iv) Other than in connection with a change in the
Company's capitalization (as described in Section 15(a), Options may not be
repriced, replaced, regranted through cancellation or modified without
shareholder approval if the effect of such repricing, replacement, regrant or
modification would be to reduce the exercise price of such Incentive Stock
Options or Nonstatutory Stock Options.

               (b) Vesting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

               (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the Grant Date. Acceptable
forms of consideration may include:

                          (i) cash;

                          (ii) check or wire transfer (denominated in U.S.
Dollars);

                          (iii) other Shares which (A) in the case of Shares
acquired upon exercise of an Option, have been owned by the Awardee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                          (iv) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

                          (v) any combination of the foregoing methods of
payment; or

                          (vi) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

        10. Exercise of Option.

               (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the respective Award Agreement. No Option may be exercised during any
leave of absence other than an approved personal or medical leave with an
employment guarantee upon return. An Option shall continue to vest during any
authorized leave

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of absence and such Option may be exercised to the extent vested upon the
Awardee's return to active employment status. An Option may not be exercised for
a fraction of a Share.

                      An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Award Agreement) from the person entitled to exercise the Option, (ii) full
payment for the Shares with respect to which the related Option is exercised,
and (iii) with respect to Nonstatutory Stock Options, payment of all applicable
withholding taxes due upon such exercise.

                      Shares issued upon exercise of an Option shall be issued
in the name of the Awardee or, if requested by the Awardee, in the name of the
Awardee and his or her spouse. Until the Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Shares subject to an Option,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 15 of the Plan.

                      Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

               (b) Termination of Employment. Unless otherwise provided for by
the Administrator in the Award Agreement, if an Awardee ceases to be an
Employee, other than as a result of circumstances described in Sections 10(c),
(d), (e) and (f) below, the Awardee's unvested Option shall terminate
immediately upon the Awardee's termination. On the date of the Awardee's
termination of employment, the Shares covered by the unvested portion of his or
her Option shall revert to the Plan.

                      Unless otherwise provided for by the Administrator in the
Award Agreement, if an Awardee ceases to be an Employee, other than as a result
of circumstances described in Sections 10(c), (d), (e) and (f) below, the
Awardee's vested Option shall be exercisable for 3 months after the Awardee's
termination, or if earlier, the expiration of the term of such Option. If the
Awardee does not exercise his or her vested Option within the appropriate
exercise period set forth above, the Option shall automatically terminate, and
the Shares covered by such Option shall revert to the Plan.

               (c) Disability or Retirement of Awardee. Unless otherwise
provided for by the Administrator in the Award Agreement, if an Awardee ceases
to be an Employee as a result of the Awardee's total and permanent disability or
retirement due to age, in accordance with the Company's or its Subsidiaries'
retirement policy, all unvested Options shall immediately vest and the Awardee
may exercise his or her Option within three (3) years of the date of such
disability or retirement for a Nonstatutory Stock Option, within three (3)
months of the date of such disability or retirement for an Incentive Stock
Option, or if earlier, the expiration of the term of such Option. If the Awardee
does not exercise his or her Option within the time specified herein, the Option
shall automatically terminate, and the Shares covered by such Option shall
revert to the Plan.

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               (d) Death of Awardee. Unless otherwise provided for by the
Administrator in the Award Agreement, if an Awardee dies while an Employee, all
unvested Options shall immediately vest and all Options may be exercised for one
(1) year following the Awardee's death, or if earlier, the expiration of the
term of such Option. The Option may be exercised by the beneficiary designated
by the Awardee (as provided in Section 17), the executor or administrator of the
Awardee's estate or, if none, by the person(s) entitled to exercise the Option
under the Awardee's will or the laws of descent or distribution. If the Option
is not so exercised within the time specified herein, the Option shall
automatically terminate, and the Shares covered by such Option shall revert to
the Plan.

               (e) Voluntary Severance Incentive Program and Workforce
Management Program. If an Awardee ceases to be an Employee as a result of
participation in the Company's or its Subsidiaries' voluntary severance
incentive program approved by the Board or Executive Committee, all unvested
Options shall immediately vest and all outstanding Options shall be exercisable
for three (3) months following the Awardee's termination (or such other period
of time as provided for by the Administrator) or if earlier, the expiration of
the term of such Option. If, after termination, of Awardee's employment the
Awardee does not exercise his or her Option within the time specified herein,
the Option shall automatically terminate, and the Shares covered by such Option
shall revert to the Plan.

               If an Awardee ceases to be an Employee as a result of
participation in the Company's Workforce Management Program, all unvested
Options or SARs granted after August 28, 2001, shall immediately vest and all
outstanding Options or SARs shall be exercisable for three (3) months following
the Awardee's termination or if earlier, the expiration of the term of such
Option or SAR. If, after termination, of Awardee's employment the Awardee does
not exercise his or her Option or SAR within the time specified herein, the
Option or SAR shall automatically terminate, and the Shares covered by such
Option or SAR shall revert to the Plan.

               (f) Divestiture. If an Employee ceases to be a Participant
because of a divestiture of the Company, the Administrator may, in its sole
discretion, make such Employee's outstanding Options fully vested and
exercisable and provide that such Options remain exercisable for a period of
time to be determined by the Administrator. The determination of whether a
divestiture will occur shall be made by the Administrator in its sole
discretion. If, after the close of the divestiture, the Awardee does not
exercise his or her Option within the time specified herein, the Option shall
automatically terminate and the shares covered by such Option shall revert to
the Plan.

               (g) Buyout Provisions. At any time, the Administrator may, but
shall not be required to, offer to buy out for a payment in cash or Shares an
Option previously granted based on such terms and conditions as the
Administrator shall establish and communicate to the Awardee at the time that
such offer is made.

        11. SARs.

               (a) General. The Administrator may grant SARs to Participants
subject to the terms and conditions not inconsistent with the Plan and
determined by the Administrator. The terms and conditions shall be provided for
in the Award Agreement which may be delivered in writing or

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electronically. SARs shall be exercisable, in whole or in part, at such times as
the Administrator shall specify in the Award Agreement.

               (b) Exercise. Upon the exercise of a SAR, in whole or in part, an
Awardee shall be entitled to a cash payment in an amount equal to the difference
between the Fair Market Value of a fixed number of shares of Common Stock
covered by the exercised portion of the SAR on the date of such exercise, over
the Fair Market Value of the Common Stock covered by the exercised portion of
the SAR on the Grant Date; provided, however, that the Administrator may place
limits on the aggregate amount that may be paid upon the exercise of a SAR. The
Company's obligation arising upon the exercise of a SAR will be paid in cash.

               (c) Method of Exercise. A SAR shall be deemed to be exercised
when written or electronic notice of such exercise has been given to the Company
in accordance with the terms of the SAR by the person entitled to exercise the
SAR. The SAR shall cease to be exercisable to the extent it has been exercised.

               (d) Termination of Employment. Unless otherwise provided for by
the Administrator in the Award Agreement, if an Awardee ceases to be an
Employee, other than as a result of circumstances described in Sections 11(e)
and (f) below, the Awardee's unvested SAR, shall terminate immediately upon the
Awardee's termination.

               Unless otherwise provided for by the Administrator in the Award
Agreement, if an Awardee ceases to be an Employee, other than as a result of
circumstances described in Sections 11(e) and (f) below, the Awardee's vested
SAR shall be exercisable for 3 months after the Awardee's termination, or if
earlier, the expiration of the term of such SAR.

               (e) Disability or Retirement of Awardee. Unless otherwise
provided for by the Administrator in the Award Agreement, if an Awardee ceases
to be an Employee as a result of the Awardee's total and permanent disability or
retirement due to age, in accordance with the Company's or its Subsidiaries'
retirement policy, the Award shall immediately vest. The Awardee may exercise
his or her SAR within three (3) three years following the Awardee's total and
permanent disability or retirement or, if earlier, the expiration of the term of
such SAR. If the Awardee fails to exercise his or her SAR within the specified
time period, the SAR shall terminate.

               (f) Death of Awardee. Unless otherwise provided for by the
Administrator in the Award Agreement, if an Awardee dies while an Employee, the
SAR shall immediately vest and be exercisable for (1) one year following the
Awardee's death or, if earlier, the expiration of the term of such SAR. The SAR
may be exercised by the beneficiary designated by the Awardee (as provided in
Section 17), the executor or administrator of the Awardee's estate or, if none,
by the person(s) entitled to exercise the SAR under the Awardee's will or the
laws of descent or distribution. If the SAR is not so exercised within the
specified time period, the SAR shall terminate.

               (g) Buyout Provisions. At any time, the Administrator may, but
shall not be required to, offer to buy out for a payment in cash or Shares, SAR
previously granted based on such terms and conditions as the Administrator shall
establish and communicate to the Awardee at the time that such offer is made.

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        12. Stock Awards.

               (a) General. Stock Awards may be issued either alone, in addition
to, or in tandem with other Awards granted under the Plan. After the
Administrator determines that it will offer a Stock Award under the Plan, it
shall advise the Awardee in writing or electronically, by means of an Award
Agreement, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the Awardee shall be entitled to receive or
purchase, the price to be paid, if any, and, if applicable, the time within
which the Awardee must accept such offer. The offer shall be accepted by
execution of an Award Agreement in the form determined by the Administrator. The
Administrator will require that all shares subject to a right of repurchase or
forfeiture be held in escrow until such repurchase right or risk of forfeiture
lapses. The grant or vesting of a stock award may be made contingent on
achievement of performance conditions, including net order dollars, net profit
dollars, net profit growth, net revenue dollars, revenue growth, individual
performance, earnings per share, return on assets, return on equity, and other
financial objectives, customer satisfaction indicators and guaranteed efficiency
measures, each with respect to Agilent and/or an individual business unit.

               (b) Forfeiture. Unless the Administrator determines otherwise,
the Award Agreement shall provide for the forfeiture of the unvested Restricted
Stock upon the Awardee ceasing to be an Employee except as provided below in
Sections 12(c), (d) and (e). To the extent that the Awardee purchased the
Restricted Stock, the Company shall have a right to repurchase the unvested
Restricted Stock at the original price paid by the Awardee upon Awardee ceasing
to be a Participant for any reason, except as provided below in Sections 12(c),
(d) and (e).

               (c) Disability or Retirement of Awardee. Unless otherwise
provided for by the Administrator in the Award Agreement, if an Awardee ceases
to be an Employee as a result of the Awardee's total and permanent disability or
retirement due to age, in accordance with the Company's or its Subsidiaries'
retirement policy, the Award shall continue to vest, provided the following
conditions are met:

                          (i) The Awardee shall not render services for any
organization or engage directly or indirectly in any business which, in the
opinion of the Administrator, competes with, or is in conflict with the interest
of, the Company. The Awardee shall be free, however, to purchase as an
investment or otherwise stock or other securities of such organizations as long
as they are listed upon a recognized securities exchange or traded
over-the-counter, or as long as such investment does not represent a substantial
investment to the Awardee or a significant (greater than 10%) interest in the
particular organization. For the purposes of this subsection, a company (other
than a Subsidiary) which is engaged in the business of producing, leasing or
selling products or providing services of the type now or at any time hereafter
made or provided by the Company shall be deemed to compete with the Company;

                          (ii) The Awardee shall not, without prior written
authorization from the Company, use in other than the Company's business, any
confidential information or material relating to the business of the Company,
either during or after employment with the Company;

                          (iii) The Awardee shall disclose promptly and assign
to the Company all right, title and interest in any invention or idea,
patentable or not, made or conceived by the Awardee

                                      -11-
<PAGE>
during employment by the Company, relating in any manner to the actual or
anticipated business, research or development work of the Company and shall do
anything reasonably necessary to enable the Company to secure a patent where
appropriate in the United States and in foreign countries; and

                          (iv) An Awardee retiring due to age shall render, as a
Consultant and not as an Employee, such advisory or consultative services to the
Company as shall be reasonably requested by the Board or the Executive Committee
in writing from time to time, consistent with the state of the retired Awardee's
health and any employment or other activities in which such Awardee may be
engaged. For purposes of this Plan, the Awardee shall not be required to devote
a major portion of time to such services and shall be entitled to reimbursement
for any reasonable out-of-pocket expenses incurred in connection with the
performance of such services.

               (d) Death of Awardee. Unless otherwise provided for by the
Administrator in the Award Agreement, if an Awardee dies while an Employee, the
Stock Award shall immediately vest and all forfeiture provisions and repurchase
rights shall lapse as to a prorated number of shares determined by dividing the
number of whole years since the Grant Date by the number of whole years between
the Grant Date and the date that the Stock Award would have fully vested (as
provided for in the Award Agreement). The vested portion of the Stock Award
shall be delivered to the beneficiary designated by the Awardee (as provided in
Section 17), the executor or administrator of the Awardee's estate or, if none,
by the person(s) entitled to receive the vested Stock Award under the Awardee's
will or the laws of descent or distribution.

               (e) Voluntary Severance Incentive Program. If an Awardee ceases
to be an Employee as a result of participation in the Company's or its
Subsidiaries' voluntary severance incentive program approved by the Board or
Executive Committee, the Stock Award shall immediately vest and all forfeiture
provisions and repurchase rights shall lapse as to a prorated number of shares
determined by dividing the number of whole years since the Grant Date by the
number of whole years between the Grant Date and the date that the Stock Award
would have fully vested (as provided for in the Award Agreement).

               (f) Rights as a Shareholder. Unless otherwise provided for by the
Administrator, once the Stock Award is accepted, the Awardee shall have the
rights equivalent to those of a shareholder, and shall be a shareholder when his
or her acceptance of the Stock Award is entered upon the records of the duly
authorized transfer agent of the Company.

        13. Cash Awards. Cash Awards may be granted either alone, in addition
to, or in tandem with other Awards granted under the Plan. After the
Administrator determines that it will offer a Cash Award, it shall advise the
Awardee in writing or electronically, by means of an Award Agreement, of the
terms, conditions and restrictions related to the Cash Award.

        14. Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by the beneficiary
designation, will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Awardee, only by the Awardee. If the
Administrator makes an Award transferable, such Award shall contain such
additional terms and conditions as the Administrator deems appropriate.

                                      -12-
<PAGE>
        15. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

               (a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number and kind of shares of Common Stock
covered by each outstanding Award, and the number and kind of shares of Common
Stock which have been authorized for issuance under the Plan but as to which no
Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Common
Stock covered by each such outstanding Award, shall be proportionately adjusted
for any increase or decrease in the number or kind of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Award.

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Awardee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Option or
SAR to be fully vested and exercisable until ten (10) days prior to such
transaction. In addition, the Administrator may provide that any restrictions on
any Award shall lapse prior to the transaction, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Award will
terminate immediately prior to the consummation of such proposed transaction.

               (c) Merger or Asset Sale. In the event there is a change of
control of the Company, as determined by the Board, the Board may, in its
discretion, (A) provide for the assumption or substitution of, or adjustment to,
each outstanding Award (B) accelerate the vesting of Options and SARs and
terminate any restrictions on Cash Awards or Stock Awards and (C) provide for
the cancellation of Awards for a cash payment to the Awardee.

        16. Amendment and Termination of the Plan.

               (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

               (b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

               (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Award,
unless mutually agreed otherwise between the Awardee and the Administrator,
which agreement must be in writing and signed by the Awardee and the Company.
Termination of the Plan shall not affect the Administrator's ability to

                                      -13-
<PAGE>
exercise the powers granted to it hereunder with respect to Awards granted under
the Plan prior to the date of such termination.

        17. Designation of Beneficiary.

               (a) An Awardee may file a written designation of a beneficiary
who is to receive the Awardee's rights pursuant to Awardee's Award or the
Awardee may include his or her Awards in an omnibus beneficiary designation for
all benefits under the Plan. To the extent that Awardee has completed a
designation of beneficiary while employed with Hewlett-Packard Company, such
beneficiary designation shall remain in effect with respect to any Award
hereunder until changed by the Awardee.

               (b) Such designation of beneficiary may be changed by the Awardee
at any time by written notice. In the event of the death of an Awardee and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such Awardee's death, the Company shall allow the executor or
administrator of the estate of the Awardee to exercise the Award, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may allow the spouse or one or more dependents
or relatives of the Awardee to exercise the Award.

        18. Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Award unless the exercise of such Option or Stock
Award and the issuance and delivery of such Shares shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

        19. Inability to Obtain Authority. To the extent the Company is unable
to or the Administrator deems it infeasible to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
the Company shall be relieved of any liability with respect to the failure to
issue or sell such Shares as to which such requisite authority shall not have
been obtained.

        20. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

        21. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months of the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

        22. Notice. Any written notice to the Company required by any provisions
of this Plan shall be addressed to the Secretary of the Company and shall be
effective when received.

        23. Governing Law. This Plan and all determinations made and actions
taken pursuant hereto shall be governed by the substantive laws, but not the
choice of law rules, of the state of Delaware.

        24. Unfunded Plan. Insofar as it provides for Awards, the Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to
Participants who are granted Awards of

                                      -14-
<PAGE>
Shares under this Plan, any such accounts will be used merely as a bookkeeping
convenience. Except for the holding of Restricted Stock in escrow pursuant to
Section 12, the Company shall not be required to segregate any assets which may
at any time be represented by Awards, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor the Administrator be
deemed to be a trustee of stock or cash to be awarded under the Plan. Any
liability of the Company to any Awardee with respect to an Award shall be based
solely upon any contractual obligations which may be created by the Plan; no
such obligation of the Company shall be deemed to be secured by any pledge or
other encumbrance on any property of the Company. Neither the Company nor the
Administrator shall be required to give any security or bond for the performance
of any obligation, which may be created by this Plan.

                                      -15-
<PAGE>
           ADDENDUM TO THE AGILENT TECHNOLOGIES, INC. 1999 STOCK PLAN

Pursuant to Section 4(b)(vi) of the Plan the following modifications to the Plan
will apply in the countries as set forth below:

        AUSTRALIA

        Pursuant to Section 4(b)(vi) of the Plan the following modifications to
the Plan will apply in Australia:

        (1) Purpose

        This Addendum (the "Australian Addendum") to the Agilent Technologies,
Inc 1999 Stock Plan (the "U.S. Plan") is hereby adopted to set forth certain
rules which, together with the provisions of the U.S. Plan which are not
modified hereby, shall govern the operation of the Plan with respect to
Australian-resident employees of Agilent Technologies, Inc. ("Agilent") and its
Australian subsidiaries (the "Australian Subsidiaries"). The Plan is intended to
comply with the provisions of the Corporations Act 2001, ASIC Policy Statement
49 and any ASIC exemption instrument issued pursuant to that Policy Statement.

        (2) Definitions

        Except as set forth below, capitalised terms used herein shall have the
meaning ascribed to them in the U.S. Plan. In the event of any conflict between
these provisions and the U.S. Plan, these provisions shall prevail.

        For the purposes of this Australian Addendum:

        "Agilent" means Agilent Technologies, Inc.

        "ASIC" means the Australian Securities and Investments Commission;

        "Australian Offerees" means all persons to whom an offer or invitation
        of shares of Common Stock in Agilent is made in Australia under the
        Plan;

        "Common Stock" means the shares of common stock of Agilent;

        "Company" means Agilent or its duly authorised Australian Subsidiaries;

        "Options" means options to acquire shares of common stock in Agilent;

        "Plan" means collectively the U.S. Plan and the Australian Addendum; and

        "U.S. Plan" means the Agilent Technologies, Inc. 1999 Stock Plan.

                                      -16-
<PAGE>
        (3) Australian Offerees

        The offer under the Plan must be extended only to Australian Offerees
who at the time of the offer are full or part-time employees or directors of the
Company.

        (4) No Contribution Plan or Trust

        The offer under the Plan must not involve a contribution plan or any
offer, issue or sale being made through a trust.

        (5) Form of Awards

        Only Common Stock and Options to acquire Common Stock shall be awarded
to Australian-resident employees under the Plan. All Options will be granted to
Australian Offerees at no cost to them.

        (6) Australian Offer Document

                        (6.1) Copy of Plan

        The offer must be in writing and must include or be accompanied by a
copy of the rules of the Plan. A document describing certain terms of offers of
Options (the "Offer Document") will be distributed to Australian Offerees.

                        (6.2) Australian Dollar Equivalent of Exercise Price

        The Offer Document must specify the Australian dollar equivalent of the
exercise price of the Options at the date of the offer.

                        (6.3) Updated Pricing Information

        The Offer Document must include an undertaking that, and an explanation
of the way in which, the Company will, during the option term and within a
reasonable period of an offeree so requesting, make available to the Australian
Offeree the Australian dollar equivalent of the current market price of the
shares of Common Stock and the Australian dollar equivalent of the exercise
price for the Options, as at the date of the offeree's request.

        For the purposes of this clause 6.3, the current market price of a share
of Common Stock shall be taken as the price published by the operator of the New
York Stock Exchange as the final price for the previous trading day. Please note
that for Australian tax purposes, market value is defined differently, as
described in the Offer Document.

                                      -17-
<PAGE>
        (7) Exchange Rate for Australian Dollar Equivalent of a Price

        For the purposes of clauses 6.2 and 6.3, the Australian dollar
equivalent of the exercise price for the Options and current market price for a
share of Common Stock shall be calculated by reference to the Australian/U.S.
dollar exchange rate published by an Australian bank on the preceding business
day.

        (8) Loan or Financial Assistance

        If the Company offers an Australian Offeree any loan or other financial
assistance for the purpose of acquiring the Common Stock to which the offer
relates, the Offer Document must disclose the conditions, obligations and risks
associated with such loan or financial assistance.

        (9) Restriction on Capital Raising: 5% limit

        In the case of any offer or invitation of unissued shares of Common
Stock or Options for issue, the number of shares of Common Stock that are the
subject of the offer or invitation to Australian residents or to be received on
exercise of an Option must not exceed 5% of the total number of issued shares in
that class of Agilent as at the time of the offer or invitation.

        In calculating the number of shares, the following must be counted:

               (a) the number of shares of Common Stock in the same class which
would be issued to Australian residents were each outstanding offer or
invitation or Option to acquire unissued shares of Common Stock, being an offer
or invitation made or Option acquired pursuant to an employee share scheme
extended only to employees (including directors) of Agilent and its associated
bodies corporate, to be accepted or exercised (as the case may be); and

               (b) the number of shares of Common Stock in the same class issued
to Australian residents during the previous five years pursuant to the employee
share scheme or any other employee share scheme extended only to employees
(including directors) of Agilent and its associated bodies corporate.

        In calculating the number of shares of Common Stock for the purposes of
this paragraph 9, shares of Common Stock offered in the following circumstances
shall be disregarded:

               (a) offers to people situated outside Australia at the time of
the offer;

               (b) offers that were excluded offers or invitations within the
meaning of the Corporations Law as it stood prior to 13 March 2000; and

               (c) offers that did not require disclosure to investors pursuant
to Section 708 of the Corporations Act 2001.

                                      -18-
<PAGE>
        (10) Lodgment of Offer Document with the ASIC

        A copy of the Offer Document (which need not contain details of the
offer particular to the offeree or the identity or entitlement of the offeree)
and each accompanying document shall be filed with ASIC no later than seven days
after the provision of that material to the Australian Offerees.

        (11) Compliance with Undertakings

        The Company must comply with any undertaking required to be made in the
Offer Document, including the undertaking to provide updated pricing information
on request.

                                    * * * * *

        BRAZIL

        All stock options granted in Brazil will only be exercisable using the
cashless exercise method. Both full cashless exercise (proceeds remitted in
cash) and partial cashless exercise (proceeds remitted in stock) may be
permitted. Cash exercises are prohibited.

        CHINA

        All stock options granted in China will only be exercisable using the
cashless exercise method. Only full cashless exercise (proceeds remitted in
cash) will be permitted. Cash exercises are prohibited.

        FRANCE

        All options granted in France shall be subject to the additional terms
and conditions of the Agilent Technologies, Inc. Sub-Plan for French Employees.

        INDIA

        All options granted in India shall be subject to the additional terms
and conditions of the Agilent Technologies, Inc. India Cashless Stock Option
Sub-Plan.

        ITALY

        All stock options granted in Italy will only be exercisable using the
cashless exercise method. Only full cashless exercise (proceeds remitted in
cash) will be permitted. Cash exercises are prohibited.

                                      -19-
<PAGE>
        SWITZERLAND

        Notwithstanding Section 8 herein, options granted in Switzerland shall
have a term of ten (10) years and six (6) months.

                                      -20-<PAGE>
                                                                     Exhibit 4.1

                            SIMPLEX SOLUTIONS, INC.

                                       AND

                       LA SALLE BANK NATIONAL ASSOCIATION

                        PREFERRED STOCK RIGHTS AGREEMENT

                             DATED AS OF MAY 2, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>            <C>                                                                            <C>
Section 1.     Certain Definitions...............................................................1

Section 2.     Appointment of Rights Agent.......................................................7

Section 3.     Issuance of Rights Certificates...................................................7

Section 4.     Form of Rights Certificates.......................................................9

Section 5.     Countersignature and Registration................................................10

Section 6.     Transfer, Split Up, Combination and Exchange of Rights Certificates;
               Mutilated, Destroyed, Lost or Stolen Rights Certificates.........................11

Section 7.     Exercise of Rights; Exercise Price; Expiration Date of Rights....................11

Section 8.     Cancellation and Destruction of Rights Certificates..............................13

Section 9.     Reservation and Availability of Preferred Shares.................................14

Section 10.    Record Date......................................................................15

Section 11.    Adjustment of Exercise Price, Number of Shares or Number of Rights...............15

Section 12.    Certificate of Adjusted Exercise Price or Number of Shares.......................22

Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............22

Section 14.    Fractional Rights and Fractional Shares..........................................26

Section 15.    Rights of Action.................................................................27

Section 16.    Agreement of Rights Holders......................................................27

Section 17.    Rights Certificate Holder Not Deemed a Stockholder...............................28

Section 18.    Concerning the Rights Agent......................................................28

Section 19.    Merger or Consolidation or Change of Name of Rights Agent........................29

Section 20.    Duties of Rights Agent...........................................................29

Section 21.    Change of Rights Agent...........................................................32
</TABLE>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>            <C>                                                                            <C>
Section 22.    Issuance of New Rights Certificates..............................................32

Section 23.    Redemption.......................................................................33

Section 24.    Exchange.........................................................................34

Section 25.    Notice of Certain Events.........................................................35

Section 26.    Notices..........................................................................36

Section 27.    Supplements and Amendments.......................................................36

Section 28.    Successors.......................................................................37

Section 29.    Determinations and Actions by the Board of Directors, etc........................37

Section 30.    Benefits of this Agreement.......................................................37

Section 31.    Severability.....................................................................38

Section 32.    Governing Law....................................................................38

Section 33.    Counterparts.....................................................................38

Section 34.    Descriptive Headings.............................................................38

EXHIBITS

Exhibit A      Form of Certificate of Designation

Exhibit B      Form of Rights Certificate

Exhibit C      Summary of Rights
</TABLE>

                                      -iii-
<PAGE>

                        PREFERRED STOCK RIGHTS AGREEMENT

        This Preferred Stock Rights Agreement is dated as of May 2, 2002,
between Simplex Solutions, Inc., a Delaware corporation (the "Company"), and La
Salle Bank National Association (the "Rights Agent").

        On May 2, 2002 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board of
Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "RIGHT") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on May 17, 2002 (the "RECORD DATE"), each Right representing the right to
purchase one one-thousandth (0.001) of a share of Series A Participating
Preferred Stock (as such number may be adjusted pursuant to the provisions of
this Agreement), having the rights, preferences and privileges set forth in the
form of Certificate of Designations of Rights, Preferences and Privileges of
Series A Participating Preferred Stock attached hereto as Exhibit A, upon the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (as such number may be adjusted pursuant to
the provisions of this Agreement) with respect to each Common Share that shall
become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined), and in
certain circumstances after the Distribution Date.

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

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

            (a) "ACQUIRING PERSON" shall mean any Person, who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall be deemed to be an Acquiring Person as the result of an acquisition
of Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common Shares of the Company
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), then such Person shall be deemed
to be an Acquiring Person unless upon becoming the Beneficial Owner of such
additional Common Shares of the Company such Person does not beneficially own

<PAGE>

15% or more of the Common Shares of the Company then outstanding.
Notwithstanding the foregoing, (i) if the Company's Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Shares
that would otherwise cause such Person to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Shares it beneficially owned but had no
actual knowledge of the consequences of such beneficial ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement including, without
limitation Section 1(gg) hereof; and (ii) if, as of the date hereof, any Person
is the Beneficial Owner of 15% or more of the Common Shares outstanding, such
Person shall not be or become an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), unless and until such time as such
Person shall become the Beneficial Owner of additional Common Shares (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Shares in Common Shares or pursuant to a split or subdivision
of the outstanding Common Shares), unless, upon becoming the Beneficial Owner of
such additional Common Shares, such Person is not then the Beneficial Owner of
15% or more of the Common Shares then outstanding. Notwithstanding anything in
this Agreement to the contrary, neither Cadence Design Systems, Inc. nor any of
its Affiliates shall be deemed an "Acquiring Person" so long as the Agreement
and Plan of Merger dated April 24, 2002, by and among the Company, Cadence
Design Systems, Inc. and Zodiac Acquisition, Inc. has not been terminated, nor
shall Cadence Design Systems, Inc. or any of its Affiliates be deemed an
"Acquiring Person" as a result of the acquisition of Common Shares of the
Company pursuant to the exercise of its rights under the Stock Option Agreement
dated as of April 24, 2002 between Cadence Design Systems, Inc. and the Company
(the "OPTION AGREEMENT") provided that following any exercise of such rights
under the Option Agreement, Cadence Design Systems, Inc. and its Affiliates
will at no time beneficially own, in the aggregate, more than 19.9% of the
outstanding Company Common Shares.

            (b) "ADJUSTMENT FRACTION" shall have the meaning set forth in
Section 11(a)(i) hereof.

            (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 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" any securities:

                (i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);

                                      -2-
<PAGE>

                (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed pursuant to this Section
1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially own, (1)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2) securities
which a Person or any of such Person's Affiliates or Associates may be deemed to
have the right to acquire pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of its Affiliates or
Associates) if such agreement has been approved by the Board of Directors of the
Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security under this Section 1(d)(ii)(B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or

                (iii) which are beneficially owned, directly or indirectly, by
any other Person (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 (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B))
or disposing of any securities of the Company; provided, however, that in no
case shall an officer or director of the Company be deemed (x) the Beneficial
Owner of any securities beneficially owned by another officer or director of the
Company solely by reason of actions undertaken by such persons in their capacity
as officers or directors of the Company or (y) the Beneficial Owner of
securities held of record by the trustee of any employee benefit plan of the
Company or any Subsidiary of the Company for the benefit of any employee of the
Company or any Subsidiary of the Company, other than the officer or director, by
reason of any influence that such officer or director may have over the voting
of the securities held in the plan.

            (e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in 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., New
York time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.

                                      -3-
<PAGE>

            (g) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in
Section 11(a)(iii) hereof. "COMMON SHARES" when used with reference to the
Company shall mean the shares of Common Stock of the Company, par value at
$0.001 per share. Common Shares when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.

            (h) "COMPANY" shall mean Company, a Delaware corporation, subject to
the terms of Section 13(a)(iii)(C) hereof.

            (i) "CURRENT PER SHARE MARKET PRICE" of any security (a "Security"
for purposes of this definition), for all computations other than those made
pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading
Days immediately prior to such date; provided, however, that in the event that
the Current Per Share Market Price of the Security is determined during a period
following the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable
thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported 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 Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, 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
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Security, 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. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively
deemed to be (x) the Current Per Share Market Price of the Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by (y) 1,000. If the Security is not publicly

                                      -4-
<PAGE>

held or so listed or traded, Current Per Share Market Price shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.

            (j) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii) hereof.

            (k) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close of
Business on the tenth (10th) day (or such later date as may be determined by
action of the Company's Board of Directors) after the Shares Acquisition Date
(or, if the tenth (10th) day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or (ii) the Close of
Business on the tenth (10th) Business Day (or such later date as may be
determined by action of the Company's Board of Directors) 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, assuming the successful consummation
thereof, such Person would be an Acquiring Person.

            (l) "EQUIVALENT SHARES" shall mean Preferred Shares and any other
class or series of capital stock of the Company which is entitled to the same
rights, privileges and preferences as the Preferred Shares.

            (m) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.

            (n) "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

            (o) "EXERCISE PRICE" shall have the meaning set forth in Section
4(a) hereof.

            (p) "EXPIRATION DATE" shall mean the earliest to occur of: (i) the
Close of Business on the Final Expiration Date, (ii) the Redemption Date, or
(iii) the time at which the Board of Directors orders the exchange of the Rights
as provided in Section 24 hereof.

            (q) "FINAL EXPIRATION DATE" shall mean May 17, 2012.

            (r) "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

            (s) "PERSON" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.

            (t) "POST-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

                                      -5-
<PAGE>

            (u) "PREFERRED SHARES" shall mean shares of Series A Participating
Preferred Stock, par value $0.001 per share, of the Company.

            (v) "PRE-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

            (w) "PRINCIPAL PARTY" shall have the meaning set forth in Section
13(b) hereof.

            (x) "RECORD DATE" shall have the meaning set forth in the recitals
at the beginning of this Agreement.

            (y) "REDEMPTION DATE" shall have the meaning set forth in Section
23(a) hereof.

            (z) "REDEMPTION PRICE" shall have the meaning set forth in Section
23(a) hereof.

            (aa) "RIGHTS AGENT" shall mean (i) La Salle Bank National
Association, (ii) its successor or replacement as provided in Sections 19 and 21
hereof or (iii) any additional Person appointed pursuant to Section 2 hereof.

            (bb) "RIGHTS CERTIFICATE" shall mean a certificate substantially in
the form attached hereto as Exhibit B.

            (cc) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set
forth in the recitals at the beginning of this Agreement.

            (dd) "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.

            (ee) "SECTION 13 EVENT" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.

            (ff) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

            (gg) "SHARES ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such;
provided that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be
deemed

                                      -6-
<PAGE>

to have occurred by virtue of such event and no Distribution Date shall be
deemed to have occurred by virtue of such event.

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

            (ii) "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which an amount of voting securities sufficient to elect a majority of
the directors or Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such Person, or any
corporation or other entity otherwise controlled by such Person.

            (jj) "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.

            (kk) "SUMMARY OF RIGHTS" shall mean a summary of this Agreement
substantially in the form attached hereto as Exhibit C.

            (ll) "TOTAL EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.

            (mm) "TRADING DAY" shall mean a day on which the principal national
securities exchange on which a referenced security is listed or admitted to
trading is open for the transaction of business or, if a referenced security is
not listed or admitted to trading on any national securities exchange, a
Business Day.

            (nn) A "TRIGGERING EVENT" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.

        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 Shares) 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, upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any co-Rights Agent.

        Section 3. Issuance of Rights Certificates.

            (a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates
for Common Shares registered in the

                                      -7-
<PAGE>

names of the holders thereof (which certificates shall also be deemed to be
Rights Certificates) and not by separate Rights Certificates and (ii) the right
to receive Rights Certificates will be transferable only in connection with the
transfer of Common Shares. Until the earlier of the Distribution Date or the
Expiration Date, the surrender for transfer of certificates for Common Shares
shall also constitute the surrender for transfer of the Rights associated with
the Common Shares represented thereby. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Rights
Certificate evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11 hereof, then at the
time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights (in accordance
with Section 14(a) hereof). As of the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates and may be transferred by the
transfer of the Rights Certificates as permitted hereby, separately and apart
from any transfer of Common Shares, and the holders of such Rights Certificates
as listed in the records of the Company or any transfer agent or registrar for
the Rights shall be the record holders thereof.

            (b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company's transfer agent and registrar. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights.

            (c) Unless the Board of Directors by resolution adopted at or before
the time of the issuance of any Common Shares after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date (or, in certain
circumstances provided in Section 22 hereof, after the Distribution Date)
specifies to the contrary, Rights shall be issued in respect of all Common
Shares that are so issued, and Certificates representing such Common Shares
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 A RIGHTS AGREEMENT BETWEEN SIMPLEX
        SOLUTIONS, INC. AND LA SALLE BANK NATIONAL ASSOCIATION, AS THE RIGHTS
        AGENT, DATED AS OF MAY 2, 2002 (THE "RIGHTS AGREEMENT"), THE TERMS OF
        WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS
        ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF SIMPLEX SOLUTIONS,

                                      -8-
<PAGE>

        INC. 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 WITHOUT CHARGE
        AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES
        SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY
        PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
        ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
        WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
        SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

            (d) In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.

        Section 4. Form of Rights Certificates.

            (a) The Rights Certificates (and the forms of election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or a national market system, on which
the Rights may from time to time be listed or included, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date (or in
the case of Rights issued with respect to Common Shares issued by the Company
after the Record Date, as of the date of issuance of such Common Shares) and on
their face shall entitle the holders thereof to purchase such number of
one-thousandths (0.001) of a Preferred Share as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth (0.001)
of a Preferred Share being hereinafter referred to as the "EXERCISE PRICE" and
the aggregate Exercise Price of all Preferred Shares issuable upon exercise of
one Right being hereinafter referred to as the "TOTAL EXERCISE PRICE"), but the
number and type of securities purchasable upon the exercise of each Right and
the Exercise Price shall be subject to adjustment as provided herein.

                                      -9-
<PAGE>

            (b) Any Rights Certificate issued pursuant to Section 3(a) 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 Post-Event
Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, 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:

        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 THE RIGHTS 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 Chief Executive Officer, its Chief
Financial Officer, its President or any Vice President, either manually or by
facsimile signature, and by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal (if any) or a facsimile thereof. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates on behalf of the Company had not ceased to be such officer of the
Company; and any Rights Certificate 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 office designated for such purposes, 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.

                                      -10-
<PAGE>

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

            (a) Subject to the provisions of Sections 7(e), 14 and 24 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
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-thousandths (0.001) of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office 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 Sections 7(e), 14 and 24 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 from the registered holder 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, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.

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

            (a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date by
surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the Exercise
Price for each one-thousandth (0.001) of a

                                      -11-
<PAGE>

Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as to which the Rights are exercised.

            (b) The Exercise Price for each one-thousandth (0.001) of a
Preferred Share issuable pursuant to the exercise of a Right shall initially be
seventy dollars ($70.00), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.

            (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Price for the number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent for the Preferred Shares) a certificate or certificates
for the number of one-thousandths (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) 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 one-thousandths (0.001) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of one-thousandths (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
are to be purchased (in which case certificates for the Preferred Shares (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) represented by such receipts shall be deposited by the transfer agent
with the depository agent) and the Company hereby directs the depository agent
to comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depository 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) when appropriate, after receipt
thereof, deliver such cash to or upon the order of the registered holder of such
Rights Certificate. The payment of the Exercise Price (as such amount may be
reduced (including to zero) pursuant to Section 11(a)(iii) hereof) and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Rights Certificate in accordance with Section 9(e) hereof, may be made in cash
or by certified bank check, cashier's check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue securities
of the Company other than Preferred Shares, 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.

                                      -12-
<PAGE>

            (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 to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, 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 Triggering 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 (a
"POST-EVENT TRANSFEREE"), (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Company's Board of Directors has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e) (a "PRE-EVENT TRANSFEREE") or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees,
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or to any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of such Acquiring
Person's 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 Section 7 unless such registered holder shall, in
addition to having complied with the requirements of subsection 7(a), have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

        Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no 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 Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled

                                      -13-
<PAGE>

Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate evidencing the destruction thereof to the Company.

        Section 9. Reservation and Availability of Preferred Shares.

            (a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.

            (b) If the Company shall hereafter list any of its Preferred Shares
on a national securities exchange, then so long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.

            (c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities 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 expiration of the
Rights. The Company may temporarily suspend, for a period 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, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. 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. 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, or an
exemption therefrom shall be available, and until a registration statement has
been declared and remains effective.

                                      -14-
<PAGE>

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

            (e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Rights
Certificates or of any Preferred Shares (or other securities of the Company)
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
certificates or depository receipts for the Preferred Shares (or other
securities of the Company) in a name other than that of, the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise or to issue
or to deliver any certificates or depository receipts for Preferred Shares (or
other securities of the Company) upon the exercise of any Rights until any 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. Record Date. Each Person in whose name any certificate for a
number of one-thousandths (0.001) of a Preferred Share (or other securities of
the Company) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of Preferred Shares (or other
securities of the Company) 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 Total Exercise Price with respect to which
the Rights have been exercised (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the 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 holder
of Preferred Shares (or other securities of the Company) 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 Exercise Price, Number of Shares or Number of
Rights. The Exercise Price, the number and kind of shares or other property
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) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller

                                      -15-
<PAGE>

number of Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification shall be adjusted so that
the Exercise Price thereafter shall equal the result obtained by dividing the
Exercise Price in effect immediately prior to such time by a fraction (the
"ADJUSTMENT FRACTION"), the numerator of which shall be the total number of
Preferred Shares (or shares of capital stock issued in such reclassification of
the Preferred Shares) outstanding immediately following such time and the
denominator of which shall be the total number of Preferred Shares outstanding
immediately prior to such time; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of such Right; and (2) the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) issuable upon the
exercise of each Right shall equal the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event described
in clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment
Fraction; provided, however, that, no such adjustment shall be made pursuant to
this Section 11(a)(i) to the extent that there shall have simultaneously
occurred an event described in clause (A), (B), (C) or (D) of Section 11(n) with
a proportionate adjustment being made thereunder. Each Common Share that shall
become outstanding after an adjustment has been made pursuant to this Section
11(a)(i) shall have associated with it the number of Rights, exercisable at the
Exercise Price and for the number of one-thousandths (0.001) of a Preferred
Share (or shares of such other capital stock) as one Common Share has associated
with it immediately following the adjustment made pursuant to this Section
11(a)(i).

                (i) Subject to Section 24 of this Agreement, in the event that a
Triggering Event shall have occurred, then promptly following such Triggering
Event each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the Exercise Price in
effect immediately prior to the occurrence of the Triggering Event, in lieu of a
number of one-thousandths (0.001) of a Preferred Share, such number of Common
Shares of the Company as shall equal the quotient obtained by dividing (A) the
product obtained by multiplying (1) the Exercise Price in effect immediately
prior to the occurrence of the Triggering Event by (2) the number of
one-thousandths (0.001) of a Preferred Share for which a Right was exercisable
(or would have been exercisable if the Distribution Date had occurred)
immediately prior to the first occurrence of a Triggering Event, by (B) fifty
percent (50%) of the Current Per Share Market Price for Common Shares on the
date of occurrence of the Triggering Event; provided, however, that the Exercise
Price and the number of Common Shares of the Company so receivable upon exercise
of a Right shall be subject to further adjustment as appropriate in accordance
with Section 11(e) hereof to reflect any events occurring in respect of the
Common Shares of the Company after the occurrence of the Triggering Event.

                                      -16-
<PAGE>

                (ii) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if the Company's Board of Directors
determines that such action is necessary or appropriate and not contrary to the
interest of holders of Rights and, in the event that the number of Common Shares
which 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, or
if any necessary regulatory approval for such issuance has not been obtained by
the Company, the Company shall: (A) determine the excess of (1) the value of the
Common Shares issuable upon the exercise of a Right (the "CURRENT VALUE") over
(2) the Exercise Price (such excess, the "SPREAD") and (B) with respect to each
Right, make adequate provision to substitute for such Common Shares, upon
exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3)
other equity securities of the Company (including, without limitation, shares or
units of shares of any series of preferred stock which the Company's Board of
Directors has deemed to have the same value as Common Shares (such shares or
units of shares of preferred stock are herein called "COMMON STOCK
EQUIVALENTS")), except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, (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 Company's Board of Directors based upon the advice of a nationally
recognized investment banking firm selected by the Company's Board of Directors;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Triggering 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 Exercise Price, Common
Shares (to the extent available), except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, and
then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Company's Board of Directors shall determine in good faith
that it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights or that any necessary
regulatory approval for such issuance will be obtained, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval (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 shares, to take any action to obtain any required
regulatory approval 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

                                      -17-
<PAGE>

this Section 11(a)(iii), the value of the Common Shares shall be the Current Per
Share Market Price of the Common Shares 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 Shares on such date.

            (b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred Shares
or Equivalent Shares, as the case may be, to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Company's
Board of Directors, 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. Preferred Shares and Equivalent Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.

            (c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders of
the Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any, or
a dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Per Share
Market Price of a Preferred Share or

                                      -18-
<PAGE>

an Equivalent Share on such record date, less the fair market value per
Preferred Share or Equivalent 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) 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 Preferred Share or Equivalent Share, as the case may be, and the
denominator of which shall be such Current Per Share Market Price of a Preferred
Share or Equivalent Share on such record date; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Exercise Price shall be adjusted to be the Exercise Price which
would have been in effect if such record date had not been fixed.

            (d) Anything herein to the contrary notwithstanding, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) of the Exercise Price;
provided, however, that any adjustments which by reason of this Section 11(d)
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 (0.0001) of a Common Share
or other share or one hundred-thousandth (0.00001) of a Preferred Share, as the
case may be. Notwithstanding the first sentence of this Section 11(d), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.

            (e) If as a result of an adjustment made pursuant to Section 11(a)
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
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right and, if required, the Exercise 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 Shares contained in
Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.

            (f) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one-thousandths (0.001)
of a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.

            (g) Unless the Company shall have exercised its election as provided
in Section 11(h), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 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 Exercise Price, that number of Preferred Shares
(calculated to the nearest one hundred-thousandth (0.00001) of a share) obtained
by

                                      -19-
<PAGE>

(i) multiplying (x) the number of Preferred Shares covered by a Right
immediately prior to this adjustment, by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (ii) dividing
the product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.

            (h) The Company may elect on or after the date of any adjustment of
the Exercise Price as a result of the calculations made in Section 11(b) or (c)
to adjust the number of Rights, in substitution for any adjustment in the number
of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one-thousandths (0.001) of a Preferred Share 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 hundred-thousandth (0.00001)) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Exercise Price is adjusted or any day
thereafter, but, if any 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(h), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Exercise 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.

            (i) Irrespective of any adjustment or change in the Exercise Price
or the number of Preferred Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Exercise Price per one one-thousandth (0.001) of a Preferred Share and the
number of one-thousandths (0.001) of a Preferred Share which were expressed in
the initial Rights Certificates issued hereunder.

            (j) Before taking any action that would cause an adjustment reducing
the Exercise Price below the par or stated value, if any, of the number of
one-thousandths (0.001) of a Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and

                                      -20-
<PAGE>

legally issue as fully paid and nonassessable shares such number of
one-thousandths (0.001) of a Preferred Share at such adjusted Exercise Price.

            (k) In any case in which this Section 11 shall require that an
adjustment in the Exercise 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 issuing to the holder of any Right exercised after such record date of
the number of one-thousandths (0.001) of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one-thousandths (0.001) of a Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise 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) upon the occurrence of the event requiring such
adjustment.

            (l) Anything in this Section 11 to the contrary notwithstanding,
prior to the Distribution Date, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred or Common Shares, (ii) issuance wholly for cash of
any Preferred or Common Shares at less than the current market price, (iii)
issuance wholly for cash of Preferred or Common Shares or securities which by
their terms are convertible into or exchangeable for Preferred or Common Shares,
(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 or
Common Shares shall not be taxable to such stockholders.

            (m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or
permit to be taken) 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.

            (n) In the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding
Common Shares (by reverse stock split or otherwise) into a smaller number of
Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (A)-(D) above; (2) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision,

                                      -21-
<PAGE>

combination or reclassification shall be adjusted so that the Exercise Price
thereafter shall equal the result obtained by multiplying the Exercise Price in
effect immediately prior to such time by a fraction, the numerator of which
shall be the total number of Common Shares outstanding immediately prior to the
event described in clauses (A)-(D) above, and the denominator of which shall be
the total number of Common Shares outstanding immediately after such event;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of such Right; and (3) the
number of one-thousandths (0.001) of a Preferred Share (or shares of such other
capital stock) issuable upon the exercise of each Right outstanding after such
event shall equal the number of one-thousandths (0.001) of a Preferred Share (or
shares of such other capital stock) as were issuable with respect to one Right
immediately prior to such event. Each Common Share that shall become outstanding
after an adjustment has been made pursuant to this Section 11(n) shall have
associated with it the number of Rights, exercisable at the Exercise Price and
for the number of one-thousandths (0.001) of a Preferred Share (or shares of
such other capital stock) as one Common Share has associated with it immediately
following the adjustment made pursuant to this Section 11(n). If an event occurs
which would require an adjustment under both this Section 11(n) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.

        Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the force or effect
of the requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment contained
therein and shall not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.

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

            (a) In the event that, following a Triggering Event, directly or
indirectly:

                (i) the Company shall consolidate with, or merge with and into,
any other Person (other than a wholly-owned Subsidiary of the Company in a
transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m) hereof);

                (ii) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such merger,
all or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any other person (or the Company); or

                                      -22-
<PAGE>

                (iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating fifty percent (50%) or more 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 or one or more of
its wholly owned Subsidiaries in one or more transactions, each of which
individually (and together) complies with Section 11(m) hereof),

                    then, concurrent with and in each such case,

                    (A) each holder of a Right (except as provided in Section
7(e) hereof) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the Total Exercise Price applicable immediately
prior to the occurrence of the Section 13 Event in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party (as
hereinafter defined), free of any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by dividing
such Total Exercise Price by an amount equal to fifty percent (50%) of the
Current Per Share Market Price of the Common Shares of such Principal Party on
the date of consummation of such Section 13 Event, provided, however, that the
Exercise Price and the number of Common Shares of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;

                    (B) 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;

                    (C) 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;

                    (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common Shares)
in connection with the consummation of any such transaction as may be necessary
to ensure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights; and

                    (E) upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Total Exercise Price as
provided in this Section 13(a), such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such holder,
at the time of such transaction, owned the Common Shares of the Principal Party
receivable upon the exercise of such Right pursuant to this Section 13(a), and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.

                                      -23-
<PAGE>

                    (F) For purposes hereof, the "earning power" of the Company
and its Subsidiaries shall be determined in good faith by the Company's Board of
Directors on the basis of the operating income of each business operated by the
Company and its Subsidiaries during the three fiscal years preceding the date of
such determination (or, in the case of any business not operated by the Company
or any Subsidiary during three full fiscal years preceding such date, during the
period such business was operated by the Company or any Subsidiary).

            (b) For purposes of this Agreement, the term "PRINCIPAL PARTY" shall
mean:

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

                (ii) in the case of any transaction described in clause (iii) of
Section 13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions, or, if more than one Person that is a party to such transaction
or transactions receives the same portion of the assets or earning power so
transferred and each such portion would, were it not for the other equal
portions, constitute the greatest portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding;
provided that in any such case described in the foregoing clause (b)(i) or
(b)(ii), if the Common Shares of such Person are not at such time or have not
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary
of another Person the Common Shares of which are and have been so registered,
the term "Principal Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ration as its interest in such Person bears to the total of such interests.

               (c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized Common Shares
that have not been

                                      -24-
<PAGE>

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
issuer shall have executed and delivered to the Rights Agent a supplemental
agreement confirming that such Principal Party shall, upon consummation of such
Section 13 Event, assume this Agreement in accordance with Sections 13(a) and
13(b) hereof, that all rights of first refusal or preemptive rights in respect
of the issuance of Common Shares of such Principal Party upon exercise of
outstanding Rights have been waived, that there are no rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights and
that such transaction shall not result in a default by such Principal Party
under this Agreement, and further providing that, as soon as practicable after
the date of such Section 13 Event, such Principal Party will:

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

                (ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and

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

        In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).

            (d) In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its certificate
of incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction

                                      -25-
<PAGE>

unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with or as a consequence
of, the consummation of the proposed transaction.

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

            (f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.

        Section 14. Fractional Rights and Fractional Shares.

            (a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable, as determined pursuant to the second sentence of
Section 1(j) hereof.

            (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth (0.001) of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth (0.001) of a
Preferred Share). Interests in fractions of Preferred Shares in integral
multiples of one one-thousandth (0.001) of a Preferred Share may, at the
election of the Company, be evidenced by depository receipts, pursuant to an
appropriate agreement between the Company and a depository selected by it;
provided, that such agreement shall provide that the holders of such depository
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depository receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth (0.001) of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an

                                      -26-
<PAGE>

amount in cash equal to the same fraction of the current market value of a
Preferred Share. For purposes of this Section 14(b), the current market value of
a Preferred Share shall be (x) one thousand multiplied by (y) the closing price
of a Common Share (as determined pursuant to the second sentence of Section 1(j)
hereof) for the Trading Day immediately prior to the date of such exercise.

            (c) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares
upon the exercise or exchange of Rights. In lieu of such fractional Common
Shares, the Company shall 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 a Common Share. For purposes
of this Section 14(c), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 1(j) hereof) for the Trading Day immediately prior to the date of
such exercise.

            (d) The holder of a Right by the acceptance of the Right expressly
waives his or her right to receive any fractional Rights or any fractional
shares (other than fractions that are integral multiples of one one-thousandth
(0.001) of a Preferred Share) upon exercise of a Right.

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

        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 the Common Shares;

            (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

                                      -27-
<PAGE>

Agent designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates fully
executed; and

            (c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares 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 Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.

        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 to be the holder of the Preferred Shares
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as specifically 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
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 gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. In no event will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of such
loss or damage.

            (b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preferred Shares or Common Shares 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 reasonably believed by it to
be genuine and to be signed, executed and, where

                                      -28-
<PAGE>

necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.

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

            (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust 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 the 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
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

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

        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 Per Share Market Price) be

                                      -29-
<PAGE>

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 any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, 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 to the Company and
any other Person only for its own gross 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 (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

            (e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any 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 change in the exercisability of the Rights
or any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of a certificate furnished
pursuant to Section 12 describing such change or adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

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

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

                                      -30-
<PAGE>

faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five (5)
Business Days after the date on which any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.

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

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

            (j) 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.

                                      -31-
<PAGE>

        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 Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) 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 Preferred
Shares and the Common Shares 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 or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services 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
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred
Shares and the Common Shares, 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 Exercise 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 Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company outstanding at the
date hereof 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;

                                      -32-
<PAGE>

provided, however, that (i) no such Rights Certificate shall be issued and this
sentence shall be null and void ab initio if, and to the extent that, such
issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise available special tax treatment 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.

            (a) The Company may, at its option and with the approval of the
Board of Directors, at any time prior to the Close of Business on the earlier of
(i) the fifth day following the Shares Acquisition Date (or such later date as
may be determined by action of the Company's Board of Directors and publicly
announced by the Company) and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
herein referred to as the "REDEMPTION Price") and the Company may, at its
option, pay the Redemption Price either in Common Shares (based on the Current
Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The date on which the Board of Directors elects to
make the redemption effective shall be referred to as the "REDEMPTION DATE."

            (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.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within ten (10) days 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 their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

                                      -33-
<PAGE>

        Section 24. Exchange.

            (a) Subject to applicable laws, rules and regulations, and subject
to subsection 24(c) below, the Company may, at its option, by action of the
Board of Directors, at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Shares at an exchange ratio of one Common Share 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 shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares 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 Shares then outstanding.

            (b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to subsection 24(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 Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.

            (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with Section 24(a), the Company shall
either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively, at the option
of a majority of the Board of Directors, with respect to each Right (i) pay cash
in an amount equal to the Current Value (as hereinafter defined), in lieu of
issuing Common Shares in exchange therefor, or (ii) issue debt or equity
securities or a combination thereof, having a value equal to the Current Value,
in lieu of issuing Common Shares in exchange for each such Right, where the
value of such securities shall be determined by a nationally recognized
investment banking firm selected by majority vote of the Board of Directors, or
(iii) deliver any combination of cash, property, Common Shares and/or other
securities having a value equal to the Current Value in exchange for each Right.
For purposes of this Section 24(c) only, the Current Value shall mean the

                                      -34-
<PAGE>

product of the Current Per Share Market Price of Common Shares on the date of
the occurrence of the event described above in subsection (a), multiplied by the
number of Common Shares for which the Right otherwise would be exchangeable if
there were sufficient shares available. To the extent that the Company
determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of this Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date on which the event described in Section 24(a) shall have occurred, in order
to seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision 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.

            (d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof).

            (e) The Company may, at its option, by majority vote of the Board of
Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors based upon the advice of one or more nationally recognized investment
banking firms.

            (f) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to subsection 24(e) 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 rights in exchange therefor as has been
determined by the Board of Directors in accordance with subsection 24(e) above.
The Company shall give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the transfer agent for the Common Shares of the Company.
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 Rights will be effected.

        Section 25. Notice of Certain Events.

            (a) In case the Company shall propose to effect or permit to occur
any Triggering Event or Section 13 Event, the Company shall give notice thereof
to each holder of Rights in

                                      -35-
<PAGE>

accordance with Section 26 hereof at least twenty (20) days prior to occurrence
of such Triggering Event or such Section 13 Event.

            (b) In case any Triggering Event or Section 13 Event shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 26 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 Sections 11(a)(ii) and 13
hereof.

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

                       Simplex Solutions, Inc.
                       521 Almanor Avenue
                       Sunnyvale, California  94085
                       Attention: Chief Executive Officer

                       with a copy to:
                       Wilson Sonsini Goodrich & Rosati
                       Professional Corporation
                       650 Page Mill Road
                       Palo Alto, California 94304-1050
                       Attention:  Robert Sanchez

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

                       La Salle Bank National Association
                       135 South La Salle Street, Room 1960
                       Chicago, Illinois 60603
                       Attention: Greg Malatia

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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

        Section 27. Supplements and Amendments. Prior to the occurrence of a
Distribution Date, the Company may supplement or amend this Agreement in any
respect without the approval of

                                      -36-
<PAGE>

any holders of Rights and the Rights Agent shall, if the Company so directs,
execute such supplement or amendment. From and after the occurrence of a
Distribution Date, the Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any holders of Rights
in order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) 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 that shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); 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 (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). 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 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.

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

        Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares 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 shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement and (ii) to 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 Certificates and all other parties and
(y) with respect to claims specifically arising from the Agreement, not subject
the Board to any liability to the holders of the Rights.

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

                                      -37-
<PAGE>

exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).

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

        Section 32. Governing Law. This Agreement and 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 to
be made and performed entirely within such State.

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

        Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                      -38-
<PAGE>
   IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

"COMPANY"                                 SIMPLEX SOLUTIONS, INC.

                                          By:     /s/ Penelope Herscher
                                             -----------------------------------

                                          Name:       Penelope A. Herscher
                                               ---------------------------------

                                          Title:      Chief Executive Officer
                                                --------------------------------

"RIGHTS AGENT"                            LA SALLE BANK NATIONAL
                                          ASSOCIATION

                                          By:     /s/ G. Malatia
                                             -----------------------------------

                                          Name:       Gregory Malatia
                                               ---------------------------------

                                          Title:      First Vice President
                                                --------------------------------

                                      -39-
<PAGE>

                                    EXHIBIT A

       CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES OF
        SERIES A PARTICIPATING PREFERRED STOCK OF SIMPLEX SOLUTIONS, INC.

        The undersigned, Penelope A. Herscher, does hereby certify:

        1. That she is duly elected and acting Chief Executive Officer of
Simplex Solutions, Inc., a Delaware corporation (the "CORPORATION").

        2. That pursuant to the authority conferred upon the Board of Directors
by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors of the Corporation on May 2, 2002
adopted the following resolutions creating a series of 38,000 shares of
Preferred Stock designated as Series A Participating Preferred Stock:

        "RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Amended and Restated Certificate of
Incorporation, the Board of Directors does hereby provide for the issue of a
series of Preferred Stock of the Corporation and does hereby fix and herein
state and express the designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions of such
series of Preferred Stock as follows:

        Section 1. Designation and Amount. The shares of such series shall be
designated as "SERIES A PARTICIPATING PREFERRED STOCK." The Series A
Participating Preferred Stock shall have a par value of $0.001 per share, and
the number of shares constituting such series shall be 38,000.

        Section 2. Proportional Adjustment. In the event that the Corporation
shall at any time after the issuance of any share or shares of Series A
Participating Preferred Stock (i) declare any dividend on Common Stock of the
Corporation ("COMMON STOCK") payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the Corporation shall
simultaneously effect a proportional adjustment to the number of outstanding
shares of Series A Participating Preferred Stock.

        Section 3. Dividends and Distributions.

            (a) Subject to the prior and superior right of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A Participating Preferred Stock shall be entitled to receive
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of January, April, July, and October in each year (each such date being referred
to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Participating Preferred Stock, in an amount per share

<PAGE>

(rounded to the nearest cent) equal to 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Participating Preferred
Stock.

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

            (c) Dividends shall begin to accrue on outstanding shares of Series
A Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Participating Preferred
Stock, unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Participating Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of
shares of Series A Participating Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.

        Section 4. Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:

            (a) Each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation.

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

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

                                      -2-
<PAGE>

        Section 5. Certain Restrictions.

            (a) The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for consideration
any shares of Common Stock after the first issuance of a share or fraction of a
share of Series A Participating Preferred Stock unless concurrently therewith it
shall declare a dividend on the Series A Participating Preferred Stock as
required by Section 3 hereof.

            (b) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Preferred Stock as provided in Section 3
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not

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

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

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

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

            (c) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.

                                      -3-
<PAGE>

        Section 6. Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein and in the Amended and Restated Certificate of Incorporation, as then
amended.

        Section 7. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Participating Preferred Stock shall be entitled to receive an aggregate amount
per share equal to 1,000 times the aggregate amount to be distributed per share
to holders of shares of Common Stock plus an amount equal to any accrued and
unpaid dividends on such shares of Series A Participating Preferred Stock.

        Section 8. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.

        Section 9. No Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.

        Section 10. Ranking. The Series A Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.

        Section 11. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preference or special rights
of the Series A Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority of the outstanding
shares of Series A Participating Preferred Stock, voting separately as a series.

        Section 12. Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Preferred Stock.

                                      -4-
<PAGE>

        RESOLVED FURTHER, that the President, Chief Executive Officer or Chief
Financial Officer and the Secretary or any Assistant Secretary of this
corporation be, and they hereby are, authorized and directed to prepare and file
a Certificate of Designation of Rights, Preferences and Privileges in accordance
with the foregoing resolution and the provisions of Delaware law and to take
such actions as they may deem necessary or appropriate to carry out the intent
of the foregoing resolution."

        I further declare under penalty of perjury that the matters set forth in
the foregoing Certificate of Designation are true and correct of my own
knowledge.

        Executed at Sunnyvale, California on May __, 2002.

                                       SIMPLEX SOLUTIONS, INC.

                                       By:
                                          -----------------------------------
                                          Penelope A. Herscher
                                          Chief Executive Officer

                                      -5-
<PAGE>

                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

        NOT EXERCISABLE AFTER THE EARLIER OF (i) MAY 16, 2012, (ii) THE DATE
        TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
        RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
        REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE
        TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
        RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
        ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE 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 RIGHTS
        AGREEMENT.]*

                               RIGHTS CERTIFICATE

                             SIMPLEX SOLUTIONS, 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 May 2, 2002, (the "RIGHTS
AGREEMENT"), between Simplex Solutions, Inc., a Delaware corporation (the
"COMPANY"), and La Salle Bank National Association (the "RIGHTS AGENT"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
May 17, 2012 at the office of the Rights Agent designated for such purpose, or
at the office of its successor as Rights Agent, one one-thousandth

----------------
*  The portion of the legend in bracket shall be inserted only if applicable and
   shall replace the preceding sentence.

<PAGE>

(0.001) of a fully paid and non-assessable share of Series A Participating
Preferred Stock, par value $0.001 per share (the "PREFERRED SHARES"), of the
Company, at an Exercise Price of $70.00 per one-thousandth (0.001) of a
Preferred Share (the "EXERCISE 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 one-thousandths (0.001) of a Preferred Share which may be
purchased upon exercise hereof) set forth above are the number and Exercise
Price as of May 17, 2002 based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Exercise Price and the number and
kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.

        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 principal executive offices of
the Company and the above-mentioned office of the Rights Agent.

        Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option, at
a redemption price of $0.001 per Right or (ii) may be exchanged by the Company
in whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.

        This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office 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
amount of securities 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.

        No fractional portion of less than one one-thousandth (0.001) of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.

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

                                      -2-
<PAGE>

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.

        WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________, _____.

ATTEST:                                 SIMPLEX SOLUTIONS, INC.

                                        By:
---------------------------------          ---------------------------------
Secretary

                                        Its:
                                            --------------------------------

Countersigned:

LA SALLE BANK NATIONAL ASSOCIATION
as Rights Agent

By:
   ---------------------------------

Its:
    ---------------------------------

                                      -3-
<PAGE>

                   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 transfer unto

--------------------------------------------------------------------------------
                  (Please print name and address of transferee)

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

Dated: _______________, ____

                                                   -----------------------------
                                                   Signature

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

                                                   -----------------------------
                                                   Signature

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                          FORM OF ELECTION TO PURCHASE

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

To:___________________________

        The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths (0.001) of a Preferred Share issuable
upon the exercise of such Rights and requests that certificates for such number
of one-thousandths (0.001) of a Preferred Share issued in the name of:

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 remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

--------------------------------------------------------------------------------

Dated: _______________, ____

                                                   -----------------------------
                                                   Signature

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

                                                   -----------------------------
                                                   Signature

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                     NOTICE

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

<PAGE>

                                    EXHIBIT C

                             STOCKHOLDER RIGHTS PLAN
                             SIMPLEX SOLUTIONS, INC.

                                SUMMARY OF RIGHTS

DISTRIBUTION AND                     The Board of Directors has declared a
TRANSFER OF RIGHTS;                  dividend of one Right for each share of
RIGHTS CERTIFICATE:                  Common Stock of Simplex Solutions, Inc.
                                     (the "COMPANY") outstanding. Prior to the
                                     Distribution Date referred to below, the
                                     Rights will be evidenced by and trade with
                                     the certificates for the Common Stock.
                                     After the Distribution Date, the Company
                                     will mail Rights certificates to the
                                     Company's stockholders and the Rights will
                                     become transferable apart from the Common
                                     Stock.

DISTRIBUTION DATE:                   Rights will separate from the Common Stock
                                     and become exercisable following (a) the
                                     tenth day (or such later date as may be
                                     determined by the Company's Board of
                                     Directors) after a person or group acquires
                                     beneficial ownership of 15% or more of the
                                     Company's Common Stock or (b) the tenth
                                     business day (or such later date as may be
                                     determined by the Company's Board of
                                     Directors) after a person or group
                                     announces a tender or exchange offer, the
                                     consummation of which would result in
                                     ownership by a person or group of 15% or
                                     more of the Company's Common Stock.
                                     Notwithstanding the foregoing, neither
                                     Cadence Design Systems, Inc. nor its
                                     affiliates will trigger the provisions of
                                     the stockholder rights plan until such time
                                     as the Agreement and Plan of Merger by and
                                     among the Company, Cadence Design Systems,
                                     Inc. and Zodiac Acquisition, Inc. dated as
                                     of April 24, 2002 has been terminated, nor
                                     shall Cadence Design Systems, Inc. or any
                                     of its affiliates be deemed an "Acquiring
                                     Person" as a result of the acquisition of
                                     shares of Common Stock of the Company
                                     pursuant to the exercise of its rights
                                     under the Stock Option Agreement dated as
                                     of April 24, 2002 between Cadence Design
                                     Systems, Inc. and the Company ( the "OPTION
                                     AGREEMENT") provided that following any
                                     exercise of such rights under the Option
                                     Agreement, Cadence Design Systems, Inc. and
                                     its affiliates will at no time beneficially
                                     own, in the aggregate, more than 19.9% of
                                     the outstanding shares of Company Common
                                     Stock.

PREFERRED STOCK                      After the Distribution Date, each Right
PURCHASABLE UPON                     will entitle the holder to purchase for
EXERCISE OF RIGHTS:                  $70.00 (the "EXERCISE PRICE"), a fraction
                                     of a share of the Company's Preferred Stock
                                     with economic terms similar to that of one
                                     share of the Company's Common Stock.

FLIP-IN:                             If an acquirer (an "ACQUIRING PERSON")
                                     obtains 15% or more of the Company's Common
                                     Stock, then each Right (other than Rights
                                     owned by an Acquiring Person or its
                                     affiliates) will entitle the holder thereof
                                     to purchase, for the Exercise Price, a
                                     number of shares of the Company's Common
                                     Stock having a then-current market value of
                                     twice the Exercise Price.

FLIP-OVER:                           If, after an Acquiring Person obtains 15%
                                     or more of the Company's Common Stock, (a)
                                     the Company merges into another entity, (b)
                                     an acquiring entity merges into the Company
                                     or (c) the Company sells more than 50% of
                                     the Company's assets or earning power, then
                                     each Right (other than Rights owned by an
                                     Acquiring Person or its affiliates) will
                                     entitle the holder thereof to purchase, for
                                     the Exercise Price, a number of shares of
                                     Common Stock of the person engaging in the
                                     transaction having a then current market
                                     value of twice the Exercise Price.

<PAGE>

EXCHANGE PROVISION:                  At any time after the date on which an
                                     Acquiring Person obtains 15% or more of the
                                     Company's Common Stock and prior to the
                                     acquisition by the Acquiring Person of 50%
                                     of the outstanding Common Stock, the Board
                                     of Directors of the Company may exchange
                                     the Rights (other than Rights owned by the
                                     Acquiring Person or its affiliates), in
                                     whole or in part, for shares of Common
                                     Stock of the Company at an exchange ratio
                                     of one share of Common Stock per Right
                                     (subject to adjustment).

REDEMPTION OF THE                    Rights will be redeemable at the Company's
RIGHTS:                              option for $0.001 per Right at any time on
                                     or prior to the fifth day (or such later
                                     date as may be determined by the Company's
                                     Board of Directors) after public
                                     announcement that a Person has acquired
                                     beneficial ownership of 15% or more of the
                                     Company's Common Stock (the "SHARES
                                     ACQUISITION DATE").

EXPIRATION OF THE                    The Rights expire on the earliest of (a)
RIGHTS:                              May 17, 2012 or (b) exchange or redemption
                                     of the Rights as described above.

AMENDMENT OF TERMS                   The terms of the Rights and the Rights
OF RIGHTS:                           Agreement may be amended in any respect
                                     without the consent of the Rights holders
                                     on or prior to the Distribution Date;
                                     thereafter, the terms of the Rights and the
                                     Rights Agreement may be amended without the
                                     consent of the Rights holders in order to
                                     cure any ambiguities or to make changes
                                     which do not adversely affect the interests
                                     of Rights holders (other than the Acquiring
                                     Person).

VOTING RIGHTS:                       Rights will not have any voting rights.

ANTI-DILUTION                        Rights will have the benefit of certain
PROVISIONS:                          customary anti-dilution provisions.

TAXES:                               The Rights distribution should not be
                                     taxable for federal income tax purposes.
                                     However, following an event which renders
                                     the Rights exercisable or upon redemption
                                     of the Rights, stockholders may recognize
                                     taxable income.

The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the Preferred Stock
Rights Agreement dated as of May 2, 2002 between the Company and La Salle Bank
National Association as Rights Agent (the "RIGHTS AGREEMENT"). The Rights
Agreement may be amended from time to time. A copy of the Rights Agreement was
filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A, as amended, filed on May 23, 2002. A copy of
the Rights Agreement is available free of charge from the Company.

                                      -2-

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