Document:

exhibit10-1_16802.htm

    EXHIBIT 10.1

     

     

    
      AGREEMENT
AND GENERAL RELEASE OF ALL CLAIMS

      

      

      This
Agreement and General Release of All Claims (“Agreement”) is entered into by and
between Fredericus A. Colen (“You” or “Employee”) and Boston Scientific
Corporation (“BSC”) as of the latest date of execution by the parties to this
Agreement.  You have been employed by BSC and/or one or more
affiliates of BSC.  BSC may discharge its obligations under this
Agreement directly or through any affiliate.  This Agreement shall not
become effective until the Effective Date (as defined in Paragraph 8(a)(v),
below).  This Agreement supersedes and cancels any prior employment
agreements or arrangements You may have entered into with BSC except for (i) the
Agreement Concerning Employment for U.S. Employees (“Employee Agreement”)
attached hereto as Attachment 1, which you entered into by electronic
acknowledgment on April 1, 2009, and (ii) the Directors and Officers
Indemnification Agreement (“Directors and Officers Indemnification Agreement”)
attached hereto as Attachment 2, effective as of July 1, 2001.  Your
obligations under the Employee Agreement shall be in addition or complementary
to and shall not be superseded by this Agreement.  However, if there
is any conflict in terms between this Agreement and the Employee Agreement, the
terms of this Agreement prevail.

      

      In consideration of the mutual
covenants, agreements, and representations contained herein, the adequacy of
which is hereby acknowledged, the parties hereto expressly and intentionally
bind themselves as follows:

      

      1.           Retirement

      

      You represent and BSC acknowledges that
You are retiring from BSC for family reasons.  You hereby acknowledge
and agree that your service as Executive Vice President and Chief Technology
Officer and as an employee of BSC will end effective June 30, 2010 (“Retirement
Date”).  During the remainder of your employment, You shall perform
any and all requested responsibilities and provide any and all requested
transitional assistance.

      

      2.           Payments
by BSC

      

      (a)           BSC
shall pay You the lump sum amount of Six Hundred Thousand Dollars ($600,000.00),
less applicable payroll withholding for taxes and other applicable deductions
(the “Lump Sum Salary Payment”).  BSC shall pay You the Lump Sum
Salary Payment within ten (10) business days following the later of (i) the
Effective Date, or (ii) the Retirement Date.  You expressly
acknowledge that upon the occurrence of the Retirement Date, You will not be
eligible for any payments or benefits other than those described in this
Agreement under any existing BSC Severance Pay Plan and/or Layoff Notification
Plan.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)           BSC
acknowledges that your retirement in accordance with this Agreement in
combination with your execution and nonrevocation of this Agreement shall
entitle You to a payment pursuant to The Boston Scientific Corporation Executive
Retirement Plan (the “Executive Retirement Plan”), which shall be paid in the
amount and at the time specified in Section 6 of the Executive Retirement
Plan.

      

      (c)           You
will remain eligible in the ordinary course for an incentive payment under BSC’s
2010 Performance Incentive Plan (“2010 PIP”).  You acknowledge and
agree that due to your retirement and under the terms of the 2010 PIP, any
payment under the 2010 PIP will be a pro-rata portion of any payment that would
have been made had You remained employed by BSC for all of calendar year 2010,
such pro-ration to be determined based on your employment with BSC through your
Retirement Date.  The funding of both the individual and team
components of your 2010 PIP payment will be based fifty percent (50%) on the
Corporate funding unit results and fifty percent (50%) on the CRV funding unit
results.  You further agree that the individual component of such
payment shall be calculated using one hundred percent (100%) of the twenty-five
percent (25%) component of the 2010 PIP payment that is based on individual
performance.  Your 2010 PIP payment shall be based on your previously
established 2010 PIP incentive target percentage of seventy percent (70%),
subject to 2010 PIP funding to be determined in the ordinary course under the
2010 PIP terms and conditions and further subject to the above-referenced
pro-ration.  Any such payment will be made at the same time it is made
to other participants in the 2010 PIP, in other words in 2011, currently
anticipated to be made by March 15, 2011.  You will not be eligible
for consideration for incentive payments under any other or future Performance
Incentive Plan, and You hereby waive any right to such consideration or such
payments.

      

      (d)           BSC
will pay You for all accrued but unused vacation time through the Retirement
Date under applicable BSC policy and in accordance with applicable state
law.

      

      (e)           BSC
will pay You the amount due You under our Executive Allowance Plan based upon
your employment through your Retirement Date in accordance with the terms of the
Executive Allowance Plan.

      

      (f)           BSC
has provided you with a lump sum of Twenty-one Thousand Six and 50/100 Dollars
($21,006.50) as a reimbursement of certain house-hunting, temporary leaving move
assistance and miscellaneous related relocation expenses (the “Reimbursed
Expenses”).  BSC shall further reimburse You for or shall pay directly
certain other relocation costs totaling approximately Five Thousand Dollars
($5,000) that you incurred  prior to March 15, 2010 in connection with
an anticipated 2010 relocation to Massachusetts, which consist of approximately
One Thousand Dollars ($1,000) for an agent’s fee for a Massachusetts property
tour and certain other real estate transaction costs, consisting of Minnesota
property appraisal fees, Minnesota and Massachusetts property inspection fees, a
Minnesota property title search and an attorney’s fee for review of a purchase
and sale agreement (the “Approved Pending Expenses”).   To the

       

      
        
           

        

        
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      extent
that BSC determines that the Reimbursed Expenses and the Approved Pending
Expenses constitute taxable income to you, BSC shall issue a further payment to
you to defray the anticipated taxes due on such amount using any reasonable
gross-up methodology determined by BSC.  BSC’s obligation to provide
reimbursement of the Approved Pending Expenses shall be subject to your
presentation of appropriate documentation in a timely manner in accordance with
applicable BSC policy concerning relocation.

      

      (g)           To
the extent, if any, that You incurred the cost of moving personal goods to
Florida between February 3, 2010 and March 15, 2010, BSC shall reimburse You for
all reasonable such costs, subject to presentation of appropriate documentation
consistent with BSC policies.  For the avoidance of doubt, any home
purchase expenses shall not be subject to reimbursement.

      

      (h)           BSC
acknowledges that You have the right to submit a written request to Pete
Nicholas, Chairman of the Board of Directors of BSC, and John Pepper, Chairman
of the Executive Human Resources and Compensation Committee of the Board of
Directors of BSC (“Compensation Committee”), for an additional award based on
contributions You have made to the Company during Your
employment.  Mr. Nicholas and Mr. Pepper together shall have the sole
discretion to grant or deny any request for an additional award, and their
judgment in this regard is final.  Only a decision by Mr. Nicholas and
Mr. Pepper to grant this request that is rendered in writing on or before May
10, 2010, shall be valid for purposes of this paragraph.

      

      3.           Termination
of Salary and Employment Benefits

      

      Your current base salary at the rate of
Six Hundred Thousand Dollars ($600,000) per year and your participation in BSC’s
Medical/Dental/Vision Plans, 401(k) Plan, Stock Option Plan(s), and Global
Employee Stock Ownership Plan, if any, Accidental Death and Dismemberment
(AD&D), Business Travel Accident, and Short-Term and Long-Term Disability
Plans will continue until and will terminate as of your Retirement Date, as will
your accrual of vacation time.  Your participation in BSC’s life
insurance plans, including any BSC funding of any such plan, will continue until
and terminate as of Your Retirement Date.  For avoidance of any doubt,
this Agreement does not impact any life insurance policy or plan that You may
have that is outside any BSC plan, including any such policy that may previously
have been offered to you through or funded by BSC.  You will
participate through the Retirement Date in all other benefits and benefit plans
in which You are currently enrolled to the same extent as do active
employees.  Your participation in and entitlement to any and all other
benefits and benefits plans in which You are currently enrolled, but which are
not otherwise specifically addressed in this Agreement, terminate on the
Retirement Date.  Subject to your election and continued eligibility,
You may continue coverage under BSC’s Medical/Dental/Vision Plans after your
Retirement Date pursuant to the Consolidated Omnibus Reconciliation Act of 1985
(“COBRA”), provided that You make timely payments of COBRA premiums and
otherwise satisfy the requirements of COBRA.  BSC will cause You to be
provided with all legally required information and election materials concerning
your COBRA rights in a timely manner.

       

      
        
           

        

        
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      4.           Stock
Options, Deferred  Stock Units and Performance Share
Units

      

      Nothing in this Agreement is intended
to modify your rights and obligations with respect to previous grants of stock
options, deferred stock units and/or performance share units, including without
limitation (i) the acceleration of the vesting of your unvested stock options
based on your retirement eligibility, (ii) the conversion of all unvested
deferred stock units to shares of common stock based on your retirement
eligibility, and (iii) your forfeiture of all performance share units due to
your retirement less than one year after the date of the grant.  The
terms of applicable grant agreements and plan documents remain in effect and you
qualify as having retired for purposes of the plans referenced in this Paragraph
4.

      

      5.           Indemnification

      

      You shall have all rights to
indemnification with respect to legal claims and legal expenses that are
available to current and former officers of BSC under the Certificate of
Incorporation and Bylaws of BSC and to you under your Directors and Officers
Indemnification Agreement.

      

      6.           Expense
Reimbursement

      

      BSC will
reimburse You in accordance with usual BSC policy for all unreimbursed business
travel and other out-of-pocket expenses incurred by You through the Retirement
Date in the performance of your duties as an employee of BSC.  Such
expenses must be submitted no later than the Retirement Date.

      

      7.           Outplacement

      

      BSC agrees to provide You with
outplacement assistance in an amount not to exceed Twenty-Five Thousand Dollars
($25,000.00), for a period of up to twelve (12) months, such assistance to be
provided by an outplacement assistance firm of your choosing, and to begin no
later than the Retirement Date.

      

      8.           Release

      

      (a)           Employee
hereby releases and forever discharges BSC and its subsidiaries, affiliates,
predecessors, successors, and assigns and the Directors, officers, shareholders,
employees, representatives and agents of each of the foregoing (collectively
“Releasees”) of and from the following as of the date of the Employee’s
execution of this Agreement:

      

      (i)           Any
and all claims, demands, and liabilities whatsoever of every name and nature
(other than those arising directly out of this Agreement), including (without
limitation) any claim in the nature of so-called whistleblower complaints to the
extent permitted by applicable law, and any and all claims, demands and
liabilities with 

       

      
        
           

        

        
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      respect
to Employee’s employment or the terms and conditions or notice of termination or
termination of his employment, benefits or compensation which Employee has
against Releasees, or ever had;

      

      (ii)           As
included in the above, without limitation, Employee releases all claims known or
unknown for tortious injury, breach of contract, and wrongful discharge
(including without limitation, any claim for constructive discharge), all claims
for infliction of emotional distress, all claims for slander, libel, or
defamation of character, all claims of retaliation, and all claims for
attorneys’ fees, as related to Employee’s employment, or the terms and
conditions or notice of termination or termination of his employment, benefits,
or compensation; and

      

      (iii)           Employee
specifically releases and forever discharges Releasees from any and all claims
based upon any allegation of employment discrimination, including (without
limitation) discrimination on the basis of race, color, sex, sexual orientation,
age  (including any
claim pursuant to the Federal Age Discrimination in Employment Act (“ADEA”)),
religion, disability or national origin.

      

      (iv)           Notwithstanding
anything in the foregoing to the contrary, Employee does not release any right
to indemnification that Employee may have under Minnesota Statutory Sections
181.970 or 302A.521 or any rights of Employee under this Agreement.

      

      (v)           Pursuant
to Minnesota Statutory Section 363.031(2), Employee may rescind this Agreement
for any reason within fifteen (15) calendar days after he signs it (the
“Rescission Period”).  To be effective, the rescission must be in
writing and hand-delivered or mailed within the Rescission Period to BSC, c/o
Andrew N. Milani, Senior Vice President, Human Resources, One Boston Scientific
Place, Natick, MA 01760, or his successor.  If mailed, the rescission
must be:  (a) postmarked within the Rescission Period, (b) properly
addressed to Mr. Milani (or his successor) at the address specified in the
preceding sentence, and (c) sent by certified mail, return receipt
requested.  If delivered by hand, it must be given within the
Rescission Period to Mr. Milani (or his successor).  This
Agreement shall not become effective or enforceable until the day after the
Rescission Period expires (the “Effective Date”).  Therefore, no BSC
obligations will arise under Paragraphs 2(a), (b), and (f) above, until the
Effective Date and no payments shall be made under such provisions until after
the Effective Date at such times as provided above.  The Rescission
Period set forth herein is intended to encompass and run concurrently with the
7-day revocation period provided under the Federal Older Workers Benefit
Protection Act, which amends ADEA.

      

      (b)           BSC
hereby releases and forever discharges You and your heirs, administrators and
executors (“Your Releasees”) from any and all claims, agreements, obligations,
injuries, damages, causes of action, debts or liabilities (together “Claims”)
that BSC may have or may 

       

      
        
           

        

        
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      have ever
had, whether known or unknown, against any of Your Releasees as a result of any
facts or circumstances that occurred or existed or of which BSC had notice at
any time prior to the date of BSC’s execution of this Agreement; provided that
notwithstanding the foregoing, BSC does not release You or Your Releasees from
any Claims based on acts and/or omissions that satisfy the elements of a
criminal offense.

      

      9.           No
Damages Sought

      

      Employee
represents and states that he has not sought and will not seek or accept any
damages or individualized relief in connection with any complaints or charges
filed against Releasees with any local, state or federal agency or court, and
Employee agrees that if any complaint or charge is filed on his behalf, he shall
take all reasonable steps necessary to refuse any damages or individualized
relief in connection therewith.

      

      10.           No
Liability Admitted

      

      Employee acknowledges that neither
BSC’s execution of this Agreement nor BSC’s performance of any of its terms
shall constitute an admission by BSC of any wrongdoing by any of the
Releasees.  BSC likewise acknowledges that neither Employee’s
execution of this Agreement nor Employee’s performance of any of its terms shall
constitute an admission by Employee of any wrongdoing.

      

      
        11.   Restrictive
Covenants and Other Obligations

      

      

      Employee
acknowledges that he is subject to restrictions on post-employment activities
and other obligations under the Executive Retirement Plan and the Employee
Agreement.  As part of the consideration for this Agreement, Employee
specifically confirms that he is subject to all obligations applicable to
Participants in the Executive Retirement Plan and to all obligations set forth
in the Employee Agreement.  Such obligations include without
limitation the obligations (i) to return all documents and other property of
BSC; (ii) to maintain complete confidentiality concerning confidential
information of BSC; (iii) not to compete with BSC for twenty-four (24) months
following the Retirement Date; (iv) not to solicit customers of BSC for
twenty-four (24) months following the Retirement Date; and (v) not to solicit or
hire BSC employees for twenty-four (24) months following the Retirement
Date.  All of the foregoing obligations are more fully set forth in
the Executive Retirement Plan and the Employee Agreement.

      

      12.           No
Detrimental Communications

      

      (a)           Employee
agrees that he will not make or cause to be disclosed any negative, adverse or
derogatory statements to any media outlet, industry group, financial institution
or consultant, client or customer of the Releasees regarding any of the
Releasees or about any of the Releasees’ products or services, business affairs,
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      prospects
for the future.  Furthermore, Employee hereby represents to BSC that
he has made no such communication, and Employee acknowledges that BSC relies
upon this representation in agreeing to enter into this Agreement.

      

      (b)           You
agree that You will refer any prospective employer inquiring about You and/or
your work at BSC to Mr. Milani (or his successor), who will, directly or through
a designee, in accordance with BSC’s usual policy on providing references,
verify your dates of employment and last position held but will release no other
information about You or the circumstances regarding your separation from
employment with BSC, except that the person responding may state that You
retired from BSC for family reasons.

      

      13.           Future
Assistance

      

      BSC may seek the assistance,
cooperation or truthful testimony of Employee in connection with any
investigation, litigation, patent application or prosecution, or intellectual
property or other proceeding (collectively, “Proceedings”) arising out of
matters within the knowledge of Employee and/or related to his position as an
employee of BSC, and in any such instance, Employee shall provide such
assistance, cooperation or truthful testimony and BSC shall pay Employee’s
reasonable costs and expenses in connection therewith.  Such
assistance and cooperation may include, without limitation, sharing
institutional and personal knowledge that is relevant to a Proceeding and
preparing for testimony as a fact witness in a Proceeding.  Employee’s
obligations with respect to testimony as a fact witness in a Proceeding are to
appear without the necessity of a subpoena and to testify
truthfully.  Employee acknowledges that in the absence of this
Agreement he could be compelled to testify pursuant to a subpoena, and therefore
no part of the consideration to be paid to Employee under this Agreement is
considered to include payment for any time spent testifying as a fact witness or
for the substance of any such testimony.  Notwithstanding anything to
the contrary in this Agreement, statements made in the course of truthful
testimony in any Proceeding in which Employee is required to testify shall not
be considered to violate any provision of this Agreement, including without
limitation Paragraph 13.  For purposes of this Agreement, all services
pursuant to this Paragraph 13, other than testimony and related time spent as a
fact witness that BSC could otherwise compel by a subpoena, are referred to as
“Cooperation Services.”  BSC shall pay Employee at the rate of Three
Hundred Dollars ($300.00) per hour for his performance of Cooperation
Services.  Employee agrees to invoice BSC for all Cooperation
Services, by delivery of such invoice to Tim Pratt or his designee, by the first
business day of the quarter following the quarter in which they are
performed.  BSC agrees to pay Employee within thirty (30) days of
receipt of such invoice.  Employee shall perform Cooperation Services
and shall make himself available to testify as a fact witness upon reasonable
notice by BSC; provided that BSC shall make reasonable efforts, to extent
practicable, to accommodate Employee’s professional and personal commitments
when scheduling Cooperation Services and his appearance to
testify.  For the avoidance of doubt, Employee’s obligations to
provide Cooperation Services and to provide truthful testimony as a fact witness
without the necessity of a subpoena are permanent obligations.

      

      
        
           

        

        
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      14.           Confidentiality

      

      Employee agrees to keep confidential
the existence of this Agreement, as well as all of its terms and conditions, and
not to disclose to any person or entity the existence, terms or conditions of
this Agreement except to his attorney, financial advisors and/or members of his
immediate family provided they agree to keep confidential the existence, terms
and conditions of this Agreement.  In the event that Employee believes
he is compelled by law to divulge the existence, terms or conditions of this
Agreement in a manner prohibited by the preceding sentence, he will notify BSC
(by notifying BSC’s Legal Department) of the basis for the belief before
actually divulging the information.  Employee hereby confirms that as
of the date of signing this Agreement, he has not disclosed the existence, terms
or conditions of this Agreement, except as permitted by this Paragraph
14.  Notwithstanding the foregoing, BSC acknowledges that it may be
subject to public disclosure obligations with respect to this Agreement or
material terms thereof.   To the extent that BSC makes public
disclosure of information concerning this Agreement, You shall not thereafter be
subject to confidentiality obligations with respect to the same
information.

      

      15.Failure to Meet
Obligations

      

      In the event of a breach by Employee of
Paragraph 11, 12 or 14 above, the Executive Retirement Plan or the Employee
Agreement, Employee shall repay to BSC all of the amounts paid under Paragraphs
2(a) (b) and (f), above, and shall be liable, moreover, for any damages which a
court may determine and shall be subject to injunctive relief damages, and any
other relief which a court may award.  The previous sentence shall not
be construed to have any effect on the Employee’s ability to bring an ADEA
charge with the Equal Employment Opportunity Commission (“EEOC”) or lawsuit
challenging the waiver of ADEA claims contained herein, or to participate in any
investigation or proceedings conducted by the EEOC (which term hereinafter shall
be deemed to refer to the EEOC or any state or local fair employment practices
agency acting as an EEOC deferral agency for purposes of filing an ADEA charge
with the EEOC); provided that this sentence shall not be construed to imply that
there is any question concerning the validity of the waiver of ADEA claims in
this Agreement.

      

      16.           Resignations

      

      Employee hereby agrees to cooperate in
the execution of any document reasonably requested to evidence Employee’s
resignation from any and all positions that Employee holds with BSC or any
affiliate, effective as of the Resignation Date.

      

      17.           Governing
Law; Severability

      

      This Agreement is entered into and
shall be construed under the laws of the Commonwealth of Massachusetts, without
regard to its conflict of laws rules.  In the event any provision of
this Agreement is determined to be illegal or unenforceable by a duly authorized

       

      
        
           

        

        
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      court of
competent jurisdiction, then the remainder of this Agreement shall not be
affected thereby, it being the intention of the parties that each provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.  Except as provided immediately below, if any portion of the
Release language in Paragraph 8, above, were ruled to be unenforceable for any
reason, Employee shall return the consideration provided under Paragraph 2(a),
(b) and (f), above, to BSC upon demand by BSC, which demand shall be made if
Employee were to file any claims against any of the Releasees in violation of
this Agreement.  The foregoing sentence shall not apply to Employee’s
ability to bring an ADEA charge with the EEOC or lawsuit challenging the waiver
of ADEA claims; provided that this sentence shall not be construed to imply that
there is any question concerning the validity of the waiver of ADEA claims in
this Agreement.

      

      18.           Waivers;
Amendments

      

      The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation and shall not be deemed a waiver of any
subsequent breach.  No modification, alteration, or change or waiver
of any provision of this Agreement shall be effective unless in writing and
signed by both parties wherein specific reference is made to this
Agreement.

      

      19.           No
Other Inducements

      

      This Agreement sets forth the entire
understanding of the parties in connection with its subject
matter.  Any and all prior negotiations are merged in this
Agreement.  Neither of the parties has made any settlement,
representation or warranty in connection with the issues addressed in this
Agreement (except those expressly set forth in this Agreement) which has been
relied upon by the other party, or which acted as an inducement for the other
party to enter into this Agreement.

      

      20.           Persons
Bound by the Agreement

      

      This Agreement shall be binding upon
and inure to the benefit of Employee, his heirs and estate and to the benefit of
the Releasees and its respective successors and assigns.

      

      21.           Assignment
of Interests

      

      Employee warrants that he has not
assigned, or transferred or purported to assign or transfer any claim against
Releasees.

      

      22.           Prevailing
Party Entitled to Fees

      

      In the event that any action or
proceeding is initiated to enforce or interpret the provisions of this
Agreement, or to recover for a violation of the Agreement, the prevailing party

       

      
        
           

        

        
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      in any
such action or proceeding shall be entitled to its costs (including reasonable
attorneys’ fees); provided that if Employee files a lawsuit challenging the
waiver of ADEA claims contained herein, the prevailing party will be entitled to
his or its costs, including reasonable attorneys’ fees only to the extent
specifically authorized under federal law.

      

      23.           Taxation
of Payments and Benefits

      

      BSC shall undertake to make deductions,
withholdings and tax reports with respect to payments and benefits under this
Agreement to the extent that it reasonably and in good faith believes that it is
required to make such deductions, withholdings and tax
reports.   Payments under this Agreement shall be in amounts net
of any such deductions or withholdings.  Except to the extent
otherwise specified, nothing in this Agreement shall be construed to require BSC
to make any payments to compensate You for any adverse tax effect associated
with any payments or benefits or for any deduction or withholding from any
payment or benefit.  Each payment pursuant to this Agreement that is
due at a different time shall be considered to be a separate payment for
purposes of Section 409A of the Internal Revenue Code.

      

      24.           Representation

      

      BSC hereby advises Employee to consult
an attorney of his choice before executing this Agreement.  Employee
represents that, prior to executing this Agreement, he was advised to and did
review the provisions of this Agreement with counsel of his choice.

      

      25.           Approval
of Agreement

      

      Employee acknowledges that
notwithstanding anything to the contrary in this Agreement, the effectiveness of
this Agreement, including section 2(h) of this Agreement, is subject to the
approval of this Agreement by BSC’s Board of Directors or the Compensation
Committee of the Board of Directors or any other committee of the Board of
Directors that is authorized to approve this Agreement.

      

      The
parties have read the foregoing Agreement and know its contents, and know that
its terms are contractual and legally binding.  The parties further
agree that they enter this Agreement voluntarily and that they have not been
pressured or coerced in any way into signing this Agreement.

      

      
 

      
        
           

        

        
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      IN WITNESS WHEREOF, the
parties hereby agree.

       

      

        
          	
                  By:

                	
                  ____________________________

                	
                  __________________________

                	 
	 
      	
                  Fredericus
      A. Colen

                	
                  Date

                	 
	 
      	 
      	 
      	 
	
                  Boston
      Scientific Corporation

                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	
                  By:

                	
                  ____________________________

                	
                  ___________________________

                	 
	 
      	
                  J.
      Raymond Elliott

                	
                  Date

                	 
	 
      	
                  President
      & Chief Executive Officer

                	 
      	 
	 
      	 
      	 
      	 

        

      

    
      
         

      

      
        - 11
-Exhibit 4.1

	
   

  	
   

  	
   

  

 

RIGHTS AGREEMENT

 

DATED AS OF APRIL 26, 2010,

 

BY AND BETWEEN

 

GEORGIA GULF CORPORATION

 

AND

 

COMPUTERSHARE TRUST
COMPANY, N.A.,

AS RIGHTS AGENT

	
   

  	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
  1.

  	
   

  	
  Certain Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Appointment of Rights Agent

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Issue of Right Certificates

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Form of Right Certificates

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Countersignature and Registration

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

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

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Exercise of Rights; Purchase Price; Expiration Date of Rights

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Cancellation and Destruction of Right Certificates

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Company Covenants Concerning Securities and Rights

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Record Date

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

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

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Certificate of Adjusted Purchase Price or Number of Securities

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

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

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Fractional Rights and Fractional Securities

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Rights of Action

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Agreement of Rights Holders

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Right Certificate Holder Not Deemed a Stockholder

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Concerning the Rights Agent

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Merger or Consolidation or Change of Name of Rights Agent

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Duties of Rights Agent

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Change of Rights Agent

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Issuance of New Right Certificates

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Redemption

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Exchange

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Notice of Certain Events

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Notices

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Supplements and Amendments

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Successors; Certain Covenants

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Benefits of This Agreement

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  Governing Law

  	
   

  	
  34

  

 

i

 

	
  31.

  	
   

  	
  Severability

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Descriptive Headings, Etc.

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Determinations and Actions by the Board

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Effective Time

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Counterparts

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  A-1

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  B-1

  

 

ii

 

RIGHTS
AGREEMENT

 

This Rights Agreement, dated
as of April 26, 2010  (this “Agreement”), is made and entered
into by and between Georgia Gulf Corporation,  a Delaware corporation (the “Company”), and Computershare Trust
Company, N.A., a federally chartered trust company, as Rights Agent (the “Rights Agent”).

 

RECITALS

 

WHEREAS, the Company is
currently party to an Amended and Restated Rights Agreement, effective as of December 5,
2000, as amended (the “Original
Agreement”), by and between the Company and Computershare Trust
Company, N.A. (successor to EquiServe Trust Company, N.A.), as rights agent,
pursuant to which certain preferred share purchase rights (the “1990 Rights”) have
been issued in respect of the Company’s Common Shares (as hereinafter defined);

 

WHEREAS, the 1990 Rights
will expire by their terms at 5:00 p.m., Eastern time, on April 27,
2010;

 

WHEREAS, on April 20,
2010, the Board of Directors of the Company authorized and declared a dividend
distribution of one right (a “Right”) in
respect of each of the Company’s Common Shares outstanding as of the Close of
Business (as hereinafter defined) on May 10, 2010 (the “Record Date”), each Right initially
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), on the terms and subject to the conditions herein set
forth, and further authorized and directed the issuance of one Right (subject
to adjustment as provided herein) with respect to each Common Share issued or
delivered by the Company (whether originally issued or delivered from the
Company’s treasury) after the Record Date but prior to the earlier of the
Distribution Date (as hereinafter defined) and the Expiration Date (as
hereinafter defined) or as provided in Section 22.

 

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

 

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

 

(a)           “Acquiring Person”
means (i) any Person that has received written notice from the Company
that the Board of Directors of the Company has determined such Person to be a
member of a Concerted Action Group, if after receipt of such notice (A) such
Person (or any of such Person’s Affiliates or Associates) or any other Person
that has received written notice from the Company that the Board of Directors
of the Company has determined such other Person to be a member of the same
Concerted Action Group (or any of such other Person’s Affiliates or Associates)
either (1) becomes the Beneficial Owner of any additional Common Shares,
other than as a result of a stock dividend, rights dividend, stock split or
similar transaction effected by the Company in which all holders of Common
Shares are treated equally or (2) Acts in Concert with any member of such
Concerted Action Group (or any Affiliate or Associate of any such member) in an
Adverse Manner, or (B) any other Person who is the Beneficial Owner of

 

 

Common Shares becomes an
Affiliate or Associate of such Person, and (ii) any Person (other than the
Company or any Related Person) who or which, together with all Affiliates and
Associates of such Person, is or becomes the Beneficial Owner of 20%  or more of the then-outstanding Common Shares; provided,
however, that (x) any Person who would otherwise qualify as an
Acquiring Person on the date of this Agreement will not be deemed to be an
Acquiring Person for any purpose of this Agreement unless and until such time
as (1) such Person or any Affiliate or Associate of such Person thereafter
becomes the Beneficial Owner of additional Common Shares representing 1% or
more of the then-outstanding Common Shares, other than as a result of a stock
dividend, rights dividend, stock split or similar transaction effected by the
Company in which all holders of Common Shares are treated equally, or (2) any
other Person who is the Beneficial Owner of Common Shares representing 1% or
more of the then-outstanding Common Shares becomes an Affiliate or Associate of
such Person, provided that the foregoing exclusion shall cease to apply with
respect to any Person at such time as such Person, together with all Affiliates
and Associates of such Person, ceases to Beneficially Own 20% or more of the
then-outstanding Common Shares, and (y) a Person will not be deemed to
have become an Acquiring Person solely as a result of a reduction in the number
of Common Shares outstanding unless and until such time as (1) such Person
or any Affiliate or Associate of such Person thereafter becomes the Beneficial
Owner of additional Common Shares representing 1% or more of the
then-outstanding Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in which all holders
of Common Shares are treated equally, or (2) any other Person who is the
Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this Section 1(a),
has become such inadvertently, and such Person divests as promptly as
practicable or agrees in writing with the Company to divest, a sufficient
number of Common Shares so that such Person would no longer be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this Section 1(a),
then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.

 

(b)           A Person will be deemed to
have “Acted in Concert”
or to be “Acting in
Concert” with another Person if the Board of Directors of the
Company determines that (i) such Person has knowingly acted or is
knowingly acting (whether or not pursuant to an express agreement, arrangement
or understanding) in concert with, or towards a common goal or otherwise in
parallel with, such other Person in relation to acquiring, holding or disposing
of any securities of the Company, (ii) each such Person is aware of the
other Person’s conduct in relation to the Company’s securities, and (iii) the
conduct of each such Person in relation to the Company’s securities constitutes
at least a portion of the basis for the conduct of the other Person in relation
to the Company’s securities.

 

(c)           “Adverse Manner” means a manner  that the Board of Directors determines is intended, or is reasonably likely, to change or influence the
control of the Company or to cause pressure on the Company to take action or
enter into a transaction or series of transactions that Board determines
represents a threat to the Company’s corporate policy and effectiveness that
warrants a defensive responsive action by the Company.

 

2

 

(d)           “Affiliate” and “Associate” will have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement, provided, however, that a
Person will not be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were Directors of the Company.

 

(e)           A Person will be deemed the “Beneficial
Owner” of, and to “Beneficially Own,”
any securities:

 

(i)            which
such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, directly or indirectly, within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement; or

 

(ii)           the
beneficial ownership of 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, warrants, options or
other rights (in each case, other than upon exercise or exchange of the
Rights); provided, however, that a Person will 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; or

 

(iii)          which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or not in writing); or

 

(iv)          of which any other Person is
the Beneficial Owner, if such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person’s Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of any
securities of the Company;

 

provided, however,
that a Person will not be deemed the Beneficial Owner of, or to Beneficially
Own, any security (A) if such Person has the right to vote such security
pursuant to an agreement, arrangement or understanding (whether or not in
writing) which (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report), or (B) if
such beneficial ownership arises solely as a result of such Person’s status as
a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided
further, however, that nothing in this Section 1(c) will
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 an underwriting 

 

3

 

syndicate until the
expiration of 40 calendar days after the date of such acquisition, or such
later date as the Directors of the Company may determine in any specific case.

 

(f)            “Business Day”
means any day other than a Saturday, Sunday or a day on which banking institutions
in the State of New York (or such other
state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.

 

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

 

(h)           “Common Shares”
when used with reference to the Company means the shares of Common Stock, par value  $0.01 per
share, of the Company; provided, however, that if the Company is
the continuing or surviving corporation in a transaction described in Section 13(a)(ii),
“Common Shares” when used with reference to the Company means shares of the
capital stock or units of the equity interests with the greatest aggregate
voting power of the Company.  “Common
Shares” when used with reference to any corporation or other legal entity other
than the Company, including an Issuer, means shares of the capital stock or
units of the equity interests with the greatest aggregate voting power of such
corporation or other legal entity.

 

(i)            “Company”
means Georgia Gulf Corporation,  a Delaware corporation.

 

(j)            A Person will be deemed to be a member of a “Concerted Action Group”
if the Board of Directors determines that (i) such Person, together with
its Affiliates and Associates, Beneficially Owns 5%  or more of the Company’s then-outstanding Common Shares, and (ii) such
Person has Acted in Concert or is Acting in Concert with one or more Persons
and either (A) that all of such Persons in the aggregate, and together
with their respective Affiliates and Associates, Beneficially Own 20% or more
of the Company’s then-outstanding Common Shares or (B) that (1) all
of such Persons in the aggregate, and together with their respective Affiliates
and Associates, Beneficially Own 10% or more of the Company’s then-outstanding
Common Shares and (2) one or more of such Persons have acted, or are
acting or are reasonably likely to act in an Adverse Manner.

 

(k)           “Distribution Date”
means the earlier of:  (i) the Close
of Business on the tenth calendar day
following the Share Acquisition Date (or, if the tenth calendar day after the
Share Acquisition Date occurs before the Record Date, the Close of Business on
the Record Date), or (ii) the Close of Business on the tenth Business Day
(or, unless the Distribution Date shall have previously occurred, such later
date as may be specified by the Board of Directors of the Company) after the
commencement of a tender or exchange offer by any Person (other than the
Company or any Related Person), if upon the consummation thereof such Person
would be the Beneficial Owner of 20%  or more of the
then-outstanding Common Shares.

 

(l)            “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

4

 

(m)          “Expiration Date”
means the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23,
and (iii) the time at which all exercisable Rights are exchanged as
provided in Section 24.

 

(n)           “Final
Expiration Date” means (i) the third anniversary of the
Record Date, or (ii) the day following the certification of the voting
results of the Company’s 2011 annual meeting of stockholders, if prior to that
date a proposal to approve this Agreement has not received the affirmative vote
of the holders of a majority of the Common Shares present in person or
represented by proxy, entitled to vote and actually voted on the proposal at a
duly called meeting of stockholders, or any adjournment or postponement
thereof, at which a quorum is present.

 

(o)           “Flip-in Event”
means any event described in clauses (A), (B) or (C) of Section 11(a)(ii).

 

(p)           “Flip-over Event”
means any event described in clauses (i), (ii) or (iii) of Section 13(a).

 

(q)           “Issuer” has
the meaning set forth in Section 13(b).

 

(r)            “Person”
means any individual, firm, corporation, limited liability company or other
legal entity, and includes any successor (by merger or otherwise) of such
entity.

 

(s)           “Preferred Shares”
means shares of Junior Participating
Preferred Stock, par value
$0.01 per share, of the Company.

 

(t)            “Purchase Price”
means initially $100.00  per one
one-hundredth of a Preferred Share, subject to adjustment from time to time as
provided in this Agreement.

 

(u)           “Record Date”
has the meaning set forth in the Recitals to this Agreement.

 

(v)           “Redemption Price”
means $0.001 per Right, subject to adjustment by resolution of the Board of
Directors of the Company to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date.

 

(w)          “Related Person”
means (i) any Subsidiary of the Company or (ii) any employee benefit
or stock ownership plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan.

 

(x)            “Right” has
the meaning set forth in the Recitals to this Agreement.

 

(y)           “Right Certificates”
means certificates evidencing the Rights, in substantially the form attached as
Exhibit A.

 

(z)            “Rights Agent”
means Computershare Trust Company, N.A., a federally chartered trust company,  unless and until a successor Rights Agent has become such
pursuant to the terms of this Agreement, and thereafter, “Rights Agent” means
such successor Rights Agent.

 

5

 

(aa)         “Securities Act” means the
Securities Act of 1933, as amended.

 

(bb)         “Share Acquisition Date” means
the first date of public announcement by the Company (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.

 

(cc)         “Subsidiary” when used with
reference to any Person means any corporation or other legal entity of which a
majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person; provided, however,
that for purposes of Section 13(b), “Subsidiary” when used with reference
to any Person means any corporation or other legal entity of which at least 20%
of the voting power of the voting equity securities or equity interests is
owned, directly or indirectly, by such Person.

 

(dd)         “Trading Day” means any day on
which the principal national securities exchange or quotation system on which
the Common Shares are listed or admitted to trading is open for the transaction
of business or, if the Common Shares are not listed or admitted to trading on
any national securities exchange or quotation system, a Business Day.

 

(ee)         “Triggering Event” means any
Flip-in Event or Flip-over Event.

 

2.             Appointment of Rights Agent.  The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions of
this Agreement, and the Rights Agent hereby accepts such appointment and hereby
agrees to comply with the applicable requirements governing transfer agents and
registrars.  The Company may from time to
time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten days’ prior written notice to the Rights
Agent.  The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or omissions
of any such Co-Rights Agent.

 

3.             Issue of Right Certificates.  (a)  Until the Distribution Date, (i) the
Rights will be evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof, which certificates
representing Common Shares will also be deemed to be Right Certificates (or, if
the Common Shares are uncertificated, by the registration of the associated
Common Shares on the stock transfer books of the Company), (ii) the Rights
will be transferable only in connection with the transfer of the underlying
Common Shares, and (iii) the transfer of any Common Shares in respect of
which Rights have been issued will also constitute the transfer of the Rights
associated with such Common Shares. 
Commencing as promptly as practicable after the Record Date, the Company
will make available a copy of a Summary of Rights to Purchase Preferred Stock
in substantially the form attached as Exhibit B to any holder of
Rights who may request it from time to time prior to the Expiration Date.

 

(b)           Rights will be issued by the Company in respect of all
Common Shares (other than Common Shares issued upon the exercise or exchange of
any Right) issued or delivered by the Company (whether originally issued or
delivered from the Company’s treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date.  Certificates evidencing such Common Shares
will have stamped on, impressed on, printed on, written on, or otherwise
affixed to them the following legend or such similar legend as the Company may
deem 

 

6

 

appropriate and as is not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
quotation system on which the Common Shares may from time to time be listed or
quoted, or to conform to usage:

 

This Certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights Agreement between  Georgia Gulf Corporation and Computershare Trust Company,
N.A., dated as of April 26, 2010  (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Georgia Gulf Corporation.  The Rights are not
exercisable prior to the occurrence of certain events specified in the Rights
Agreement.  Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged,
may expire, may be amended, or may be evidenced by separate certificates and no
longer be evidenced by this Certificate. 
Georgia Gulf Corporation  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 the Rights Agreement, Rights that are or were beneficially owned
by an Acquiring Person or any Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement) may become null and void.

 

(c)           Any Right Certificate issued pursuant to this Section 3
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time
upon the transfer of any Rights to an Acquiring Person or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate and any Right Certificate issued pursuant to Section 6 or 11
hereof upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall be subject to and contain the
following legend or such similar legend as the Company may deem appropriate and
as is 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:

 

The Rights represented by this Right Certificate are
or were beneficially owned by a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Right Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 11(a)(ii) or
Section 13 of the Rights Agreement.

 

(d)           As promptly as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first-class, insured, postage prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate
evidencing

 

7

 

one Right for each Common Share so held,
subject to adjustment as provided herein. 
As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

 

(e)           In the event that the Company purchases or otherwise
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares will be deemed canceled and
retired so that the Company will not be entitled to exercise any Rights
associated with the Common Shares so purchased or acquired.

 

4.             Form of Right Certificates.  The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the reverse
thereof) will be substantially in the form attached as Exhibit A
with such changes and marks of identification or designation, and such legends,
summaries or endorsements printed thereon, as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
or quotation system on which the Rights may from time to time be listed or
quoted, or to conform to usage.  Subject
to the provisions of Section 22, the Right Certificates, whenever issued,
on their face will entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as are set forth therein at the Purchase
Price set forth therein, but the Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number of Rights
outstanding will be subject to adjustment as provided herein.

 

5.             Countersignature and Registration.  (a) The
Right Certificates will be executed on behalf of the Company by its Chairman of
the Board, its President or any Vice President, either manually or by facsimile
signature, and will have affixed thereto the Company’s seal or a facsimile
thereof which will be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature.  The Right Certificates will be countersigned
by the Rights Agent, either manually or by facsimile signature, and will not be
valid for any purpose unless so countersigned. 
In case any officer of the Company who signed any of the Right
Certificates ceases to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right 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 Right Certificates had not ceased to be
such an officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, is a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this 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 the principal office of the Rights Agent
designated for such purpose and at such other offices as may be required to
comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
any quotation system on which the Rights may from time to time be listed or
quoted, books for registration and transfer of the Right Certificates issued
hereunder.  Such books will show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.

 

8

 

6.             Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.  (a) Subject
to the provisions of Sections 7(d) and 14, at any time after the Close of
Business on the Distribution Date and prior to the Expiration Date, any Right
Certificate or Right Certificates representing exercisable Rights may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of one one-hundredths of a Preferred Share (or other securities, as the case
may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.  Any registered holder desiring to transfer,
split up, combine or exchange any such Right Certificate or Right Certificates
must make such request in a writing delivered to the Rights Agent and must
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent
designated for such purpose.  Thereupon
or as promptly as practicable thereafter, subject to the provisions of Sections
7(d) and 14, the Company will prepare, execute and deliver to the Rights
Agent, and the Rights Agent will countersign and deliver, a Right Certificate
or Right 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 Right
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 Right Certificate and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, 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 Right Certificate if mutilated, the Company will
prepare, execute and deliver a new Right Certificate of like tenor to the
Rights Agent and the Rights Agent will countersign and deliver such new Right
Certificate to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

 

7.             Exercise of Rights; Purchase Price; Expiration Date
of Rights.  (a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the exercise
price for the total number of securities as to which such surrendered Rights
are exercised and (ii) an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
the provisions of Section 9(d).

 

(b)           Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly executed,
accompanied by payment as described above, the Rights Agent will promptly (i) requisition
from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased or, in the case of
uncertificated shares or 

 

9

 

other securities, requisition from any
transfer agent therefor a notice setting forth such number of shares or other
securities to be purchased for which registration will be made on the stock
transfer books of the Company (and the Company hereby irrevocably authorizes
and directs its transfer agent to comply with all such requests), or, if the
Company elects to deposit Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (and the Company hereby irrevocably
authorizes and directs such depositary agent to comply with all such requests),
(ii) after receipt of such certificates (or notices or depositary
receipts, as the case may be), cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, (iii) when appropriate,
requisition from the Company or any transfer agent therefor (or make available,
if the Rights Agent is the transfer agent) certificates representing the number
of equivalent common shares (or, in the case of uncertificated shares, a notice
of the number of equivalent common shares for which registration will be made
on the stock transfer books of the Company) to be issued in lieu of the
issuance of Common Shares in accordance with the provisions of Section 11(a)(iii),
(iv) when appropriate, after receipt of such certificates or notices,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated
by such holder, (v) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of the issuance of fractional shares in
accordance with the provisions of Section 14 or in lieu of the issuance of
Common Shares in accordance with the provisions of Section 11(a)(iii), (vi) when
appropriate, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate, and (vii) when appropriate,
deliver any due bill or other instrument provided to the Rights Agent by the
Company for delivery to the registered holder of such Right Certificate as
provided by Section 11(l).

 

(c)           In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the Company will prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent will countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14.

 

(d)           Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be obligated to
undertake any action with respect to any purported transfer, split up,
combination or exchange of any Right Certificate pursuant to Section 6 or
exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Right Certificate has (i) completed and signed
the certificate following the form of assignment or the form of election to
purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or 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 may
reasonably request.

 

8.             Cancellation and Destruction of Right Certificates.  All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange will, if
surrendered to the Company or to any of its stock transfer agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, will be 

 

10

 

canceled by it, and no Right Certificates
will be issued in lieu thereof except as expressly permitted by the provisions
of this Agreement.  The Company will
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent will so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent will deliver all
canceled Right Certificates to the Company, or will, at the written request of
the Company, destroy such canceled Right Certificates, and in such case will
deliver a certificate of destruction thereof to the Company.

 

9.             Company Covenants Concerning Securities and Rights.  The Company covenants and agrees that:

 

(a)           It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, a number of Preferred Shares that will be sufficient to permit the
exercise pursuant to Section 7 of all outstanding Rights.

 

(b)           So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
issuable upon the exercise of the Rights may be listed on a national securities
exchange or quoted on a quotation system, it will endeavor to cause, from and
after such time as the Rights become exercisable, all securities reserved for
issuance upon the exercise of Rights to be listed on such exchange or quoted on
such system, upon official notice of issuance upon such exercise.

 

(c)           It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) delivered (or evidenced by registration
on the stock transfer books of the Company) upon exercise of Rights, at the
time of delivery of the certificates for (or registration of) such securities,
will be (subject to payment of the Purchase Price) duly authorized, validly
issued, fully paid and nonassessable securities.

 

(d)           It will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights (or, if such securities are
uncertificated, the registration of such securities on the stock transfer books
of the Company); provided, however, that the Company will not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts representing (or
the registration of) securities issued upon the exercise of Rights in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or deliver any certificates,
depositary receipts or notices representing securities issued upon the exercise
of any Rights until any such tax or charge has been paid (any such tax or charge
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s reasonable satisfaction that
no such tax is due.

 

(e)           It will use its best efforts (i) to file on an
appropriate form, as soon as practicable following the later of the Share
Acquisition Date and the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as
soon as practicable after 

 

11

 

such filing, and (iii) to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date.  The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the applicable state securities or “blue sky” laws in connection with the
exercisability of the Rights.  The
Company may temporarily suspend, for a period of time after the date set forth
in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement and to permit it to become effective. 
Upon any such suspension, the Company will issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect.  In addition, if the Company
determines that a registration statement should be filed under the Securities
Act or any state securities laws following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company will 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
anything in this Agreement to the contrary, the Rights will not be exercisable
in any jurisdiction if the requisite registration or qualification in such
jurisdiction has not been effected or the exercise of the Rights is not
permitted under applicable law.

 

(f)            Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the Distribution
Date, the Company will not 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 eliminate or otherwise diminish the benefits intended to be
afforded by the Rights.

 

(g)           In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section 11, 13, 14
or 24, it will make all arrangements necessary so that such other securities
and/or cash are available for distribution by the Rights Agent, if and when
appropriate.

 

10.           Record Date. 
Each Person in whose name any certificate representing Preferred Shares
(or Common Shares and/or other securities, as the case may be) is issued (or in
which such securities are registered upon the stock transfer books of the
Company) upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate (or registration) will be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price and all applicable transfer taxes was made; provided, however,
that if the date of such surrender and payment is a date upon which the
transfer books of the Company for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) are closed, such Person will be
deemed to have become the record holder of such securities on, and such
certificate (or registration) will be dated, the next succeeding Business Day
on which the transfer books of the Company for the Preferred Shares (or Common
Shares and/or other securities, as the case may be) are open.  Prior to the exercise of the Rights evidenced
thereby, the holder of a Right 

 

12

 

Certificate will not be entitled to any
rights of a holder of any security for which the Rights are or may become
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights, and
will not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.

 

11.           Adjustment of Purchase Price, Number and Kind of
Securities or Number of Rights.  The
Purchase Price, the number and kind of securities issuable upon exercise of
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 that the Company at any time after the Record Date (A) declares
a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivides
the outstanding Preferred Shares, (C) combines the outstanding Preferred
Shares into a smaller number of Preferred Shares, or (D) issues any shares
of its capital stock in a reclassification of the Preferred Shares (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification and/or the number and/or kind of
shares of capital stock issuable on such date upon exercise of a Right, will be
proportionately adjusted so that the holder of any Right exercised after such
time is entitled to receive upon payment of the Purchase Price then in effect
the aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
transfer books of the Company for the Preferred Shares were open, the holder of
such Right would have owned upon such exercise (and, in the case of a
reclassification, would have retained after giving effect to such
reclassification) and would have been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right.  If
an event occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) or Section 13, the adjustment provided for in
this Section 11(a)(i) will be in addition to, and will be made prior
to, any adjustment required pursuant to Section 11(a)(ii) or Section 13.

 

(ii)           Subject to the
provisions of Section 24, if:

 

(A)  any Person becomes an Acquiring Person; or

 

(B)  any Acquiring Person or any Affiliate or Associate of any
Acquiring Person, directly or indirectly, (1) merges into the Company or
otherwise combines with the Company and the Company is the continuing or
surviving corporation of such merger or combination (other than in a
transaction subject to Section 13), (2) merges or otherwise combines
with any Subsidiary of the Company, (3) in one or more transactions
(otherwise than in connection with the exercise, exchange or conversion of
securities exercisable or exchangeable for or convertible into shares of any
class of capital stock of the Company or any of its Subsidiaries) transfers
cash, securities or any other property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class of
capital stock of the 

 

13

 

Company
or any of its Subsidiaries or for securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the Company or any of
its Subsidiaries, or otherwise obtains 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 or exchangeable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries (otherwise than as part
of a pro rata distribution to all holders of shares of any class of capital
stock of the Company, or any of its Subsidiaries), (4) sells, purchases,
leases, exchanges, mortgages, pledges, transfers or otherwise disposes (in one
or more transactions) to, from, with or of, as the case may be, the Company or
any of its Subsidiaries (otherwise than in a transaction subject to Section 13),
any property, including securities, on terms and conditions less favorable to
the Company than the Company would be able to obtain in an arm’s-length
transaction with an unaffiliated third party, (5) receives any
compensation from the Company or any of its Subsidiaries other than
compensation as a director or a regular full-time employee, in either case at
rates consistent with the Company’s (or its Subsidiaries’) past practices, or (6) receives
the benefit, directly or indirectly (except proportionately as a stockholder),
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

 

(C)  during such time as there is an Acquiring Person, there is
any reclassification of securities of the Company (including any reverse stock
split), or any 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 (whether or
not with or into or otherwise involving an Acquiring Person), other than a
transaction subject to Section 13, 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 of the Company or any of
its Subsidiaries, or of securities exercisable or exchangeable for or
convertible into equity securities of the Company or any of its Subsidiaries,
of which an Acquiring Person, or any Affiliate or Associate of any Acquiring
Person, is the Beneficial Owner;

 

then,
and in each such case, from and after
the latest of the Distribution Date, the Share Acquisition Date and the date of
the occurrence of such Flip-in Event, proper provision will be made so
that each holder of a Right, except as provided below, will thereafter have the
right to receive, upon exercise thereof in accordance with the terms of this
Agreement at an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the date
of the occurrence of such Flip-in Event (or, if any other Flip-in Event shall
have previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the first occurrence of
a Flip-in Event), in lieu of Preferred Shares, such number of Common Shares as
equals the result obtained by (x) multiplying the then-current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the occurrence of such
Flip-in Event (or, if any other Flip-in Event shall have 

 

14

 

previously
occurred, multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the first occurrence of a Flip-in Event), and
dividing that product by (y) 50% of the current per share market price of
the Common Shares (determined pursuant to Section 11(d)) on the date of
the occurrence of such Flip-in Event. 
Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Flip-in Event, any Rights that are Beneficially
Owned by (A) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (B) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the occurrence of a
Flip-in Event, or (C) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or concurrently with
the occurrence of a Flip-in Event pursuant to either (1) a transfer from
an Acquiring Person to holders of its equity securities or to any Person with
whom it has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (2) a transfer which the Directors of the
Company have determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions of this Section 11(a)(ii),
and subsequent transferees of any of such Persons, will be void without any
further action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Agreement.  The Company will use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but will have no liability to any holder of Right Certificates
or any 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.  Upon the occurrence of a
Flip-in Event, no Right Certificate that represents Rights that are or have
become void pursuant to the provisions of this Section 11(a)(ii) will
thereafter be issued pursuant to Section 3 or Section 6, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of this Section 11(a)(ii) will
be canceled.  Upon the occurrence of a
Flip-over Event, any Rights that shall not have been previously exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only pursuant to Section 13 and not pursuant to this Section 11(a)(ii).

 

(iii)          Upon the occurrence
of a Flip-in Event, if there are not sufficient Common Shares authorized but
unissued or issued but not outstanding to permit the issuance of all the Common
Shares issuable in accordance with Section 11(a)(ii) upon the
exercise of a Right, the Board of Directors of the Company will use its best
efforts promptly to authorize and, subject to the provisions of Section 9(e),
make available for issuance additional Common Shares or other equity securities
of the Company having equivalent voting rights and an equivalent value (as
determined in good faith by the Board of Directors of the Company) to the
Common Shares (for purposes of this Section 11(a)(iii), “equivalent common shares”).  In the event that equivalent common shares
are so authorized, upon the exercise of a Right in accordance with the
provisions of Section 7, the registered holder will be entitled to receive
(A) Common Shares, to the extent any are available, and (B) a number
of equivalent common shares, which the Board of Directors of the Company has
determined in good faith to have a value equivalent to the excess of (x) the
aggregate current per share 

 

15

 

market
value on the date of the occurrence of the most recent Flip-in Event of all the
Common Shares issuable in accordance with Section 11(a)(ii) upon the
exercise of a Right (the “Exercise Value”)
over (y) the aggregate current per share market value on the date of the
occurrence of the most recent Flip-in Event of any Common Shares available for
issuance upon the exercise of such Right; provided, however, that
if at any time after 90 calendar days after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of the
most recent Flip-in Event, there are not sufficient Common Shares and/or
equivalent common shares available for issuance upon the exercise of a Right,
then the Company will be obligated to deliver, upon the surrender of such Right
and without requiring payment of the Purchase Price, Common Shares (to the
extent available), equivalent common shares (to the extent available) and then
cash (to the extent permitted by applicable law and any agreements or
instruments to which the Company is a party in effect immediately prior to the
Share Acquisition Date), which securities and cash have an aggregate value
equal to the excess of (1) the Exercise Value over (2) the product of
the then-current Purchase Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right was exercisable immediately prior to the
date of the occurrence of the most recent Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, the product of the then-current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right would have been exercisable immediately prior to the
date of the occurrence of such Flip-in Event if no other Flip-in Event had
previously occurred).  To the extent that
any legal or contractual restrictions prevent the Company from paying the full
amount of cash payable in accordance with the foregoing sentence, the Company
will pay to holders of the Rights as to which such payments are being made all
amounts which are not then restricted on a pro rata basis and will continue to
make payments on a pro rata basis as promptly as funds become available until
the full amount due to each such Rights holder has been paid.

 

(b)           In the event that the Company fixes a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), “equivalent preferred
shares”)) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (determined pursuant to Section 11(d))
on such record date, the Purchase Price to be in effect after such record date
will be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which is the number
of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be offered)
would purchase at such current per share market price and the denominator of
which is the number of Preferred Shares outstanding on such record date plus
the number of additional Preferred Shares and/or equivalent preferred shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of one 

 

16

 

Right be less than the aggregate par value of
the shares of capital stock issuable upon exercise of one Right.  In case such subscription price may be paid
in a consideration part or all of which is in a form other than cash, the value
of such consideration will be as determined in good faith by the Board of
Directors of the Company, whose determination will be described in a statement
filed with the Rights Agent.  Preferred
Shares owned by or held for the account of the Company will not be deemed outstanding
for the purpose of any such computation. 
Such adjustment will be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants are not so
issued, the Purchase Price will be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

 

(c)           In the event that the Company fixes a record date for the
making of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which is the current per share market price of
the Preferred Shares (as determined pursuant to Section 11(d)) on such
record date or, if earlier, the date on which Preferred Shares begin to trade
on an ex-dividend or when issued basis for such distribution, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed with the
Rights Agent) of the portion of the evidences of indebtedness, cash, assets or
stock so to be distributed or of such subscription rights, options or warrants
applicable to one Preferred Share, and the denominator of which is such current
per share market price of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. 
Such adjustments will be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

 

(d)           (i)            For
the purpose of any computation hereunder, the “current
per share market price” of Common Shares on any date will be
deemed to be the average of the daily closing prices per share of such Common
Shares for the 30 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the current per share market price of
the Common Shares is determined during a period following the announcement by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into such
Common Shares (other than the Rights) or (B) any subdivision, combination
or reclassification of such Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price will be appropriately
adjusted to take into account ex-dividend trading or to reflect the current per
share market price per Common Share equivalent. 
The closing price for each day will 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

 

17

 

either
case as reported in the principal consolidated quotation system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Common Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated quotation system with
respect to securities listed on the principal national securities exchange on
which the Common Shares are listed or admitted to trading or, if the Common
Shares 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 such
market then in use, or, if on any such date the Common Shares 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 Shares
selected by the Board of Directors of the Company.  If the Common Shares are not publicly held or
not so listed or traded, or are not the subject of available bid and asked
quotes, “current per share market price” will mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent.

 

(ii)           For the purpose of
any computation hereunder, the “current per share market
price” of the Preferred Shares will be determined in the same
manner as set forth above for Common Shares in Section 11(d)(i), other
than the last sentence thereof.  If the
current per share market price of the Preferred Shares cannot be determined in
the manner provided above, the “current per share market price” of the
Preferred Shares will be conclusively deemed to be an amount equal to the
current per share market price of the Common Shares multiplied by one hundred
(as such number may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar transactions relating to
the Common Shares occurring after the date of this Agreement).  If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, or the subject of
available bid and asked quotes, “current per share market price” of the Preferred
Shares will mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent. 
For all purposes of this Agreement, the current per share market price
of one one-hundredth of a Preferred Share will be equal to the current per
share market price of one Preferred Share divided by one hundred.

 

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

 

(f)            If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than 

 

18

 

Preferred Shares, thereafter the number
and/or kind of such other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the
Purchase Price in respect thereof) will apply on like terms to any such other
securities (and the Purchase Price in respect thereof).

 

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

 

(h)           Unless the Company has exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price pursuant to Section 11(b) or
Section 11(c), each Right outstanding immediately prior to the making of
such adjustment will thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a Preferred Share issuable upon
exercise of a Right immediately prior to such adjustment of the Purchase Price
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
substitution for any adjustment in the number of one one-hundredths of a
Preferred Share issuable upon the exercise of a Right.  Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. 
Each Right held of record prior to such adjustment of the number of
Rights will 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 will 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.  Such record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, will be at least 10 calendar days later
than the date of the public announcement. 
If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company will, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to the
provisions of Section 14, the additional Rights to which such holders are
entitled as a result of such adjustment, or, at the option of the Company, will
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof if required by the Company, new Right
Certificates evidencing all the Rights to which such holders are entitled after
such adjustment.  Right Certificates so
to be distributed will 

 

19

 

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 will be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.

 

(j)            Without respect to any adjustment or change in the
Purchase Price and/or the number and/or kind of securities issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number and kind of
securities which were expressed in the initial Right Certificate issued
hereunder.

 

(k)           Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares or below the then par value, if any, of any other
securities of the Company issuable upon exercise of the Rights, the Company will
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 Preferred Shares or such other securities, as the case may
be, at such adjusted Purchase Price.

 

(l)            In any case in which this Section 11 otherwise
requires that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of Preferred Shares or other securities of
the Company, if any, issuable upon such exercise over and above the number of
Preferred Shares or other 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 delivers to such holder a due
bill or other appropriate instrument evidencing such holder’s right to receive
such additional Preferred Shares or other securities upon the occurrence of the
event requiring such adjustment.

 

(m)          Notwithstanding anything in this Agreement to the contrary,
the Company will 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 of Directors of the
Company determines to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of
Preferred Shares at less than the current per share market price therefor, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) stock dividends,
or (v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Shares is not taxable
to such stockholders.

 

(n)           Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the Record Date prior
to the Distribution Date (i) pays a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivides the outstanding Common
Shares, (iii) combines the outstanding Common Shares into a smaller number
of shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, will be proportionately adjusted
so that the number of Rights thereafter associated with each Common Share
following any such event equals the result obtained by 

 

20

 

multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction the numerator
of which is the total number of Common Shares outstanding immediately prior to
the occurrence of the event and the denominator of which is the total number of
Common Shares outstanding immediately following the occurrence of such event.  The adjustments provided for in this Section 11(n) will
be made successively whenever such a dividend is paid or such a subdivision,
combination or reclassification is effected.

 

12.           Certificate of Adjusted Purchase Price or Number of
Securities.  Whenever an adjustment
is made as provided in Section 11 or Section 13, the Company will
promptly (a) prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is
made after the Distribution Date, mail a brief summary of such adjustment to
each holder of a Right Certificate in accordance with Section 26.

 

13.           Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.  (a) 
In the event that:

 

(i)            at any time after a
Person has become an Acquiring Person, the Company consolidates with, or merges
with or into, any other Person and the Company is not the continuing or
surviving corporation of such consolidation or merger; or

 

(ii)           at any time after a
Person has become an Acquiring Person, any Person consolidates with the
Company, or merges with or into the Company, and the Company is the continuing or
surviving corporation of such merger or consolidation and, in connection with
such merger or consolidation, all or part of the Common Shares is changed into
or exchanged for stock or other securities of any other Person or cash or any
other property; or

 

(iii)          at any time after a
Person has become an Acquiring Person, the Company, directly or indirectly,
sells or otherwise transfers (or one or more of its Subsidiaries sells or
otherwise transfers), in one or more transactions, assets or earning power (including
without limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing in the aggregate more than
50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or Persons other than the Company or one or more of
its wholly owned Subsidiaries;

 

then, and in each such case, proper provision
will be made so that from and after the
latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-over Event (A) each holder of a Right thereafter
has the right to receive, upon the exercise thereof in accordance with
the terms of this Agreement at an exercise price per Right equal to the product
of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Share Acquisition Date, such number of duly
authorized, validly issued, fully paid, nonassessable and freely tradeable Common
Shares of the Issuer, free and clear of any liens, encumbrances and other
adverse claims and not subject to any rights of call or first refusal, as
equals the result obtained by (x) multiplying the then-current Purchase
Price by the number of one one-hundredths of a 

 

21

 

Preferred Share for which a Right is
exercisable immediately prior to the Share Acquisition Date and dividing that
product by (y) 50% of the current per share market price of the Common Shares
of the Issuer (determined pursuant to Section 11(d)), on the date of the
occurrence of such Flip-over Event; (B) the Issuer will thereafter be
liable for, and will assume, by virtue of the occurrence of such Flip-over
Event, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term “Company”
will thereafter be deemed to refer to the Issuer; and (D) the Issuer will
take such steps (including without limitation the reservation of a sufficient
number of its Common Shares to permit the exercise of all outstanding Rights)
in connection with such consummation as may be necessary to assure that the
provisions hereof are thereafter applicable, as nearly as reasonably may be
possible, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights.

 

(b)           For purposes of this Section 13, “Issuer” means (i) in the case
of any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring Person (including
the Company as the continuing or surviving corporation of a transaction
described in Section 13(a)(ii) above), and (ii) in the case of
any Flip-over Event described in Section 13(a)(iii) above, the Person
that is the party receiving the greatest portion of the assets or earning power
(including without limitation securities creating any obligation on the part of
the Company and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any such
case, (A) if (1) no class of equity security of such Person is, at
the time of such merger, consolidation or transaction and has been continuously
over the preceding 12-month period, registered pursuant to Section 12 of
the Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of which is and has
been so registered, the term “Issuer” means such other Person; and (B) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are and have been so
registered, the term “Issuer” means whichever of such Persons is the issuer of
the equity security having the greatest aggregate market value.  Notwithstanding the foregoing, if the Issuer
in any of the Flip-over Events listed above is not a corporation or other legal
entity having outstanding equity securities, then, and in each such case, (x) if
the Issuer is directly or indirectly wholly owned by a corporation or other legal
entity having outstanding equity securities, then all references to Common
Shares of the Issuer will be deemed to be references to the Common Shares of
the corporation or other legal entity having outstanding equity securities
which ultimately controls the Issuer, and (y) if there is no such
corporation or other legal entity having outstanding equity securities, (I) proper
provision will be made so that the Issuer creates or otherwise makes available
for purposes of the exercise of the Rights in accordance with the terms of this
Agreement, a kind or kinds of security or securities having a fair market value
at least equal to the economic value of the Common Shares which each holder of
a Right would have been entitled to receive if the Issuer had been a corporation
or other legal entity having outstanding equity securities; and (II) all
other provisions of this Agreement will apply to the issuer of such securities
as if such securities were Common Shares.

 

(c)           The Company will not consummate any Flip-over Event if, (i) at
the time of or immediately after such Flip-over Event, there are or would be
any rights, warrants, instruments or securities outstanding or any agreements
or arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to, 

 

22

 

simultaneously with or immediately after such
Flip-over Event, the stockholders of the Person who constitutes, or would
constitute, the Issuer for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates, or (iii) the form or nature of the organization
of the Issuer would preclude or limit the exercisability of the Rights.  In addition, the Company will not consummate
any Flip-over Event unless the Issuer has a sufficient number of authorized
Common Shares (or other securities as contemplated in Section 13(b) above)
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 to
such consummation the Company and the Issuer have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in subsections
(a) and (b) of this Section 13 and further providing that as
promptly as practicable after the consummation of any Flip-over Event, the
Issuer will:

 

(A)  prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities issuable upon
exercise of the Rights on an appropriate form, and use its best efforts to
cause such registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the Expiration
Date;

 

(B)  take all such action as may be appropriate under, or to
ensure compliance with, the applicable state securities or “blue sky” laws in
connection with the exercisability of the Rights; and

 

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

 

(d)           The provisions of this Section 13 will similarly
apply to successive mergers or consolidations or sales or other transfers.  In the event that a Flip-over Event occurs at
any time after the occurrence of a Flip-in Event, except for Rights that have
become void pursuant to Section 11(a)(ii), Rights that shall not have been
previously exercised will cease to be exercisable in the manner provided in Section 11(a)(ii) and
will thereafter be exercisable in the manner provided in Section 13(a).

 

14.           Fractional Rights and Fractional Securities.  (a) The
Company will not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights.  In lieu of such fractional Rights, the
Company will pay as promptly as practicable to the registered holders of the
Right Certificates with regard to which such fractional Rights otherwise would
be issuable, an amount in cash equal to the same fraction of the current market
value of one Right.  For the purposes of
this Section 14(a), the current market value of one Right is the closing
price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights otherwise would have been issuable.  The closing price for any day is 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 quotation 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 quotation system with respect to securities listed on the
principal 

 

23

 

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 such market then in use, or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company.  If the Rights are not publicly
held or are not so listed or traded, or are not the subject of available bid
and asked quotes, the current market value of one Right will mean the fair
value thereof as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed with the
Rights Agent.

 

(b)           The Company will not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares or to
register fractional Preferred Shares on the stock transfer books of the Company
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share).  Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement provides that the holders of such depositary
receipts have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts.  In lieu of
fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company may pay to any Person to whom
or which such fractional Preferred Shares would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of one Preferred
Share.  For purposes of this Section 14(b),
the current market value of one Preferred Share is the closing price of the
Preferred Shares (as determined in the same manner as set forth for Common
Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; provided, however,
that if the closing price of the Preferred Shares cannot be so determined, the
closing price of the Preferred Shares for such Trading Day will be conclusively
deemed to be an amount equal to the closing price of the Common Shares
(determined pursuant to the second sentence of Section 11(d)(i)) for such
Trading Day multiplied by one hundred (as such number may be appropriately
adjusted to reflect events such as stock splits, stock dividends,
recapitalizations or similar transactions relating to the Common Shares
occurring after the date of this Agreement); provided  further, however,
that if neither the Common Shares nor the Preferred Shares are publicly held or
listed or admitted to trading on any national securities exchange, or the
subject of available bid and asked quotes, the current market value of one
Preferred Share will mean the fair value thereof as determined in good faith by
the Board of Directors of the Company, whose determination will be described in
a statement filed with the Rights Agent.

 

(c)           Following the occurrence of a Triggering Event, the
Company will not be required to issue fractions of Common Shares or other
securities issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities or to register any
such fractional securities on the stock transfer books of the Company.  In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same 

 

24

 

fraction of the current market value of one
such security.  For purposes of this Section 14(c),
the current market value of one Common Share or other security issuable upon
the exercise or exchange of Rights is the closing price thereof (as determined
in the same manner as set forth for Common Shares in the second sentence of Section 11(d)(i))
for the Trading Day immediately prior to the date of such exercise or exchange;
provided, however, that if neither the Common Shares nor any such
other securities are publicly held or listed or admitted to trading on any
national securities exchange, or the subject of available bid and asked quotes,
the current market value of one Common Share or such other security will mean
the fair value thereof as determined in good faith by the Board of Directors of
the Company, whose determination will mean the fair value thereof as will be
described in a statement filed with the Rights Agent.

 

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, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the holder
of any Common Shares), 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 Right Certificate in the manner provided in such Right
Certificate and in this Agreement. 
Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under this Agreement, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.

 

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 are transferable
only in connection with the transfer of the Common Shares;

 

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

 

(c)           The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Share certificate, if
any, made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;

 

25

 

(d)           Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14.

 

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

 

17.           Right Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Right Certificate
will be entitled to vote, receive dividends, or be deemed for any purpose the
holder of Preferred Shares or any other securities of the Company which may at
any time be issuable upon the exercise of the Rights represented thereby, nor
will anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of Directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25),
or to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement or exchanged pursuant to the
provisions of Section 24.

 

18.           Concerning the Rights Agent.  (a) The Company will pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder.  The Company will also
indemnify the Rights Agent for, and hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without gross
negligence, bad faith, or willful misconduct on the part of the Rights Agent,
for anything done or omitted to be done 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 arising therefrom,
directly or indirectly.

 

(b)           The Rights Agent will be protected and will 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 Right
Certificate or certificate or other notice evidencing Preferred Shares or
Common Shares or other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed, and, where necessary, verified or
acknowledged, by the proper Person or Persons.

 

26

 

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 is a party, or any corporation succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, will 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 that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21.  If at
the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and if at that time any of the Right Certificates shall not have
been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
will have the full force provided in the Right Certificates and in this
Agreement.

 

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

 

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 Right Certificates, by their
acceptance thereof, will 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 will 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 deems it necessary or desirable that any fact or
matter 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 President, any Vice President, the Secretary or the Treasurer of the
Company and delivered to the Rights Agent, and such certificate will 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 will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.

 

27

 

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

 

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

 

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

 

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

 

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

 

(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 will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof. 
The Rights Agent will not be under any duty or responsibility to ensure
compliance with any applicable federal or state securities laws in connection
with the issuance, transfer or exchange of Right Certificates.

 

28

 

(j)            If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise, transfer, split up, combination or exchange,
either (i) the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, or (ii) any
other actual or suspected irregularity exists, the Rights Agent will not take
any further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company, and will
thereafter take further action with respect thereto only in accordance with the
Company’s written instructions.

 

(k)           The 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.

 

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 30
calendar days’ notice in writing mailed to the Company and, in the event that
the Rights Agent or one of its Affiliates is not also the transfer agent for
the Company, to each transfer agent of the Preferred Shares or the Common
Shares by registered or certified 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
have resigned automatically and be discharged from its duties under this
Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice. 
The Company may remove the Rights Agent or any successor Rights Agent
upon 30 calendar days’ notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Preferred Shares and the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first class mail.  If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint a successor to the
Rights Agent.  If the Company fails to
make such appointment within a period of 30 calendar days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who will, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right 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, will be a
corporation or other legal entity organized and doing business under the laws
of the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), 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 individually or combined with an Affiliate at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million.  After appointment, the
successor Rights Agent will 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 will 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 

 

29

 

effective date of any such appointment, the
Company will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Preferred Shares or the Common Shares, and mail
a notice thereof in writing to the registered holders of the Right
Certificates.  Failure to give any notice
provided for in this Section 21, however, or any defect therein, will 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.

 

22.           Issuance of New Right Certificates.  Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Purchase
Price per share and the number or kind of securities issuable upon exercise of
the Rights made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance
or sale by the Company of Common Shares following the Distribution Date and
prior to the Expiration Date, the Company (a) will, with respect to Common
Shares so issued or sold pursuant to the exercise, exchange or conversion of
securities (other than Rights) issued prior to the Distribution Date which are
exercisable or exchangeable for, or convertible into Common Shares, and (b) may,
in any other case, if deemed necessary, appropriate or desirable by the Board
of Directors of the Company, issue Right Certificates representing an
equivalent number of Rights as would have been issued in respect of such Common
Shares if they had been issued or sold prior to the Distribution Date, as
appropriately adjusted as provided herein as if they had been so issued or
sold; provided, however, that (i) no such Right Certificate
will be issued if, and to the extent that, in its good faith judgment the Board
of Directors of the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to
the Person to whom or which such Right Certificate otherwise would be issued
and (ii) no such Right Certificate will be issued if, and to the extent
that, appropriate adjustment otherwise has been made in lieu of the issuance
thereof.

 

23.           Redemption.  (a) Prior to the Expiration Date,
the Board of Directors of the Company may, at its option, redeem all but not
less than all of the then-outstanding Rights at the Redemption Price at any
time prior to the Close of Business on the later of (i) the Distribution
Date and (ii) Share Acquisition Date. 
Any such redemption will be effective immediately upon the action of the
Board of Directors of the Company ordering the same, unless such action of the
Board of Directors of the Company expressly provides that such redemption will
be effective at a subsequent time or upon the occurrence or nonoccurrence of
one or more specified events (in which case such redemption will be effective
in accordance with the provisions of such action of the Board of Directors of
the Company).

 

(b)           Immediately upon the effectiveness of the redemption of
the Rights as provided in Section 23(a), 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 will be to receive the
Redemption Price, without interest thereon. 
Promptly after the effectiveness of the redemption of the Rights as
provided in Section 23(a), the Company will publicly announce such
redemption and, within 10 calendar days thereafter, will give notice of such
redemption to the holders of the then-outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Company; provided, however, that the failure to
give, or 

 

30

 

any defect in, any such notice will not
affect the validity of the redemption of the Rights.  Any notice that is mailed in the manner
herein provided will be deemed given, whether or not the holder receives the
notice.  The notice of redemption mailed
to the holders of Rights will state the method by which the payment of the
Redemption Price will be made.  The
Company may, at its option, pay the Redemption Price in cash, Common Shares
(based upon the current per share market price of the Common Shares (determined
pursuant to Section 11(d)) at the time of redemption), or any other form
of consideration deemed appropriate by the Board of Directors of the Company
(based upon the fair market value of such other consideration, determined by
the Board of Directors of the Company in good faith) or any combination
thereof.  The Company may, at its option,
combine the payment of the Redemption Price with any other payment being made
concurrently to holders of Common Shares and, to the extent that any such other
payment is discretionary, may reduce the amount thereof on account of the
concurrent payment of the Redemption Price. 
If legal or contractual restrictions prevent the Company from paying the
Redemption Price (in the form of consideration deemed appropriate by the Board
of Directors) at the time of redemption, the Company will pay the Redemption
Price, without interest, promptly after such time as the Company ceases to be
so prevented from paying the Redemption Price.

 

24.           Exchange.  (a) The Board of Directors of the
Company may, at its option, at any time after the later of the Share Acquisition Date and the  Distribution Date, exchange all or
part of the then-outstanding and exercisable Rights (which will not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii))
for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date (such exchange ratio being
hereinafter referred to as the “Exchange Ratio”).  Any such exchange will be effective
immediately upon the action of the Board of Directors of the Company ordering
the same, unless such action of the Board of Directors of the Company expressly
provides that such exchange will be effective at a subsequent time or upon the
occurrence or nonoccurrence of one or more specified events (in which case
such exchange will be effective in accordance with the provisions of such action
of the Board of Directors of the Company). 
Notwithstanding the foregoing, the Board of Directors of the Company
will not be empowered to effect such exchange at any time after any Person
(other than the Company or any Related Person), who or which, together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the then-outstanding Common Shares.

 

(b)           Immediately upon the effectiveness of the exchange of any
Rights as provided in Section 24(a), and without any further action and
without any notice, the right to exercise such Rights will terminate and the
only right with respect to such Rights thereafter of the holder of such Rights
will be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.  Promptly after the effectiveness of the
exchange of any Rights as provided in Section 24(a), the Company will
publicly announce such exchange and, within 10 calendar days thereafter, will
give notice of 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; provided,
however, that the failure to give, or any defect in, such notice will
not affect the validity of such exchange. 
Any notice that is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice.  Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be 

 

31

 

effected and, in the event of any partial
exchange, the number of Rights which will be exchanged.  Any partial exchange will be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii)) held by each holder of
Rights.

 

(c)           In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any Common Share exchangeable for a
Right (i) equivalent common shares (as such term is used in Section 11(a)(iii)),
(ii) cash, (iii) debt securities of the Company, (iv) other
assets, or (v) any combination of the foregoing, in any event having an
aggregate value, as determined in good faith by the Board of Directors of the
Company (whose determination will be described in a statement filed with the
Rights Agent), equal to the current market value of one Common Share
(determined pursuant to Section 11(d)) on the Trading Day immediately
preceding the date of the effectiveness of the exchange pursuant to this Section 24.

 

25.           Notice of Certain Events.  (a) If, after the Distribution
Date, the Company proposes (i) to pay any dividend payable in stock of any
class to the holders of Preferred Shares or to make any other distribution to
the holders of Preferred Shares (other than a regular periodic cash dividend), (ii) to
offer to the holders of Preferred Shares rights, options or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, (iii) to effect
any reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to
effect any consolidation or merger into or with, 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 assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) representing more than 50% of
the assets and earning power of the Company and its Subsidiaries, taken as a
whole, to any other Person or Persons other than the Company or one or
more of its wholly owned Subsidiaries, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or reclassification of the Common Shares then, in each
such case, the Company will give to each holder of a Right Certificate, to the
extent feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes of such stock
dividend, distribution or offering of rights, options 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 Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least
10 calendar days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and, in the case of any such
other action, at least 10 calendar days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever is the earlier.

 

(b)           In case any Triggering Event occurs, then, in any such
case, the Company will as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 26,
a notice of the occurrence of such event, which specifies the event and the
consequences of the event to holders of Rights.

 

32

 

(c)           Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date, a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of any Rights or of any Common Shares for purposes of this Agreement.

 

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

 

Georgia
Gulf Corporation

115
Perimeter Place, Suite 460

Atlanta,
Georgia  30346

Attention:  General Counsel

 

(b)           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 Right Certificate to or on the Rights Agent
will be sufficiently given or made if sent by overnight delivery service or
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:

 

Computershare Trust Company, N.A.

250
Royall Street

Canton,
Massachusetts  02021

Attention:  Client Services

 

(c)           Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any Common
Shares) will 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.

 

27.           Supplements and Amendments.  Prior to the time at which the Rights cease
to be redeemable pursuant to Section 23, and subject to the penultimate
sentence of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the approval of
any holders of Rights or Common Shares. 
From and after the time at which the Rights cease to be redeemable
pursuant to Section 23, and subject to the penultimate sentence of this Section 27,
the Company may, and the Rights Agent will if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights or Common Shares in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to supplement or amend the
provisions hereunder in any manner which the Company may deem desirable; provided,
however, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), and no such supplement or
amendment shall cause the Rights again to become redeemable or cause this 

 

33

 

Agreement again to become supplementable or
amendable otherwise than in accordance with the provisions of this
sentence.  Without limiting the
generality or effect of the foregoing, this Agreement may be supplemented or
amended to provide for such voting powers for the Rights and such procedures
for the exercise thereof, if any, as the Board of Directors of the Company may
determine to be appropriate.  Upon the
delivery of a certificate from an officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent will execute such supplement or amendment; provided, however,
that such supplement or amendment does not adversely affect the rights, duties
or obligations of the Rights Agent under this Agreement.  Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment may be made which decreases the stated
Redemption Price to an amount less than $0.001 per Right.  Notwithstanding anything in this Agreement to
the contrary, the limitations on the ability of the Board of Directors to amend
this Agreement set forth in this Section 27 shall not affect the power or
ability of the Board of Directors to take any other action that is consistent
with its fiduciary duties under Delaware law, including without limitation
accelerating or extending the Expiration Date or making any other amendment to
this Agreement that is permitted by this Section 27 or adopting a new
stockholder rights plan with such terms as the Board of Directors determines in
its sole discretion to be appropriate.

 

28.           Successors; Certain Covenants.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.

 

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

 

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

 

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 will remain in full force and effect and will in
no way be affected, impaired or invalidated; provided, however,
that nothing contained in this Section 31 will affect the ability of the
Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.

 

32.           Descriptive Headings, Etc.  Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and will not control or
affect the meaning or 

 

34

 

construction of any of the provisions
hereof.  Unless otherwise expressly
provided, references herein to Articles, Sections and Exhibits are to Articles,
Sections and Exhibits of or to this Agreement.

 

33.           Determinations and Actions by the Board.  For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, will be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act.  The Board of Directors of the Company will
have the exclusive power and authority to administer this Agreement and to
exercise or refrain from exercising any and all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including
without limitation the right and power (i) to interpret the provisions of
this Agreement (including without limitation Section 27, this Section 33
and other provisions hereof relating to its powers or authority hereunder), (ii) to
make all determinations deemed necessary or advisable for the administration of
this Agreement (including without limitation any determination contemplated by Section 1(a) or
any determination as to whether particular Rights shall have become void), and (iii) to
rescind any determination previously made by the Board of Directors of the
Company, with such prospective or retroactive effect as the Board deems to be
appropriate or advisable.  All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, any omission with respect to any of the
foregoing) which are done or made by the Board of Directors of the Company in
good faith will (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 of Directors of the Company to any liability to any Person,
including without limitation the Rights Agent and the holders of the Rights.

 

34.           Effective Time. 
Notwithstanding anything in this Agreement to the contrary, this
Agreement will not be effective until the Close of Business on April 27,
2010.

 

35.           Counterparts. 
This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all
such counterparts will together constitute but one and the same
instrument.  A signature to this
Agreement transmitted electronically shall have the same authority, effect and
enforceability as an original signature.

 

35

 

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

 

	
   

  	
   

  	
  GEORGIA
  GULF CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Joel I. Beerman 

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Joel
  I. Beerman 

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President, General Counsel

  and Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Dennis V. Moccia 

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Dennis
  V. Moccia 

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Manager,
  Contract Administrator

  

 

36

 

EXHIBIT A

 

FORM OF RIGHT CERTIFICATE

 

	
  Certificate No. R-

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rights

  

 

 

NOT EXERCISABLE AFTER [INSERT
FINAL EXPIRATION DATE] OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED.  THE RIGHTS ARE SUBJECT TO
REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.  UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR
WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.

 

Right Certificate

 

GEORGIA GULF
CORPORATION

 

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 April 26,
2010 (the “Rights Agreement”), between
Georgia Gulf Corporation, a Delaware corporation (the “Company”),
and Computershare Trust Company, N.A., a federally chartered trust company  (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 the Expiration Date (as
such term is defined in the Rights Agreement) at the principal office or
offices of the Rights Agent designated for such purpose, one one-hundredth of a
fully paid nonassessable share of Junior Participating Preferred Stock, par
value $0.01 per share (the “Preferred Shares”), of the Company,
at a purchase price of $100.00 per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to
Purchase and related Certificate duly executed. 
If this Right Certificate is exercised in part, the holder will be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.  The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of the date of the Rights
Agreement, based on the Preferred Shares as constituted at such date.

 

As provided in the Rights Agreement, the Purchase
Price and/or the number and/or kind of securities issuable upon the exercise of
the Rights evidenced by this Right Certificate are subject to adjustment upon
the occurrence of certain events.

 

A-1

 

This Right 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 of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the
Rights Agreement.  Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and can
be obtained from the Company without charge upon written request therefor.  Terms used herein with initial capital
letters and not defined herein are used herein with the meanings ascribed
thereto in the Rights Agreement.

 

Pursuant to the Rights Agreement, from and after the
first occurrence of a Flip-in Event, any Rights that are Beneficially Owned by (i) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has the purpose or effect of
avoiding certain provisions of the Rights Agreement, and subsequent transferees
of any of such Persons, will be void without any further action and any holder
of such Rights will thereafter have no rights whatsoever with respect to such
Rights under any provision of the Rights Agreement.  From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.

 

This Right Certificate, with or without other Right
Certificates, may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates entitling the holder to purchase a like
number of one one-hundredths of a Preferred Share (or other securities, as the
case may be) as the Right Certificate or Right Certificates surrendered
entitled such holder (or former holder in the case of a transfer) to purchase,
upon presentation and surrender hereof at the principal office of the Rights
Agent designated for such purpose, with the Form of Assignment (if
appropriate) and the related Certificate duly executed.

 

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 $0.001 per Right or may be exchanged in whole
or in part.  The Rights Agreement may be
supplemented and amended by the Company, as provided therein.

 

The Company is not required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or other securities issuable upon the
exercise of any Right or Rights evidenced hereby.  In lieu of issuing such fractional Preferred 

 

A-2

 

Shares or other securities,
the Company may make a cash payment, as provided in the Rights Agreement.

 

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

 

This Right Certificate will not be valid or
obligatory for any purpose until it has been countersigned by the Rights Agent.

 

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

 

 

	
  ATTEST:

  	
   

  	
  GEORGIA
  GULF CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
  Countersigned:
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  	
   

  	
   

  	
   

  

 

A-3

 

Form of Reverse Side of Right Certificate

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate)

 

FOR VALUE RECEIVED,
                              
hereby sells, assigns and transfers unto

	
   

  
	
  (Please print name and address of transferee)

  

 

 

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

 

Dated: 
                    ,

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

	
  Signature
  Guaranteed:

  	
   

  	
   

  

 

A-4

 

CERTIFICATE

 

The undersigned hereby certifies by checking the
appropriate boxes that:

 

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

 

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

 

Dated: 
                    ,

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

 

A-5

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to

exercise the Right Certificate)

 

To Georgia Gulf Corporation:

 

The undersigned hereby irrevocably elects to exercise
                    
Rights represented by this Right Certificate to purchase the one one-hundredths
of a Preferred Share or other securities issuable upon the exercise of such
Rights and requests that certificates for such securities be issued in the name
of and delivered to:

 

	
  Please insert social
  security 

  	
   

  
	
  or other identifying
  number:

  	
   

  

 

	
   

  
	
  (Please print name and address)

  
	
   

  

 

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

 

	
  Please insert social
  security 

  	
   

  
	
  or other identifying
  number:

  	
   

  

 

	
   

  
	
  (Please print name and address)

  
	
   

  

 

Dated: 
                    ,

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

	
  Signature
  Guaranteed:

  	
   

  	
   

  

 

A-6

 

CERTIFICATE

 

The undersigned hereby certifies by checking the
appropriate boxes that:

 

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

 

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

 

Dated: 
                    ,

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

NOTICE

 

Signatures on the foregoing Form of Assignment and Form of
Election to Purchase and in the related Certificates must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

 

Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved medallion signature program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended.

 

A-7

 

EXHIBIT B

 

Summary of Rights to Purchase Preferred Shares

 

On April 20, 2010, the
Board of Directors of Georgia Gulf Corporation declared a dividend of one
preferred share purchase right for each outstanding common share.  The dividend is payable on May 10, 2010  to our stockholders of record on that date.  The terms of the rights and the rights plan
are set forth in a Rights Agreement, dated as of April 26, 2010, by and
between Georgia Gulf Corporation and Computershare Trust Company, N.A., as
rights agent.

 

Our Board adopted the rights
plan to protect our stockholders from coercive takeover practices or takeover
bids that are inconsistent with their best interests.  In
general terms, the rights plan may impose a significant penalty upon any person
or group that is or becomes the beneficial owner of 20%  or more of our outstanding common shares
(or, in the case of a person or group that beneficially owns 20% or more of the
company’s outstanding common shares as of April 27, 2010, additional
common shares representing 1% or more of the outstanding shares) without the
prior approval of our Board.  The rights
plan may also impose a significant penalty upon certain groups of stockholders
that together beneficially own 20% or more (10% or more in cases where our Board
has determined that one or more of such stockholders have acted, are acting or
are reasonably likely to act in an “adverse manner,” as described below) of our
common shares and that have been determined by our Board to have acted or to be
acting in concert or in parallel in relation to acquiring, holding or disposing
of any securities of the Company, if, after receipt of notice of that Board
determination any member of the group becomes the beneficial owner of
additional common shares, or takes additional concerted or parallel action in
an “adverse manner.”  An “adverse manner”
is a manner that our Board determines is intended or is reasonably likely to
change or influence the control of the Company or to pressure the Company to
act in ways that the Board determines represents a threat to the Company’s
corporate policy and effectiveness.  A
person or group that acquires beneficial ownership of the Company’s shares
and/or engages in other actions sufficient to cause the rights to be triggered
is called an “acquiring person.”  Any
rights held by an acquiring person will be void and may not be exercised.

 

This summary of rights provides a general
description of the rights plan.  Because
it is only a summary, this description should be read together with the entire
rights plan, which we incorporate in this summary by reference.  We have filed the rights plan with the
Securities and Exchange Commission as an exhibit to our registration statement
on Form 8-A.  Upon written request,
we will provide a copy of the rights plan free of charge to any stockholder.

 

The Rights.  Our Board of Directors authorized the issuance
of one right per each outstanding common share on May 10, 2010.  If the rights become exercisable, each right
would allow its holder to purchase from us one one-hundredth of a share of our Junior Participating Preferred Stock
for a purchase price of $100.00.  Each
fractional preferred share would give the stockholder approximately the same
dividend, voting and liquidation rights as does one common share.  Prior to exercise, however, a right does not
give its holder any dividend, voting or liquidation rights.

 

B-1

 

Exercisability.  The rights will not be exercisable until the
earlier of:

 

·                  10 days after a  public
announcement by  Georgia Gulf Corporation that a
person or group has become an acquiring person; and

 

 

·                  10 business days (or a later date determined
by our Board) after a person or group begins a tender or exchange offer that,
if completed, would result in that person or group being the beneficial owner
of 20% or more of Georgia Gulf Corporation’s common shares.

 

We refer to the date that
the rights become exercisable as the “distribution date.”  Until the distribution date, our  common share certificates will also evidence the rights and
will contain a notation to that effect. 
Any transfer of common shares prior to the distribution date will
constitute a transfer of the associated rights. 
After the distribution date, the rights will separate from the common
shares and be evidenced by separate right certificates.

 

Flip-in Event.  After the distribution date, if a person or
group is or becomes an acquiring person, all holders of rights, except an
acquiring person, may exercise their rights upon payment of the purchase price
to purchase our common shares (or other securities or assets as determined by
the Board) with a market value of two times the purchase price.

 

Flip-over Event.  After the distribution date, if a flip-in
event has already occurred and Georgia Gulf Corporation is acquired in a merger
or similar transaction, all holders of rights except an acquiring person may
exercise their rights upon payment of the purchase price, to purchase shares of
the acquiring corporation with a market value of two times the purchase price
of the rights.

 

Rights may be exercised to purchase our preferred
shares only after the distribution date occurs and prior to the occurrence of a
flip-in event as described above.  A
distribution date resulting from the commencement of a tender offer or exchange
offer described in the second bullet point above could precede the occurrence
of a flip-in event, in which case the rights could be exercised to purchase our
preferred shares.  A distribution date
resulting from any occurrence described in the first bullet point above would
necessarily follow the occurrence of a flip-in event, in which case the rights
could be exercised to purchase common shares or other securities as described
above.

 

Expiration.  Unless earlier redeemed or exchanged, the
rights will expire (i) on the third anniversary of issuance, or (ii) on
the day following the certification of the voting results of the Company’s 2011
annual meeting of stockholders, if prior to that date a proposal to approve the
rights plan has not received the affirmative vote of the holders of a majority
of the common shares present in person or represented by proxy, entitled to
vote and actually voted on the proposal and which has actually been voted at a
duly called meeting of stockholders, or any adjournment or postponement
thereof, at which a quorum is present.

 

Redemption.  Our Board may redeem all (but not less than
all) of the rights for a redemption price of $0.001 per right at any time
before the later of the distribution
date and the date of the first public announcement or disclosure by
Georgia Gulf Corporation that a person or group has become an acquiring
person.  Once the rights are redeemed,
the right to exercise the rights will 

 

B-2

 

terminate, and the only right of the holders
of rights will be to receive the redemption price.  The Board may adjust the redemption
price if we declare a stock split or issue a stock dividend on our  common shares.

 

Exchange.  After the later of the distribution date and the  date
of the first public announcement by Georgia Gulf Corporation that a person or
group has become an acquiring person, but before any person beneficially owns
50% or more of our outstanding common shares, our Board may exchange each right
(other than rights that have become void) for one common share or an equivalent
security.

 

Anti-Dilution Provisions.  Our Board may adjust the purchase price of
the preferred shares, the number of preferred shares issuable and the number of
outstanding rights to prevent dilution that may occur as a result of certain
events, including among others, a stock dividend, a stock split or a
reclassification of the preferred shares or our common shares.  No adjustments to the purchase price of less
than 1% will be made.

 

Amendments.  Before the time rights cease to be
redeemable, our Board may amend or supplement the rights plan without the
consent of the holders of the rights, except that no amendment may decrease the
redemption price below $0.001 per right. 
At any time thereafter, our Board may amend or supplement the rights
plan only to cure an ambiguity, to alter time period provisions, to correct
inconsistent provisions or to make any additional changes to the rights plan,
but only to the extent that those changes do not impair or adversely affect any
rights holder and do not result in the rights again becoming redeemable.  The limitations on our Board’s ability to
amend the rights plan does not affect our Board’s power or ability to take any
other action that is consistent with its fiduciary duties, including without
limitation accelerating or extending the expiration date of the rights, making
any amendment to the rights plan that is permitted by the rights plan or
adopting a new rights plan with such terms as our Board determines in its sole
discretion to be appropriate.

 

*       *       *

 

B-3

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