Document:

Exhibit 4.1

THE MANITOWOC COMPANY, INC.

AND

COMPUTERSHARE TRUST COMPANY, N.A.

RIGHTS AGENT

RIGHTS AGREEMENT

DATED AS OF MARCH 21, 2007

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Certain Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Appointment of Rights Agent

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Issue of Rights Certificates

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Form of Rights Certificates

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Countersignature and Registration

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

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

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Exercise of Rights; Purchase Price; Expiration Date
  of Rights

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Cancellation and Destruction of Rights Certificates

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Reservation and Availability of Capital Stock

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Common Stock Record Date

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Adjustment of Purchase Price, Number and Kind of
  Shares or Number of Rights

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.

  	
   

  	
  Certificate of Adjusted Purchase or Number of Shares

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.

  	
   

  	
  Consolidation, Merger or Sale or Transfer of Assets
  or Earning Power

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.

  	
   

  	
  Fractional Rights and Fractional Shares

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.

  	
   

  	
  Rights of Action

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.

  	
   

  	
  Agreement of Rights Holders

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 17.

  	
   

  	
  Rights Certificate Holder Not Deemed a Shareholder

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 18.

  	
   

  	
  Concerning the Rights Agent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 19.

  	
   

  	
  Merger or Consolidation or Change of Name of Rights
  Agent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 20.

  	
   

  	
  Duties of Rights Agent

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 21.

  	
   

  	
  Change of Rights Agent

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 22.

  	
   

  	
  Issuance of New Rights Certificates

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 23.

  	
   

  	
  Redemption

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 24.

  	
   

  	
  Exchange

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 25.

  	
   

  	
  Notice of Certain Events

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 26.

  	
   

  	
  Notices

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 27.

  	
   

  	
  Supplements and Amendments

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 28.

  	
   

  	
  Successors

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 29.

  	
   

  	
  Determinations and Actions by the Board of Directors

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 30.

  	
   

  	
  Benefits of this Agreement

  	
   

  	
  36

  

 

 i
 

 

	
  Section 31.

  	
   

  	
  Severability

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 32.

  	
   

  	
  Governing Law

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 33.

  	
   

  	
  Counterparts

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 34.

  	
   

  	
  Descriptive Headings

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 35.

  	
   

  	
  Force Majeure

  	
   

  	
  37

  

 

 ii

RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated as of March 21, 2007 (the
“Agreement”), between The Manitowoc Company, Inc., a Wisconsin corporation (the
“Company”), and Computershare Trust Company, N.A., a national banking
association (the “Rights Agent”).

WITNESSETH

WHEREAS, on March 21, 2007 (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 outstanding at the Close of Business (as such term is
hereinafter defined) on March 30, 2007 (the “Record Date”), and has
authorized the issuance of one Right for each share of Common Stock (as such
term is hereinafter defined) of the Company issued between the Record Date
(whether originally issued or delivered from the Company’s treasury) and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined), each Right initially representing
the right to purchase one share of Common Stock of the Company 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 hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 20% or more of the shares of Common
Stock then outstanding, but shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person holding Common
Stock for or pursuant to the terms of any such plan; provided, however, that a
Person (a “Passive Holder”) shall not become an Acquiring Person if, solely as
a result of a reduction in the number of shares of Common Stock outstanding due
to the repurchase of Common Stock by the Company, such Passive Holder, together
with all Affiliates and Associates of such Passive Holder after such
repurchase, shall become the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding, unless and until such time as such Passive
Holder or any Affiliate or Associate of such Passive Holder shall become the Beneficial
Owner of any additional shares of Common Stock or any other Person who is the
Beneficial Owner of any shares of Common Stock shall become an Affiliate or
Associate of such Passive Holder, if after giving effect to such additional
shares or the shares beneficially owned by such other Person, such Passive
Holder, together with all Affiliates and Associates of such Passive Holder,
shall be the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding.  Notwithstanding the

foregoing, if the Board
(as such term is hereinafter defined) determines in good faith that a Person
who would otherwise be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be 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 (the “Exchange
Act”), as in effect on the date of this Agreement.

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

(i)                                     which
such Person or any of such Person’s Affiliates or Associates, 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,” securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange;

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

 2
 

(iii)                               which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of, or with respect to, acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
provision 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,” any
securities acquired through such person’s participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of
such acquisition.

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

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

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

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

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

(i)            “Section 11(a)(ii)
Event” shall mean any event described in
Section 11(a)(ii)(A),(B) or (C) 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) or 14(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.

 3
 

(l)            “Subsidiary”
shall mean, with reference to any Person, any corporation or other entity of
which a majority of the voting power of the voting securities or voting
interests is 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.

(n)           Other Defined Terms.  The following terms shall have the meanings
indicated in the following Sections of this Agreement:

	
  (i)

  	
   

  	
  “Act” - Section 9(b).

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  “Adjustment Shares” -
  Section 11(a)(ii).

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  “Agreement” - Preamble.

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  “Common Stock Equivalents” -
  Section 11(a)(iii).

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  “Company” - Preamble.

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  “Current Market Price” -
  Section 11(d).

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  “Current Value” -
  Section 11(a)(iii).

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  “Distribution Date” -
  Section 3(a).

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  “Equivalent Common Stock” -
  Section 11(b).

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  “Exchange Act” -
  Section 1(b).

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  “Exchange Ratio” -
  Section 24(a).

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  “Expiration Date” -
  Section 7(a).

  
	
   

  	
   

  	
   

  
	
  (xiii)

  	
   

  	
  “Final Expiration Date” -
  Section 7(a).

  
	
   

  	
   

  	
   

  
	
  (xiv)

  	
   

  	
  “NASDAQ” -
  Section 11(f).

  
	
   

  	
   

  	
   

  
	
  (xv)

  	
   

  	
  “Passive Holder” -
  Section 1(a).

  
	
   

  	
   

  	
   

  
	
  (xvi)

  	
   

  	
  “Principal Party” -
  Section 13(b).

  
	
   

  	
   

  	
   

  
	
  (xvii)

  	
   

  	
  “Purchase Price” -
  Sections 4(a), 11(a)(ii) and 13(a).

  
	
   

  	
   

  	
   

  
	
  (xviii)

  	
   

  	
  “Record Date” -
  Preamble.

  
	
   

  	
   

  	
   

  
	
  (xix)

  	
   

  	
  “Redemption Date” -
  Section 7(a).

  
	
   

  	
   

  	
   

  
	
  (xx)

  	
   

  	
  “Redemption Price” -
  Section 23(a).

  

 

 4
 

 

	
  (xxi)

  	
   

  	
  “Rights” - Preamble.

  
	
   

  	
   

  	
   

  
	
  (xxii)

  	
   

  	
  “Rights Agent” - Preamble.

  
	
   

  	
   

  	
   

  
	
  (xxiii)

  	
   

  	
  “Rights Certificates” - Section 3(a).

  
	
   

  	
   

  	
   

  
	
  (xxiv)

  	
   

  	
  “Rights Dividend Declaration Date” - Preamble.

  
	
   

  	
   

  	
   

  
	
  (xxv)

  	
   

  	
  “Section 11(a)(ii) Trigger Date” -
  Section 11(a)(iii).

  
	
   

  	
   

  	
   

  
	
  (xxvi)

  	
   

  	
  “Spread” - Section 11(a)(iii).

  
	
   

  	
   

  	
   

  
	
  (xxvii)

  	
   

  	
  “Substitution Period” - Section 11(a)(iii).

  
	
   

  	
   

  	
   

  
	
  (xxviii)

  	
   

  	
  “Summary of Rights” - Section 3(b).

  
	
   

  	
   

  	
   

  
	
  (xxix)

  	
   

  	
  “Trading Day” - Section 11(d).

  

 

 

Section
2.  Appointment of Rights Agent.  The Company hereby appoints the Rights Agent
to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint
such co-rights agents as it may deem necessary or desirable, upon ten (10) days’
prior written notice to the Rights Agent. 
The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such co-Rights Agent.

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 after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or
any Person holding Common Stock for or pursuant to the terms of any such plan)
is first commenced within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof such
Person would be the Beneficial Owner of 20% 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
Rights Certificates (as such term is hereinafter defined)) and not by separate
Rights Certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). 
As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class mail, postage prepaid, to each record holder of the
Common Stock as of the Close of 

 5
 

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 A
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 Sections 11(a)
or 11(i) hereof, at the time of distribution of the Rights Certificates the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights.  As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.

(b)           As promptly as
practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Common Stock, in substantially the form attached
hereto as Exhibit B (the “Summary of Rights”), by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Record Date, at the address of such holder shown on the
records of the Company.  With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution 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 (as
such term is defined in Section 7(a) hereof), the surrender for 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.

(c)           Rights shall be issued
in respect of all shares of Common Stock which are issued (whether originally
issued or delivered from the Company’s treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date or, in
certain circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear the following
legend:

This
certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between The Manitowoc Company, Inc. (the “Company”)
and Computershare Trust Company, N.A. (the “Rights Agent”), dated as of
March 21, 2007 (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company and the Rights Agent.  Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.  The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor.  Under certain circumstances as
set forth in

 6
 

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 surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.

Section 4.  Form of Rights Certificates.

(a)           The Rights Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit A
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.  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 shares of Common Stock
as shall be set forth therein at the price set forth therein (the “Purchase
Price”), but the amount and type of securities purchasable (or other
consideration to be made available) 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 (other than a bona fide purchaser for value who
has no knowledge that the transferor was an Acquiring Person or an Associate or
Affiliate of an Acquiring Person) 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 that the Board 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,

 7
 

exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:

The
Rights represented by this Rights Certificate are or were beneficially owned by
a Person who was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement).  Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of 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 President, any Vice President or its Treasurer,
either manually or by facsimile signature, and shall have affixed thereto the
Company’s seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile signature.  The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned.  In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before 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 or to be 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, the Rights
Certificate number, 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 Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of shares of Common Stock (or, following a
Triggering Event, other securities,

 8
 

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

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

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

(a)           Subject to
Section 7(e) hereof, the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii), Section 23(a) and
Section 24(b) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment (in accordance with subsection (c) of
this Section 7) of the aggregate Purchase Price with respect to the total
number of shares of Common Stock (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the Close of Business on February    ,
2017 (the “Final Expiration Date”), or (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the “Redemption Date”) (the
earlier of (i) and (ii) being herein referred to as the “Expiration
Date”).

 9
 

(b)           The Purchase Price for
each share of Common Stock pursuant to the exercise of a Right shall initially
be $220.00, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

(c)           Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price per
share of Common Stock (or other shares, securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Rights Certificate in accordance
with Section 9 hereof, in cash, or by certified check or cashiers check
payable to the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon (i) promptly requisition from any transfer agent of the
shares of Common Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of shares of Common
Stock to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
promptly requisition from the Company the amount of cash, if any, to be paid in
lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder,
and (iv) when appropriate, after receipt thereof, promptly deliver such
cash, if any, to or upon the order of the registered holder of such Rights
Certificate.  In the event that the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.

(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 remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.

(e)           Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Triggering Event, any Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such (other than a bona
fide purchaser for value who has no knowledge that the transferor was an
Acquiring Person or an Associate or Affiliate of an Acquiring Person), 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

 10
 

transferred Rights or
(B) a transfer that the Board 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 insure 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 to 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, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.

Section 9.  Reservation and Availability of Capital
Stock.

(a)           So long as the shares
of Common Stock (and, following the occurrence of a Triggering Event, 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.

(b)           If then required by
applicable law, the Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Triggering Event as to which the consideration to be delivered by the Company
upon exercise of the Rights has been determined pursuant to this Agreement, or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act of 1933 (the “Act”), with
respect to the Common Stock or other securities purchasable upon exercise of
the Rights on an

 11
 

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 Common Stock or other securities and (B) the
date of the expiration of the Rights.  If
then required by applicable law, the Company will also take such action as may
be appropriate under the securities or “blue sky” laws of the various states in
connection with the exercisability of the Rights.  The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(b), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. 
Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in
effect.  Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.

(c)           The Company covenants
and agrees that it will take all such action as may be necessary to ensure that
all shares of Common Stock (and, following the occurrence of a Triggering
Event, 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.

(d)           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
shares of Common Stock (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 shares of Common Stock (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 shares of Common
Stock (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 any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company’s satisfaction that no such tax is due.

Section 10.  Common Stock
Record Date.  Each person in whose
name any certificate for shares of Common Stock (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 shares of Common Stock (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,

 12
 

that if the date
of such surrender and payment is a date upon which the Common Stock (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 on, and
such certificate shall be dated, the next succeeding Business Day on which the
Common Stock (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 (in such holder’s capacity as such) to any rights of a shareholder
of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote any shares, to
receive dividends or other distributions with respect to any shares or to
exercise any preemptive rights with respect to any shares, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.

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

(a)                                  (i)            In the event the
Company shall at any time after the date of this Agreement (A) declare a
dividend on the Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common 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 the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Common 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 the
aggregate number and kind of shares of Common 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 Common Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.  If an event occurs 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
the Section 11(a)(ii) hereof.

 13
 

(ii)           In the event that:

(A)                              Any
Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any
time after the date of this Agreement, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger or combination
and the Common Stock of the Company shall remain outstanding and unchanged,
(2) shall, in one or more transactions, transfer any assets to the Company
or to any of its Subsidiaries (including, in the case of Subsidiaries, by way
of a merger or consolidation of any such Subsidiary) in exchange (in whole or
in part) for shares of any class of capital stock of the Company or any of its
Subsidiaries, or for securities exercisable for or convertible into shares of
any class of capital stock of the Company or any of its Subsidiaries, or
otherwise obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of the
Company or any of its Subsidiaries or securities exercisable for or convertible
into shares of any class of capital stock of the Company or any of its
Subsidiaries (other than pursuant to a pro rata distribution to all holders of
such shares of any class of capital stock of the Company or any of its
Subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one or more
transactions, to, from, with or of (as the case may be) the Company or any of
its Subsidiaries (including, in the case of Subsidiaries, by way of a merger or
consolidation of any Subsidiary), assets on terms and conditions less favorable
to the Company than the Company would be able to obtain in arm’s-length
negotiation with an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of in one or more transactions, to, from, with or of (as the case may
be) the Company or any of the Company’s Subsidiaries (including, in the case of
Subsidiaries, by way of a merger or consolidation of any Subsidiary) (other
than incidental to the lines of business, if any, engaged in as of the date
hereof between the Company and such Acquiring Person or Associate or Affiliate)
assets

 14
 

having an aggregate fair
market value of more than $25,000,000, other than pursuant to a transaction set
forth in Section 13(a) hereof, (5) shall receive any compensation
from the Company or any of the Company’s Subsidiaries other than compensation
for full-time employment as a regular employee at rates in accordance with the
Company’s (or its Subsidiaries’) past practices, or (6) shall receive the
benefit, directly or indirectly (except proportionately as a shareholder and
except if resulting from a requirement of law or governmental regulation), of
any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or other tax advantage provided by the Company or any of its
Subsidiaries, or

(B)                                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
holding Common Stock for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of more than
20.0% of the shares of Common Stock then outstanding, unless the event causing
the 20.0% threshold to be crossed is a transaction set forth in Section 13(a)
hereof or is an acquisition of shares of Common Stock pursuant to a tender
offer or exchange offer for all outstanding shares of Common Stock at a price
and on terms determined by at least a majority of the members of the Board who
are not officers of the Company, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
shareholders (taking into account all factors which such members of the Board
deem relevant including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the
Company and its shareholders, and provided that a Person shall not be deemed to
have become the Beneficial Owner of more than 20.0% of the shares of Common
Stock then outstanding for the purposes of this Section 11(a)(ii)(B)
solely as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of Common Stock by the Company, unless and
until such time as such Person

 15

or any Affiliate or
Associate of such Person shall become the Beneficial Owner of any additional
shares of Common Stock or any other Person who is the Beneficial Owner of any
shares of Common Stock shall become an Affiliate or Associate of such Person, if
after giving effect to such additional shares or the shares beneficially owned
by such other Person, such Person, together with all Affiliates and Associates
of such Person, shall be the Beneficial Owner of more than 20.0% of the shares
of Common Stock then outstanding, or

(C)                                During
such time as there is an Acquiring Person, there shall be any reclassification
of securities (including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction or transactions to
which the provisions of Section 13(a) apply (whether or not with or into
or otherwise involving an Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or of securities
exercisable for or convertible into equity securities of the Company or any of
its Subsidiaries, which is directly or indirectly beneficially owned by an
Acquiring Person or any Associate or Affiliate of any Acquiring Person,

then, promptly following five (5) days after the date
of the occurrence of an event described in Section 11(a)(ii)(B) hereof and
promptly following the occurrence of any event described in
Section 11(a)(ii)(A) or (C) hereof, proper provision shall be made so
that each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
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 shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first occurrence, shall thereafter
be referred to as the “Purchase Price” for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares being called herein the “Adjustment Shares”);
provided that the Purchase Price and the number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of such first occurrence.

 16
 

(iii)                               In
the event that the number of shares of Common Stock which are authorized by the
Company’s articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), and subject to such
limitations as are necessary to prevent default under any agreement for money
borrowed to which the Company is a party and to comply with applicable law, the
Company shall: (A) determine the excess of (1) the value (based on
the Current Market Price) of the Adjustment Shares issuable upon the exercise
of a Right (the “Current Value”) over (2) the Purchase Price (such excess,
the “Spread”), and (B) with respect to each Right, make adequate provision
to substitute for, or provide an election to acquire in lieu of, the Adjustment
Shares, upon payment of the applicable Purchase Price (which term shall include
any reduced purchase price), (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board has deemed to have the same value as shares of Common Stock
(such shares or units of shares of preferred stock, (hereinafter referred to as
the “Common Stock Equivalents”)), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company’s right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to herein
as the “Section 11(a)(ii) Trigger Date”), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread.  If
the Board shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days after
the Section 11(a)(ii) Trigger Date, in order

 17
 

that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, the “Substitution Period”).  To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any authorization
of additional shares and/or to decide the appropriate form of distribution to
be made pursuant to such first sentence and to determine the value
thereof.  In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and the value of
any Common Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date.

(b)           In case the Company
shall fix a record date for the issuance of rights, options or warrants to all
holders of Common Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days after such record date)
Common Stock (or shares having the same rights, privileges and preferences as
the shares of Common Stock (“Equivalent Common Stock”)) or securities
convertible into Common Stock or Equivalent Common Stock at a price per share
of Common Stock or Equivalent Common Stock (or having a conversion price per
share, if a security convertible into Common Stock or Equivalent Common Stock)
less than the Current Market Price per share of Common 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 Common Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock and/or Equivalent Common 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 Common Stock outstanding on such
record date, plus the number of additional shares of Common Stock and/or
Equivalent Common Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible).  In case such subscription
price may be paid by delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall be as determined in
good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights.  Shares of Common
Stock owned by or held for the account of the Company shall not be

 18
 

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 Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of debt securities
(including 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 Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of the Common
Stock on such record date, less the fair market value (as determined in good
faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights) of the portion of the cash, assets or debt securities so to be
distributed or of such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current Market Price
per share of Common Stock.  Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.

(d)           For the purpose of any
computation hereunder, other than computations made pursuant to Section 11(a)(iii)
hereof, the “Current Market Price” per share of the Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the “Current
Market Price” per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following such date; provided,
however, that in the event that the current market price per share of the
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) any dividend or distribution on the
Common Stock (other than a regular quarterly cash dividend and other than the
Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the “Current
Market Price” shall be properly adjusted to take into account ex-dividend
trading.  The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the

 19
 

shares of Common Stock
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System (“NASDAQ”) or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board.  If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as determined
in good faith by the Board shall be used. 
The term “Trading Day” shall mean a day on which the principal national
securities exchange or NASDAQ on which the shares of Common Stock are listed,
traded 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 or NASDAQ, a Business Day.  If the Common Stock is not publicly held or
not so listed or traded, “Current Market Price” per share shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.

(e)           Anything herein to the
contrary notwithstanding, except for the last sentence of this
Section 11(e), 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,
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 Common Stock), other securities
or property, thereafter the number of such other shares, securities or property
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 Common Stock
contained in this Section 11, and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares, securities or property.

(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 shares of Common Stock purchasable

 20
 

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 shares of Common Stock (calculated to the
nearest ten-thousandth) obtained by (i) multiplying (x) the number of
shares 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 shares of Common
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 shares of Common 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, shall be at least ten (10)
days later than the date of the public announcement.  If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates 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.

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

 21
 

(k)           Before taking any
action that would cause an adjustment reducing the Purchase Price below the
then par value, if any, of the shares of Common 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 (to the extent provided in paragraph
9(d)) such number of shares of Common Stock at such adjusted Purchase Price.

(l)            In any case in which
this Section 11 shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date the shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the shares of Common 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 of Common Stock
and other capital stock (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 its
good faith judgment the Board shall determine to be advisable in order that any
(i) consolidation or subdivision of the Common Stock, (ii) issuance
wholly for cash of any shares of Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable for shares
of Common 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 Common Stock shall not be taxable to such
shareholders.

(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), (ii) merge with or into any other Person (other than a
Subsidiary of the Company), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one or more 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), 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.

 22
 

(o)           The Company covenants
and agrees that, after the Distribution Date, it will not, except as permitted
by Sections 23, 24, 27 or 31 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; provided, however, that the
issuance of additional Rights pursuant hereto, including by action of the Board
under Section 22 hereof, shall not be deemed to violate this
Section 11(o).

Section 12.  Certificate of
Adjusted Purchase 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 Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with
Section 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 Subsidiary of the Company), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company) shall consolidate with, or merge with
or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company), 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 in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal, redemption or repurchase or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of shares of Common 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 shares for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which,

 23
 

following the first
occurrence of a Section 13 Event, shall be referred as the “Purchase Price”
for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event (or the fair market value on such
date of other securities or property of the Principal Party, as provided for
herein); provided that the Purchase Price and the number of shares of Common
Stock of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of the first occurrence of a Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term “Company” shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to 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.

(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
for or into which shares of Common Stock of the Company are exchanged or
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 shares of 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 Section 13 Event unless the Principal
Party shall have a sufficient number of authorized shares of its Common

 24
 

Stock which have
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 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 Section 13 Event, 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; and

(ii)                                  Will
deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 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 shall thereafter become exercisable in the manner described in
Section 13(a).

(d)           Notwithstanding
anything in this Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a Person or
Persons (or a wholly owned subsidiary of any such Person or Persons) who
acquired shares of Common Stock pursuant to a tender offer or exchange offer
for all outstanding shares of Common Stock which complies with the provisions
of Section 11(a)(ii)(B) hereof, (ii) the price per share of Common
Stock offered in such transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such tender offer or exchange offer, and (iii) the
form of consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form of consideration
paid pursuant to such tender offer or exchange offer.  Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.

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(a)(i) hereof, or to distribute Rights
Certificates which evidence fractional Rights. 
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable an amount in cash

 25
 

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 by NASDAQ or
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board.  If on any such date no
such market maker is making a market in the Rights the fair value of the Rights
on such date as determined in good faith by the Board shall be used.

(b)           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 thereof, 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(b), the
current market value of one share of Common Stock shall be the closing price of
a share of Common Stock (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the date of such exercise.

(c)           The holder of a Right,
by the acceptance of the Rights, expressly waives his right to receive any
fractional Rights or any fractional shares upon exercise of a Right, except as
otherwise set forth herein.

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

 26
 

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 to 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)           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 shall be affected by any notice to the
contrary; and

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

Section 17.  Rights
Certificate Holder Not Deemed a Shareholder.  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 shares of Common 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 shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (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.

 27
 

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,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.

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

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

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

 28
 

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

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

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

(b)           Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of “Current 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 any one of the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.

(c)           The Rights Agent shall
be liable hereunder to the Company and any other Person only for its own gross
negligence, bad faith or willful misconduct.

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

(e)           The Rights Agent shall
not be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 7(e)

 29
 

hereof), any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 24 hereof, 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 to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common 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 to and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to any 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 shareholder, director, officer or employee of the Rights Agent, may buy,
sell or deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.

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

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

(k)           If, with respect to any
Rights Certificate surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form 

 30

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

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

 31
 

the number or kind
or class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.  In addition, the Company may, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with the issuance or sale of
shares of Common Stock following the Distribution Date.

Section 23.  Redemption.

(a)           The Board may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the Close of Business on the
tenth Business Day following the Record Date), or (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of One Cent ($0.01) per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the “Redemption Price”) and the Company may, at its
option, pay the Redemption Price in shares of Common Stock (based on the
Current Market Price of such Common Stock at the time of redemption).  If, following the occurrence of a Stock
Acquisition Date and following the expiration of the Company’s right of
redemption set forth in the preceding sentence but prior to any Triggering
Event, (i) each Person who was an Acquiring Person shall have transferred
or otherwise disposed of a number of shares of Common Stock in one or more
transactions, not directly or indirectly involving the Company, which did not
result in the occurrence of a Triggering Event such that each such Person is
thereafter a Beneficial Owner of 10% or less of the outstanding shares of
Common Stock, and (ii) there are no other Persons who are Acquiring
Persons and who became Acquiring Persons prior to the Board’s redemption
authorization, then the Company’s right of redemption set forth in the
preceding sentence shall be reinstated. 
Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company’s right of
redemption set forth in the first sentence of this Section 23(a) has
expired.

(b)           Immediately upon the action of the
Board 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 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.  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.  The
failure to give, or any defect in, any such notice shall not affect the
validity of such redemption.

 32
 

Section 24.  Exchange.

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

(b)           Immediately upon the action of the
Board ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio.  The Company shall
promptly give notice to the Rights Agent and public notice of any such
exchange; provided, however, that 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 that 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 shares of 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 that have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.

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

(d)           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, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such fractional
shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock.  For the purposes of this Section 24(d),
(i) 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)

 33
 

hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.

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 Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular cash dividend
out of earnings or retained earnings of the Company), or (ii) to offer to
the holders of Common Stock rights or warrants to subscribe for or to purchase
any additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company), 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 or more 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 (other
than the Company and/or any of its Subsidiaries), 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, or 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 Common 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 ten (10) days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least ten (10) 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 Common Stock, whichever shall be the earlier.

(b)           In case any Section 11(a)(ii)
Event 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.

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:

The Manitowoc Company,
Inc.

Attention:  General Counsel

2400 South 44th Street

Manitowoc, Wisconsin  54220

 34
 

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

Computershare Trust
Company, N.A.

525 Washington Boulevard

Jersey City, NY 07310

Attention:  Relationship Management

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.  The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other change which the Company may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. 
Without limiting the foregoing, the Company may at any time prior to
such time as any Person becomes an Acquiring Person amend this Agreement to
lower the thresholds set forth in Sections 1(a) and 3(a) hereof to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding shares of Common Stock then known by the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
Person holding shares of Common Stock for or pursuant to the terms of any such
plan) and (ii) 10%.

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. 
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, and any
determination of 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 provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date hereof.  The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the

 35
 

Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board to any liability to the holders of the Rights.

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

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

Section 32.  Governing Law.  This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York 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.

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.

 36
 

Section 35.  Force
Majeure.  Notwithstanding anything to
the contrary contained herein, Rights Agent shall not be liable for any delays
or failures in performance resulting from acts beyond its reasonable control
including, without limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer
facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war, or
civil unrest.

 37
 

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

	
  

  	
   

  	
  THE MANITOWOC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Maurice D.
  Jones

  	
   

  
	
   

  	
   

  	
   

  	
  Maurice D.
  Jones, Senior Vice

  	
   

  
	
   

  	
   

  	
   

  	
  President,
  General Counsel and

  	
   

  
	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dennis V.
  Moccia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dennis V. Moccia

  	
   

  
	
   

  	
   

  	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  

 

 38

EXHIBIT A

[FORM OF RIGHTS
CERTIFICATE]

Certificate No. R-             Rights

NOT EXERCISABLE AFTER MARCH
   , 2017 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY.  THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT 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 BE OR BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*

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

RIGHTS CERTIFICATE

THE MANITOWOC
COMPANY, INC.

This certifies that                                        ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of March 21,
2007 (the “Rights Agreement”), between The Manitowoc Company, Inc., a Wisconsin
corporation (the “Company”), and Computershare Trust Company, N.A., a federally
chartered savings association (the “Rights Agent”), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m. (New York time) on March 29, 2017
at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one fully paid, nonassessable share of common
stock, par value $0.01 per share, of the Company (the “Common Stock”), at a
purchase price of $220.00 per share (the “Purchase Price”), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. 
The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are such numbers and Purchase
Price as of March 30, 2007, based on the Common Stock as constituted at
such date and are

 A-1
 

subject to modification
and adjustment upon the happening of certain events as provided in the Rights
Agreement.

Upon the occurrence of a
Triggering 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 (other than a
bona fide purchaser for value who has no knowledge that the transferor was an
Acquiring Person or an Associate or Affiliate of an Acquiring Person), or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became 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 any such
Triggering Event.

The Board of Directors of
the Company may, at its option, at any time after any person becomes an
Acquiring Person and prior to the acquisition by such person of 50% or more of
the shares of Common Stock then outstanding, exchange all or part of the then
outstanding and exercisable Rights (other than those held by the Acquiring
Person and Affiliates and Associates of the Acquiring Person) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right,
subject to adjustment.  Immediately upon
the action of the Board of Directors of the Company ordering an exchange of the
Rights, the Rights affected by such order will no longer be exercisable and
thereafter the only right of the holders of such Rights will be to receive the
shares of Common Stock issuable by the Company in exchange for such Rights.

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

This Rights Certificate,
with or without other Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase.  If the Rights evidenced by
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 redemption price of $0.01 per Right,
payable, at the election of the Company, in cash or shares of Common

 A-2
 

Stock, at any time prior
to the earlier of the close of business on (i) the tenth Business Day (as
such term is defined in the Rights Agreement) following the Stock Acquisition
Date (as such term is defined in the Rights Agreement), and (ii) the Final
Expiration Date (as such term is defined in the Rights Agreement).  After the expiration of the redemption
period, the Company’s right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding
shares of Common Stock in one or more transactions not involving the
Company.  Immediately upon action of the
Board of Directors of the Company ordering redemption of the Rights, the Rights
will no longer be exercisable and thereafter the only right of the holders of
such Rights will be to receive the redemption price for each Right so held.

The terms of the Rights
evidenced by this Certificate may be supplemented or amended without the
approval of any holder of the Rights (or the shares of Common Stock) as set
forth in the Rights Agreement.

The Company is not
required to issue any fractional shares of Common Stock upon the exercise of
any Right or Rights evidenced hereby.  In
lieu thereof, the Company may, at its sole option, make a cash payment as
provided in the Rights Agreement.

No holder of this Rights
Certificate shall be entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Common 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 shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.

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

 A-3
 

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

Dated as of                        ,
20   .

	
  Attest:

  	
   

  	
  THE
  MANITOWOC COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

 A-4
 

[Form of Reverse Side of Certificate]

FORM OF ASSIGNMENT

 (To be executed by
the registered holder if such holder desires to transfer the Rights
Certificate.)

FOR VALUE RECEIVED                 hereby
sells, assigns and transfers unto                            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:

Signatures on this
Assignment and Certificate must be guaranteed with a medallion signature
guarantee by an “eligible guarantor institution” as that term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended,
including (as such terms are defined therein) any (a) bank, (b) broker,
dealer, municipal securities dealer, municipal securities broker, government
securities dealer and government securities broker, (c) credit union,
(d) national securities exchange, registered securities association or
clearing agency, or (e) savings association.

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 in the Rights Agreement);

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

	
  Dated:                          ,
  20  

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

Signature Guaranteed:

NOTICE

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

 A-5
 

FORM OF ELECTION TO
PURCHASE

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

TO:         THE MANITOWOC COMPANY,
INC.

The undersigned
hereby irrevocably elects to exercise                           Rights
represented by this Rights Certificate to purchase the shares of Common 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 print name
and address)

                                                                                                                                                          

Social security or other
identifying number:

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 print name
and address)

                                                                                                                                                          

Social security or
other identifying number:

Dated:                                ,
20  

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

Signature Guaranteed:

Signatures on this
Election to Purchase and Certificate must be guaranteed with a medallion
signature guarantee by an “eligible guarantor institution” as that term is
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended,
including (as such terms are defined therein) any (a) bank,
(b) broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer and government securities broker,
(c) credit union, (d) national securities exchange, registered
securities association or clearing agency, or (e) savings association.

 A-6
 

CERTIFICATE

The undersigned hereby
certifies by checking the appropriate boxes that:

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

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

	
  Dated:                             ,
  20  

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

Signature Guaranteed:

NOTICE

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

 A-7

EXHIBIT B

SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK

On
March 21, 2007, the Board of Directors of The Manitowoc Company, Inc. (the
“Company”) approved a Rights Agreement (the “Rights Agreement”) between the
Company and Computershare Trust Company, N.A., as Rights Agent and declared a
dividend distribution of one right (a “Right”) for each outstanding share of
Common Stock, par value $0.01 per share, of the Company (the “Common Stock”),
to shareholders of record at the close of business on March 30, 2007 (the “Record
Date”).   In addition to the Rights
issued as a dividend on the Record Date, the Board of Directors has also
determined that one Right shall be issued together with each share of Common
Stock issued by the Company after the Record Date.  Generally, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Company one
share of Common Stock at a purchase price, in cash, of $220.00 per share,
subject to adjustment as set forth in the Rights Agreement (the “Purchase Price”
or “Exercise Price”). A full description of the Rights and their terms is
contained in the Rights Agreement.  The
Rights and Rights Agreement replace similar rights and rights agreement that
expired at the close of business on September 18, 2006.

The
Rights become exercisable on the “Distribution Date”, which is that date that
the any of the following occurs: (1) 10 days following a public
announcement that a person or group of affiliated persons (an “Acquiring Person”)
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of Common Stock of the Company (the “Stock
Acquisition Date”); or (2) 10 business days following the commencement of
a tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of such outstanding shares of Common
Stock.   The Rights will expire at the
close of business on March 29, 2017, unless earlier redeemed or exchanged
by the Company as described below.

Except
as otherwise provided in the Rights Agreement or determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.

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
March 30, 2007 will contain a legend incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificate for
Common Stock outstanding will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such
certificate.  On the Distribution Date,
the Rights will separate from the Common Stock. 
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 the event that, among other things (i) the
Company is the surviving corporation in a merger with an Acquiring Person and
the Common Stock is not changed or exchanged, (ii) a Person (other than
the Company and its affiliates) becomes the

 B-1
 

beneficial owner of more than 20% of the then
outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock at a price and on terms which a majority of
the independent directors of the Company determines to be fair to, and
otherwise in the best interests of, the shareholders), (iii) an Acquiring
Person engages in one or more “self-dealing” transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person’s ownership
interest being increased by more than 1% (e.g., a reverse stock split), at any
time following the Distribution Date, each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the Exercise Price of the Right. 
Notwithstanding any of the foregoing, following the occurrence of any of
the events set forth in this paragraph, 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.

For example, at an Exercise Price of $220.00 per
Right, each Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph would entitle
its holder to purchase $440.00 worth of Common Stock (or other consideration,
as noted above) for $220.00.  If the
Common Stock had a per share value of $55.00 at such time, the holder of each
valid Right would be entitled to purchase eight shares of Common Stock for
$220.00.

In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation,
(ii) the Company engages in a merger or other business combination
transaction with another person in which the Company is the surviving
corporation, but in which the Common Stock is changed or exchanged, or
(iii) 50% or more of the Company’s assets or earning power is sold or
transferred, each holder of a Right (except Rights held by an Acquiring Person,
which will be null and void) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Exercise Price of the Right.

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

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

 B-2
 

The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding shares of Common Stock then known to the Company to be beneficially
owned by any person or group of affiliated or associated persons and
(ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.

At any time after any person becomes an Acquiring
Person and prior to the acquisition by such person of 50% or more of the shares
of Common Stock then outstanding, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person that will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right, subject to adjustment. 
Immediately upon the action of the Board of Directors ordering an
exchange of the Rights, the Rights affected by such order will no longer be
exercisable and thereafter the only right of the holders of such Rights will be
to receive the shares of Common Stock issuable by the Company in exchange for
such Rights.

At any time until the close of business on the tenth
business day following the Stock Acquisition Date the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right, subject to
adjustment.  After the redemption period
has expired, the Company’s right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in one or more transactions not involving
the Company.  Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.01 redemption price.

Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder 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 shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or for other consideration) of the Company or for
common stock of an acquiring company as set forth above.

A copy of the Rights Agreement was filed with the
Securities and Exchange Commission on March 21, 2007, as an Exhibit to the
Company’s Current Report on Form 8-K.  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.

 B-3Exhibit 10.1

NetBank, Inc.

Management Incentive Plan

Plan Document

(Tier I and II for
Executive and Other Officers)

Plan
Year 2007

Plan Purpose

The following is a
description of the NetBank, Inc. (the “Company”) Management Incentive Plan (Tier
I and II Executive and Other Officers) (“MIP” or the “Plan”). The purpose of
the MIP is to:

·                  Support the
achievement of key business objectives, ensuring that MIP participants are
stakeholders in achieving key Company goals

·                  Motivate
participants to accomplish specific goals and provide significant rewards for
high performers

·                  Attract and
retain well-qualified executive and other officers

·                  Ensure
that total near-term compensation is affordable, competitive, objectively
determined and directly linked to performance

Effective Date

The Plan Year
shall be from January 1 through December 31. 
The Plan will be reviewed annually to ensure proper alignment with the
Company’s business objectives.

Eligible Participants

Individuals
eligible to participate in the Plan (“Participant) include the following
positions:  certain executive and other
officers (and the Tier I and II subsets thereof) as defined and approved by the
Compensation Committee (the “Compensation Committee”) of the Board of Directors
(the “Board”) at the beginning of the Plan Year.

Plan Structure

The plan structure
is made up of several components:  Target
Incentive, Sections & Sections Weights, and Section Performance Goals. These
components are established on or before the beginning of the third month of the
Plan Year.  The Compensation Committee
will be responsible for establishing all components for any Participants
subject to  Section 16 of the Securities
and Exchange Act of 1934, as amended (each a “Section 16 Officer”).  The Chief Executive Officer (“CEO”) will
establish all components for all Participants that are not Section 16 Officers.

I. Target Incentive

A Participant’s Target incentive under the Plan shall be determined as
a dollar amount that is equal to a percentage of the Participant’s base salary  at the beginning of the Plan Year and can
range from 20% of annual base salary up to a maximum of 100% of annual base
salary.

Maximum
and Minimum Incentive:

A Participant can earn between 0% of the Target incentive up to a
maximum of 200% of the Target incentive based upon performance against
pre-established Section Performance Goals.

The chart below reflects the payout ranges as a % of Target incentive
at the various levels of performance.

	
  

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
  Performance
  Rating

  	
   

  	
  (Unacceptable

  Results)

  	
   

  	
  (Below

  Target)

  	
   

  	
  (Target)

  	
   

  	
  (Exceeds

  Target)

  	
   

  	
  (Greatly

  Exceeds

  Target)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payout (as a % of Target)

  	
   

  	
  0%

  of

  Target

  Incentive

  	
   

  	
  50%

  of

  Target

  Incentive

  	
   

  	
  100%

  of

  Target

  Incentive

  	
   

  	
  150%

  of

  Target

  Incentive

  	
   

  	
  200%

  of

  Target

  Incentive

  	
   

  

 

II. Sections and Section Weight

The MIP is comprised of 3
separate Sections: Company, Line of Business, and Individual.  Each Section is weighted separately for a
total scorecard weight of 100%. Weights for each Section are based upon the
Participant’s level within the organization. 
The higher the level of the Participant within the organization, the
more heavily the Company Section should be weighted on the scorecard
(referenced below). The weight for the Company Section shall range from a
minimum of 75% to a maximum of 100%.  For
example, the Company Section weight for the CEO shall be 100%.

III. Section Performance Goals

Specific Section Performance
Goals will be assigned under each of the three MIP Sections (Company, Line of
Business, and Individual), as applicable. 
Participants may be assigned up to four goals in each such Section.  The goals should be linked to the most
critical and relevant “performance measure” representing the Participant’s
planned activities for the Plan Year. 
More than four goals should not be used because it may have the effect
of diluting the significance of any one goal. 
All goals should be given a percentage weight to reflect their relative
priority to the Company and the Participant’s overall potential impact on each
goal.  The aggregate weight of the goals
within each Section shall equal 100% for such Section.

Section Performance Goals should conform to the
following “S.M.A.R.T” principles:

	
  Specific

  	
   

  	
  The goal relates to a desirable product of
  effort/contribution, which is clearly understood by all.

  
	
  Measurable

  	
   

  	
  The goal can be readily and objectively assessed
  relative to degree of attainment.

  
	
  Achievable

  	
   

  	
  The goal is set based on a realistic chance for
  achievement.

  
	
  Results
  Based

  	
   

  	
  The goal relates to products of effort or
  conclusions, which add value rather than focus on activities performed.

  
	
  Time
  Focused

  	
   

  	
  The time period for completion is specified when the
  goal is established.

  

 

Year End
Scoring

After the end of
the Plan Year, all results are scored on a scorecard and calculated.  The Compensation Committee will approve all
final scores for all Participants, including Section 16 Officers and
Participants that are not Section 16 Officers.

Defining
Scorecard Ratings

The scorecard performance
ratings will be as follows:

“5” — Greatly Exceeds Target

“4” — Exceeds Targets

“3” — Meets Targets

“2” — Below Target

“1” — Unacceptable
Results

Payouts
under the Plan

Payouts of
incentive bonus under the Plan may be paid in cash or shares of the Company’s
common stock (“Shares”).  Tier 1
Participants will be eligible to receive a payout payable solely in Shares,
while Tier 2 Participants will be eligible to receive a payout payable 50% in
Shares and 50% in cash.

Target Amount
Payable in Shares.  The
target amount payable in Shares is computed by dividing (A) the product of the Participant’s
target payout dollar amount under the Plan multiplied by the percent of the
target payout payable in Shares by (B) the closing price of the Company’s
common stock on the last business day of the prior fiscal year (for Plan Year
2007, December 29, 2006).

Example (for illustration purposes
only):

Officer X, a Tier 2 Participant, with an annual base
salary of $150,000 and a target payout equal to 50% of base salary:  

Target Payout =  
$75,000 (cash equivalent)

Percent of Target Payable
in Shares = 50% (= $37,500)

(Note: 100% for all Tier 1 Participants)

Stock Price on December 29, 2006 =   $4.64 per share

Target Amount Payable in
Shares = 8,100  ($37,500/$4.64)

(Note:  shares
are rounded to nearest 1,000 for Tier 1 Participants and to the nearest 100 for
Tier II Participants)

Target
Amount Payable in Cash. 
The target amount payable in cash is computed by multiplying the
Participant’s target payout under the Plan by the percent of the target payout payable
in cash:

Example (for illustration purposes
only):

Officer X, a Tier 2 Participant with an annual base
salary of $150,000 and a target payout equal to 50% of base salary:   

Target Payout =  
$75,000 (cash equivalent)

Percent of Target Payable
in Cash = 50%

(Note: 50% for all Tier II Participants)

Target Amount Payable in Cash = $37,500

Payout Process; 1996 Stock Incentive Plan

All incentive bonus awards (including stock
awards, in the case of an incentive bonus payable in Shares) will be determined
and paid within two and one half months after the end of the Plan Year.  All incentive bonus awards under the Plan are
subject to the final approval of the Compensation Committee.  Any portion of an MIP incentive bonus award
paid in Shares shall be in the form of a “Stock Award” under, and pursuant to, the
Company’s 1996 Stock Incentive Plan, as amended, and also pursuant to a Stock Award
Agreement, substantially in the form attached hereto as Exhibit A, between
the Company and the Participant, which shall be entered into at the time of
award, in connection a payout hereunder, if any.  Any portion of an MIP incentive bonus award
paid in cash shall not be under or pursuant to the Company’s 1996 Stock Incentive
Plan, as amended.

Plan
Administration

Plan Administrator. 
The Compensation Committee will
administer the MIP and shall administer the MIP with respect to any Stock
Awards hereunder in accordance with the provisions of the Company’s 1996 Stock
Incentive Plan, as amended, which provisions are incorporated herein by
reference.

Plan Duration.  The Compensation Committee reserves the right
to amend, change and/or terminate this Plan at any time, without prior notice.

No Employment Contract.  The MIP does not create, nor should it be
construed to constitute, a contract of employment between the Company and any Participant.  Participation in the MIP does not create a
right to continued employment with the Company or any subsidiary or affiliate of
the Company in any capacity.

Payment
Eligibility.  Earned
incentive bonus will be paid within two and one half months after the end of
the Plan Year.  To be eligible to receive
an incentive bonus payout, the Participant must be employed by the Company at
the time of payout, unless otherwise approved by the Compensation Committee in
its sole and absolute discretion.  If the
Participant’s employment is terminated before an MIP incentive bonus payout, no
incentive bonus award shall be due and payable, unless otherwise approved by
the Compensation Committee in its sole and absolute discretion.

New Officers — New Hires and Promotions.  In the event a person is
hired or promoted into a position that, or the Compensation Committee
determines, is eligible to be a Participant in the MIP, such person may be
eligible to be a Participant not sooner than the beginning of the next fiscal
quarter of the Company.  As soon as
practicable after such person becomes a Participant, the Compensation Committee
shall establish each component for a Section 16 Officer and the CEO shall
establish as provided herein each component for all Participants that are not
Section 16 Officers.

For new Participants or Participants that receive a promotional salary
increase during the Plan Year, all calculations under the MIP for such Plan
Year shall be on a pro rata basis.  For
example, in the case of a promotion where the Participant receives a salary
increase during the Plan Year, the increased salary will be used for MIP
calculations only for that portion of the Plan Year in which such increased
salary was in effect, and the salary in effect before such increase will be
used for the preceding portion of the Plan Year.

Re-assignment of Duties.  In the event that a
Participant is reassigned from a one position to another position eligible for
participation hereunder during the Plan Year, all calculations under the MIP
with respect to such Participant will be prorated for the number of months in
each position.  As soon as practicable
after re-assignment of such person, the Compensation Committee shall establish
each component for a Section 16 Officer and the CEO shall establish as provided
herein each component for Participants that are not Section 16 Officers.

Plan
Interpretation.  If there is any ambiguity as to the
meaning of any terms or provisions of the MIP, the Compensation Committee’s interpretation
or determination will be final and binding. 
The altering, inflating and/or inappropriate manipulation of
performance/sales results or any other infraction of recognized ethical
business standards may subject the Participant to disciplinary action up to and
including termination of employment.  In
addition, any incentive compensation as provided by the MIP to which the Participant
would otherwise be entitled may be revoked.

General
Conditions.  The MIP, and the transactions and
payments hereunder shall, in all respects, be governed by, and construed and
enforced in accordance with the laws of the State of Georgia.  Each provision of the MIP is severable, and
if any provision is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not, in any way,
be affected or impaired thereby.

EXHIBIT A

NetBank, Inc.

Management Incentive Plan

Plan Document

Form of Stock Award Agreement

Plan Year 2007

This STOCK AWARD
AGREEMENT (“Agreement”) is made and entered into as of the      
day of          ,      
by and between NetBank, Inc. (the “Company”), a Georgia corporation, and                     
(the “Participant”).

The Compensation
Committee (the “Compensation Committee”) of the Board of Directors of the
Company has determined that Participant is eligible to participate in the
Company’s Management Incentive Plan for Tier I and II Executive and Other
Officers (the “Plan”) and has approved under the Plan an incentive bonus award
payable in shares of the Company’s Common Stock.  The Compensation Committee administers the
Plan and has the same powers with respect to this Agreement as it has under the
Plan.

The Company, in
consideration of the Participant’s performance under the Plan, hereby awards to
the Participant, as of the Grant Date, the Restricted Shares described below
pursuant to the Plan and the Company’s 1996 Stock Incentive Plan, as amended,
(the “Stock Award”).  The terms and conditions of the
Stock Award hereunder are set forth in this Agreement, including in the
Additional Terms and Conditions attached hereto and incorporated herein by
reference as part of this Agreement, and in the Plan.

	
  A.

  	
  Grant Date:                                                                  ,
                .

  
	
   

  	
   

  
	
  B.

  	
  Restricted Shares:
                  shares
  of the Company’s common stock (“Common Stock”), par value $.01.

  
	
   

  	
   

  
	
  C.

  	
  Vesting Schedule: The Restricted
  Shares shall vest according to the Vesting Schedule attached hereto as Schedule 
  1 (the “Vesting Schedule”). Restricted Shares which become vested
  pursuant to the Vesting Schedule are herein referred to as the “Vested
  Restricted Shares.” If the Participant’s employment is terminated before the
  vesting of the Restricted Shares, the Stock Award hereunder shall terminate
  and the Participant shall have no right to receive any unvested shares of
  Common Stock.

  

 

IN WITNESS
WHEREOF, the Company and Participant have signed and sealed this Agreement as
of the Grant Date set forth above.

	
  

  	
  NETBANK, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
							

 

ADDITIONAL TERMS
AND CONDITIONS OF

NETBANK, INC.

MANAGEMENT INCENTIVE PLAN

(TIER I AND II EXECUTIVE
AND OTHER OFFICERS)

STOCK AWARD
AGREEMENT

PLAN YEAR 2007

1.             Condition
to Delivery of Restricted Shares.

(a)           Participant  must deliver to the Company, within thirty
(30) days after the earlier of (i) the date on which any Restricted Shares
become Vested Restricted Shares, or (ii) the making of an election
pursuant to Code Section 83(b) as to all or any portion of the Restricted
Shares, either cash or a certified check payable to the Company in the amount
of all tax withholding obligations (whether federal, state or local), imposed
on the Company by reason of the vesting of the Restricted Shares, or the making
of an election pursuant to Code Section 83(b), as applicable, except as
provided in Section 1(b).

(b)           If the Participant does not
make an election pursuant to Code Section 83(b), in lieu of paying the
withholding tax obligation in cash or by certified check as described in
Section 1(a), Participant may elect to have the actual number of Vested
Restricted Shares reduced by the smallest number of whole shares of Common
Stock which, when multiplied by the Fair Market Value of the Common Stock as of
the Tax Date as determined by the Compensation Committee under the Company’s
1996 Stock Incentive Plan, as amended, is sufficient to satisfy the amount of
the tax withholding obligations imposed on the Company by reason of the vesting
of the Restricted Shares (the “Withholding Election”). Participant may make a
Withholding Election only if all of the following conditions are met:

(i)            the Withholding Election must
be made on or prior to the date on which the amount of tax required to be
withheld is determined (the “Tax Date”) by executing and delivering to the
Company a properly completed Notice of Withholding Election, in substantially
the form of Exhibit  A attached hereto; and

(ii)            any Withholding
Election made will be irrevocable; however, the Compensation Committee may, in
its sole discretion, disapprove and give no effect to any Withholding Election.

2.             Restricted
Shares Held by the Share Custodian. Participant hereby authorizes and
directs the Company to deliver any share certificate issued by the Company to
evidence Restricted Shares to the Secretary of the Company or such other
officer of the Company as may be designated by the Compensation Committee (the “Share
Custodian”) to be held by the Share Custodian until the Restricted Shares
become Vested Restricted Shares in accordance with the Vesting Schedule. When
the Restricted Shares become Vested Restricted Shares, the Share Custodian
shall deliver the Restricted Shares to the Participant. In the event that the
Participant forfeits any of the Restricted Shares, and the number of Vested
Restricted Shares includes a fraction of a share, the Share Custodian shall not
be required to deliver the fractional share, and the Company may pay the
Participant the amount determined by the Company to be the estimated fair
market value therefor. Participant hereby irrevocably appoints the Share
Custodian, and any successor thereto, as the true and lawful attorney-in-fact
of Participant with full power and authority to execute any stock transfer
power or other instrument necessary to transfer the Restricted Shares to the
Company in accordance with this Agreement, in the name, place, and stead of the
Participant. The term of such appointment shall commence on the date of the
Stock Award and shall continue until the Restricted Shares are delivered to the
Participant as provided above. During the period that the Share Custodian holds
the shares of Common Stock subject to this Section 2, the Participant shall be
entitled to all rights applicable to shares of Common Stock not so held, except
as provided in this Agreement. In the event the number of shares of Common
Stock is increased or reduced by a change in the par value, split-up, stock
split, reverse stock split, reclassification, merger, reorganization,
consolidation, or otherwise, in such shares of Common Stock, the Participant
agrees that any certificate representing shares of Common Stock or other
securities of the Company issued as a result of any of the

foregoing shall be
delivered to the Share Custodian and shall be subject to all of the provisions
of this Agreement as if initially granted thereunder.

3.             Dividends.
The Participant shall be entitled to dividends paid on all Restricted Shares as
and when declared and paid.

4.             Restrictions
on Transfer of Restricted Shares.

(a)           General
Restrictions. Except as provided by this Agreement, the Participant shall
not have the right to make or permit to exist any transfer or hypothecation,
whether outright or as security, with or without consideration, voluntary or
involuntary, of all or any part of any right, title or interest in or to any
Restricted Shares. Any such disposition not made in accordance with this
Agreement shall be deemed null and void. The Company will not recognize, or
have the duty to recognize, any disposition not made in accordance with the
Plan and this Agreement, and any Restricted Shares so transferred will continue
to be bound by the Plan and this Agreement. The Participant (and any subsequent
holder of Restricted Shares) may not sell, pledge or otherwise directly or
indirectly transfer (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law) any interest in or any
beneficial interest in any Restricted Shares except pursuant to the provisions
of this Agreement. Any sale, pledge or other transfer (or any attempt to effect
the same) of any Restricted Shares in violation of any provision of the Plan or
this Agreement shall be void, and the Company shall not record such transfer,
assignment, pledge or other disposition on its books or treat any purported
transferee of such Restricted Shares as the owner of such Restricted Shares for
any purpose.

(b)           Certain
Permitted Transfers. The restrictions contained in this Section 4 will not
apply with respect to transfers of the Restricted Shares pursuant to applicable
laws of descent and distribution; provided
that the restrictions contained in this Section 4 will continue to be
applicable to the Restricted Shares after any such transfer; and provided further that the transferees of
such the Restricted Shares must agree in writing to be bound by the provisions
of the Plan and this Agreement.

5.             Additional
Restrictions on Transfer.

(a)           In
addition to any legends required under applicable securities laws, the
certificates representing the Restricted Shares shall be endorsed with the
following legend and the Participant shall not make any transfer of the
Restricted Shares without first complying with the restrictions on transfer
described in such legend:

TRANSFER IS
RESTRICTED

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND FORFEITURE PROVISIONS WHICH ALSO APPLY TO THE
TRANSFEREE AS SET FORTH IN A RESTRICTED STOCK AWARD, DATED                 ,
A COPY OF WHICH IS AVAILABLE FROM THE COMPANY.

(b)           Opinion
of Counsel. No holder of Restricted Shares may sell, transfer, assign,
pledge or otherwise dispose of (whether with or without consideration and
whether voluntarily or involuntarily or by operation of law) any interest in or
any beneficial interest in any Restricted Shares, except pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), without first delivering to the Company an opinion of
counsel (reasonably acceptable in form and substance to the Company) that
neither registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such transfer.

6.             Change
in Capitalization.

(a)           The
number and kind of Restricted Shares shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or combination of shares or the payment of a stock dividend
in shares of Common Stock to holders of

outstanding shares of Common Stock or any other
increase or decrease in the number of shares of Common Stock outstanding which
is effected without receipt of consideration by the Company. No fractional
shares shall be issued in making such adjustment. All adjustments made by the
Compensation Committee under this Section shall be final, binding, and
conclusive.

(b)           In the event of a merger or
consolidation, extraordinary dividend (including a spin-off), reorganization or
other change in the corporate structure of the Company or a tender offer for
shares of Common Stock, an appropriate adjustment may be made with respect to
the Restricted Shares such that other securities, cash or other property may be
substituted for the Common Stock held by the Participant pursuant to this Stock
Award.

(c)           The existence of the Plan and
the Stock Award shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.

7.             Governing
Laws. This Agreement shall be construed, administered and enforced
according to the laws of the State of Georgia.

8.             Successors.
This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, successors, and permitted assigns of the parties.

9.             Notice.
Except as otherwise specified herein, all notices and other communications
under this Agreement shall be in writing and shall be deemed to have been given
if personally delivered or if sent by registered or certified United States
mail, return receipt requested, postage prepaid, addressed to the proposed
recipient at the last known address of the recipient. Any party may designate
any other address to which notices shall be sent by giving notice of the
address to the other parties in the same manner as provided herein.

10.           Severability.
In the event that any one or more of the provisions or portion thereof
contained in this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, the same shall not invalidate or
otherwise affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.

11.           Entire
Agreement. Subject to the terms and conditions of the Plan and the Company’s
1996 Stock Incentive Plan, which are incorporated herein by this reference as
if fully set forth herein, this Award expresses the entire understanding and
agreement of the parties with respect to the subject matter. This Award may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument. This Agreement
may be amended only by another written agreement, signed by both parties.

12.           Violation.
Any disposition of the Restricted Shares or any portion thereof shall be a
violation of the terms of this Agreement and shall be void and without effect.

13.           Headings;
Capitalized Terms; Incorporation of the Plan. Paragraph headings used
herein are for convenience of reference only and shall not be considered in
construing this Agreement. Capitalized terms used, but not defined, in this
Agreement have the same meaning as in the Plan. 
All of the provisions of the Plan are incorporated in this Agreement and
have the same effect as if they were set forth in full in this Agreement.  If there is any inconsistency between this
Agreement and the Plan, the terms of the Plan will govern.

14.           Specific
Performance. In the event of any actual or threatened default in, or breach
of, any of the terms, conditions and provisions of this Agreement, the party or
parties who are thereby aggrieved shall have the right to specific performance
and injunction in addition to any and all other rights and remedies at law or
in equity, and all such rights and remedies shall be cumulative.

15.           No
Right to Continued Retention. Neither the establishment of the Plan,
participation in the Plan nor the award of Restricted Shares hereunder shall be
construed as giving Participant the right to any continued service relationship
with the Company or any subsidiary of the Company in any capacity. The Company
reserves the right to terminate Participant’s service at any time and for any
reason or for no reason.

EXHIBIT A

NOTICE OF WITHHOLDING
ELECTION

NETBANK, INC.

MANAGEMENT INCENTIVE PLAN

(TIER I AND II EXECUTIVE
AND OTHER OFFICERS)

PLAN YEAR 2007

	
  TO:

  	
  NetBank, Inc.

  
	
   

  	
   

  
	
  FROM:

  	
   

  	
   

  

 

RE:       Withholding Election

This election
relates to the Stock Award identified in Paragraph 3 below. I hereby certify
that:

(1)                         My
correct name and social security number and my current address are set forth at
the end of this document.

(2)                         I
am (check one, whichever is applicable).

o                                    the
original recipient of the Stock Award.

o                                    the legal
representative of the estate of the original recipient of the Stock Award.

o                                    a legatee of the
original recipient of the Stock Award.

o                                    the legal guardian
of the original recipient of the Stock Award.

(3)                         The Stock
Award pursuant to which this election relates was issued under the NetBank,
Inc. Management Incentive Plan for Tier I and II Executive and Other Officers
(the “Plan”) in the name of
                              for
a total of
                          shares
of Common Stock. This election relates to
                      shares
of Common Stock issued upon the vesting of the Restricted Shares, provided that
the numbers set forth above shall be deemed changed as appropriate to reflect
stock splits and other adjustments contemplated by the applicable Plan
provisions.

(4)                         I hereby
elect to have certain of the shares withheld by the Company for the purpose of
having the value of the shares applied to pay federal, state and
local, if any, taxes arising from the exercise. 
The fair market value of the shares, as determined under the Plan, to be
withheld in addition to $
                       in
cash to be tendered to the Company by the recipient of the Stock Award shall be
equal to the minimum statutory tax withholding requirement under federal, state
and local law in connection with the exercise.

(5)                         This
Withholding Election is made no later than the Tax Date and is otherwise timely
made pursuant to the Plan and Section 1 of the Additional Terms and Conditions
of the Stock Award Agreement.

(6)                         I further
understand that, if this Withholding Election is not disapproved by the
Compensation Committee, the Company shall withhold from the Common Stock a
whole number of shares of Common Stock having the value specified in Paragraph
4 above.

(7)                         The Plan
has been made available to me by the Company, I have read and understand the
Plan and I have no reason to believe that any of the conditions therein to
the making of this Withholding Election have not been met. Capitalized terms
used in this Notice of Withholding Election without definition shall have the
meanings given to them in the Plan.

	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Name (Printed)

  
	
   

  
	
   

  	
   

  
	
  Street Address

  
	
   

  
	
   

  	
   

  
	
  City, State, Zip
  Code

  
						

 

SCHEDULE 1

NETBANK, INC.

MANAGEMENT INCENTIVE PLAN

(TIER I AND II EXECUTIVE
AND OTHER OFFICERS)

STOCK AWARD
AGREEMENT

PLAN YEAR 2007

Vesting Schedule
of Restricted Shares

Fifty percent
(50%) of the Restricted Shares will vest immediately on the Grant Date.

The remaining 50%
of the Restricted Shares will vest on the one year anniversary of the Grant
Date.

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