RIGHTS AGREEMENT

 

KELLWOOD COMPANY

 

and

 

AMERICAN STOCK TRANSFER AND TRUST COMPANY

 

Rights Agent

 

Dated as of June 10, 2006

 

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TABLE OF CONTENTS

 

Page  

 

 

 

 

Section 1.

Certain Definitions

1

Section 2.

Appointment of Rights Agent

7

Section 3.

Issue of Right Certificates

7

Section 4.

Form of Right Certificates

8

Section 5.

Countersignature and Registration

9

Section 6.

Transfer, Split Up, Combination and Exchange of Right Certificates;
                  Mutilated, Destroyed, Lost or Stolen Right
Certificates                                                 9

Section 7.

Exercise of Rights; Purchase Price; Expiration Date of Rights

10

Section 8.

Cancellation and Destruction of Right Certificates

12

Section 9.

Reservation and Availability of Preferred Stock

12

Section 10.

Deferred Stock Record Date

13

Section 11.

The Flip-In

14

Section 12.

The Flip-Over

16

Section 13.

Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights                     18

Section 14.

Fractional Rights and Fractional Shares

22

Section 15.

Rights of Action

23

Section 16.

Agreement of Right Holders

23

Section 17.

Right Certificate Holder Not Deemed a Stockholder

24

Section 18.

Concerning the Rights Agent

24

Section 19.

Merger or Consolidation or Change of Name of Rights Agent

25

Section 20.

Duties of Rights Agent

25

Section 21.

Change of Rights Agent

27

Section 22.

Issuance of New Right Certificates

28

Section 23.

Redemption and Termination

28

Section 24.

Effectiveness of this Agreement

29

Section 25.

Notice of Certain Events

29

Section 26.

Notices

30

Section 27.

Supplements and Amendments

30

Section 28.

Successors

31

Section 29.

Determinations and Actions by the Board of Directors, Etc

31

Section 30.

Benefits of this Agreement

32

Section 31.

Severability

32

Section 32.

Governing Law

32

Section 33.

Counterparts

33

Section 34.

Descriptive Headings

33

Exhibit A –Certificate of Designation, Preferences and Rights

Exhibit B – Form of Right Certificate

Exhibit C – Form of Summary of Rights

 

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RIGHTS AGREEMENT

Rights Agreement, dated as of June 10, 2006 (the “Agreement”), between KELLWOOD
COMPANY, a Delaware corporation (the “Company”), and AMERICAN STOCK TRANSFER AND
TRUST COMPANY, a trust company organized under the laws of the State of New York
(the “Rights Agent”).

W I T N E S S E T H:

WHEREAS, on June 11, 2006, the Rights Agreement dated as of June 11, 1986
between the Company and the Rights Agent will expire;

WHEREAS, the Board of Directors of the Company deems it to be in the interest of
the Company to adopt a new Rights Agreement to replace the existing rights
agreement; and

WHEREAS, on June 10, 2006, in connection with the expiration of the existing
rights agreement of the Company, the Board of Directors of the Company
authorized and declared a dividend distribution of one right for each
outstanding share of common stock, without par value, of the Company (the
“Common Stock”) outstanding on June 16, 2006 or such other date as determined by
the Chief Executive Officer or any Executive Vice President of the Company (the
“Record Date”), subject to the completion of appropriate documentation, and
contemplates the issuance of one right for each share of Common Stock of the
Company issued between the Record Date and the Distribution Date (as hereinafter
defined) and one Right for each share of Common Stock of the Company issued upon
exercise of stock options granted prior to the Distribution Date or under any
employee plan or arrangement established prior to the Distribution Date, each
Right representing the right to purchase one one-hundredth of a share of Series
A Junior Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and
Rights attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the “Rights”).

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

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

(a)          "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20% or more of the Voting Power of the aggregate of all shares of Voting
Stock then outstanding and shall include all Affiliates and Associates of such
Person; but such term shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or any Subsidiary of
the Company, or (iv) any trust fiduciary of other entity organized, appointed or
established that holds Common Stock or other Voting Stock for or pursuant to the
terms of any such employee benefit plan. Notwithstanding the foregoing:

 

 

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(i)           no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Voting Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate percentage of the
total Voting Power represented by all shares of Voting Stock of the Company
Beneficially Owned by such Person to 20% or more of the total Voting Power of
the aggregate of all shares of Voting Stock then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 20% or more of the total
Voting Power of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Voting Stock of the Company (other than
shares issued by the Company as a dividend or distribution made pro rata to all
holders of Common Stock), then such Person shall be deemed to be an "Acquiring
Person";

(ii)          If the Board of Directors determines in good faith that a Person
who would otherwise be an “Acquiring Person” has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of shares of
Voting Stock so that such Person would no longer be an “Acquiring Person,” then
such Person shall not be deemed to be an “Acquiring Person” for any purposes of
this Agreement; and

(iii)         No Person shall become an “Acquiring Person” if any such Person
who has become and is such a Beneficial Owner solely because (A) of a change in
the aggregate number of shares of Voting Stock since the last date on which such
Person acquired Beneficial Ownership of any shares of the Voting Stock or (B) if
acquired such Beneficial Ownership in the good faith belief that such
acquisition would not (1) cause such Beneficial Ownership to be equal to or
exceed 20% of the Voting Power of the aggregate of all shares of Voting Stock of
the Company then outstanding and such Person relied in good faith in computing
the percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company that are inaccurate or out-of-date or (2) otherwise
cause a Distribution Date or the adjustment provided for in a Flip-In Event or
Flip-Over Event to occur. Notwithstanding this clause (iii), if any Person that
is not an Acquiring Person due to this clause (iii) does not reduce its
percentage of Beneficial Ownership of the Voting Power of the aggregate of all
shares of Voting Stock of the Company then outstanding to less than 20% by the
Close of Business on the fifth Business Day after notice from the Company (the
date on which such notice is first mailed or sent being the first day) that such
person’s Beneficial Ownership of the Voting Power of the aggregate of all shares
of Voting Stock of the Company then outstanding is equal to or exceeds 20%, such
Person shall, at the end of such five Business Day period, become an Acquiring
Person (and such clause (B) shall no longer apply to such Person).

(iv)         For purposes of this definition, the determination whether any
Person acted in “good faith” shall be conclusively determined by the Board of
Directors of the Company, acting by a vote of those directors of the Company
whose approval would be required to redeem the Rights under this Agreement.

 

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(b)          “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the Exchange Act Regulations, as in
effect on the date of this Agreement; provided, however, that no director or
officer of the Company shall be deemed an Affiliate or Associate of any other
director or officer of the Company solely as a result of his or her being a
director or officer of the Company.

(c)          A Person shall be deemed the “Beneficial Owner” of and shall be
deemed to “Beneficially Own” and to have “Beneficial Ownership” of any
securities:

(i)           that such Person or any of such Person’s Affiliates or Associates
beneficially owns, directly or indirectly (as determined pursuant to Rule 13d-3
of the Exchange Act Regulations as in effect on the date of this Agreement);
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own or to have Beneficial Ownership of, any security if the
agreement, arrangement, or understanding to vote such security that would
otherwise render such Person the Beneficial Owner of such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the Exchange Act and the Exchange Act Regulations,
and (2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report);

(ii)          that 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, whether or not in writing (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), 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 or to have Beneficial Ownership of securities
tendered pursuant to a tender or exchange offer made in accordance with the
Exchange Act Regulations 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 (except to the extent contemplated by the proviso
to subparagraph (i) of this paragraph (c)); or

(iii)        that are Beneficially Owned, directly or indirectly, by any other
Person (or any Affiliate or Associate of such Person) with which such Person (or
any of such Person’s Affiliates or Associates) has any agreement, arrangement,
or understanding, whether or not in writing (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to subparagraph (i) of
this paragraph (c)), or disposing of any such securities.

 

3

 

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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 that such Person would be
deemed to Beneficially Own hereunder.

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

(f)           “Closing Price” of any security on any given day shall be the last
sale price, regular way, of such security or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, on
the principal trading market on which such security is then traded.

(g)          “Common Stock” shall mean the common stock, without par value, of
the Company, and “common stock” when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interest having power to control or direct
the management, of such Person.

(h)          “Common Equity Interest” when used with reference to any Person
other than the Company shall mean the class or series of capital stock (or
equity interest) with the greatest voting power (in relation to any other
classes or series of capital stock (or equity interest)) of such other Person.

(i)           “Current Market Price” of any security on any given day shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of such security for 10 consecutive Trading Days (as hereinafter defined)
immediately preceding such date; provided, however, that with respect to shares
of capital stock, in the event that the current market price per share of the
capital stock is determined during a period following the announcement of (i) a
dividend or distribution on the capital stock payable in shares of such capital
stock or securities convertible into shares of such capital stock (other than
the Rights), or (ii) any subdivision, combination or reclassification of the
capital stock, and prior to the expiration of the requisite 10 Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then and in each such case, the “Current Market Price” shall
be properly adjusted to take into account ex-dividend trading; and provided
further that if the security is not publicly held or not so listed or traded,
Current Market Price per share or other trading unit shall mean the fair value
per share or other trading unit as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.

 

4

 

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(j)           “Distribution Date” shall mean the earlier of (i) the tenth day
after the Stock Acquisition Date (as hereinafter defined) or (ii) the tenth
Business Day (or such later date as may be determined by action of a majority of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person and of which later date the Company will give the Rights Agent prompt
written notice) after the date of the commencement of, or first public
announcement of the intent to commence, a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company or any entity holding
shares of Common Stock organized, appointed or established by the Company for or
pursuant to the terms of any such plan), if upon consummation thereof, such
Person would be the Beneficial Owner of shares of Voting Power representing 20%
or more of the total Voting Power of the aggregate of all shares of Voting Stock
then outstanding (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights) other than pursuant to a
Qualified Offer.

(k)          “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to such rule or
regulation as was in effect on the date of this Agreement.

(l)           “Exchange Act Regulations” shall mean the General Rules and
Regulations under the Exchange Act.

 

(m)

“Flip-In Event” shall mean the event described in Section 11(a) hereof.

(n)          “Flip-Over Event” shall mean any of the events described in Section
12(a) hereof.

(o)          “Person” shall mean any individual, partnership (general or
limited), limited liability company, firm, corporation, association, trust,
unincorporated organization, or other entity, as well as any syndicate or group
deemed to be a Person under Section 14(d)(2) of the Exchange Act.

(p)          “Preferred Stock” shall mean shares of Series A Junior Preferred
Stock, without par value, of the Company.

(q)          "Qualified Offer" shall mean an acquisition of shares of Common
Stock pursuant to a tender offer or an exchange offer for all outstanding shares
of Common Stock at a price and on terms determined by at least a majority of the
members of the Board who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring Person,
after receiving advice from one or more investment banking firms, to be (a) at a
price which is fair to stockholders and not inadequate (taking into account all
factors which such members of the Board deem relevant, including prices which
could reasonably be achieved, if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its stockholders.

 

5

 

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(r)           “Stock Acquisition Date” shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such other than pursuant to a Qualified Offer.

(s)          “Subsidiary” shall mean, with reference to any Person, any other
Person of which (1) a majority of the Voting Power of the Voting Securities or
equity interests is Beneficially Owned, directly or indirectly, by such
first-mentioned Person or otherwise controlled by such first-mentioned Person,
or (2) an amount of Voting Securities or equity interests sufficient to elect at
least a majority of the directors or equivalent governing body of such other
Person is Beneficially Owned, directly or indirectly, by such first-mentioned
Person, or otherwise controlled by such first-mentioned Person.

(t)           “Trading Day,” with respect to any security 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.

 

(u)

“Triggering Event” shall mean a Flip-In Event or a Flip-Over Event.

(v)          “Voting Power” when used with reference to the Voting Securities of
any Person shall mean the number of votes (whether cast in person, by proxy, or
by written consent) entitled (1) to be cast generally in the election of
directors or members of the governing body of such Person (if such person is a
corporation or is managed by or under the direction of a governing body
performing functions and having obligations similar to those of a corporate
board of directors) or (2) to participate in the management and control of such
Person (if such Person is not a corporation and is not managed by or under the
direction of a governing body performing functions and having obligations
similar to those of a corporate board of directors).

(w)         “Voting Securities” when used in reference to any Person, shall mean
the outstanding capital stock, equity interest, or other voting securities of
such Person, in each case entitling the holder thereof (1) to cast votes, in
person or by proxy, or to act by written consent, in the election of directors
or members of the governing body of such Person (if such person is a corporation
or is managed by or under the direction of a governing body performing functions
and having obligations similar to those of a corporate board of directors) or
(2) to participate in the management and control of such Person (if such Person
is not a corporation and is not managed by or under the direction of a governing
body performing functions and having obligations similar to those of a corporate
board of directors).

(x)          “Voting Stock” shall mean the Common Stock, the Preferred Stock,
and any other class or series of securities or Voting Securities of the Company
entitled to vote generally, together with the Common Stock, (1) to be cast
generally in the election of directors or members of the governing body of the
Company or (2) to participate in the management and control of the Company.

(y)          “Whole Board” shall mean the total number of directors which the
Company would have if there were no vacancies.

 

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Any determination required by the definitions contained in this Section 1 shall
be made by the Board of Directors of the Company in its good faith judgment,
which determination shall be final and binding on the Rights Agent.

Section 2.          Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.

Section 3.          Issue of Right Certificates. (a) Until the Distribution
Date, (x) the Rights will be evidenced by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock (including
a transfer to the Company). As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right certificate, in substantially the form of Exhibit B hereto (the
“Right Certificates”), evidencing one Right for each share of Common Stock so
held. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Sections 11, 12 or 13 hereof, at the time
of distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14 hereof) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

(b)          As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit C (the “Summary of Rights”), by first-class, postage prepaid mail to
each record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company. Until
the earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Stock
represented thereby.

(c)          Certificates for the Common Stock issued after the Record Date but
prior the earlier of the Distribution Date or the Expiration Date (as
hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between Kellwood Company (the “Company”)
and American Stock Transfer and Trust Company dated as of June 10, 2006 (the
“Rights Agreement”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the

 

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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. Under certain circumstances, Rights beneficially owned
by Acquiring Persons (as defined in the Rights Agreement) or any Affiliate or
Associate thereof (as defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.

(d)          After the Distribution Date but prior to the Expiration Date,
Rights shall, without further action, be issued in connection with the issuance
of Common Stock upon the exercise of stock options granted prior to the
Distribution Date or pursuant to other benefits under any employee plan or
arrangement established prior to the Distribution Date; provided, however, that
if, pursuant to the terms of any option or other benefit plan, the number of
shares issuable thereunder is adjusted after the Distribution Date, the number
of Rights issuable upon issuance of the shares shall be equal only to the number
of shares which would have been issuable prior to the adjustment. In the event
that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the shares of
Common Stock that are no longer outstanding.

Section 4.          Form of Right Certificates. (a) The Right Certificates may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or to conform to usage. Subject to the
provisions of this Agreement, including Sections 7.11, 12, 13, 22 and 24, the
Right Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
shares of Preferred Stock as shall be set forth therein at the Purchase Price
(as defined in Section 7(b)), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.

(b)          Any Rights Certificate issued pursuant hereto that represents
Rights Beneficially Owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing written or oral agreement, arrangement, or understanding regarding
either the transferred Rights, shares of Common Stock, or the Company, or (B) a
transfer that the Board of Directors has determined in good faith to be part of
a plan, agreement, arrangement, or

 

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understanding that has as a primary purpose or effect the avoidance of Section
7(e) hereof shall, upon the written direction of the Board of Directors, contain
(to the extent feasible), the following legend:

“The Rights represented by this Rights Certificate are or were Beneficially
Owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such capitalized terms are defined in the
Rights Agreement, dated as of June 10, 2006 (the “Rights Agreement”), by and
between Kellwood Company and American Stock Transfer and Trust Company, as
Rights Agent). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section 7(e)
of the Rights Agreement.”

Section 5.          Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature and shall have affixed thereto the Company’s seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually counter-signed by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the 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 Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company and any Right
Certificates 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 Rights Agreement any such person was not such an officer.

(b)          Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices in New York City, 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. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
(other than Rights Certificates representing Rights that have become null and
void pursuant to Section 7(e) hereof, that have been redeemed pursuant to
Section 23 hereof, or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of shares of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase.

 

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

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

Section 7.          Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Sections 7(e), 9(c) and 9(f) hereof, (i) the Close of
Business on June 10, 2016 (the “Final Expiration Date”), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof or (iii) the time
at which the Rights are exchanged as provided in Section 24 hereof (the earlier
of (i), (ii), and (iii) being the “Expiration Date”), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby in whole or in
part at any time after the Distribution Date (except as provided herein) 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 principal
corporate trust office of the Rights Agent, together with payment of the
Purchase Price for each share of Preferred Stock as to which the Rights are
exercised.

(b)          The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $100, and
shall be subject to adjustment from time to time as provided in Sections 11, 12
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with Paragraph (c) below. Each one one-hundredth of a
share of Preferred Stock shall be referred to herein as a “Unit” of Preferred
Stock.

(c)          (1)         Subject to Section 14 hereof, following the
Distribution Date, the Company may (at the direction of the Board of Directors)
deposit with a corporation in good standing organized under the laws of the
United States or any State of the United States, which is

 

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authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority (the
“Depositary Agent”) certificates representing the shares of Preferred Stock that
may be acquired upon exercise of the Rights and may cause such Depositary Agent
to enter into an agreement pursuant to which the Depositary Agent shall issue
receipts representing interests in the shares of Preferred Stock so deposited.

(2)          Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price for the Units of Preferred Stock (or, following a Triggering Event, other
securities, cash, or other assets, as the case may be) to be purchased thereby
as set forth below and an amount equal to any applicable tax or charge required
to be paid by the holder of such Rights Certificate in accordance with Section 9
hereof, or evidence satisfactory to the Company of payment of such tax or
charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the Preferred Stock
certificates representing such number of shares of Preferred Stock (or fractions
of shares that are integral multiples of one one-hundredth of a share of
Preferred Stock) as are to be purchased and the Company will direct its transfer
agent to comply with all such requests, and/or (B) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Preferred Stock as are to be purchased and the Company will direct the
Depositary Agent to comply with all such requests, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
such depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate. In the event that the Company is obligated to issue Common
Stock or other securities of the Company, pay cash, and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such Common Stock, other securities, cash, and/or
other property is available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11 hereof) may be made in cash or
by certified or bank check or money order payable to the order of the Company.

(d)          In case the registered holder of any Right Certificate shall
exercise less 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 and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Sections 6 and 14 hereof.

(e)          Notwithstanding anything in this Agreement to the contrary, from
and after the time that any Person becomes an Acquiring Person, any Rights
Beneficially Owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and who receives such Rights pursuant to
either (A) a transfer (whether or

 

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not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom the Acquiring Person (or such
Associate or Affiliate) has any continuing written or oral agreement,
arrangement, or understanding regarding the transferred Rights, Voting Stock, or
the Company or (B) a transfer that the Board of Directors has determined in good
faith to be part of a plan, agreement, arrangement, or understanding that has as
a primary purpose or effect the avoidance of this Section 7(e), shall be null
and void without any further action, and any holder of such Rights thereafter
shall have no rights or preferences whatsoever with respect to such Rights,
whether under any provision of this Agreement, the Rights Certificates, or
otherwise (including, without limitation, rights and preferences pursuant to
Sections 7, 11, 12, 13, 14, 23, and 24 hereof). The Company shall use reasonable
efforts to ensure compliance with the provisions of this Section 7(e) and
Section 4(b), but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any other Person as a result of the
Company’s failure to make any determination under this Section 7(e) or such
Section 4(b) with respect to an Acquiring Person or its Affiliates, Associates,
or transferees.

(f)           Notwithstanding anything in this Agreement or any Rights
Certificate 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 by such
registered holder unless such registered holder shall have (i) completed and
executed the certificate 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) of the Rights represented by such Rights
Certificate 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 any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights 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 Certificates purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.

Section 9.          Reservation and Availability of Preferred Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or any
authorized and issued shares of Preferred Stock held in its treasury, the number
of shares of Preferred Stock that will be sufficient to permit the exercise in
full of all outstanding Rights.

(b)          So long as the shares of Preferred Stock issuable upon the exercise
of the Rights may be listed on any national securities exchange, the Company
shall use its best efforts

 

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to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.

(c)          The Company shall use its best efforts to (i) file, as soon as
practicable following the earlier of the Distribution Date or as soon as is
required by law, a registration statement under the Securities Act of 1933 (the
“Act”), with respect to the Preferred Stock purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after the filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date. The Company will
also take all action necessary to ensure compliance with the securities laws of
the various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed one hundred
twenty (120) days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statements. Upon any suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in that jurisdiction shall have
been obtained and, if applicable, until a registration statement has been
declared effective.

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

(e)          The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect-of the issuance or delivery of the Right Certificates and
of any certificates for shares of Preferred Stock 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 the shares of Preferred Stock in
respect of a name other than, that of the registered holder of the Right
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for shares of Preferred Stock upon the exercise of any Rights
until 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 satisfaction that no such tax is due.

Section 10.        Deferred Stock Record Date. Each person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such

 

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certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock transfer books of the Company are open.

Section 11.        The Flip-In. The Purchase Price, the number and kind of
securities 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)
Subject to the provisions of the following subparagraphs (b) and (c) and Section
23, in the event any Person becomes an Acquiring Person other than pursuant to a
Qualified Offer, each holder of a Right (which shall not include Rights which
have become null and void pursuant to the provisions of Section 7(e) hereof)
shall thereafter have a right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of shares of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a share of Preferred
Stock for which a Right is then exercisable and dividing that product by (y) 50%
of the Current Market Price per share of the Common Stock on the date of the
occurrence of such event (such number of shares being herein referred to as the
"Adjustment Shares").

(b)          In the event that there shall not be sufficient issued but not
outstanding and authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(a), the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exercise of the rights;
provided, however, if the Company is unable to cause the authorization of a
sufficient number of additional shares of Common Stock, then, in the event the
Rights become so exercisable, the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party shall, upon the
exercise of such Rights, (i) pay an amount in cash equal to the excess of (A)
the product of (1) the number of Adjustment Shares, multiplied by (2) the
Current Market Price of the Common Stock (such product being herein referred to
as the "Current Value"), over (B) the Purchase Price, in lieu of issuing shares
of Common Stock and requiring payment therefor, or (ii) issue debt or equity
securities, or a combination thereof, having a value equal to the Current Value,
where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, and require the payment of the Purchase Price, or (iii) deliver any
combination of cash, property, Common Stock and/or other securities having the
requisite value, and require payment of all or any requisite portion of the
Purchase Price. To the extent that the Company determines that some action need
be taken pursuant to clauses (i), (ii), or (iii) of the proviso of this
subparagraph (b), a majority of the Whole Board may suspend the exercisability
of the Rights for a period of up to 45 days following the date on which the
Flip-In Event shall have occurred, in order to decide the appropriate form of
distribution to be made pursuant to the above proviso and to determine the value
thereof. In the event of any suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at the time the suspension is no
longer in effect.

(c)          The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person other than pursuant to a
Qualified Offer, exchange all or part of the then outstanding and exercisable
Rights (which shall not include

 

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Rights that have been null and void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one 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 Stock or pursuant to the terms of any such plan), together with
all Affiliates and Associates of such Person, becomes the beneficial Owner of
75% or more of the Voting Power of the aggregate of all Voting Stock then
outstanding. Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to this subparagraph (c)
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become null and void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights. In any
exchange pursuant to this subparagraph (c), the Company, at its option, may
substitute shares of Preferred Stock (or shares of equivalent preferred stock,
as such term is defined in Section 13(b) hereof) for Common Stock exchangeable
for Rights, at the initial rate of one one-hundredth of a share of Preferred
Stock (or equivalent preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock or Preferred Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this subparagraph (c), the Company shall take
all such action as may be necessary to authorize additional shares of Common
Stock or Preferred Stock for issuance upon exchange of the Rights. The Company
shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares. In lieu of such
fractional shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subparagraph
(c), the current market value of a whole share shall be the Closing Price of the
Common Stock for the Trading Day immediately prior to the date of exchange
pursuant to this subparagraph (c).

 

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Section 12.        The Flip-Over. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.

(a)          In the event that, following the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a direct or indirect, wholly-owned Subsidiary of the
Company), (y) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell, 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 other Person or Persons,
then, and in each such case, (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of shares of freely tradeable common stock of the
Principal Party, free and clear of any lien, encumbrance or other adverse claim,
as shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-hundredths of a share of Preferred Stock
for which a Right is then exercisable (or the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
the occurrence of the Flip-In Event if a Flip-In Event has previously occurred)
and dividing that product by (2) 50% of the Current Market Price per share of
the common stock of such Principal Party on the date of consummation of the
Flip-Over Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of the Flip-Over Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term Company” shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 13 hereof shall apply to such Principal
Party; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common
stock) in connection with 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 shares of common stock thereafter deliverable upon
the exercise of the Rights; and the provisions of Section 11 hereof shall be of
no effect following the first occurrence of any Flip-Over Event.

 

(b)

“Principal Party” shall mean:

(i)           in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 12(a), (A) the Person that is the issuer of any
securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate Current Market Price and (B) if
no securities are so issued, the Person that is the other party to such merger
or consolidation, or, if there is more than one such Person, the Person the
Common Stock of which has the highest aggregate Current Market Price; and

 

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(ii)          in the case of any transaction described in clause (z) of the
first sentence of Section 12(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
Current Market Price; provided, however, that in any such case, (1) if the
Common Stock of such Person is not at such time and has not been continuously
over the preceding twelve-month period registered under Section 12 of the
Exchange Act (“Registered Common Stock”), or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person that has
Registered Common Stock outstanding, “Principal Party” shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered Common Stock or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person but is not a direct or indirect Subsidiary of
another Person that has Registered Common Stock outstanding, “Principal Party”
shall refer to the ultimate parent entity of such first-mentioned Person; (3) if
the Common Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is directly or indirectly controlled by more
than one Person, and one or more of such other Persons has Registered Common
Stock outstanding, “Principal Party” shall refer to whichever of such other
Persons is the issuer of the Registered Common Stock having the highest
aggregate Current Market Price; and (4) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, “Principal Party” shall
refer to whichever ultimate parent entity is the corporation having the greatest
stockholders’ equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.

(c)          The Company shall not consummate any Flip-Over Event or any other
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 12, and unless prior thereto the Company and such
Principal Party and each other Person who may become a Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 12
and further providing that the Principal Party will, as soon as practicable
after the Flip-Over Event:

(i)           (A) prepare and file at its own expense an appropriate
registration statement under the Securities Act with respect to the Common Stock
that may be acquired upon exercise of the Rights, (B) cause such registration
statement to become and remain effective (and to include a prospectus complying
with the requirements of the Securities Act) until the Expiration Date, and (C)
take such action as may be required to ensure that any acquisition of such
Common Stock upon the exercise of the Rights complies with any applicable state
securities or “blue sky” laws; and

 

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

(d)          In case the Principal Party that is to be a party to a transaction
referred to in this Section 12 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 12, shares of
Common Stock of such Principal Party at less than the then Current Market Price
per share or securities exercisable for, or convertible into, Common Stock of
such Principal Party at less than such then current market price (other than to
holders of Rights pursuant to this Section 12) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of this Section 12,
then, in such event, the Company shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.

(e)          Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 12 shall not be applicable to a Flip-Over Event, if
(i) such Flip-Over Event is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock which is a Qualified Offer (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per share of Common
Stock offered in such transaction is not less than the price per share of Common
Stock paid to all holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 12(e), all Rights hereunder shall
expire.

(f)           The provisions of this Section 12 shall similarly apply to
successive Flip-Over Events, mergers, consolidations, sales or other transfers.
In the event that a Flip-Over Event shall occur at any time after the occurrence
of a Flip-In Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 12(a).

Section 13.        Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 13.

 

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(a)          In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 13(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 Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which could
require an adjustment under both Section 11(a) hereof and this Section 13(a),
the adjustment provided for in this Section 13(a) shall be in addition to, and
shall be made prior to any adjustment required pursuant to Section 13(a).

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

 

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(c)          In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend at a rate not in excess of è$20+ per share of Preferred Stock),
assets (other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 13(b)), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market Price per one one-hundredth
of a share of the Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
one-hundredth of a share of Preferred Stock and the denominator of which shall
be such current market price per one one-hundredth of a share of the Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would be in effect
if such record date had not been fixed.

(d)          Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 13(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 13 shall be made to the nearest
cent or to the nearest ten-hundredth of a share of Common Stock or other share
of one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 13(d), any adjustment
required by this Section 13 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.

(e)          If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Stock, 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 shares contained
in Section 13(a) through (c), inclusive, and the provisions of Section 7, 9, 10,
12 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.

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

(g)          Unless the Company shall have exercised its election as provided in
Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(b) and (c), each Right outstanding immediately
prior to the making of such

 

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adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.

(h)          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 shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-millionth) 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 13(h), 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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.

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

(j)           Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the shares of
Preferred Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Preferred Stock at such adjusted Purchase Price.

 

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(k)          In any case in which this Section 13 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.

(l)           Anything in this Section 13 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 13, as and to
the extent that in its sole discretion the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends, or (v)
issuance of rights, options or warrants referred to in this Section 13,
hereafter made by the Company to holders of its Preferred Stock shall, if
practicable, not be taxable to such stockholders.

(m)         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 if at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.

(n)          The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Sections 23, 24, 26 or 27 hereof, take any
action the purpose or effect of which is to diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights, unless such action
is approved by the Whole Board.

(o)          Whenever an adjustment is made as provided in Sections 11, 12 and
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock a copy of such Certificate and (c)
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.

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

 

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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 Price of a whole Right as of the date on which such fractional
Rights would have been otherwise issuable.

(b)          The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). Subject to Section 7(c) hereof, fractions of shares
of Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
Depositary Agent selected by it. In lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth of a share of Preferred
Stock, the Company may pay to the registered holders of 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 Price of one one-hundredth of a share of
Preferred Stock as of the date of such exercise.

(c)          The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.

Section 15.        Rights of Action. All rights of action in respect of this
Agreement other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock) without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such 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 shall be entitled to specific performance
of the and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to 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 Common Stock;

 

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

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

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

Section 17.        Right Certificate Holder Not Deemed a Stockholder. Except as
otherwise expressly provided in this Agreement, 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 shares of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders, 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 disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without 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
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement.

 

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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 Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.

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 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 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 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.

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

(b)          Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without

 

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limitation, the identity of any Acquiring Person) be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent, for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

(c)          The Rights Agent shall be liable hereunder 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 facts or recitals contained in this Agreement or in the Right
Certificates or be required to verify the same (except as to its
countersignature on such Right Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.

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

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

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

(h)          The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or

 

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contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.

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

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

(k)          The Rights Agent shall not be required to take notice or be deemed
to have notice of any fact event or determination under the Rights Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.

Section 21.        Change of Rights Agent. (a) Resignation. 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 of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail.

(b)          Removal by Company. 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
of the Common Stock and Preferred Stock, by registered or certified mail, and to
the holders of the Right Certificates by first-class mail.

(c)          Replacement. If the Rights Agent resigns or is removed or otherwise
becomes incapable of acting, the Company shall appoint a successor Rights Agent.
If the Company fails to appoint a successor Rights Agent within 30 days after
giving the Rights Agent notice of its removal, or within 30 days after receiving
written notice of the resignation or incapacity of the Rights Agent from the
Rights Agent or a holder of a Right Certificate (who shall, with its notice,
submit its 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.

(d)          Qualifications. Any successor Rights Agent, whether appointed by
the Company or by a court, shall: (i) be a trust company or banking corporation
organized in any of the United States and doing business in good standing under
the laws of the United States or of

 

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the State of Missouri or of the State of New York ; (ii) be authorized to do
business as a trust company or banking institution in the State of Missouri or
the State of New York; (iii) be subject to supervision or examination by federal
or state authority; and (iv) have, at the time of its appointment as Rights
Agent, a combined capital and surplus of at least $10,000,000.

(e)          Succession Procedures. 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 the appointment of the successor
Rights Agent, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and 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 the Rights Certificates to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by a majority of the Board of Directors to reflect
any adjustment or change made in accordance with the provisions of this
Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the Rights Certificates.
In addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued 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 Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.

Section 23.        Redemption and Termination. (a) The Board of Directors of the
Company may, at its option, at any time on or prior to the earlier of (i) the
tenth day following the Stock Acquisition Date, subject to extension by the
Board of Directors for a period of time up to, but not exceeding, ten additional
days, or (ii) the Final Expiration Date, redeem all but not less than all 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, by
action of a majority of the Whole Board, pay the Redemption Price either in
shares of Company Common Stock, of the shares of Company Common Stock at

 

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the time of redemption) or cash. Subject to the foregoing, the redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Whole Board in its sole discretion may establish.
Notwithstanding anything in this Agreement to the contrary, no Right may be
exercised until such time as the Rights have become non-redeemable in accordance
with the terms of this Agreement.

(b)          Promptly upon the action of the Board of Directors of the Company
extending the redemption period pursuant to Section 23(a)(i), evidence of which
shall have been filed with the Rights Agent, the Company shall issue a press
release indicating the date to which the Board of Directors has extended its
right to redeem the Rights.

(c)          Promptly upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. In any case, failure
to give such notice to any particular holder of Rights shall not affect the
sufficiency of the notice to other holders of Rights.

Section 24.        Effectiveness of this Agreement. It is intended that this
Agreement shall replace the existing Rights Agreement of the Company entered
into on June 11, 1986 which expires on June 11, 2006 (the “Existing Rights
Agreement”). This Agreement shall become effective upon the expiration of the
Existing Rights Agreement.

Section 25.        Notice of Certain Events. (a) In case the Company shall
propose (1) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend at a rate not in excess of
$20 per share), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any Flip-Over Event, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, Flip-Over Event,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of

 

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such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock whichever shall be the
earlier.

(b)          Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the occurrence of such
event and the consequences thereof to holders of Rights under Sections 11(a) or
12(a) hereof, as the case may be.

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:

Kellwood Company
600 Kellwood Parkway
St. Louis County, Missouri 63017
Attention: Secretary

 

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

American Stock Transfer and Trust Company
59 Maiden Lane
New York, New York 10038
Plaza Level

 

Telephone: (718) 921 8200

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. The Company shall deliver a copy of any notice or demand
it delivers to the holder of any Right Certificate to the Rights Agent and the
Rights Agent shall deliver a copy of any notice or demand it deliver to the
holder of any Right Certificate to the Company.

Section 27.        Supplements and Amendments. Subject to the penultimate
sentence of this Section 27, the Company, by action of the Board of Directors,
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights in order to cure any ambiguity, to correct or supplement
any provision contained herein that may be defective or inconsistent with any
other provisions herein, to shorten or lengthen any time period hereunder, or to
make any other provisions with respect to the Rights that the Company may

 

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deem necessary or desirable, any such supplement or amendment to be evidenced by
a writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner that would adversely affect the
interests of the holders of Rights (other than Rights that have become null and
void pursuant to Section 7(e) hereof). Without limiting the foregoing, the
Company, by action of the Board of Directors, may at any time prior to such time
as any Person becomes an Acquiring Person amend this Agreement (A) to make the
provisions of this Agreement inapplicable to a particular transaction by which a
Person would otherwise become an Acquiring Person or to otherwise alter the
terms and conditions of this Agreement as they may apply with respect to any
such transaction; and (B) to lower the thresholds set forth in Sections 1(a) and
3(a) to not less than the greater of (i) the sum of .001% and the largest
percentage of Voting Power represented by the then outstanding shares of Voting
Stock then known by the Company to be Beneficially Owned by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any Subsidiary of the Company, or any trustee or fiduciary
holding shares of Voting Stock for, or pursuant to the terms of, any such plan,
acting in such capacity), and (ii) 10%. Upon delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however, that no
supplement or amendment may be made to Sections 18, 19, 20, or 21 hereof without
the consent of the Rights Agent. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.

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

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

 

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the Board of Directors of the Company or any member thereof to any liability to
the holders of the Rights.

(b)          It is understood that the TIDE Committee (as described below) of
the Board of Directors shall review and evaluate this Agreement in order to
consider whether the maintenance of this Agreement continues to be in the best
interests of the Company, its stockholders and other relevant constituencies of
the Company at least once every three years, or sooner than that if any Person
shall have made a proposal to the Company or its stockholders, or taken any
other action that, if effective, could cause such Person to become an Acquiring
Person hereunder, if a majority of the members of the TIDE Committee shall deem
such review and evaluation appropriate after giving due regard to all relevant
circumstances. Following each such review, the TIDE Committee shall communicate
its conclusions to the full Board of Directors, including any recommendation in
light thereof as to whether this Agreement should be modified or the Rights
should be redeemed. The TIDE Committee shall be comprised of members of the
Board of Directors who are not officers, employees or Affiliates of the Company
and shall be the Corporate Governance Committee of the Board of Directors (or
any successor committee) as long as the members of such committee meet such
requirements.

(c)          The TIDE Committee and the Board of Directors, when considering
whether this Agreement should be modified or the Rights should be redeemed,
shall have the power to set their own agenda and to retain at the expense of the
Company their choice of legal counsel, investment bankers and other advisors.
The TIDE Committee and the Board of Directors, when considering whether this
Agreement should be modified or the Rights should be redeemed, shall have the
authority to review all information of the Company and to consider any and all
factors they deem relevant to an evaluation of whether this Agreement should be
modified or the Rights should be redeemed.

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

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

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

 

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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.

 

33

 

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

Attest:

 

KELLWOOD COMPANY

 

 

 

By:

 

 

By:

 

 

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

 

 

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

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

 

Attest:

 

AMERICAN STOCK TRANSFER AND TRUST COMPANY

 

 

 

By:

 

 

By:

 

 

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

 

 

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

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

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                Exhibit A

 

AMENDED CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES A JUNIOR
PREFERRED STOCK

of

KELLWOOD COMPANY

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

We, Hal J. Upbin, President, and Thomas H. Pollihan, Secretary, of Kellwood
Company, a corporation organized and existing under the General Corporation Law
of the State of Delaware, in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:

That on February 23, 1999, the Board of Directors, acting pursuant to the
authority conferred upon the Board of Directors by Article Fourth of the
Certificate of Incorporation of the Corporation and in accordance with Section
151(g) of the General Corporation Law of the State of Delaware, adopted the
following resolution amending and restating the Certificate of Designation,
Preferences and Rights of Series A Junior Preferred Stock, thereby increasing
the number of designated shares so designated, and reflecting the change in par
value thereof to $.01 per share:

“RESOLVED, to amend the Company’s Certificate of Designation, Preferences and
Rights of Series A Junior Preferred Stock in order to (1) increase the number of
shares of preferred stock designated thereunder to 300,000, and (2) to reflect
the change in the par value previously approved by the stockholders from shares
without par value to shares with a par value of $.01 per share.”

That Certificate of Designation, Preferences and Rights of Series A Junior
Preferred Stock is hereby amended and restated as follows:

 

Section 1.

Designation and Amount.

The shares of a series of the Preferred Stock of the Corporation, par value $.01
per share, shall be designated as "Preferred Stock, Series A" (the "Series
Preferred Stock") and the number of shares constituting the series shall be
300,000.

 

Section 2.

Dividends and Distributions.

(A)         The holders of shares of Series Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the fifteenth
day of January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or

 

A-1

 

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fraction of a share of Series Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $20.00 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 of the Corporation (the “Common Stock”) since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision of 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 of those cases the multiplier set forth
in clause (b) of the preceding sentence shall be adjusted by multiplying such
multiplier by a fraction the numerator of which is the number of share of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

(B)         The Corporation shall declare a dividend or distribution on the
Series Preferred Stock as provided in paragraph (A) 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 $20.00 per share on the Series Preferred
Stock shall nevertheless be payable on the subsequent Quarterly Dividend Payment
Date.

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

 

Section 3.

Voting Rights.

The holders of shares of Series Preferred Stock shall have the following voting
rights:

 

A-2

 

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

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

(C)         (i)          If at any time dividends on any Series Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of the contingency shall mark the beginning of a period (herein
called a “default period”) which shall extend until the time when all accrued
and unpaid dividends for all pervious quarterly dividend periods and for the
current quarterly dividend period on all shares of Series Preferred stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, the holders of Series Preferred Stock, voting as a class,
irrespective of series, shall have the right to elect two Directors, which
Directors shall be in addition to the then otherwise authorized number of
Directors.

(ii)          During any default period, such voting right of the holders of
Series Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders provided that such voting right shall not be exercised unless the
holders of 25% in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. After the holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period and during the continuance
of such period, the number of Directors shall not be increased or decreased
except by vote of the holders of Preferred Stock as herein provided.

(iii)        Unless the holders of Series Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of the meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall
be given to each holder of record of Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. The meeting shall be called for a time not earlier than 20 days and
not later than 60

 

A-3

 

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days after the order or request or in default of the calling of the meeting
within 60 days after the order or request, the meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (c)(iii), no such special
meeting shall be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.

(iv)         In any default period the holders of Common Stock, and other
classes of stock of the Corporation, if applicable, shall continue to be
entitled to elect the whole number of Directors then otherwise authorized.

(v)          The Directors elected by the holders of Preferred Stock shall
continue in office until the next annual meeting of stockholders and until their
successors shall have been elected by such holders or until the expiration of
the default period. Any vacancy in the Board of Directors may be filled by vote
of a majority of the remaining Directors theretofore elected by the holders of
the class of stock which elected the Director whose office shall have become
vacant. References in this paragraph (C) to Directors elected by the holders of
a particular class of stock shall include Directors elected by the Directors to
fill vacancies as provided in the foregoing sentence.

(vi)         Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may
then be authorized by the Board of Directors.

(D)         Except as set forth herein, holders of Series 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 Series Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:

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

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

(iii)        redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up)

 

A-4

 

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

(iv)         purchase or otherwise acquire for consideration any shares of
Series Preferred Stock, or any shares of stock ranking on a parity with the
Series 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 the 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 Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire the shares at the time and in the manner therein
set forth.

 

Section 5.

Reacquired Shares.

Any shares of Series Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.

 

Section 6.

Liquidation, Dissolution or Winding Up.

Upon any voluntary liquidation, dissolution or winding up of the Corporation, 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
Series Preferred Stock unless, prior thereto, the holders of shares of Series
Preferred Stock shall have received $100.00 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 Series
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 Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series
Preferred Stock, except distributions made ratably on the Series Preferred Stock
and all other such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon the liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any
dividend on 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 case the aggregate amount to which holders of shares of Series Preferred
Stock were entitled immediately prior to the event

 

A-5

 

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

 

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

 

Section 7.

Consolidation, Merger, etc.

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

 

Section 8.

No Redemption.

The shares of Series Preferred Stock shall not be redeemable.

 

Section 9.

Amendment.

The Certificate of Incorporation of the Corporation shall not be amended in any
manner that would materially alter or change the powers, preferences or special
rights of the Series Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series Preferred Stock, voting together as a single class.

IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury as of this 23rd day
of February, 1999.

Hal J. Upbin, President

ATTEST:    Thomas H. Pollihan, Secretary

 

A-6

 

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Exhibit B

[Form of Right Certificate)

Certificate No. R—

______ Rights

NOT EXERCISABLE AFTER JUNE 10, 2016 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.

Right Certificate

KELLWOOD COMPANY

This certifies that ______________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entities
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of June 10, 2006 (the “Rights Agreement”) between Kellwood
Company, a Delaware corporation (the “Company”), and American Stock Transfer and
Trust Company, a trust company organized under the laws of the State of Missouri
(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. (St. Louis time) on June 10, 2016 at the principal corporate trust
office of the Rights Agent, or its successor as Rights Agent, one one-hundredth
of a fully paid, nonassessable share of Series A Junior Preferred Stock (the
“Preferred Stock”) of the Company, at a purchase price of $100 per one
one-hundredth of a 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
shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of                   . As provided in the Rights Agreement, the Purchase Price,
the type of security, and the number of shares of Preferred Stock or common
stock 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, 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 above-mentioned office of the Rights
Agent and are also available upon written request to the Rights Agent.

 

B-1

 

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This Right Certificate, with or without other Right Certificates, upon surrender
at the principal corporate trust office of the Rights Agent, 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
shares of Preferred Stock 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 may be redeemed by the Company at its option at a redemption price
of $0.01 per Right.

No fractional shares of preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock), 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 shares of Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this 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.

 

B-2

 

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

Dated as of ____________________

ATTEST:

 

KELLWOOD COMPANY

 

 

 

 

 

By:

 

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Secretary

 

 

Title:

 

 

 

Countersigned:

 

 

 

 

 

AMERICAN STOCK TRANSFER AND                TRUST COMPANY

 

By:

 

 

 

 

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Name:

By:

 

 

 

Title:

 

Authorized Signature

 

 

 

 

 

 

 

 

 

B-3

 

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(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 transfer 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 __________ as attorney to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.

Dated:

_________________

 

 

 

 

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Signature

 

 

Signature Guaranteed:

 

___________________________

NOTICE

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

 

B-4

 

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FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to

exercise Rights represented by the

Right Certificate.)

To:

KELLWOOD COMPANY

The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights and requests that certificates for such
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 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:

___________

 

 

 

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Signature Guaranteed:

Signature

 

 

NOTICE

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

 

B-5

 

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EXHIBIT C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED STOCK

On June 10, 2006, the Board of Directors of Kellwood Company (the “Company”)
entered into the Rights Agreement (the “Rights “Agreement”) with American Stock
Transfer and Trust Company (the “Rights Agent”), and, in connection therewith,
on June 1, 2006 declared a dividend distribution of one preferred stock purchase
right (collectively, the “Rights”) on each outstanding share of common stock,
(the “Common Stock”), of the Company, subject to the completion of appropriate
documentation. The distribution is to be made to stockholders of record on June
16, 2006 or such other date as determined by the Chief Executive Officer or any
Executive Vice President of the Company (the “Record Date”). These Rights
replace the existing rights attached to the Common Stock, as the existing rights
expired on June 11, 2006. Except as set forth below, each Right entitles the
registered holder thereof to purchase from the Company a unit consisting of one
one-hundredth of a share (a “Unit”) of a newly created series of the Company's
Series A Junior Preferred Stock (the “Preferred Stock”), at a purchase price of
$100 per Unit (the “Purchase Price”), subject to anti-dilution adjustments
described below.

The Rights are represented by the Common Stock certificates and are not
exercisable or transferable apart from the Common Stock until the earlier to
occur of (i) ten days following a public announcement that a person or group of
affiliated or associated persons (an “Acquiring Person”), has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the Voting
Power of the aggregate of all shares of Voting Stock (the “Stock Acquisition
Date”) or (ii) ten business days following the commencement of (or announcement
of an intention to make) a tender offer or exchange offer if, upon consummation
thereof, such person or group would be the beneficial owner of 20% or more of
the Voting Power of the aggregate of all shares of Voting Stock then outstanding
(the earlier of the dates being called the “Distribution Date”), except in
either case pursuant to an offer for all outstanding shares of Common Stock
which the independent directors determine to be fair and not inadequate and to
otherwise be in the best interests of the Company and its stockholders, after
receiving advice from one or more investment banking firms (a “Qualified
Offer”). Until the Distribution Date (or earlier redemption or expiration of the
Rights), Common Stock certificates will contain a notation incorporating the
Rights Agreement by reference. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights (the “Rights Certificates”)
will be mailed to stockholders who were holders of record of the Common Stock as
of the close of business on the Distribution Date. From and after the
Distribution Date, the separate Right Certificates alone will evidence the
Rights. The Rights will expire at the close of business on June 10, 2016 (the
“Final Expiration Date”) unless earlier redeemed or exchanged by the Company.

If an Acquiring Person becomes the beneficial owner of more than 20% of the then
of the Voting Power of the aggregate of all shares of Voting Stock other than
pursuant to a Qualified Offer, each holder of a Right will thereafter have the
right to receive, upon exercise of the Right at the then current Purchase Price,
shares of Common Stock which at the time of the transaction would have a market
value of two times the Purchase Price. Notwithstanding the

 

C-1

 

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foregoing, no Right may be exercised for Common Stock of the Company until the
Rights have become non-redeemable, as described below. If, at any time following
the Distribution Date, the Company is acquired in a merger or other business
combination transaction or 50% or more of its assets or earning power is sold
other than pursuant to a Qualified Offer, each holder of a Right will thereafter
have the right to receive, upon exercise of the Right at the then current
Purchase Price, a number of shares of common stock of the acquiring company
which at the time of the transaction would have a market value of two times the
Purchase Price. The events described in this paragraph are defined as
“Triggering Events.”

Following the occurrence of any Triggering Events, any Rights that are or were
beneficially owned by an Acquiring Person will be null and void.

The Purchase Price payable, and the number of Units of Preferred Stock or other
securities or property issuable, 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
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of Preferred Stock of evidence of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).

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

At any time on or prior to the earlier of (i) the tenth day following the Stock
Acquisition Date (which period may be extended for an additional ten days), or
(ii) the Final Expiration Date, the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right (the “Redemption Price”). Immediately
upon the action of the Board of Directors of the Company ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.

At any time any person becomes an Acquiring Person and prior to such time as
such person, together with its affiliates becomes the beneficial owner of at
least 75% of the Company’s outstanding Common Stock, the Company may, provided
that all necessary regulatory approvals have been obtained, exchange the Rights
(other than Rights owned by such Acquiring Person which become null and void),
in whole or in part, at a ratio of one share of Common Stock per Right, subject
to adjustment.

Until a Right is exercised, the holder of the Right will not have any rights as
a stockholder of the Company solely by virtue of holding the Right, including,
without limitation, the right to vote or to receive dividends.

As long as the Rights are attached to the Common Stock, the Company will issue
one Right with each new share of Common Stock issued so that all shares will
have attached Rights. After the Distribution Date but prior to the Final
Expiration Date, Rights shall only be

 

C-2

 

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issued in connection with the issuance of Common Stock upon the exercise of
stock options granted prior to the Distribution Date or pursuant to other
benefits under any employee plan or arrangement established prior to the
Distribution Date.

The terms of the Rights may be amended by the Board of Directors of the Company;
provided, however, that after a person becomes an Acquiring Person, the Company
may not amend the Rights Agreement only if the amendment will not adversely
affect the interests of holders of Rights (other than an Acquiring Person).

The Corporate Governance Committee of the Board of Directors shall review and
evaluate the Rights Agreement in order to consider whether the maintenance of
the Rights Agreement continues to be in the best interests of the Company, its
stockholders and other relevant constituencies of the Company at least once
every three years, or sooner than that if any Person shall have made a proposal
to the Company or its stockholders, or taken any other action that, if
effective, could cause such person to become an Acquiring Person, if a majority
of the members of the Committee shall deem such review and evaluation
appropriate after giving due regard to all relevant circumstances. Following
each such review, the Committee shall communicate its conclusions to the full
Board of Directors, including any recommendation in light thereof as to whether
the Rights Agreement should be modified or the Rights should be redeemed.

The Preferred Stock purchased upon exercise of the Rights will be
non-redeemable. Each share of Preferred Stock will have a minimum preferential
quarterly dividend rate of $20.00 per share, but will be entitled to an
aggregate dividend of 100 times the dividend declared on the Common Stock. In
the event of liquidation, the holders of the Preferred Stock will receive a
preferred liquidation payment of $100.00 per share, but will be entitled to
receive an aggregate liquidation payment equal to 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100 votes, voting
together as one class with the Common Stock. Finally, in the event of any
consolidation, merger, combination or other transaction in which shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or other property, each share of Preferred Stock will be entitled to receive
100 times the aggregate amount of stock or securities, cash and/or other
property, into which or for which each share of Common Stock is changed or
exchanged. The foregoing rights of the Preferred Stock are protected against
dilution if additional shares of Common Stock are issued. Fractional shares of
Preferred Stock will not be issuable and in lieu thereof a cash payment will be
made.

A copy of the Rights Agreement is available free of charge from the Rights
Agent, American Stock Transfer and Trust Company, Attention: Rights Agent for
Kellwood Company Rights Agreement. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Amended Rights Agreement, which is incorporated herein by reference.

 

 

C-3