Document:

exv4w1

 

Exhibit 4.1

IMATION CORP.

and

The Bank of New York

as Rights Agent

Rights Agreement

Dated as of June 21, 2006

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	1.	 	Certain Definitions
	 	 	1	 
	2.	 	Appointment of Rights Agent
	 	 	4	 
	3.	 	Issue of Rights Certificates
	 	 	4	 
	4.	 	Form of Rights Certificates
	 	 	5	 
	5.	 	Countersignature and Registration
	 	 	6	 
	6.	 	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
	 	 	6	 
	7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	7	 
	8.	 	Cancellation and Destruction of Rights Certificates
	 	 	8	 
	9.	 	Reservation and Availability of Capital Stock
	 	 	8	 
	10.	 	Preferred Stock Record Date
	 	 	9	 
	11.	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	9	 
	12.	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	16	 
	13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	16	 
	14.	 	Fractional Rights and Fractional Shares
	 	 	18	 
	15.	 	Rights of Action
	 	 	19	 
	16.	 	Agreement of Rights Holders
	 	 	19	 
	17.	 	Rights Certificate Holder Not Deemed a Stockholder
	 	 	19	 
	18.	 	Concerning the Rights Agent
	 	 	20	 
	19.	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	20	 
	20.	 	Duties of Rights Agent
	 	 	20	 
	21.	 	Change of Rights Agent
	 	 	22	 
	22.	 	Issuance of New Rights Certificates
	 	 	22	 
	23.	 	Redemption
	 	 	22	 
	24.	 	Exchange
	 	 	23	 
	25.	 	Notice of Certain Events
	 	 	24	 

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	Section	 	 	 	Page	 
	26.	 	Notices
	 	 	25	 
	27.	 	Supplements and Amendments
	 	 	25	 
	28.	 	Successors
	 	 	25	 
	29.	 	Determinations and Actions by the Board of Directors, etc.
	 	 	25	 
	30.	 	Benefits of this Agreement
	 	 	26	 
	31.	 	Severability
	 	 	26	 
	32.	 	Governing Law; Jurisdiction; Waiver of Jury Trial
	 	 	26	 
	33.	 	Counterparts
	 	 	26	 
	34.	 	Descriptive Headings
	 	 	26	 

Exhibit A – Amended and Restated Certificate of Designation, Preferences and Rights

Exhibit B – Form of Rights Certificate

Exhibit C – Summary of Rights to Purchase Series A Junior Participating Preferred Stock

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RIGHTS AGREEMENT

     RIGHTS AGREEMENT, dated as of June 21, 2006 (the “Agreement”), between Imation Corp., a
Delaware corporation (the “Company”), and The Bank of New York, a New York banking association (the
“Rights Agent”).

W I T N E S S E T H

     WHEREAS, on June 21, 2006 (the “Rights Dividend Declaration Date”), the Board of Directors of
the Company authorized and declared a dividend distribution of one Right for each share of common
stock, par value $.01 per share, of the Company (the “Common Stock”) outstanding at the close of
business on July 3, 2006 (the “Record Date”), and has further authorized the issuance of one Right
(as such number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock of the Company issued (i) between the Record Date (whether originally
issued or delivered from the Company’s treasury) and the earlier of the Distribution Date or the
Expiration Date or (ii) upon the exercise or conversion, before the Expiration Date, of any option
or other security exercisable for or convertible into Common Stock, which option or other security
is outstanding on the Distribution Date (as such terms are defined in this Agreement), each Right
initially representing the right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock (the “Preferred Stock”) of the Company having the rights, powers and
preferences set forth in the Amended and Restated Certificate of Designation, Preferences and
Rights in the form attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the “Rights”);

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

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

     (a) “Acquiring Person” shall mean any Person (as such term is defined in this
Agreement) who or which, together with all Affiliates and Associates (as such terms are
defined in this Agreement) of such Person, shall be the Beneficial Owner (as such term is
defined in this Agreement) of fifteen percent (15%) or more of the shares of Common Stock
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan, (iv) any Person who, together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner of fifteen
percent (15%) or more of the shares of Common Stock then outstanding as a result of a
reduction in the number of shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company unless and until such Person, after becoming aware
that such Person has become the Beneficial Owner of fifteen percent (15%) or more of the
then outstanding shares of Common Stock, acquires beneficial ownership of any additional
shares of Common Stock which would render such Person, together with all Affiliates and
Associates of such Person, the Beneficial Owner of fifteen percent (15%) or more of the
shares of Common Stock then outstanding, (v) any Person who, on or prior to the Rights
Dividend Declaration Date, has disclosed in a Schedule 13D or Schedule 13G statement on file
with the Securities and Exchange Commission as of the Rights Dividend Declaration Date that
such Person, together with all Affiliates and Associates of such Person, is the Beneficial
Owner of fifteen percent (15%) or more of the shares of Common Stock then outstanding,
unless such Person acquires beneficial ownership of shares of Common Stock in addition to
those disclosed in such Schedule 13D or Schedule 13G statement which would render such
Person, together with all Affiliates and Associates of such Person, the Beneficial Owner of
fifteen percent (15%) or more of the shares of Common Stock then outstanding, or (vi) any
Person who becomes the Beneficial Owner of fifteen percent (15%) or more of the shares of
Common Stock of the Company then outstanding as a result of the direct or indirect
acquisition, by way of merger, stock purchase, asset purchase or otherwise, of another
Person or Persons who “beneficially owns” shares of Common Stock, provided the Common Stock
of the Company is not the primary asset of such other Person or Persons, such acquisition is
made without any intention of changing or influencing control of the Company, and the
Person, after becoming aware that such Person has become the “beneficial owner” of fifteen
percent (15%) or more of the then outstanding shares of Common Stock, does not acquire
“beneficial ownership” of any
additional shares of Common Stock which would render such Person, together with all
Affiliates and Associates of such Person, the Beneficial Owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding. A Person other than the Company or any
Subsidiary of the Company holding shares of Common Stock for or pursuant to the terms of an
employee benefit plan of the Company or of any Subsidiary of the Company and in addition
being the Beneficial Owner of shares of Common Stock that are not held for or pursuant to
the terms of any such plan shall be deemed to constitute an Acquiring Person,
notwithstanding anything herein stated, if, but only if, it, together with its Affiliates
and Associates, shall be the Beneficial Owner of fifteen percent (15%) or more, exclusive of
those shares of Common Stock held by it for or pursuant to the terms of any such plan, of
the shares of Common Stock then outstanding. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would otherwise be
deemed an “Acquiring Person” 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 shares of Common Stock that would
otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the
extent of its Beneficial Ownership 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 such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer be deemed an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement.

 

 

     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended and in effect on the date of this Agreement, (the “Exchange Act”).

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

     (i) that such Person or any of such Person’s Affiliates or Associates, directly
or indirectly, has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, pursuant to any agreement,
arrangement or understanding, whether or not in writing, or upon the exercise of
conversion rights, exchange rights, other rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” or to “have beneficial ownership
of,” any securities pursuant to subparagraph (i), (ii) or (iii) of this paragraph
(c) solely because (A) such securities are 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, (B)
such securities are issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) such securities are issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights were
acquired by such Person or any of such Person’s Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
“Original Rights”) or pursuant to Section 11(i) or Section 11(p) hereof in
connection with an adjustment made with respect to any Original Rights;

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

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     (iii) that are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person’s Affiliates or Associates) has any agreement, arrangement or understanding,
whether or not in writing, for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (c)) or disposing of any voting securities of the Company; provided,
however, that nothing in this paragraph (c) shall cause a person engaged in business
as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially
own,” or to “have beneficial ownership of,” any securities acquired through such
person’s participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.

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

     (e) “Close of business” on any given date shall mean 5:00 P.M., New York time, on such
date except that the close of business on July 3, 2006, shall mean 5:00 p.m. Minneapolis
time; 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.

     (f) “Common Stock,” when used with reference to the Company, shall mean the common
stock, par value $.01 per share, of the Company (as such par value may be changed from time
to time), except that “Common Stock” when used with reference to any Person other than the
Company shall mean the capital stock of such other Person with the greatest voting power, or
the equity securities or other equity interest having power to control or direct the
management, of such Person, or if such other Person is a Subsidiary of another Person, the
Person or Persons that ultimately control such first-mentioned Person.

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

     (h) “Preferred Stock” shall mean shares of Series A Junior Participating Preferred
Stock, par value $.01 per share (as such par value may be changed from time to time), of the
Company having the rights and preferences set forth in the Amended and Restated Certificate
of Designation, Preferences and Rights in the form attached hereto as Exhibit A, and, to the
extent that there are not a sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any other series of
Preferred Stock, par value $.01 per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series A Junior Participating
Preferred Stock.

     (i) “Section 11(a) (ii) Event” shall mean any event described in Section 11(a) (ii)
hereof.

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

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

     (l) “Subsidiary” shall mean, with reference to any Person, any corporation or other
entity of which an amount of voting securities or other equity interests sufficient to elect
at least a majority of the directors (or Persons with comparable responsibilities if the
entity has no directors) of such corporation or other entity is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.

     (m) “Triggering Event” shall mean any Section 11(a) (ii) Event or any Section 13 Event.

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

     Section 3. Issue of Rights Certificates.

     (a) Until the earlier of (i) the close of business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii) the close of business on the
tenth business day (or such later date as the Board shall determine before such time as any
Person becomes an Acquiring Person) after the date of the first public announcement (as
defined in Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act) 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 or any Subsidiary of the Company for or pursuant to
the terms of any such plan) relating to a tender or exchange offer, the consummation of
which would result in beneficial ownership by such Person of fifteen percent (15%) or more
of the shares of Common Stock then outstanding (the earlier of (i) and (ii) being herein
referred to as the “Distribution Date”), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send or cause to be sent by
first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of
the close of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the form of
Exhibit B hereto (the “Rights Certificates”), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the Company may 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 if cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.

     (b) Following the Record Date, the Company will make available a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), to
each holder of the Common Stock which so requests a copy. With respect to certificates for
the Common Stock outstanding as of the Record Date, until the Distribution Date (or the
earlier Expiration Date), the Rights will be evidenced by such certificates for the Common
Stock and the registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the Expiration Date,
the transfer of any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock. Notwithstanding any legend contained on any such surrendered
stock certificate, from and after the close of business on the Record Date, the surrender
for transfer of any such certificate for Common Stock shall not constitute the transfer of
the rights granted pursuant to the Rights Agreement, dated June 18, 1996, as amended, to
which the Company is a party (the “Expiring Rights”), which Expiring Rights shall expire at
the close of business on July 3, 2006.

     (c) Rights shall be issued in respect of all shares of Common Stock which are issued
(whether originally issued or from the Company’s treasury) after the Record Date but (i)
prior to the earlier of the Distribution Date or the Expiration Date or (ii) upon the
exercise or conversion, before the Expiration Date, of any option or other security
exercisable or convertible into Common Stock, which option or other security is outstanding
on the Distribution Date. Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the following legend:

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This Certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between Imation Corp. (the
“Company”) and the Rights Agent thereunder (the “Rights
Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal offices of Imation Corp. 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. Imation Corp.
will mail to the holder of this Certificate a copy of the
Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate
or 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 (i)
the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. If the Company purchases or acquires any
Common Stock after the Record Date but before the Distribution Date, any Rights associated with
such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock that are no longer outstanding.

     Section 4. Form of Rights Certificates.

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

     (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 transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring Person or to any
Person with whom such Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e) hereof, 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:

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

     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, any of its Senior
Vice Presidents or its Secretary, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such officer of
the Company; and any Rights Certificates may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.

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

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

     (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior to the close
of business on the Expiration Date, any Rights Certificate or Certificates (other than
Rights Certificates representing Rights that have been exchanged pursuant to Section 24) may
be transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a Triggering Event, Common Stock
or other securities, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section
14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may require payment of
a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights Certificates.

6

 

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

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

     (a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth in Section 9(c) and Section
11(a)(iii) hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly completed and executed, either manually or by
facsimile signature, to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share (or other securities, as
the case may be) as to which such surrendered Rights are exercised, at or prior to the
earliest of (i) the close of business on July 1, 2016 (the “Final Expiration Date”), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof (the earlier of
(i) and (ii) being herein referred to as the “Expiration Date”), or (iii) the time at which
such Rights are exchanged as provided in Section 24.

     (b) The Purchase Price for each one one-hundredth of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be $160, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.

     (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase duly completed and executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-hundredth of a share of Preferred
Stock (or Common Stock or other securities, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of one one-hundredths of a share of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts representing
such number of one one-hundredths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a) (iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company is obligated
to issue other securities (including Common Stock) of the Company, the Company will make all
arrangements necessary so that such other securities are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Preferred Stock would be issued.

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

7

 

     (e) Notwithstanding anything in this Agreement to the contrary, from and after the
first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to 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 Board of Directors of the Company 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),
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 other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.

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

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

     Section 9. Reservation and Availability of Capital Stock.

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

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

8

 

     (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 Section 11(a)(ii) Event on which
the consideration to be delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(ii) or Section 11(a)(iii) hereof, a registration
statement under the Securities Act of 1933 (the “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 Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or “blue sky” laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily suspend, for
a period of time ending not more than ninety (90) days after the registration statement is
filed, the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a registration statement
is required following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared effective.

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

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

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

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

9

 

(a)     (i)      In the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or capital
stock, as the case may be, issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect (and any applicable
transfer taxes), the aggregate number and kind of shares of Preferred Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer books
of the Company were open, he or she would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to be
paid upon 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. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.

         (ii)      Subject to Section 24 of this Agreement, in the event that any Person
shall, at any time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a) hereof, then, promptly following the
occurrence of any such event, proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e) hereof) shall thereafter have
the right to receive, upon exercise thereof by payment of the amount equal to the
product of the number of one-hundredths of a share of Preferred Stock that would
otherwise be issuable upon exercise of a Right and the then current Purchase Price
in accordance with the terms of this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the
current market price (determined pursuant to Section 11(d) hereof) per share of
Common Stock on the date of such first occurrence.

         (iii)      If, on the date of the occurrence of a Section 11(a)(ii) Event (the
“Adjustment Date”), the Company does not have sufficient issued but not outstanding
or reserved, or authorized, unissued and unreserved, Common Stock available to
permit the exercise in full of all Rights that are exercisable on the Adjustment
Date for the number of shares of Common Stock per Right provided for in Section
11(a)(ii), then the Exercise Price (as defined below) and the number of shares of
Common Stock to be delivered by the Company upon exercise of a Right shall be
further adjusted as provided in this subparagraph (iii).

(1)     Definitions:

	 	(A)	 	The “Aggregate Market Value” is the product of
(i) the number of Available Shares times (ii) the current per share
market price of the Common Stock on the Adjustment Date, determined as
provided in Section 11(d).
	 
	 	(B)	 	The “Available Shares” are all unreserved
shares of Common Stock which are authorized and unissued or issued but
not outstanding immediately before the Adjustment Date.

10

 

	 	(C)	 	The “Exercise Price” is the amount of the
payment that must be made by the holder of a Right in connection with
the exercise of one Right immediately before the Adjustment Date.
	 
	 	(D)	 	The “Deficiency” is the amount by which (i) two
times the Exercise Price exceeds (ii) the quotient obtained by dividing
the Aggregate Market Value by the number of Rights remaining
outstanding immediately before the Adjustment Date (the “Remaining
Rights”) (which number shall not include the Rights that are
beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) or by a transferee of any Acquiring Person (or any
Associate or Affiliate thereof) that shall have become void pursuant to
Section 7(e) or that shall otherwise have become void pursuant to
Section 7(e)).

	 	(2)	 	If the Deficiency is less than or equal to the Exercise Price,
then

	 	(A)	 	the number of shares of Common Stock to be
delivered by the Company upon exercise of a Right shall be adjusted to
equal the number of Available Shares divided by the number of Remaining
Rights; and
	 
	 	(B)	 	the amount of cash required to be delivered by
the holder of a Right upon the exercise thereof shall be adjusted (the
“New Exercise Price”) to equal the Exercise Price minus the Deficiency;
provided, however, that in no event will the New
Exercise Price be less than the aggregate par value of the Common Stock
required to be delivered upon the exercise of one Right pursuant to
subparagraph (2) (A) above.

	 	(3)	 	If the Deficiency is greater than the Exercise Price, then

	 	(A)	 	the number of shares of Common Stock to be
delivered by the Company upon exercise of a Right shall be adjusted to
equal the quotient obtained by dividing the Exercise Price by the per
share market price of the Common Stock on the Adjustment Date;
	 
	 	(B)	 	the New Exercise Price shall equal the
aggregate par value of the Common Stock required to be delivered upon
the exercise of one Right pursuant to subparagraph (3)(A) above; and
	 
	 	(C)	 	in lieu of issuing Common Stock (in whole or in
part upon the exercise of Rights) the Company may issue, upon the
exercise of Rights at the New Exercise Price, other equity securities
of the Company (including, without limitation, shares, or units or
fractions of shares, of preferred stock, which may include shares of
Preferred Stock) that the Board of Directors of the Company has
determined to have substantially the same value, voting rights and
other rights as shares of Common Stock (such equity securities are
herein called “common stock equivalents”). To the extent that such
common stock equivalents (or fractions thereof) are substituted for
Common Stock upon exercise of the Rights following the occurrence of a
Section 11(a)(ii) Event, they shall be substituted on a pro-rata basis
with respect to all Rights (other than Rights that are beneficially
owned by any Acquiring Person (or any Associate or Affiliate thereof)
or by a transferee of any Acquiring Person (or any Associate or
Affiliate thereof) that shall have become void pursuant to Section 7(e)
or that shall otherwise become void pursuant to Section 7(e)). Such
common stock equivalents shall not be included in Available Shares, and
all of the Available Shares shall be reserved, as of the Adjustment
Date, for issuance, on a pro-rata basis, upon exercise of the Rights
and may not be substituted for with common stock equivalents upon the
exercise of any Right except to the extent that the number of shares of
Common Stock required to be delivered under subparagraph (3)(A) upon the exercise of such Right
exceeds the quotient of the number of Available Shares divided by the
number of Remaining Rights.

11

 

	 	(4)	 	If, at the time any adjustment is required pursuant to this
Section 11(a) (iii), the Common Stock shall have no par value, then for the
purposes of this Section 11(a) (iii), the par value of the Common Stock shall
be deemed to be $.01 per share.
	 
	 	(5)	 	If there shall not be sufficient issued but not outstanding or
reserved or authorized but unissued and unreserved shares of Common Stock (or
common stock equivalents the issuance of which is permitted under Section
11(a)(iii)(3)(C)) to permit the exercise in full of the Rights in accordance
with this subparagraph (iii), the Company shall use its best efforts to cause
the authorization of sufficient additional shares of Common Stock or common
stock equivalents to permit such exercise and, if the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional Common Stock or common stock equivalents could be authorized to
permit such exercise, the Company may suspend the exercisability of the Rights
for a period not to exceed 90 days (and not beyond the Final Expiration Date)
in order to seek any authorization of additional Common Stock or common stock
equivalents. 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.

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

     (c) In case the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or warrants

12

 

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

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

13

 

     (ii)      For the purpose of any computation hereunder, the Current Market Price per
share of Preferred Stock shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (except as hereinafter
provided). If the Current Market Price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is not publicly
held or listed, traded, quoted or reported in a manner described in clause (i) of
this Section 11(d), the Current Market Price per share of Preferred Stock,
notwithstanding anything provided in clause (i) of this Section 11(d), shall be
conclusively
deemed to be an amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the date of this Agreement) multiplied
by the Current Market Price per share of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed, traded, quoted or
reported, Current Market Price per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.

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

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

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

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

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

14

 

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

     (k) Before taking any action that would cause an adjustment reducing the Purchase Price
below the then par value, if any, of the number of one one-hundredths of a share of
Preferred Stock 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 legally issue fully paid and nonassessable such number of one one-hundredths of
a share of Preferred Stock at such adjusted Purchase Price.

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

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

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

15

 

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

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

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

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

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

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     (b) “Principal Party” shall mean

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

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

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

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

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

     (ii) 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; and

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

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

17

 

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof (subject to the rounding adjustments
permitted under Section 3(a)), or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there may be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported on the Nasdaq
National Market or the Nasdaq Small Cap Market or any similar system then in use or, if on
any such date the Rights are not so quoted or reported, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such market maker
is making a market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used in lieu of the closing
price for such day.

     (b) The Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock). Fractions of shares of Preferred Stock in
integral multiples of one-hundredth of a share of Preferred Stock may, at the election of
the Company, be evidenced by depositary receipts pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the shares of Preferred
Stock represented by such depositary receipts. In lieu of fractional shares of Preferred
Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of a share of Preferred Stock. For purposes of this Section 14(b), the current
market value of a share of Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.

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

18

 

     (d) The holder of a Right by the acceptance of the Rights expressly waives his or her
right to receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14 or as provided in Section 11(p) (subject to the rounding adjustments
permitted under Section 3(a)).

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

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

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

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

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

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

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

19

 

     Section 18. Concerning the Rights Agent.

     (a) The Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without gross negligence 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.

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

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

     (b) In case at any time the name of the Rights Agent shall be changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the 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 (or, before the Distribution Date, the Common Stock
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.

20

 

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

     (c) The Rights Agent shall be liable hereunder only for its own gross negligence or
willful misconduct; provided, however, that the Rights Agent shall not be liable for
special, consequential, indirect or punitive damages.

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

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

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

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

     (h) The Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company or its Subsidiaries
may be interested, or contract with or lend money to the Company or its Subsidiaries 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 its Subsidiaries or for any other legal entity.

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

21

 

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

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

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement.

     Section 23. Redemption.

     (a) The Board of Directors of the Company may, at its option, at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person, or (ii) the close of
business on the Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the “Redemption
Price”). The Redemption Price shall be payable in cash by the Company. The redemption of
the Rights by the Board of Directors of the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors of the Company in its sole
discretion may establish. Except for the obligation of the Company to pay the Redemption
Price, the Board of Directors and the Company shall not have any liability to any Person as a result of the redemption of Rights
pursuant to the terms of this Section 23.

22

 

     (b) Immediately upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder’s last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption. 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 except as specifically set forth in this Section or in Section 24 or in
connection with the purchase of Common Stock before the Distribution Date.

     Section 24. Exchange.

     (a) The Board of Directors of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e)) for Common Stock, with each Right to be exchanged for such
number of shares of Common Stock as shall equal the result obtained by dividing (x) the
Exercise Price (as defined in Section 11(a)(iii)) by (y) the current per share market price
of the Common Stock (determined pursuant to Section 11(d)) on the date the Rights first
become exercisable for Common Stock pursuant to Section 11(a)(ii) (such number of shares
being hereinafter referred to as the “Exchange Ratio”). The Exchange Ratio shall be
appropriately adjusted to reflect any stock split, stock dividend or similar transaction
affecting the Common Stock that occurs after the date the Rights first become exercisable
for Common Stock pursuant to Section 11(a) (ii). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at any time after
any Person (other than (i) the Company, (ii) any Subsidiary of the Company, or (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company or any Person or
entity organized, appointed or established by the Company or any Subsidiary of the Company
for or pursuant to the terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.

     (b) Immediately upon the action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company promptly 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 promptly 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
Stock for Rights will be effected and, in the event of any partial exchange, the number of
Rights that 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)) held by each holder of Rights.

     (c) If there shall not be sufficient unreserved Common Stock issued but not outstanding
or authorized, unissued and unreserved to permit the exchange of Rights as contemplated in
accordance with this Section 24, the Company, at its option, may substitute Preferred Stock
(or equivalent preferred stock, as such term is defined in Section 11(b), or common stock
equivalents, as such term is defined in Section 11(a)(iii)(3)(C)), for Common Stock exchangeable for Rights, at the initial
rate of one-hundredth of a share of Preferred Stock (or equivalent preferred stock) or one
common stock equivalent for each share of Common Stock, as appropriately adjusted to reflect
stock splits, stock dividends or similar transactions affecting the Common Stock that occur
after the date of this Agreement.

23

 

     (d) If there shall not be sufficient unreserved shares of Common Stock, Preferred
Stock, equivalent preferred stock or common stock equivalents, authorized and unissued or
issued but not outstanding to permit the exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or Preferred Stock, equivalent preferred stock
or common stock equivalents for issuance upon exchange of the Rights.

     (e) The Company shall not be required to issue fractions of shares of Common Stock or
to distribute certificates that evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company may pay to the registered holders of the
Right Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph (e), the current
market value of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section 11(d) (i)) for the
Trading Day immediately before the date of exchange pursuant to this Section. The Board of
Directors and the Company shall not have any liability to any Person as a result of the
exchange of Rights pursuant to the terms of this Section.

     Section 25. Notice of Certain Events.

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

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

24

 

     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:

Imation Corp.

1 Imation Place

Oakdale, Minnesota 55128

Attention: Corporate Secretary

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

The Bank of New York

101 Barclay St., Floor 11E

New York, NY 10286

Attn: Stock Transfer Administration

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

     Section 27. Supplements and Amendments. Prior to such time as any Person becomes an Acquiring
Person, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates representing shares
of Common Stock. From and after such time as any Person becomes an Acquiring Person, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to
change or supplement the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person or any other
Person whose Rights shall have become null and void pursuant to Section 7(e)); 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 or any other
Person whose rights shall have become null and void pursuant to Section 7(e)). Upon the delivery
of a certificate from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of Common Stock.

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

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

25

 

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

     Section 31. Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     Section 32. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be performed entirely within such State;
provided, however, that the rights, obligations and duties of the Rights Agent hereunder shall be
governed by and construed in accordance with the laws of the State of New York. The parties agree
that all actions and proceedings by or against the Rights Agent arising out of this Agreement or
any of the transactions contemplated hereby shall be brought in the United States District Court
for the Southern District of New York or in a New York State Court in the County of New York and
that, in connection with any such action or proceeding, the parties agree to submit to the
jurisdiction of, and venue in, such court. Each of the parties hereto also irrevocably waives all
rights to trial by jury in any action, proceeding or counterclaim arising out of this Agreement or
the transactions contemplated hereby.

     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.

[Remainder of page intentionally blank; signature page follows.]

26

 

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

	 	 	 	 	 
	 	IMATION CORP.

 	 
	 	By  	/s/
Bruce A. Henderson 	 
	 	 	Name:  	Bruce A. Henderson 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 
	 	THE BANK OF NEW YORK

 	 
	 	By  	/s/ Margaret Sullivan
 	 
	 	 	Name:  	Margaret Sullivan 	 
	 	 	Title:  	Vice President 	 
	 

[Signature
page to Rights Agreement]

 

 

Exhibit A

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATION, PREFERENCES

AND RIGHTS OF SERIES A JUNIOR

PARTICIPATING PREFERRED STOCK

of

Imation Corp.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

     The undersigned officer of Imation Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:

     1. That by resolution of the Board of Directors of the Corporation adopted on June 18, 1996,
and by a Certificate of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock filed in the office of the Secretary of State of the State of Delaware on June 28,
1996, the Corporation authorized the issuance of a series of 1,000,000 shares of Series A Junior
Participating Preferred Stock of the Corporation and established the voting powers, designations,
preferences and relative, participating and other rights, and the qualifications, limitations or
restrictions thereof.

     2. That no shares of Series A Junior Participating Preferred Stock of Imation Corp. have been
issued.

     3. That pursuant to the authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation of the Corporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Board of Directors of the Corporation on June 21, 2006 adopted the
following resolution amending and restating, effective 6:00 p.m., Delaware time, on July 3, 2006,
the provisions of the Series A Junior Participating Preferred Stock:

     RESOLVED, that pursuant to the authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation of the Corporation, the Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock of Imation Corp. is hereby amended and
restated, effective 6:00 p.m., Delaware time, on July 3, 2006, to read in its entirety as follows:

     Section 1. Designation and Amount. The shares of such series shall be designated as “Series
A Junior Participating Preferred Stock” and the number of shares constituting such series shall be
1,000,000. The number of shares constituting such series may, unless prohibited by the Restated
Certificate of Incorporation or by applicable law of the State of Delaware, be increased or
decreased by resolution of the Board of Directors, provided that no decrease shall reduce the
number of Series A Junior Participating Preferred Stock to a number less than the sum of the number
of shares then outstanding or held in treasury plus the number of shares issuable upon the exercise
of outstanding options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Junior Participating Preferred Stock.

 

 

     Section 2. Dividends and Distributions.

     (A) Subject to the prior and superior rights of the holders of any shares of any class
or series of Preferred Stock ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares of Series A
Junior Participating Preferred Stock shall be entitled to receive, in preference to the
holders of shares of any class or series of stock ranking junior to the Series A Junior
Participating Preferred Stock in respect thereof, 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 March, June, September and December in each year (each such date being referred to
herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.01 per share, of the Corporation (the “Common Stock”) since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the Corporation shall
at any time after July 3, 2006 (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case the amount
to which holders of shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.

     (B) The Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in Paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Junior Participating Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the payment thereof.

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

     (A) Subject to the provision for adjustment hereinafter set forth, each share of Series
A Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after July 3, 2006 (i) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.

2

 

     (B) Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or by law, the holders of shares of Series A Junior
Participating Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.

(C)     (i)     If, at the time of any annual meeting of stockholders for the election of
directors, six quarterly dividends (whether or not consecutive) payable on any share
or shares of Series A Junior Participating Preferred Stock are in default, the
number of directors constituting the Board of Directors of the Corporation shall be
increased by two. In addition to voting together with the holders of Common Stock
for the election of other directors of the Corporation, the holders of record of the
Series A Junior Participating Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock, shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of stockholders), unless all
dividends in arrears on the Series A Junior Participating Preferred Stock have been
paid or declared and set apart for payment prior thereto, to vote for the election
of two directors of the Corporation, the holders of any Series A Junior
Participating Preferred Stock being entitled to cast a number of votes per share of
Series A Junior Participating Preferred Stock as is specified in paragraph (A) of
this Section 3. If the holders of Series A Junior Participating Preferred Stock
fail to elect two directors, voting separately as a class pursuant to the right
granted in this Section 3(C), the holders of Common Stock shall have no right to
elect directors to fill such directorships and such directorships shall remain
vacant until the holders of Series A Junior Participating Preferred Stock fill such
vacancies.

     (ii) Until all dividends in arrears on the Series A Junior Participating
Preferred Stock which permitted the election of said directors pursuant to this
Section 3(C) shall have been paid or declared and set aside for payment, any
director who shall have been so elected pursuant to the provisions of this Section
3(C) may be removed at any time, without cause, only by the affirmative vote of the
holders of the shares of Series A Junior Participating Preferred Stock at the time
entitled to cast a majority of the votes entitled to be cast for the election of any
such director at a meeting of such holders, and any vacancy thereby created may be
filled at that meeting or thereafter by the vote of such holders or by the remaining
director previously elected by a class vote of holders of the Series A Junior
Participating Preferred Stock pursuant to this Section 3(C). Any such special
meeting to remove any such director or fill such a vacancy shall be called by the
Chief Executive Officer, Chief Financial Officer, or the Secretary of the
Corporation for a time not earlier than 20 days or later than 60 days after a
request for such a meeting is made by written notice to the Secretary of the
Corporation by any stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total voting power of shares of Series A Junior
Participating Preferred Stock then outstanding.

     (iii) No voting rights may be exercised with respect to class voting by the
holders of Series A Junior Participating Preferred Stock pursuant to this Section
3(C) unless a quorum consisting of the presence in person or by proxy of holders of
at least one-third of the voting power of the outstanding Series A Junior
Participating Preferred Stock is present at the annual or special meeting. The
directors so elected pursuant to this Section 3(C) shall continue in office until
their successors shall have been elected pursuant to this Section 3(C). Any vacancy
in the Board of Directors created by the death, disability, or resignation of any
director elected by the holders of Series A Junior Participating Preferred Stock,
voting separately as a class, pursuant to this Section 3(C) may be filled by the
remaining director previously elected by a class vote of holders of the Series A
Junior Participating Preferred Stock pursuant to this Section 3(C) or by the vote of
the holders of Series A Junior Participating Preferred Stock, voting separately as a
class, to the exclusion of the holders of Common Stock.

3

 

     (iv) If and when all dividends in arrears on the Series A Junior Participating
Preferred Stock which permitted the election of directors pursuant to this Section
3(C) shall have been paid or declared and set aside for payment, the holders of the
Series A Junior Participating Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every
subsequent like default in payments of six quarterly dividends (whether or not
consecutive) on Series A Junior Participating Preferred Stock following divestiture
of the foregoing special voting rights. Upon the divestiture of the foregoing
special voting rights, the terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate, and the
number of directors constituting the Board of Directors shall be reduced by two.
The voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating Preferred
Stock in this Section 3.

     (D) Except as set forth herein or provided by law, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders of Common Stock
or any other capital stock of the Corporation having general voting rights as set forth
herein) for taking any corporate action.

     Section 4. Certain Restrictions.

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

     (i) declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock;

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

     (iii) except as provided in clause (iv) of this Section 4(A), 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 Junior 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 (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or

     (iv) purchase or otherwise acquire for consideration any shares of Series A
Junior Participating Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Participating Preferred Stock, except, notwithstanding
anything stated in clause (iii) of this Section 4(A), 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.

4

 

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

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

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Corporation, no distribution shall be made (a) to the
holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of Series A Junior Participating Preferred Stock shall have received the greater of (i)
$100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (ii) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the
aggregate amount to be distributed per share to holders of Common Stock, or (b) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred Stock, except distributions made
ratably on the Series A Junior Participating Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time after July 3, 2006,
declare or pay any dividend on the shares of Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a greater or lesser number of Common Stock, then in each such
case the aggregate amount to which holders of Series A Junior Participating Preferred Stock were
entitled immediately before such event under clause (a)(ii) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the number of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately before such event.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation shall at any time
after July 3, 2006 (i) declare or pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall
not be redeemable.

     Section 9. Rank. The Series A Junior Participating Preferred Stock shall rank junior with
respect to the payment of dividends and distribution of assets upon liquidation, dissolution or
winding up to all other series of the Corporation’s Preferred Stock hereafter issued that
specifically provide that they shall rank senior to the Series A Junior Participating Preferred
Stock.

5

 

     Section 10. Amendment. The Restated Certificate of Incorporation shall not be further
amended, whether by merger, consolidation or otherwise, in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of a majority in
voting power or more of the outstanding shares of Series A Junior Participating Preferred Stock, if
any, voting separately as a class.

     Section 11. Fractional Shares. Series A Junior 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 Junior Participating Preferred Stock.

     IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of
Designation, Preferences and Rights of Series A Junior Participating Preferred Stock this ___day
of June, 2006.

	 	 	 	 	 
	 

	 	Imation Corp.	 	 
	 
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

6

 

Exhibit B

[Form of Rights Certificate]

Certificate No. R- ________ Rights

     NOT EXERCISABLE AFTER JULY 1, 2016, OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. 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 AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)

 

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

Rights Certificate

Imation Corp.

     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 June 21, 2006 (the “Rights
Agreement”), between Imation Corp., a Delaware corporation (the “Company”), and The Bank of New
York, a New York banking corporation (the “Rights Agent”), to purchase from the Company at any time
prior to 5:00 P.M. (New York time) on July 1, 2016 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock (the “Preferred Stock”) of
the Company, at a purchase price of $160 per one one-hundredth of a share (the “Purchase Price”),
upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are, except for adjustments required
pursuant to the Rights Agreement, the number and Purchase Price as of July 3, 2006 based on the
Preferred Stock as constituted at such date. The Company reserves the right to require prior to
the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock will be issued.

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

 

 

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

     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
office or offices of the Rights Agent designated for such purpose and are available without charge
upon written request to the Rights Agent.

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

     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a cash redemption price of $0.001 per Right at any
time prior to the earlier of (i) such time as a Person becomes an Acquiring Person (as such terms
are defined in the Rights Agreement), and (ii) the close of business on the Final Expiration Date
(as such term is defined in the Rights Agreement). Such Rights may also be exchanged by the
Company in whole or in part for shares of Common Stock or other shares of capital stock of the
Company as provided in the Rights Agreement.

     No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary
receipts), if in lieu thereof a cash payment is 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 shares of Preferred Stock 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 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, manually or by facsimile signature, by the Rights Agent.

2

 

     WITNESS the manual or facsimile signature of the proper officer of the Company.

Dated as of                                         ,                     

	 	 	 	 	 
	 	Imation Corp.

 	 
	 	By  	 	 
	 	 	     Title: 	 
	 	 	 	 
	 
	 	Countersigned:

The Bank of New York

 	 
	 	By  	 	 
	 	 	     Authorized Signature 	 
	 	 	 	 

3

 

	 	 	 	 	 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

     FOR VALUE RECEIVED                                                              hereby sells, assigns
and 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:                                         , 20___

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Certificate	 	 

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 	 
	 
	 	 	 	 
	Dated:                                         , 20___

	 	 

Signature
	 	 
	 
	 	 	 	 
	Signature Guaranteed:
	 	 	 	 

NOTICE

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

4

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise Rights represented by the

Rights Certificate.)

     To: Imation Corp.:

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

     Please insert social security or other identifying number                                                             

     (Please print name and address)

               
          
               
               
               
               
              
              
              
               
              
      
               
        

               
               
               
               
              
              
               
              
              
               
                
                
       

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

     Please insert social security or other identifying number  
                
               
               
           
  

     (Please print name and address)

                 
               
               
                
               
               
               
                
               
               
        
               
        

               
 
               
               
                
               
               
               
                
               
               
         
               
        

	 	 	 	 	 
	 

	 
	 	 	 	 
	Dated:                     , 20___

	 	 

Signature
	 	 
	 
	 	 	 	 
	Signature Guaranteed:
	 	 	 	 

	 	 	 
	 

	 	 

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
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

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

	 	 	 	 	 
	 
	 	 	 	 
	Dated:                     , 20___

	 	 

Signature
	 	 
	 
	 	 	 	 
	Signature Guaranteed:
	 	 	 	 

	 	 	 
	 

	 	 

5

 

NOTICE

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

6

 

Exhibit C

SUMMARY OF RIGHTS

TO PURCHASE

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

     On June 21, 2006, the Board of Directors of Imation Corp. (the “Company”) adopted a Share
Rights Plan, providing for a dividend of one Right on each share of Common Stock (“Common Stock”)
of the Company. The dividend is payable on July 3, 2006 (the “Record Date”) to stockholders of
record at the close of business on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the “Preferred Stock”), at a Purchase Price of $160 per
one-hundredth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The
description and terms of the Rights are set forth in the Rights Agreement (the “Rights Agreement”),
dated as of June 21, 2006, between the Company and The Bank of New York, as Rights Agent (the
“Rights Agent”).

     Initially, the Rights will attach to all Common Stock certificates representing shares
outstanding at the close of business on the Record Date, or thereafter, and no separate Rights
Certificate will be distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an “Acquiring Person”) has acquired, subject to certain
exceptions, beneficial ownership of 15% or more of the outstanding shares of Common Stock (the
“Stock Acquisition Date”) or (ii) 10 business days (or such later date as may be determined by the
Board of Directors before any person or group of affiliated or associated persons becomes an
Acquiring Person) following the first public announcement relating to a tender offer or exchange
offer that would result in a person or group beneficially owning 15% or more of such outstanding
shares of Common Stock.

     Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date upon transfer or new issuance of Common Stock will
contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.

     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on July 1, 2016 unless earlier redeemed or exchanged by the Company as described below.

     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights.

     In certain events specified in the Rights Agreement, the Company is permitted temporarily to
suspend the exercisability of the Rights.

     In the event that a person or group of associated or affiliated persons becomes an Acquiring
Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common
Stock having a value equal to two times the Purchase Price, subject to certain possible
adjustments. Notwithstanding any of the foregoing, after a person becomes an Acquiring Person, all
Rights that are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.

     In the event that following the Stock Acquisition Date (i) the Company engages in a merger or
business combination transaction in which the Company is not the surviving corporation; (ii) the
Company engages in a merger or business combination transaction in which the Company is the
surviving corporation and outstanding Common Stock of the Company is changed or exchanged; or (iii)
more than 50% of the Company’s assets or earning power is sold or transferred, each holder of a
Right (except Rights which have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise of the Right, common
stock of the acquiring company having a value equal to two times the Purchase Price of the Right.

 

 

     At any time after a person or group of affiliated or associated persons becomes an Acquiring
Person and before the acquisition by a person or group of affiliated or associated persons of 50%
or more of the outstanding Common Stock (subject to certain exceptions), the Board of Directors of
the Company may exchange all or part of the Rights (other than Rights that have become void under
the terms of the Rights Agreement) for Common Stock or equivalent securities at an exchange ratio
per Right equal to the result obtained by dividing the exercise price of a Right by the current per
share market price of the Common Stock, subject to adjustment.

     At any time prior to the earlier of the date a person or group of affiliated or associated
persons becomes an Acquiring Person or July 1, 2016, the Company may (but is not required to)
redeem the Rights in whole, but not in part, at a price of $0.001 per Right, payable in cash. The
redemption of the Rights 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. Upon the redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be to receive the $0.001
redemption price. The Board of Directors will not be liable to any person as a result of the
redemption or exchange of the Rights pursuant to the provisions of the Rights Agreement.

     Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company.

     Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the
Company before a person becomes an Acquiring Person. After a person becomes an Acquiring Person,
the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of Rights (excluding the
interest of any Acquiring Person or of transferees of Acquiring Persons), or to shorten or, subject
to certain exceptions, lengthen any time period under the Rights Agreement; provided, however, that
no amendment to adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.

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

2exv4w2

 

Exhibit 4.2

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATION, PREFERENCES

AND RIGHTS OF SERIES A JUNIOR

PARTICIPATING PREFERRED STOCK

of

Imation Corp.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

     The undersigned officer of Imation Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:

     1.     That by resolution of the Board of Directors of the Corporation adopted on June 18, 1996,
and by a Certificate of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock filed in the office of the Secretary of State of the State of Delaware on June 28,
1996, the Corporation authorized the issuance of a series of 1,000,000 shares of Series A Junior
Participating Preferred Stock of the Corporation and established the voting powers, designations,
preferences and relative, participating and other rights, and the qualifications, limitations or
restrictions thereof.

     2.     That no shares of Series A Junior Participating Preferred Stock of Imation Corp. have been
issued.

     3.     That pursuant to the authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation of the Corporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Board of Directors of the Corporation on June 21, 2006 adopted the
following resolution amending and restating, effective 6:00 p.m., Delaware time, on July 3, 2006,
the provisions of the Series A Junior Participating Preferred Stock:

     RESOLVED, that pursuant to the authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation of the Corporation, the Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock of Imation Corp. is hereby amended and
restated, effective 6:00 p.m., Delaware time, on July 3, 2006, to read in its entirety as follows:

     Section 1. Designation and Amount. The shares of such series shall be designated as “Series
A Junior Participating Preferred Stock” and the number of shares constituting such series shall be
1,000,000. The number of shares constituting such series may, unless prohibited by the Restated
Certificate of Incorporation or by applicable law of the State of Delaware, be increased or
decreased by resolution of the Board of Directors, provided that no decrease shall reduce the
number of Series A Junior Participating Preferred Stock to a number less than the sum of the number
of shares then outstanding or held in treasury plus the number of shares issuable upon the exercise
of outstanding options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Junior Participating Preferred Stock.

 

 

     Section 2. Dividends and Distributions.

     (A)     Subject to the prior and superior rights of the holders of any shares of any class
or series of Preferred Stock ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares of Series A
Junior Participating Preferred Stock shall be entitled to receive, in preference to the
holders of shares of any class or series of stock ranking junior to the Series A Junior
Participating Preferred Stock in respect thereof, 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 March, June, September and December in each year (each such date
being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock, par value
$.01 per share, of the Corporation (the “Common Stock”) since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. In the event the Corporation shall at any time after July 3,
2006 (i) declare or pay any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of shares of
Series A Junior Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

     (B)     The Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in Paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

     (C)     Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Junior Participating Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the payment thereof.

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

     (A)     Subject to the provision for adjustment hereinafter set forth, each share of Series
A Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after July 3, 2006 (i) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such
event.

2

 

     (B)     Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or by law, the holders of shares of Series A Junior
Participating Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.

(C)  (i)     If, at the time of any annual meeting of stockholders for the election of
directors, six quarterly dividends (whether or not consecutive) payable on any share
or shares of Series A Junior Participating Preferred Stock are in default, the
number of directors constituting the Board of Directors of the Corporation shall be
increased by two. In addition to voting together with the holders of Common Stock
for the election of other directors of the Corporation, the holders of record of the
Series A Junior Participating Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock, shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of stockholders), unless all
dividends in arrears on the Series A Junior Participating Preferred Stock have been
paid or declared and set apart for payment prior thereto, to vote for the election
of two directors of the Corporation, the holders of any Series A Junior
Participating Preferred Stock being entitled to cast a number of votes per share of
Series A Junior Participating Preferred Stock as is specified in paragraph (A) of
this Section 3. If the holders of Series A Junior Participating Preferred Stock
fail to elect two directors, voting separately as a class pursuant to the right
granted in this Section 3(C), the holders of Common Stock shall have no right to
elect directors to fill such directorships and such directorships shall remain
vacant until the holders of Series A Junior Participating Preferred Stock fill such
vacancies.

     (ii)     Until all dividends in arrears on the Series A Junior Participating
Preferred Stock which permitted the election of said directors pursuant to this
Section 3(C) shall have been paid or declared and set aside for payment, any
director who shall have been so elected pursuant to the provisions of this Section
3(C) may be removed at any time, without cause, only by the affirmative vote of the
holders of the shares of Series A Junior Participating Preferred Stock at the time
entitled to cast a majority of the votes entitled to be cast for the election of any
such director at a meeting of such holders, and any vacancy thereby created may be
filled at that meeting or thereafter by the vote of such holders or by the remaining
director previously elected by a class vote of holders of the Series A Junior
Participating Preferred Stock pursuant to this Section 3(C). Any such special
meeting to remove any such director or fill such a vacancy shall be called by the
Chief Executive Officer, Chief Financial Officer, or the Secretary of the
Corporation for a time not earlier than 20 days or later than 60 days after a
request for such a meeting is made by written notice to the Secretary of the
Corporation by any stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total voting power of shares of Series A Junior
Participating Preferred Stock then outstanding.

     (iii)     No voting rights may be exercised with respect to class voting by the
holders of Series A Junior Participating Preferred Stock pursuant to this Section
3(C) unless a quorum consisting of the presence in person or by proxy of holders of
at least one-third of the voting power of the outstanding Series A Junior
Participating Preferred Stock is present at the annual or special meeting. The
directors so elected pursuant to this Section 3(C) shall continue in office until
their successors shall have been elected pursuant to this Section 3(C). Any vacancy
in the Board of Directors created by the death, disability, or resignation of any
director elected by the holders of Series A Junior Participating Preferred Stock,
voting separately as a class, pursuant to this Section 3(C) may be filled by the
remaining director previously elected by a class vote of holders of the Series A
Junior Participating Preferred Stock pursuant to this Section 3(C) or by the vote of
the holders of Series A Junior Participating Preferred Stock, voting separately as a
class, to the exclusion of the holders of Common Stock.

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     (iv)     If and when all dividends in arrears on the Series A Junior Participating
Preferred Stock which permitted the election of directors pursuant to this Section
3(C) shall have been paid or declared and set aside for payment, the holders of the
Series A Junior Participating Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of six quarterly dividends (whether or not consecutive) on Series A Junior
Participating Preferred Stock following divestiture of the foregoing special voting
rights. Upon the divestiture of the foregoing special voting rights, the terms of
office of all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate, and the number of directors constituting
the Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(C) shall be in addition to any other voting rights granted to the holders
of the Series A Junior Participating Preferred Stock in this Section 3.

     (D)     Except as set forth herein or provided by law, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders of Common Stock
or any other capital stock of the Corporation having general voting rights as set forth
herein) for taking any corporate action.

     Section 4. Certain Restrictions.

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

     (i)     declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock;

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

     (iii)     except as provided in clause (iv) of this Section 4(A), 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 Junior 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 (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or

     (iv)     purchase or otherwise acquire for consideration any shares of Series A
Junior Participating Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Participating Preferred Stock, except, notwithstanding
anything stated in clause (iii) of this Section 4(A), 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.

4

 

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

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

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Corporation, no distribution shall be made (a) to the
holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of Series A Junior Participating Preferred Stock shall have received the greater of (i)
$100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (ii) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the
aggregate amount to be distributed per share to holders of Common Stock, or (b) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred Stock, except distributions made
ratably on the Series A Junior Participating Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time after July 3, 2006,
declare or pay any dividend on the shares of Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a greater or lesser number of Common Stock, then in each such
case the aggregate amount to which holders of Series A Junior Participating Preferred Stock were
entitled immediately before such event under clause (a)(ii) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the number of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately before such event.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation shall at any time
after July 3, 2006 (i) declare or pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall
not be redeemable.

     Section 9. Rank. The Series A Junior Participating Preferred Stock shall rank junior with
respect to the payment of dividends and distribution of assets upon liquidation, dissolution or
winding up to all other series of the Corporation’s Preferred Stock hereafter issued that
specifically provide that they shall rank senior to the Series A Junior Participating Preferred
Stock.

5

 

     Section 10. Amendment. The Restated Certificate of Incorporation shall not be further
amended, whether by merger, consolidation or otherwise, in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of a majority in voting power or more of the
outstanding shares of Series A Junior Participating Preferred Stock, if any, voting separately as a
class.

     Section 11. Fractional Shares. Series A Junior 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 Junior Participating Preferred Stock.

     IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of
Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock this 21st day of
June, 2006.

	 	 	 	 	 
	 

	 	Imation Corp.	 	 
	 
	 
	 	/s/ John L. Sullivan 	 	 
	 

	 	 

Name: John L. Sullivan 
	 	
	 

	 	Title:   Senior Vice President,

            General Counsel and

            Secretary	 	 

6

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