WIND RIVER SYSTEMS INC
8-K, 1999-11-04
COMPUTER PROGRAMMING SERVICES
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<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                     RELATING TO ADOPTION OF A RIGHTS PLAN


                    PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

      Date of Report (Date of earliest event reported): October 21, 1999


                           WIND RIVER SYSTEMS, INC.
            (Exact name of registrant as specified in its charter)


                                   DELAWARE
                (State or other jurisdiction of incorporation)



            0-21342                                        94-2873391
     (Commission File No.)                     (IRS Employer Identification No.)



                              500 WIND RIVER WAY
                              ALAMEDA, CA 94501
             (Address of principal executive offices and zip code)



      Registrant's telephone number, including area code: (510) 748-4100


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

<PAGE>

ITEM 5.  OTHER EVENTS.

         On October 21, 1999, the Board of Directors of WIND RIVER SYSTEMS, INC.
(the "Company") approved the adoption of a Share Purchase Rights Plan
(the "Plan"). Terms of the Plan provide for a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of
common stock, par value $.001 per share (the "Common Shares"), of the
Company. The dividend is payable on November 15, 1999 (the "Record Date") to
the stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.001 per share (the
"Preferred Shares"), at a price of $160.00 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. Each one
one-hundredth of a share of Preferred Shares has designations and powers,
preferences and rights, and the qualifications, limitations and restrictions
which make its value approximately equal to the value of a Common Share. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement"), dated as of October, 1999 entered into between the
Company and American Stock Transfer and Trust Company, as rights agent (the
"Rights Agent").

         Initially, the Rights will be evidenced by the stock certificates
representing the Common Shares then outstanding, and no separate Right
Certificates, as defined, will be distributed. Until the earlier to occur of
(i) the date of a public announcement that a person, entity or group of
affiliated or associated persons have acquired beneficial ownership of 15% or
more of the outstanding Common Shares (an "Acquiring Person") or
(ii) 10 business days (or such later date as may be determined by action of
the Board of Directors prior to such time as any person or entity becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to commence, a tender offer or exchange offer the consummation of
which would result in any person or entity becoming an Acquiring Person (the
earlier of such dates being called the "Distribution Date"), the Rights will
be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with or
without a copy of the Summary of Rights, which is included in the Rights
Agreement as Exhibit C thereof (the "Summary of Rights").

         Until the Distribution Date, the Rights will be transferable with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date, upon transfer or new issuance of Common Shares, will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender or transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of the Summary of
Rights being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.

         The Rights are not exercisable until the Distribution Date. The
Rights will expire on October 22, 2001 (the "Final Expiration Date"), unless
the Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.


                                       1.

<PAGE>

         The Purchase Price payable, and the number of Preferred Shares or
other securities or other property, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences
of indebtedness or assets (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Preferred Shares) or
of subscription rights or warrants (other than those referred to above). The
exercise of Rights for Preferred Shares is at all times subject to the
availability of a sufficient number of authorized but unissued Preferred
Shares.

         The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidation or combinations of the Common Shares occurring,
in any case, prior to the Distribution Date.

         Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares would be entitled to a
minimum preferential liquidation payment of $100 per share, but would be
entitled to receive an aggregate payment equal to 100 times the payment made
per Common Share. Each Preferred Share will have 100 votes, voting together
with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount of consideration received
per Common Share. These rights are protected by customary anti-dilution
provisions. Because of the nature of the Preferred Shares' dividend and
liquidation rights, the value of one one-hundredth of a Preferred Share
should approximate the value of one Common Share. The Preferred Shares would
rank junior to any other series of the Company's preferred stock.

         In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person and its associates and affiliates (which will thereafter be void),
will for a 60-day period have the right to receive upon exercise that number
of Common Shares having a market value of two times the exercise price of the
Right (or, if such number of shares is not and cannot be authorized, the
Company may issue Preferred Shares, cash, debt, stock or a combination
thereof in exchange for the Rights). This right will terminate 60 days after
the date on which the Rights become nonredeemable (as described below),
unless there is an injunction or similar obstacle to exercise of the Rights,
in which event this right will terminate 60 days after the date on which the
Rights again become exercisable.

         Generally, under the Plan, an "Acquiring Person" shall not be deemed
to include (i) the Company, (ii) a subsidiary of the Company, (iii) any
employee benefit or compensation plan of the Company, or (iv) any entity
holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan. In addition, except under limited
circumstances, no


                                       2.

<PAGE>

person or entity shall become an Acquiring Person as the result of the
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such person or entity to 15% or more of the Common Shares then
outstanding. Further, except under certain circumstances, no person shall
become an Acquiring Person due to the acquisition of Common Shares directly
from the Company.

         In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold to an Acquiring Person, its associates or affiliates
or certain other persons in which such persons have an interest, proper
provision will be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then current exercise
price of the Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market value of two
times the exercise price of the Right.

         At any time after an Acquiring Person becomes an Acquiring Person
and prior to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share, per Right (or, at the election of the
Company, the Company may issue cash, debt, stock or a combination thereof in
exchange for the Rights), subject to adjustment.

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are integral multiples of the number of one
one-hundredths of a Preferred Share issuable upon the exercise of one Right,
which may, at the election of the Company, be evidenced by depositary
receipts), and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day prior to the
date of exercise.

         At any time prior to the earliest of (i) the day of the first public
announcement that a person has become an Acquiring Person or (ii) the Final
Expiration Date, the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $0.01 per Right (the "Redemption
Price"). Following the expiration of the above periods, the Rights become
nonredeemable. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.

         The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that
from and after such time as the rights are distributed no such amendment may
adversely affect the interest of the holders of the Rights excluding the
interests of an Acquiring Person.

         Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.


                                       3.

<PAGE>

         The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors since the Rights may be amended to permit such
acquisition or redeemed by the Company at $0.01 per Right prior to the
earliest of (i) the time that a person or group has acquired beneficial
ownership of 15% or more of the Common Shares or (ii) the final expiration
date of the rights.

ITEM 7.  EXHIBITS.

<TABLE>

     <S>  <C>
     4.1  Registrant's Certificate of Incorporation (including Certificate of
          Designation of Series A Junior Participating Preferred Stock.)

     99.1 Press Release, dated as of October 28, 1999 entitled "Wind River
          Systems, Inc. Adopts Stockholder Rights Plan."

     99.2 Rights Agreement dated as of October 22, 1999 among Wind River
          Systems, Inc. and American Stock Transfer and Trust Company.

     99.3 Form of Rights Certificate.

</TABLE>


                                       4.

<PAGE>

                                   SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                       WIND RIVER SYSTEMS, INC.


Dated: November 4, 1999                By: /s/ Richard W. Kraber
                                           -------------------------------------
                                               Richard W. Kraber
                                               Chief Financial Officer


                                       5.

<PAGE>

                               INDEX TO EXHIBITS

<TABLE>

     <S>  <C>
     4.1  Registrant's Certificate of Incorporation (including Certificate of
          Designation of Series A Junior Participating Preferred Stock.)

     99.1 Press Release, dated as of October 28, 1999 entitled "Wind River
          Systems, Inc. Adopts Stockholder Rights Plan."

     99.2 Rights Agreement dated as of October 22, 1999 among Wind River
          Systems, Inc. and American Stock Transfer and Trust Company.

     99.3 Form of Rights Certificate.

</TABLE>


                                       6.


<PAGE>

                                                                    EXHIBIT 4.1

                              AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                            WIND RIVER SYSTEMS, INC.

         Jerry L. Fiddler and David N. Wilner hereby certify that:

     1. They are the Chief Executive Officer and Secretary, respectively, of
Wind River Systems, Inc., a Delaware corporation.

     2. The date of filing of the corporation's original Certificate of
Incorporation was March 4, 1993.

     3. The Amended and Restated Certificate of Incorporation of said
corporation as provided in Exhibit A hereto was duly adopted in accordance
with the provisions of Section 242 and Section 245 of the General Corporation
Law of the State of Delaware by the Board of Directors of the corporation.

     4. Pursuant to Section 245 of the Delaware General Corporation Law,
approval of the stockholders of the corporation has been obtained.

     5. The Amended and Restated Certificate of Incorporation so adopted
reads in full as set forth in Exhibit A attached hereto and is hereby
incorporated by reference.

         IN WITNESS WHEREOF, the undersigned have signed this certificate
this 15th day of October 1993 and hereby affirm and acknowledge under penalty
of perjury that the filing of this Amended and Restated Certificate of
Incorporation is the act and deed of Wind River Systems, Inc.

                                        WIND RIVER SYSTEMS, INC.



                                        By  /s/ Jerry L. Fiddler
                                            --------------------------------
                                                Jerry L. Fiddler
                                                Chief Executive Officer

ATTEST:


/s/ David Wilner
- -------------------------------
David N. Wilner
Secretary


                                       1.

<PAGE>

                                    EXHIBIT A
                              AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                             WIND RIVER SYSTEMS, INC.

                                       I.

         The name of this corporation is Wind River Systems, Inc.

                                       II.

The address, including street, number, city and county of the registered
officer of the corporation in the State of Delaware is 32 Lockerman Square,
Suite L-100, City of Dover 19901, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address
is the Prentice-Hall Corporation System, Inc.

                                      III.

         The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the Delaware General
Corporation Law.

                                      IV.

     1. This corporation is authorized to issue Twenty-Two Million
(22,000,000) shares of its capital stock, which shall be divided into two
classes of stock designated "Common Stock" and "Preferred Stock." The total
number of shares of Common Stock which the corporation is authorized to issue
is Twenty Million (20,000,000) shares, each having a par value of one tenth
of one cent ($.001). The total number of shares of Preferred Stock which the
corporation is authorized to issue is Two Million (2,000,000), each having a
par value of one tenth of one percent ($.001).

     2. The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, by filing a certificate
pursuant to the Delaware General Corporation Law, to fix or alter from time
to time the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof,
including without limitation the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), redemption price or prices, and the liquidation preferences of
any wholly unissued series of Preferred Stock, and to establish from time to
time the number of shares constituting any such series and the designation
thereof, or any of them (a "Preferred Stock Designation"); and to increase or
decrease the number of shares of any series subsequent to the issuance of
shares of that series, but not below the number of shares of such series then
outstanding. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status that
they had prior to the adoption of the resolution originally fixing the number
of shares of such series.

         No share or shares of any series of Preferred Stock acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise
shall be reissued as part of such series, and the Board of Directors is
authorized, pursuant to Section 243 of the Delaware General

                                       2.

<PAGE>

Corporation law, to retire any such share or shares. The retirement of any
such share or shares shall not reduce the total authorized number of shares
of Preferred Stock.

                                       V.

         For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation, of its directors and of its
stockholders or any claim thereof, as the case may be, it is further provided
that:

     1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted by the Board of Directors.

         Each director shall serve until his successor is duly elected and
qualified or until his death, registration or removal. No decrease in the
number of directors constituting the Board of Directors shall shorten the
term of the incumbent director.

         Any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes shall be filled by
either (i) the affirmative vote of the holders of a majority of the voting
power of the then-outstanding shares of voting stock of the corporation
entitled to vote generally in the election of directors (the "Voting Stock")
voting together as a single class; or (ii) by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Newly created directorships resulting from
any increase in the number of directors shall, unless the Board of Directors
determines by resolution that any such newly created directorship shall be
filled by the stockholders, be filled only by the affirmative vote of the
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence
shall hold office until such director's successor shall have been elected and
qualified.

     2. The Bylaws may be altered or amended or new Bylaws adopted by the
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of
the voting power of all of the then-outstanding shares of the Voting Stock.
In furtherance and not in limitation of the power conferred by statute, the
Board of Directors is expressly authorized to adopt, amend, supplement or
repeal the Bylaws.

     3. The directors of the corporation need not be elected by written
ballot unless the Bylaws so provide.

     4. No action shall be taken by the stockholders of the corporation
except at an annual or special meeting of stockholders called in accordance
with the Bylaws and no action shall be taken by the stockholders by written
consent.

     5. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the corporation shall be given in the manner provided in
the Bylaws of the corporation.


                                       3.

<PAGE>

     6. Any director, or the entire Board of Directors, may be removed from
office at any time (i) with cause by the affirmative vote of the holders of
at least a majority of the voting power of all of the then-outstanding shares
of the Voting Stock, voting together as a single class; or (ii) without cause
by the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the then-outstanding shares
of the Voting Stock.

                                       VI.

         A director of the corporation shall, to the full extent not
prohibited by the General Corporation Law of the State of Delaware, as the
same exists or may hereafter be amended, not be liable to the corporation or
its stockholders for monetary damages for breach of his or her fiduciary duty
as a director.

                                      VII.

         Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of
any particular class or series of the Voting Stock required by law, this
Certificate of Incorporation or any Preferred Stock Designation, the
affirmative vote of the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the voting power of all of the then-outstanding shares of the
Voting Stock, voting together as a single class, shall be required to alter,
amend or repeal Article VI.

                                      VIII.

         The corporation is to have perpetual existence.

                                       IX.

         The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this right.




                                       4.

<PAGE>

                            CERTIFICATE OF AMENDMENT
                                       OF
                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                            WIND RIVER SYSTEMS, INC.


         Ronald A. Abelmann and Richard W. Kraber hereby certify that:

         FIRST: They are the duly elected and acting President and Secretary
of Wind River Systems, Inc., a Delaware.

         SECOND: The name of this Corporation is Wind River Systems, Inc.
(the "Corporation").

         THIRD: The date on which the Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware
is October 14, 1993.

         FOURTH: The amendment to the Corporation's Amended and Restated
Certificate of Incorporation set forth below was duly adopted by the Board of
Directors of the Corporation, and approved by the Stockholders in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.

     FIFTH: Article IV, Paragraph 1 of the Corporation's Amended and Restated
Certificate of Incorporation is amended to read in its entirety as follows:

                  "1. This corporation is authorized to issue two classes of
         stock to be designated, respectively, "Common Stock" and "Preferred
         Stock." The total number of shares which the corporation is authorized
         to issue is Seventy-Seven Million (77,000,000) shares. Seventy-five
         Million (75,000,000) shares shall be Common Stock, each having a par
         value of one-tenth of one cent ($.001). Two Million (2,000,000) shares
         shall be Preferred Stock, each having a par value of one-tenth of one
         cent ($.001)."

         IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Amendment of Amended and Restated Certificate of Incorporation this 23rd day
of July, 1996 and hereby affirm and acknowledge under penalty of perjury that
the filing of this Certificate of Amendment of Amended and Restated
Certificate of Incorporation of Wind River Systems, Inc. is the act and deed
of Wind River Systems, Inc.

                                        WIND RIVER SYSTEMS, INC.


                                        By:  /s/ Ronald A. Abelmann
                                             ----------------------------------
                                             Ronald A. Abelmann, President

Attest:

By:  /s/ Richard W. Kraber
     ----------------------------------
     Richard W. Kraber, Secretary


<PAGE>

                            CERTIFICATE OF AMENDMENT
                                       OF
                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                            WIND RIVER SYSTEMS, INC.


         Ronald A. Abelmann and Richard W. Kraber hereby certify that:

         FIRST: They are the duly elected and acting President and Secretary
of Wind River Systems, Inc., a Delaware corporation.

         SECOND:  The name of this Corporation is Wind River Systems, Inc.
(the "Corporation").

         THIRD: The date on which the Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware
(the "Secretary of State") is October 14, 1993. The date on which the
Certificate of Amendment of Amended and Restated Certificate of Incorporation
was filed with the Secretary of State is July 24, 1996.

         FOURTH: The amendment to the Corporation's Amended and Restated
Certificate of Incorporation set forth below was duly adopted by the Board of
Directors of the Corporation, and approved by the Stockholders in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.

         FIFTH:  Article IV,  Paragraph 1 of the  Corporation's  Amended and
Restated  Certificate of Incorporation is amended to read in its entirety as
follows:

                  "1. This corporation is authorized to issue two classes of
         stock to be designated, respectively, "Common Stock" and "Preferred
         Stock." The total number of shares which the corporation is authorized
         to issue is One Hundred and Twenty-Seven Million (127,000,000) shares.
         One Hundred Twenty-Five Million (125,000,000) shares shall be Common
         Stock, each having a par value of one-tenth of one cent ($.001). Two
         Million (2,000,000) shares shall be Preferred Stock, each having a par
         value of one-tenth of one cent ($.001)."

         IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Amendment of Amended and Restated Certificate of Incorporation this 26th day
of June, 1998 and hereby affirm and acknowledge under penalty of perjury that
the filing of this Certificate of Amendment of Amended and Restated
Certificate of Incorporation of Wind River Systems, Inc. is the act and deed
of Wind River Systems, Inc.

                                        WIND RIVER SYSTEMS, INC.



                                        By:  /s/ Ronald A. Abelmann
                                             ---------------------------------
                                                 Ronald A. Abelmann, President

Attest:

By:  /s/ Richard W. Kraber
     ------------------------------
     Richard W. Kraber, Secretary


                                       1.

<PAGE>

                          CERTIFICATE OF DESIGNATION

                                      OF

                 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                        (PURSUANT TO SECTION 151 OF THE
                       DELAWARE GENERAL CORPORATION LAW)

         WIND RIVER SYSTEMS, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on October 21, 1999:

                           RESOLVED, that pursuant to the authority granted to
                  and vested in the Board of Directors of the Company in
                  accordance with the provisions of its Amended and Restated
                  Certificate of Incorporation, the Board of Directors hereby
                  creates a series of Preferred Stock, par value $.001 per
                  share, of the Company and hereby states the designation and
                  number of shares, and fixes the relative designations and the
                  powers, preferences and rights, and the qualifications,
                  limitations and restrictions thereof (in addition to the
                  provisions set forth in the Certificate of Incorporation of
                  the Company, which are applicable to the Preferred Stock of
                  all classes and series), as follows:

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:

     SECTION 1.  DESIGNATION AND AMOUNT.  One Million Two Hundred Fifty
Thousand (1,250,000) shares of Preferred Stock, $.001 par value, are
designated "Series A Junior Participating Preferred Stock" with the
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions specified herein (the "Junior Preferred Stock").
Such number of shares may be increased or decreased by resolution of the
Board of Directors; PROVIDED, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Company convertible into Junior
Preferred Stock.

     SECTION 2.  DIVIDENDS AND DISTRIBUTIONS.

            (A)  Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior
to the Junior Preferred Stock with respect to dividends, the holders of
shares of Junior Preferred Stock, in preference to the holders of


                                      A-1

<PAGE>

Common Stock, par value $.001 per share (the "Common Stock"), of the Company,
and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of April, July,
October and January in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Junior Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $l.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Junior Preferred Stock. In the event the Company shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders of shares
of Junior Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.

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

     (C)  Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Junior Preferred


                                      A-2

<PAGE>

Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.

     SECTION 3.  VOTING RIGHTS.  The holders of shares of Junior Preferred
Stock shall have the following voting rights:

            (A)  Subject to the provision for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Company. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Junior Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

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

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

     SECTION 4.  CERTAIN RESTRICTIONS.

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

                 (i)  declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Junior Preferred Stock;

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


                                      A-3

<PAGE>

                 (iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or

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

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

     SECTION 5.  REACQUIRED SHARES.  Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth
herein, in the Amended and Restated Certificate of Incorporation, or in any
other Certificate of Designation creating a series of Preferred Stock or any
similar stock or as otherwise required by law.

     SECTION 6.  LIQUIDATION, DISSOLUTION OR WINDING UP.  Upon any
liquidation, dissolution or winding up of the Company, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Junior Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Junior Preferred Stock, except distributions made ratably on the
Junior Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Junior


                                      A-4

<PAGE>

Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

     SECTION 7.  CONSOLIDATION, MERGER, ETC.  In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Junior Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

     SECTION 8.  NO REDEMPTION.  The shares of Junior Preferred Stock shall
not be redeemable.

     SECTION 9.  RANK.  The Junior Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all
series of any other class of the Company's Preferred Stock.

     SECTION 10. AMENDMENT.  The Amended and Restated Certificate of
Incorporation of the Company shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of
Junior Preferred Stock, voting together as a single class.


                                      A-5

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this certificate
as of October 22, 1999.

                                       /s/ Thomas St. Dennis
                                       -------------------------------
                                       THOMAS ST. DENNIS
                                       Chief Executive Officer


                                       /s/ Richard W. Kraber
                                       -------------------------------
                                       RICHARD W. KRABER
                                       Secretary


                                      A-6


<PAGE>

                                                                    EXHIBIT 99.1

            WIND RIVER SYSTEMS, INC. ADOPTS STOCKHOLDER RIGHTS PLAN


ALAMEDA, CA  (OCTOBER 28, 1999) -- Wind River Systems, Inc. (Nasdaq: WIND)
announced that its board of directors approved the adoption of a stockholder
rights plan under which all stockholders of record as of November 15, 1999
will receive rights to purchase shares of a new series of preferred stock.
The adoption of the rights plan is intended as a means to guard against
abusive takeover tactics in the even an unsolicited attempt is made to
acquire Wind River and is not in response to a takeover proposal.

The rights will be distributed as a non-taxable dividend and will expire in
ten years from the record date. The rights will be exercisable only if a
person or group acquires, or announces a tender offer for 15% or more of Wind
River's outstanding common stock. If a person acquires 15% or more of Wind
River's common stock, all rightsholders except the buyer will be entitled to
acquire common stock at a discount. The effect will be to discourage
acquisitions of more than 15% of Wind River's common stock without
negotiations with the board.

The rights will trade with Wind River's common stock, unless and until they
are separated upon the occurrence of certain future events. Wind River's
board of directors may terminate the rights plan at any time or redeem the
rights prior to the time a person  acquires more than 15% of the common
stock. Additional details regarding the rights plan will be outlined in a
summary to be mailed to all stockholders following the record date.

ABOUT WIND RIVER SYSTEMS, INC.
Wind River Systems, Inc. is a worldwide leader in embedded software. Wind
River provides software development tools, real-time operating systems, and
advanced connectivity for us in products throughout the Internet,
telecommunications and data communications, digital imaging, networking,
medical, computer peripherals, automotive, and aerospace/defense markets.
Wind River is how smart things think. Founded in 1983, Wind River is
headquartered in Alameda, with operations in fifteen countries worldwide.

CONTACT:

RICHARD W. KRABER
Wind River Systems, Inc.
510-749-2181
[email protected]
- -------------------------




<PAGE>

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


                            WIND RIVER SYSTEMS, INC.

                                       AND

                    AMERICAN STOCK TRANSFER AND TRUST COMPANY
                                 AS RIGHTS AGENT

                                RIGHTS AGREEMENT

                          DATED AS OF OCTOBER 22, 1999

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

<PAGE>

<TABLE>
<CAPTION>
                               TABLE OF CONTENTS

                                                                                                         PAGE
<S>            <C>                                                                                       <C>
SECTION 1.     CERTAIN DEFINITIONS.........................................................................1

SECTION 2.     APPOINTMENT OF RIGHTS AGENT.................................................................4

SECTION 3.     ISSUE OF RIGHT CERTIFICATES.................................................................4

SECTION 4.     FORM OF RIGHT CERTIFICATES..................................................................6

SECTION 5.     COUNTERSIGNATURE AND REGISTRATION...........................................................6

SECTION 6.     TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
               DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES................................................7

SECTION 7.     EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS...............................8

SECTION 8.     CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..........................................9

SECTION 9.     AVAILABILITY OF PREFERRED SHARES............................................................9

SECTION 10.    PREFERRED SHARES RECORD DATE...............................................................10

SECTION 11.    ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.........................11

SECTION 12.    CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.................................17

SECTION 13.    CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.......................18

SECTION 14.    FRACTIONAL RIGHTS AND FRACTIONAL SHARES....................................................20

SECTION 15.    RIGHTS OF ACTION...........................................................................22

SECTION 16.    AGREEMENT OF RIGHT HOLDERS.................................................................22

SECTION 17.    RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER..........................................22

SECTION 18.    CONCERNING THE RIGHTS AGENT................................................................23

SECTION 19.    MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT..................................23

SECTION 20.    DUTIES OF RIGHTS AGENT.....................................................................24

SECTION 21.    CHANGE OF RIGHTS AGENT.....................................................................26

SECTION 22.    ISSUANCE OF NEW RIGHT CERTIFICATES.........................................................26

SECTION 23.    REDEMPTION.................................................................................27

SECTION 24.    EXCHANGE...................................................................................28

SECTION 25.    NOTICE OF CERTAIN EVENTS...................................................................30

SECTION 26.    NOTICES....................................................................................31

SECTION 27.    SUPPLEMENTS AND AMENDMENTS.................................................................31


                                      i.

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

                                                                                                         PAGE

SECTION 28.    DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC...................................32

SECTION 29.    SUCCESSORS.................................................................................32

SECTION 30.    BENEFITS OF THIS AGREEMENT.................................................................32

SECTION 31.    SEVERABILITY...............................................................................32

SECTION 32.    GOVERNING LAW..............................................................................32

SECTION 33.    COUNTERPARTS...............................................................................32

SECTION 34.    DESCRIPTIVE HEADINGS.......................................................................33



EXHIBIT A  -   Certificate of Designation

EXHIBIT B  -   Form of Rights Certificate

EXHIBIT C  -   Summary of Rights to Purchase Preferred Shares

</TABLE>


                                      ii.

<PAGE>

                                RIGHTS AGREEMENT

         THIS RIGHTS AGREEMENT ("Agreement"), dated as of October 22, 1999,
between WIND RIVER SYSTEMS, INC., a Delaware corporation (the "Company"), and
AMERICAN STOCK TRANSFER AND TRUST COMPANY ("Rights Agent").

         The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as such term is hereinafter defined) outstanding at the close of business on
November 15, 1999 (the "Record Date"), each Right representing the right to
purchase one one-hundredth of a Preferred Share (as such term is hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest to occur of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); PROVIDED, HOWEVER, that
Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof.

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

SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:

        (a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares then outstanding. Notwithstanding the foregoing, (A) the
term Acquiring Person shall not include (i) the Company, (ii) any Subsidiary
(as such term is hereinafter defined) of the Company, (iii) any employee
benefit or compensation plan of the Company or any Subsidiary of the Company,
or (iv) any entity holding Common Shares for or pursuant to the terms of any
such employee benefit or compensation plan, and (B) no Person shall become an
"Acquiring Person" either (x) as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Shares then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 15% or more of
the Common Shares then outstanding by reason of share purchases by the
Company and shall, following written notice from, or public disclosure by the
Company of such share purchases by the Company, become the Beneficial Owner
of any additional Common Shares without the prior consent of the Company and
shall then Beneficially Own more than 15% of the Common Shares then
outstanding, then such Person shall be deemed to be an "Acquiring Person," or
(y) as the result of the acquisition of Common Shares directly from the
Company, provided however that if a Person shall become the Beneficial Owner
of 15% or more of the Common Shares then outstanding by reason of share
purchases directly from the Company and shall, after that date, become
Beneficial Owner of any additional Common Shares without the prior written
consent of the Company and shall then Beneficially Own more


                                      1.

<PAGE>

than 15% of the Common Shares then outstanding, then such Person shall be
deemed to be an "Acquiring Person" or (z) if the Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divests, as promptly as
practicable (as determined in good faith by the Board of Directors), but in
any event within five Business Days, following receipt of written notice from
the Company of such event, of Beneficial Ownership of a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement; PROVIDED, HOWEVER, that if such Person shall again become the
Beneficial Owner of 15% or more of the Common Shares then outstanding, such
Person shall be deemed an "Acquiring Person," subject to the exceptions set
forth in this Section 1(a).

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

        (c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be
deemed to "beneficially own" any securities:

            (i)   which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, 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 Rights Agreement;

            (ii)  which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities, or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from those certain Voting Agreements and/or Irrevocable Proxies
executed as of October 21, 1999 by the directors and officers of the Company
in favor of Integrated Systems, Inc. in connection with the contemplated
merger transaction involving the Company and Integrated Systems, Inc. or
(2) both (X) 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 promulgated
under the Exchange Act and (Y) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or

            (iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement,


                                      2.

<PAGE>

arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section 1(c)(ii)(B)
hereof) or disposing of any securities of the Company.

         Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase, "then outstanding," when used with reference to
a Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.

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

         (e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Eastern Time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 p.m., Eastern Time, on the next succeeding
Business Day.

         (f) "COMMON SHARES" shall mean the shares of common stock, par value
$.001 per share, of the Company; PROVIDED, HOWEVER, that, "Common Shares,"
when used in this Agreement in connection with a specific reference to any
Person other than the Company, shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.

         (g) "DISTRIBUTION DATE" shall have the meaning set forth in Section 3
hereof.

         (h) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7 hereof.

         (i) "INTERESTED STOCKHOLDER" shall mean any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which
any such Acquiring Person, Affiliate or Associate has an interest, or any
other Person acting directly or indirectly on behalf of or in concert with
any such Acquiring Person, Affiliate or Associate.

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

         (k) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of the Company
having the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions set forth in the Form of
Certificate of Designation attached to this Agreement as Exhibit A.

         (l) "PURCHASE PRICE" shall have the meaning set forth in Section 7(b)
hereof.

         (m) "REDEMPTION DATE" shall have the meaning set forth in Section 7
hereof.


                                      3.

<PAGE>

(n) "SHARES ACQUISITION DATE" shall mean the first date of public announcement
by the Company or an Acquiring Person that an Acquiring Person has become such
provided, however that, if such Person is determined not to have become an
Acquiring Person pursuant to clause (z) of Subsection 1(a)(B) hereof, then no
Shares Acquisition Date shall be deemed to have occurred.

(o) "SUBSIDIARY" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.

(p) "TRANSACTION" shall mean any merger, consolidation or sale of assets
described in Section 13(a) hereof or any acquisition of Common Shares which
would result in a Person becoming an Acquiring Person or a Principal Party (as
such term is hereinafter defined).

(q) "TRANSACTION PERSON" with respect to a Transaction shall mean (i) any Person
who (x) is or will become an Acquiring Person or a Principal Party (as such term
is hereinafter defined) if the Transaction were to be consummated and (y)
directly or indirectly proposed or nominated a director of the Company which
director is in office at the time of consideration of the Transaction, or (ii)
an Affiliate or Associate of such a Person.

SECTION 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 hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.

SECTION 3.  ISSUE OF RIGHT CERTIFICATES.

    (a)     Until the earlier of (i) the Shares Acquisition Date or (ii) the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement (determined in accordance with
Rule 14d-2 under the Exchange Act) by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer (which intention to
commence remains in effect for five Business Days after such announcement),
the consummation of which would result in any Person becoming an Acquiring
Person (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights, the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the Rights (and the right to
receive Right Certificates therefor) will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid

                                      4.

<PAGE>

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, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held, subject to the adjustment provisions of Section 11 of
this Rights Agreement. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

    (b)    On the Record Date, or as soon as practicable thereafter, the
Company will send (directly or through the Rights Agent or its transfer
agent) a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof. Until the Distribution Date (or the earlier of the
Redemption Date and the Final Expiration Date), the surrender for transfer of
any certificate for Common Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.

    (c)    Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:

           This certificate also evidences and entitles the holder hereof to
    certain rights as set forth in a Rights Agreement between Wind River
    Systems, Inc. (the "Company") and American Stock Transfer and Trust
    Company as Rights Agent (the "Rights Agent"), dated as of October __,
    1999, as amended from time to time (the "Rights Agreement"), the terms
    of which are hereby incorporated herein by reference and a copy of
    which is on file at the principal executive offices of the Company.
    Under certain circumstances, as set forth in the Rights Agreement, such
    Rights will be evidenced by separate certificates and will no longer be
    evidenced by this certificate. The Company will mail to the holder of
    this certificate a copy of the Rights Agreement without charge after
    receipt of a written request therefor. As described in the Rights
    Agreement, Rights issued to any Person who becomes an Acquiring Person
    or an Affiliate or Associate thereof (as defined in the Rights
    Agreement) and certain related persons, whether currently held by or on
    behalf of such Person or by any subsequent holder, shall become null
    and void.

    With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares

                                      5.
<PAGE>

shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding. Notwithstanding this Section 3(c), the omission of a
legend shall not affect the enforceability of any part of this Rights
Agreement or the rights of any holder of the Rights.

SECTION 4.  FORM OF RIGHT CERTIFICATES.

    (a)     The Right Certificates (and the form of election to purchase
Preferred Shares, the form of assignment and the form of certification to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or quotation system on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of
Sections 7, 11 and 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of
such one one-hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.

    (b)     Any Right Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights which are null and void pursuant to Section
11(a)(ii) hereof and any Right Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:

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

    The provisions of Section 11(a)(ii) hereof shall be operative whether or
not the foregoing legend is contained on any such Right Certificate.

SECTION 5.  COUNTERSIGNATURE AND REGISTRATION. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Vice Chairman of the Board, its Chief
Financial Officer, or any of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall
cease to be such 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

                                      6.
<PAGE>

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, shall be 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.

    Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall
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.

SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 11(a)(ii), Section 14 and Section 24
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right Certificates 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 as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 11(a)(ii), Section 14 and Section 24 hereof,
countersign and deliver to the person entitled thereto 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.

    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, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will issue, execute and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

    Notwithstanding any other provisions hereof, the Company and the Rights
Agent may amend this Rights Agreement to provide for uncertificated Rights in
addition to or in place of Rights evidenced by Rights Certificates.

                                      7.
<PAGE>

SECTION 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 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 of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-hundredth of a Preferred Share (or such other number of shares
or other securities) as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on October __, 2009 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.

    (b)    The purchase price (the "Purchase Price") for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right shall
initially be $160.00 and shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.

    (c)    Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check, bank draft or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent for the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights hereunder into a depository,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts,
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 and (iv) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue securities
of the Company other than Preferred Shares (including Common Shares) of the
Company pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.

    In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such
Right Certificate to the registered holder thereof after imprinting, stamping
or otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii)
hereof, and, if fewer than all the Rights represented by such Right
Certificate were so exercised, the Rights

                                      8.
<PAGE>

Agent shall indicate on the Right Certificate the number of Rights
represented thereby which continue to include the rights provided by Section
11(a)(ii) hereof.

    (d)    In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

    (e)    The Company covenants and agrees that 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, the number of Preferred Shares that
will be sufficient to permit the exercise in full of all outstanding Rights
in accordance with this Section 7.

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

SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if delivered or surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company approximately one and one-half
years after the cancellation date, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

SECTION 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants and agrees
that so long as the Preferred Shares (and, after the time a person becomes an
Acquiring Person, Common Shares or any other securities) issuable upon the
exercise of the Rights may be listed on any national securities exchange or
quotation system, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange or quotation system upon official notice
of issuance upon such exercise.

    The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares (or Common Shares and other
securities, as the case may be) delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such

                                      9.
<PAGE>

Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares or
other securities.

    The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
HOWEVER, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person other than, or
the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for Preferred Shares upon
the exercise of any Rights until any such tax shall have been paid (any such
tax 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.

    As soon as practicable after the Distribution Date, the Company shall use
its best efforts to:

        (i)    prepare and file a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form,
will use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use its best
efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date; and

        (ii)   use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate.

SECTION 10.    PREFERRED SHARES RECORD DATE.  Each person in whose name any
certificate for Preferred Shares or other securities is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares or other securities represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered with the forms of
election and certification duly executed and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Preferred Shares
or other securities transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares or other securities transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.

                                     10.

<PAGE>

SECTION 11.  ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS.  The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

     (a)

         (i)   In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), 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 the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Shares transfer books of
the Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination
or reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to any adjustment required pursuant to Section 11(a)(ii)
hereof.

         (ii)  Subject to Section 24 hereof and the provisions of the next
paragraph of this Section 11(a)(ii), in the event any Person shall become an
Acquiring Person, each holder of a Right shall, for a period of 60 days after
the later of such time any Person becomes an Acquiring Person or the
effective date of an appropriate registration statement under the Act
pursuant to Section 9 hereof (provided, however that, if at any time prior to
the expiration or termination of the Rights there shall be a temporary
restraining order, a preliminary injunction, an injunction, or temporary
suspension by the Board of Directors, or similar obstacle to exercise of the
Rights (the "Injunction") which prevents exercise of the Rights, a new 60-day
period shall commence on the date the Injunction is removed), have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares as
shall equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on the date such Person became an Acquiring Person;
PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii). In the event
that any Person shall


                                       11.

<PAGE>

become an Acquiring Person and the Rights shall then be outstanding, the
Company shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.

     Notwithstanding anything in this Agreement to the contrary, from and
after the time any Person becomes an Acquiring Person, any Rights
beneficially owned by (i) such Acquiring Person or an Associate or Affiliate
of such Acquiring Person, (ii) a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became such, or (iii) a transferee of such Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person's becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 11(a)(ii), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 11(a)(ii) and Section 4(b) hereof
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be canceled.

         (iii)  In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a majority of the Board of
Directors then in office determines that such action is necessary or
appropriate and not contrary to the interests of holders of Rights, elect to
(and, in the event that the Board of Directors has not exercised the exchange
right contained in Section 24(c) hereof and there are not sufficient treasury
shares and authorized but unissued Common Shares to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall) take all such action as may be necessary to authorize, issue
or pay, upon the exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, Common Shares, other securities
or any combination thereof having an aggregate value equal to the value of
the Common Shares which otherwise would have been issuable pursuant to
Section 11(a)(ii) hereof, which aggregate value shall be determined by a
nationally recognized investment banking firm selected by a majority of the
Board of Directors then in office. For purposes of the preceding sentence,
the value of the Common Shares shall be determined pursuant to Section 11(d)
hereof. Any such election by the Board of Directors must be made within 60 days
following the date on which the event described in Section 11(a)(ii) hereof
shall have occurred. Following the occurrence of the event described in
Section 11(a)(ii) hereof, a majority of the Board of Directors then in office
may suspend the exercisability of the Rights for a period of up to 60 days
following the date on which the event described in Section 11(a)(ii) hereof
shall have occurred to the extent that such directors have not determined
whether


                                       12.

<PAGE>

to exercise their rights of election under this Section 11(a)(iii). In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.

     (b)  In case the Company shall fix 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 shares having the same
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions as the Preferred Shares ("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 then current
per share market price of the Preferred Shares (as such term is hereinafter
defined) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of 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 market price and
the denominator of which shall be 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 Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.

     (c) In case the Company shall fix a record date for the making of a
distribution to all holders of the 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 or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of
the Preferred Shares (as such term is hereinafter defined) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator of which
shall be such current per share


                                       13.

<PAGE>

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 of the Company to
be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall 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 any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the current per share market price
of the Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible into
such shares, or (B) any subdivision, combination or reclassification of such
Security or securities convertible into such shares, or (C) any subdivision,
combination or reclassification of such Security 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 shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or as reported on the Nasdaq National Market or, if the
Security is not listed or admitted to trading on any national securities
exchange or reported on the Nasdaq National Market, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("Nasdaq") or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company or, if on any such date no
professional market maker is making a market in the Security, the price as
determined in good faith by the Board of Directors. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.

         (ii)  For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in accordance
with the method set forth in Section 11(d)(i) hereof. If the Preferred Shares
are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
hereof


                                       14.

<PAGE>

(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof) multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent.

     (e)  No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-hundredth of a Preferred Share or one ten-thousandth of any other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.

     (f)  If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Sections 11(a) through 11(c)
hereof, inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Shares shall apply on like terms to any such
other shares.

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

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

     (i)  The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one 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


                                       15.

<PAGE>

shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 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 shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the 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 shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.

     (j)  Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates 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 issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.

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

     (m)  The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 27 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable that the effect
of such action is to, materially diminish or eliminate the benefits intended
to be afforded by the Rights. Any such action taken by the Company during any
period after any Person becomes an Acquiring Person but prior to the
Distribution Date shall be null and


                                       16.

<PAGE>

void unless such action could be taken under this Section 11(m) from and
after the Distribution Date.

     (n)  Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Preferred Shares,
issuance wholly for cash of any Preferred Shares at less than the current
market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, dividends on Preferred Shares payable in Preferred Shares or issuance
of rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.

     (o)  In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case
(A) the number of one one-hundredths of a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that number
of Rights which each Common Share outstanding immediately prior to such event
had issued with respect to it. The adjustments provided for in this
Section 11(o) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.

     (p)  The exercise of Rights under Section 11(a)(ii) hereof shall only
result in the loss of rights under Section 11(a)(ii) hereof to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including the rights represented by Section 13 hereof.

SECTION 12.  CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained
and shall not be deemed to have knowledge of any adjustment unless and until
it shall have received such certificate.


                                       17.

<PAGE>

SECTION 13.  CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.

     (a)  In the event that, following the Shares Acquisition Date or, if a
Transaction is proposed, the Distribution Date, directly or indirectly (x) the
Company shall consolidate with, or merge with and into, any Interested
Stockholder, or if in such merger or consolidation all holders of Common
Stock are not treated alike, any other Person, (y) any Interested Person, or
if in such merger or consolidation all holders of Common Stock are not
treated alike, any other Person shall consolidate with the Company, or merge
with and into the Company, and the Company shall be the continuing or
surviving corporation of such merger (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation which would
result in all of the voting power represented by the securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into securities of the
surviving entity) all of the voting power represented by the securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having changed
as a result of such merger or consolidation), or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its subsidiaries shall
sell, mortgage or otherwise transfer), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to any Interested Stockholder
or Stockholders, or if in such transaction all holders of Common Stock are
not treated alike, any other Person, (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
individually and the aggregate does not violate Section 13(d) hereof) then,
and in each such case, proper provision shall be made so that (i) each holder
of a Right, subject to Section 11(a)(ii) hereof, shall have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of freely
tradeable Common Shares of the Principal Party (as such term is hereinafter
defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result
obtained by (A) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to
Section 11(a)(ii) hereof) and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply to such Principal Party; and
(iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.


                                       18.

<PAGE>

     (b)   "Principal Party" shall mean:

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

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

PROVIDED, HOWEVER, that in any case, (1) if the Common Shares of such Person
are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect subsidiary or Affiliate of another Person the
Common Shares of which are and have been so registered, "Principal Party"
shall refer to such other Person; (2) if such Person is a subsidiary,
directly or indirectly, or Affiliate of more than one Person, the Common
Shares of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value; and (3) if such Person is
owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"subsidiary" of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 13 in
the same ratio as their direct or indirect interests in such Person bear to
the total of such interests.

     (c)   The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares that have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and each Principal Party and each
other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have (i) executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and (ii) prepared, filed
and had declared and remain effective a registration statement under the Act
on the appropriate form with respect to the Rights and the securities
exercisable upon exercise of the Rights and further providing that, as soon
as practicable after the date of any consolidation, merger, sale or transfer
of assets mentioned in paragraph (a) of this Section 13, the Principal Party
at its own expense will:

           (i)    cause the registration statement under the Act with respect
to the Rights and the securities purchasable upon exercise of the Rights on
an appropriate form to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date;

                                      19.
<PAGE>

           (ii)   use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate;

           (iii)  list the Rights and the securities purchasable upon
exercise of the Rights on each national securities exchange on which the
Common Shares were listed prior to the consummation of such consolidation,
merger, sale or transfer of assets or on the Nasdaq National Market if the
Common Shares were listed on the Nasdaq National Market or, if the Common
Shares were not listed on a national securities exchange or the Nasdaq
National Market prior to the consummation of such consolidation, merger, sale
or transfer of assets, on a national securities exchange or the Nasdaq
National Market; and

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

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

     (d)   After the Distribution Date, the Company covenants and agrees that
it shall not (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer to, in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
subsidiaries taken as a whole, any other Person (other than a Subsidiary of
the Company in a transaction which does not violate Section 11(m) hereof), if
(x) at the time of or after such consolidation, merger or sale there are any
charter or bylaw provisions or any rights, warrants or other instruments or
securities outstanding, agreements in effect or any other action taken which
would diminish or otherwise eliminate the benefits intended to be afforded by
the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 13(d).

SECTION 14.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

     (a)   The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to

                                      20.
<PAGE>

trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or as reported on the Nasdaq
National Market or, if the Rights are not listed or admitted to trading on
any national securities exchange or reported on the Nasdaq National Market,
the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by Nasdaq or
such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.

     (b)   The Company shall 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 (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; PROVIDED, HOWEVER, that holders of such
depositary receipts shall have all of the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions
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 shall pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current market value of a
Preferred Share shall be the current per share market price of the Preferred
Shares (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise
(or, if not publicly traded, in accordance with Section 11(d)(ii) hereof).

     (c)   Following the occurrence of one of the transactions or events
specified in Section 11 hereof giving rise to the right to receive Common
Shares, capital stock equivalents (other than Preferred Shares) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of Common Shares or units of such Common Shares, capital
stock equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares, capital
stock equivalents or other securities. In lieu of fractional Common Shares,
capital stock equivalents or other securities, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share or unit of such Common Shares,
capital stock equivalents or other securities. For purposes of this Section
14(c), the current market value shall be the current per share market price
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise and, if such capital stock
equivalent is not traded, each such capital stock equivalent shall have the
value of one one-hundredth of a Preferred Share.

                                      21.
<PAGE>

     (d)   The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).

SECTION 15.       RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Sections 18 and 20 hereof, 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 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, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement. Holders of Rights shall
be entitled to recover the reasonable costs and expenses, including attorneys
fees, incurred by them in any action to enforce the provisions of this
Agreement.

SECTION 16.       AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

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

     (b)   after the Distribution Date, the Right Certificates are
transferable (subject to the provisions of this Rights Agreement) only on the
registry books of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer; and

     (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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.

SECTION 17.       RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any 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

                                      22.
<PAGE>

election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.

SECTION 18.       CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
in the premises. The indemnity provided herein shall survive the expiration
of the Rights and the termination of this Agreement.

     The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Preferred Shares or Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof. In no case will the Rights
Agent be liable for special, indirect, incidental or consequential or
consequential loss or damage at any kind whatsoever (including but not
limited to lost profits), even if the Rights Agent has been advised of such
loss or damage.

SECTION 19.       MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the
shareholder services or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement any of the 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 in case 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 shall have the full
force provided in the Right Certificates and in this Agreement.

                                      23.
<PAGE>

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

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

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

     (b)   Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.

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

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

     (e)   The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or
24 hereof, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate pursuant to
Section 12 hereof describing such change or adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or

                                      24.
<PAGE>

reservation of any Preferred Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable.

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

     (g)   The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer, 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 shall not be liable for
any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the
date specified therein (which date shall not be less than three Business Days
after the date indicated in such application unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions
in response to such application specifying the action to be taken or omitted.

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

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

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

                                      25.
<PAGE>

     (k)   If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has not
been executed, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company.

SECTION 21.       CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent for the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent for the Common
Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, 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, shall be either (a) a
corporation business trust or limited liability company organized and doing
business under the laws of the United States or of any other state of the
United States which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million or (b) a
direct or indirect wholly owned subsidiary of such an entity or its
wholly-owning parent. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent for the Common Shares or Preferred 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,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.

SECTION 22.       ISSUANCE OF NEW 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 and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the earlier of the Redemption Date and the
Final Expiration Date, the Company (a) shall with respect to Common

                                      26.
<PAGE>

Shares so issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement in existence prior to the Distribution Date,
or upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company and in existence prior to the Distribution
Date, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) the Company shall not be obligated to issue any
such Right Certificates if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.

SECTION 23.       REDEMPTION.

     (a)   The Rights may be redeemed by action of the Board of Directors
pursuant to Section 23(b) hereof and shall not be redeemed in any other
manner.

     (b)

           (i)    The Board of Directors of the Company may, at its option,
at any time prior to the earlier of such time as any Person becoming an
Acquiring Person or the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), and the Company may, at
its option, pay the Redemption Price in Common Shares (based on the "current
per-share market price," as such term is defined in Section 11(d) hereof, of
the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time, on
such basis and subject to such conditions as the Board of Directors in its
sole discretion may establish. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) hereof prior to the expiration or termination of the
Company's right of redemption under this Section 23(b)(i).

           (ii)   In addition, the Board of Directors of the Company may, at
its option, at any time after the time a Person becomes an Acquiring Person
and the expiration of any period during which the holder of Rights may
exercise the rights under Section 11(a)(ii) hereof but prior to any event
described in clause (x), (y) or (z) of the first sentence of Section 13
hereof, redeem all but not less than all of the then outstanding Rights at
the Redemption Price (x) in connection with any merger, consolidation or sale
or other transfer (in one transaction or in a series of related transactions)
of assets or earning power aggregating 50% or more of the assets or earning
power of the Company and its subsidiaries (taken as a whole) in which all
holders of Common Shares are treated alike and not involving (other than as a
holder of Common Shares being treated like all other such holders) an
Interested Stockholder or a Transaction Person or (y)(A) if and for so long
as the Acquiring Person is not thereafter the Beneficial Owner of 15% or more
of the then outstanding Common Shares, and (B) at the time of redemption no
other Persons are Acquiring Persons.

                                      27.
<PAGE>

     (c)   Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to Section 23(b)
hereof, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; PROVIDED, HOWEVER, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to Section 23(b)
hereof, the Company shall mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares, PROVIDED,
HOWEVER, that failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the Distribution Date.

     (d)   The Company may, at its option, discharge all of its obligations
with respect to any redemption of the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing payment of
the Redemption Price to the registered holders of the Rights at their last
addresses as they appear on the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares, and upon such action, all outstanding Right Certificates shall
be null and void without any further action by the Company.

SECTION 24.       EXCHANGE.

     (a)   The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.

     (b)   Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) hereof
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company

                                      28.
<PAGE>

shall promptly give public notice of any such exchange; PROVIDED, HOWEVER,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent; PROVIDED, HOWEVER,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.

     (c)   In lieu of issuing Common Shares in accordance with Section 24(a)
hereof, the Company may, if a majority of the Board of Directors then in
office determines that such action is necessary or appropriate and not
contrary to the interests of the holders of Rights, elect to (and, in the
event that there are not sufficient treasury shares and authorized but
unissued Common Shares to permit any exchange of the Rights in accordance
with Section 24(a) hereof, the Company shall) take all such action as may be
necessary to authorize, issue or pay, upon the exchange of the Rights, cash
(including by way of a reduction of the Purchase Price), property, Common
Shares, other securities or any combination thereof having an aggregate value
equal to the value of the Common Shares which otherwise would have been
issuable pursuant to Section 24(a) hereof, which aggregate value shall be
determined by a nationally recognized investment banking firm selected by a
majority of the Board of Directors then in office. For purposes of the
preceding sentence, the value of the Common Shares shall be determined
pursuant to Section 11(d) hereof. Any election pursuant to this Section 24(c)
by the Board of Directors must be made within 60 days following the date on
which the event described in Section 11(a)(ii) hereof shall have occurred.
Following the occurrence on the event described in Section 11(a)(ii) hereof,
a majority of the Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to 60 days following the date
on which the event described in Section 11(a)(ii) hereof shall have occurred
to the extent that such directors have not determined whether to exercise
their rights of election under this Section 24(c). In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.

     (d)   The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share. For
the purposes of this Section 24(d), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately after the date of the first public announcement by the
Company that an exchange is to be effected pursuant to this Section 24.

     (e)   The Company shall 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 exchange of the Rights or to
distribute certificates which evidence fractional Preferred Shares

                                      29.
<PAGE>

(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; PROVIDED, HOWEVER, that holders of such
depositary receipts shall have all of the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions
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 shall pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 24(e), the current market value of a
Preferred Share shall be one hundred (100) times the closing price of a
Common Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately after the date of the first
public announcement by the Company that an exchange is to be effected
pursuant to this Section 24.

SECTION 25.       NOTICE OF CERTAIN EVENTS.

     (a)   In case the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights 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 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), to any
other Person, (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 consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with Section 26 hereof,
a notice of such proposed action, which shall specify the record date for the
purpose of such stock dividend, or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or the
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 10 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 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 the Preferred Shares, whichever shall be the earlier.

     (b)   In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe the event and
the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.

                                      30.
<PAGE>

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

                           American Stock Transfer and Trust Company
                           40 Wall Street, 46th Floor
                           New York, NY 10005
                           Attn: Joe Alicia

     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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:

                           Wind River Systems, Inc.
                           500 Wind River Way
                           Alameda, CA 94501
                           Attn:  Chief Financial Officer

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

SECTION 27.       SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders
of the Rights. From and after the Distribution Date, the Company and the
Rights Agent shall, if the Company so directs, from time to time supplement
or amend any provision of this Agreement without the approval of any holders
of Right Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) change any other
provisions with respect to the Rights which the Company may deem necessary or
desirable; PROVIDED, HOWEVER, that no such supplement or amendment shall be
made which would adversely affect the interests of the holders of Rights
(other than the interests of an Acquiring Person or its Affiliates or
Associates). Any supplement or amendment adopted during any period after any
Person has become an Acquiring Person but prior to the Distribution Date
shall become null and void unless such supplement or amendment could have
been adopted by the Company from and after the Distribution Date. Any such
supplement or amendment shall be evidenced by a writing signed by the Company
and the Rights Agent. Upon delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interest under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.

                                      31.
<PAGE>

SECTION 28.       DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or
any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration of this Agreement,
including without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to
the foregoing) which are done or made by the Board in good faith, shall (x)
be final, conclusive and binding on the Rights Agent and the holders of the
Rights, and (y) not subject the Board to any liability to the holders of the
Rights.

SECTION 29.       SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

SECTION 30.       BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation 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; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).

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

SECTION 32.       GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

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

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

                                      32.
<PAGE>

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

ATTEST:                                  WIND RIVER SYSTEMS, INC.


By: /s/ Richard W. Kraber                By: /s/ Thomas St. Dennis
    ---------------------------------        ---------------------------------
    Richard W. Kraber                        Thomas St. Dennis
    Chief Financial Officer                  President and Chief Executive
     and Secretary                            Officer



ATTEST:                                  AMERICAN STOCK TRANSFER AND TRUST
                                         COMPANY


By: /s/ Joseph Alicia                    By: /s/ Joe Wolf
    ---------------------------------        ---------------------------------

Title: Administrator                     Title: Vice President
       ------------------------------           ------------------------------



                                      33.
<PAGE>

                                   EXHIBIT A

                          CERTIFICATE OF DESIGNATION
                      (SEE EXHIBIT 4.1 TO THIS FORM 8-K)











                                      2.
<PAGE>

                                   EXHIBIT B

                          FORM OF RIGHTS CERTIFICATE
                      (SEE EXHIBIT 99.3 TO THIS FORM 8-K)















                                      3.
<PAGE>

                                    EXHIBIT C

                 SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES


                                      4.

<PAGE>

                            WIND RIVER SYSTEMS, INC.

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

                           (EXHIBIT C TO RIGHTS PLAN)

On October 21, 1999, the Board of Directors of WIND RIVER SYSTEMS, INC. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.001 per
share (the "Common Shares"), of the Company. The dividend is effective as of
November 15, 1999 (the "Record Date") with respect to the stockholders of
record on that date. The Rights will also attach to new Common Shares issued
after the Record Date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.001 per share (the "Preferred
Shares"), of the Company at a price of $160.00 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. Each Preferred
Share is designed to be the economic equivalent of 100 Common Shares. The
description and terms of the Rights are set forth in a Rights Agreement dated
as of October 22, 1999 (the "Rights Agreement"), between the Company and
American Stock Transfer and Trust Company (the "Rights Agent").

DETACHMENT AND TRANSFER OF RIGHTS

Initially, the Rights will be evidenced by the stock certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. Until the earlier to occur of (i) a public
announcement that a person or group of affiliated or associated persons, has
become an "Acquiring Person" (as such term is defined in the Rights
Agreement) or (ii) 10 business days (or such later date as the Board may
determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer which would result in the beneficial
ownership by an Acquiring Person of 15% or more of the outstanding Common
Shares (the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate. In general, an "Acquiring Person" is a person, the affiliates or
associates of such person, or a group, which has acquired beneficial
ownership of 15% or more of the outstanding Common Shares.

The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferable with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights) the
surrender or transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right


                                      5.

<PAGE>

Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.

EXERCISABILITY OF RIGHTS

The Rights are not exercisable until the Distribution Date. The Rights will
expire on October 22, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to
receive dividends.

The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable or payable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution. The number of
outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares, or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date. With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional Preferred Shares will be
issued (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.

TERMS OF PREFERRED SHARES

Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount received per Common Share.
These rights are protected by customary anti-dilution provisions. Because of
the nature of the Preferred Shares' dividend, liquidation and voting rights,
the value of the one one-hundredth interest in a Preferred Share purchasable
upon exercise of each Right should approximate the value of one Common Share.
The Preferred Shares would rank junior to any other series of the Company's
preferred stock.

TRIGGER OF FLIP-IN AND FLIP-OVER RIGHTS

In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person or any affiliate or associate thereof (which will


                                      6.

<PAGE>

thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the exercise
price of the Right. This right will commence on the date of public
announcement that a person has become an Acquiring Person (or the effective
date of a registration statement relating to distribution of the rights, if
later) and terminate 60 days later (subject to adjustment in the event
exercise of the rights is enjoined).

In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person, its affiliates or associates or
certain other persons in which such persons have an interest, proper
provision will be made so that each such holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.

REDEMPTION AND EXCHANGE OF RIGHTS

At any time prior to the earliest of (i) the close of business on the day of
the first public announcement that a person has become an Acquiring Person,
or (ii) the Final Expiration Date, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"). In general, the redemption of the Rights may be
made effective at such time on such basis with such conditions as the Board
of Directors in its sole discretion may establish Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.

At any time after any Person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become void), in
whole or in part, at an exchange ratio of one Common Share, or, under
circumstances set forth in the Rights Agreement, cash, property or other
securities of the Company, including fractions of a Preferred Share (or of a
share of a class or series of the Company's preferred stock having equivalent
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions), per Right (with value equal to such Common
Shares).

AMENDMENT OF RIGHTS

The terms of the Rights generally may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that
from and after such time as the Rights are distributed no such amendment may
adversely affect the interests of the holders of the Rights (excluding the
interest of any Acquiring Person).

ADDITIONAL INFORMATION

A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated
November 4, 1999. A copy of the Rights Agreement is available from the
Company by writing to: Wind River Systems, Inc., 500 Wind


                                      7.

<PAGE>

River Way, Alameda, California 94501. This summary description of the Rights
is not intended to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is hereby incorporated herein by reference.


                                      8.


<PAGE>

                            FORM OF RIGHT CERTIFICATE

CERTIFICATE NO. R-                                                  _____ RIGHTS

     NOT EXERCISABLE AFTER OCTOBER 22, 2009 OR EARLIER IF REDEMPTION OR
     EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
     AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

                                RIGHT CERTIFICATE

                            WIND RIVER SYSTEMS, INC.

     This certifies that ___________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of October 22, 1999 (the "Rights
Agreement"), between Wind River Systems, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer and 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 5:00 p.m.,
Eastern Time, on October 22, 2009 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $.001 per share (the
"Preferred Shares"), of the Company, at a purchase price of $160.00 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
duly executed. 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 hereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of ___________, ____, based on
the Preferred Shares as constituted at such date.

     From and after the time any Person becomes an Acquiring Person, (as such
terms are defined in the Rights Agreement), if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes such, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such, such Rights shall become null and void
without any further action and no holder hereof shall have any right with
respect to such Rights from and after the time any Person becomes an
Acquiring Person.

                                      1
<PAGE>

     As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, as amended from time to time, which
terms, provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and the
holders of the Right Certificates. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.

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

     Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for shares of
the Company's Common Stock, par value $.001 per share, or, upon circumstances
set forth in the Rights Agreement, cash, property or other securities of the
Company, including fractions of a share of Preferred Stock.

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

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

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

                                      2
<PAGE>

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

ATTEST:                                   WIND RIVER SYSTEMS, INC.


- -------------------------------------     -------------------------------------
RICHARD W. KRABER                         THOMAS ST. DENNIS
Chief Financial Officer and Secretary     Chief Executive Officer



COUNTERSIGNED:

AMERICAN STOCK TRANSFER AND TRUST
COMPANY
as Rights Agent


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

Title:
       -----------------------------




                                      3
<PAGE>

                    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




             FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED

                                      4
<PAGE>

SIGNATURE GUARANTEED:

     Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.

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

     The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person, an Interested Stockholder or
an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement); and (2) after due inquiry and to the best of the knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person, an
Interested Stockholder, or an Affiliate or Associate thereof.



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




                                      5
<PAGE>

                        FORM OF ELECTION TO PURCHASE

                (TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE
                RIGHTS REPRESENTED BY THE RIGHT CERTIFICATE.)

To American Stock Transfer and Trust Company:

     The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:

Please insert social security
or other identifying number:
                             ---------------


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


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

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

Please insert social security
or other identifying number:
                             ----------------


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


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


Dated:
       ------------------------


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



            FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED

                                       6
<PAGE>

SIGNATURE GUARANTEED:

     Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.

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

     The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not beneficially owned by nor are they being exercised
on behalf of an Acquiring Person, an Interested Stockholder or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best of the knowledge of the undersigned,
the undersigned did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person, an Interested
Stockholder, or an Affiliate or Associate thereof.



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



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

                                     NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.

     In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.



                                       7



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