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  NORTHWEST AIRLINES CORPORATION (formerly Newbridge Parent Corporation) and NORWEST BANK MINNESOTA, N.A., as Rights Agent Rights Agreement Dated as of November 20,
1998




Exhibit 4.3  






 



 

NORTHWEST AIRLINES CORPORATION
  (formerly Newbridge Parent Corporation)
  and
  NORWEST BANK MINNESOTA, N.A.,    
    
    as Rights Agent
  Rights Agreement
  Dated as of November 20, 1998

    







 




 
TABLE OF CONTENTS  



 



	 
	 	 

	Section 1.	 	Certain Definitions
	

Section 2.	
 	

Appointment of Rights Agent
	

Section 3.	
 	

Issue of Right Certificates
	

Section 4.	
 	

Form of Right Certificates
	

Section 5.	
 	

Countersignature and Registration
	

Section 6.	
 	

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

Section 7	
 	

Exercise of Rights, Purchase Price; Expiration Date of Rights
	

Section 8.	
 	

Cancellation and Destruction of Right Certificates
	

Section 9.	
 	

Availability of Shares of Preferred Stock
	

Section 10.	
 	

Preferred Stock Record Date
	

Section 11.	
 	

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

Section 12.	
 	

Certificate of Adjusted Purchase Price or Number of Shares
	

Section 13.	
 	

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

Section 14.	
 	

Fractional Rights and Fractional Shares
	

Section 15.	
 	

Rights of Action
	

Section 16.	
 	

Agreement of Right Holders
	

Section 17.	
 	

Right Certificate Holder Not Deemed a Stockholder
	

Section 18.	
 	

Concerning the Rights Agent
	

Section 19.	
 	

Merger or Consolidation or Change of Name of Rights Agent
	

Section 20.	
 	

Duties of Rights Agent
	

Section 21.	
 	

Change of Rights Agent
	

Section 22.	
 	

Issuance of New Right Certificates
	 	 	 





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Section 23.	
 	

Redemption
	

Section 24.	
 	

Exchange
	

Section 25.	
 	

Notice of Certain Events
	

Section 26.	
 	

Notices
	

Section 27.	
 	

Supplements and Amendments
	

Section 28.	
 	

Successors
	

Section 29.	
 	

Benefits of this Agreement
	

Section 30.	
 	

Severability
	

Section 31.	
 	

Governing Law
	

Section 32.	
 	

Counterparts
	

Section 33.	
 	

Descriptive Headings




ii







RIGHTS AGREEMENT  



        Agreement, dated as of November 20, 1998, between Northwest Airlines Corporation (formerly Newbridge Parent Corporation), a Delaware corporation (the
"Company"), and Norwest Bank Minnesota, N.A., a New York corporation (the "Rights Agent"). 


W I T N E S S E T H:  


        WHEREAS, on November 16, 1995, Northwest Airlines Holdings Corporation (formerly Northwest Airlines Corporation), a Delaware corporation ("Old Northwest"),
and the Rights Agent entered into a Rights Agreement (the "Rights Agreement") providing for the issuance of preferred stock purchase rights having the terms set forth therein to the holders of record
of common stock of Old Northwest; 


        WHEREAS,
on June 25, 1998, Old Northwest and the Rights Agent amended and restated the Rights Agreement to reflect the consummation by Old Northwest of certain corporate
transactions; 


        WHEREAS,
pursuant to an Amended and Restated Agreement and Plan of Merger, dated as of October 30, 1998 (the "Amended and Restated Merger Agreement"), among the Company, Old
Northwest and Newbridge Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), effective as of the date hereof, Merger Sub has merged with and into Old
Northwest (the "Merger"), with the effect that Old Northwest has become a wholly-owned subsidiary of the Company; 



        WHEREAS,
the Boards of Directors of the Company and Old Northwest desire that the holders of Common Shares (as hereinafter defined) have the same rights and privileges as the holders of
common stock of Old Northwest; and 





 

        WHEREAS,
the Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a "Right") for each share of Common Stock of the Company
outstanding as of the Effective Time of the Merger (as hereinafter defined) (the "Record Date"), it being understood that the Common Shares issued in the Merger and pursuant to the Investment
Agreement (as hereinafter defined) are deemed to be outstanding as of the Effective Time of the Merger, each Right representing the right to purchase one one-hundredth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption
Date and the Final Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be issued with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration Date in accordance with Section 22. 


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


 
 

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



        (a)   "Acquiring
Person" shall mean any Person (as such term is hereinafter defined) who or which shall be the Beneficial Owner (as such term is hereinafter defined) of a
number of Common Shares equal to 19% or more of the number of Common Shares (as such term is hereinafter defined) then outstanding (or, if such Person is an Institutional Investor (as such term is
hereinafter defined), 25% or more of the Common 



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Shares
then outstanding), but shall not include an Exempt Person (as such term is hereinafter defined); provided, however, that if the Board of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person" has become such inadvertently (including, without limitation, because (i) such Person was unaware that it beneficially owned a number of
Common Shares that would otherwise cause such Person to be a "Acquiring Person" or (ii) such Person was aware of the extent of its Beneficial Ownership of Common Shares but had no actual
knowledge of the consequences of such Beneficial Ownership under this Rights Agreement) and without any intention of changing or influencing control of the Company, and such Person, as promptly as
practicable divested or divests himself or itself of Beneficial Ownership of a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person, then such Person shall not
be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement. Notwithstanding the foregoing, (i) if a Person would otherwise be deemed an Acquiring Person upon
the adoption of this Agreement, such Person will not be deemed an Acquiring Person for any purposes of this Agreement unless and until such Person acquires Beneficial Ownership of any additional
Common Shares after the adoption of this Agreement, unless upon the consummation of the acquisition of such additional Common Shares such Person does not beneficially own a number of Common Shares
equal to 19% or more (25% or more in the case of an Institutional Investor) of the number of Common Shares then outstanding, and (ii) no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of Common Shares beneficially owned by such 



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Person
to 19% or more (25% or more in the case of an Institutional Investor) of the number of Common Shares then outstanding, provided, however, that if a Person shall become the Beneficial Owner of a
number of Common Shares equal to 19% or more (25% or more in the case of an Institutional Investor) of the number of Common Shares then outstanding by reason of such share acquisitions by the Company
and thereafter become the Beneficial Owner of any additional Common Shares, then such Person shall be deemed to be an "Acquiring Person" unless upon the consummation of the acquisition of such
additional Common Shares such Person does not beneficially own a number of Common Shares equal to 19% or more (25% or more in the case of an Institutional Investor) of the number of Common Shares then
outstanding. Notwithstanding any of the foregoing, in the event that an Institutional Investor (who is the Beneficial Owner of more than 19% of the Common Shares then outstanding at any time after the
date hereof) no longer satisfies the requirements set forth in the definition of "Institutional Investor" set forth below, then such Person shall promptly as practicable, but in no event later than 5
Business Days after the Board of Directors determines in good faith that such Person no longer meets the requirements set forth in the definition of "Institutional Investor", divest itself of a
sufficient number of Common Shares so that such Person no longer beneficially owns more than 19% of the Common Shares then outstanding. If such Person does not divest itself of Common Shares in
accordance with the requirements set forth in the prior sentence, then such Person shall be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement. The phrase "then
outstanding", when used with reference to a Person's Beneficial Ownership of Common Shares of the Company, shall mean the number of Common Shares then issued and outstanding 



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together
with the sum of (i) all Common Shares issuable upon conversion of all the shares of Series C Preferred Stock, par value $.01 per share, then issued and outstanding,
(ii) all Common Shares issuable upon the exercise of all employee stock options issued and outstanding as of November 16, 1995 and (iii) any other Common Shares not then actually
issued and outstanding but which such Person would be deemed to beneficially own hereunder. 


        (b)   "Affiliate"
and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on November 16, 1995. 



        (c)   A
Person shall be deemed the "Beneficial Owner" of, shall be deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially own": 



        (i)    any
securities which such Person or any of such Person's Affiliates or Associates is deemed to beneficially own, directly or indirectly within the meaning of
Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on November 16, 1995; 


        (ii)   any
securities which such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person 




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shall
not be deemed the Beneficial Owner of, or to beneficially own, (x) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for purchase, (y) securities which such Person has a right to acquire on the exercise of Rights at any time prior to the
time a Person becomes an Acquiring Person or (z) securities issuable upon exercise of Rights from and after the time a Person becomes an Acquiring Person if such Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof ("original Rights") or pursuant to
Section 11(i) or Section 11(n) with respect to an adjustment to original Rights; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement or
understanding to vote 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 rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); 


        (iii)  any
securities which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and selling group members 




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with
respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
of any securities of the Company; and 


        (iv)  any
securities of the Company convertible into Common Shares held by such Person. 




        Notwithstanding
any of the foregoing, no Person shall be deemed the Beneficial Owner of any securities (including any Common Shares) by virtue of the agreements, arrangements (including
any voting arrangements) and understandings set forth in the Stockholders' Agreement; provided, however, that a Person will be deemed the Beneficial Owner of any securities acquired pursuant to any
options or rights granted in the Stockholders' Agreement. 


        (d)   "Business
Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York, or the State in which the principal
office of the Rights Agent is located, are authorized or obligated by law or executive order to close. 



        (e)   "close
of business" on any given date shall mean 5:00 P.M., New York City 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 time, on the next succeeding Business Day. 


        (f)    "Common
Shares" shall mean the Company's Common Stock, par value $.01 per share and, prior to the Effective Time of the Merger, shares of the Common Stock (including the
Class A Common Stock and the Class B Common Stock), par value $.01 per share, of Old Northwest. 



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        (g)   "Common
Stock" when used with reference to any Person other than the Company shall mean the capital stock (or, in the case of an unincorporated entity, the equivalent
equity interest) with the greatest voting power of such other Person or, if such other Person is a subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person. 


        (h)   "Distribution
Date" shall have the meaning set forth in Section 3 hereof. 



        (i)    "Effective
Time of the Merger" shall mean the time when the Amended and Restated Merger Agreement is filed with the Secretary of State of the State of Delaware. 


        (j)    "Exempt
Person" shall mean (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity or trustee holding Common Shares for or pursuant to the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or of any Subsidiary of the Company and (iv) KLM so long as KLM is not the Beneficial Owner of any Common Shares other than Common
Shares which KLM has the option to purchase pursuant to the Option Agreement. In the event that KLM becomes the Beneficial Owner of any Common Shares in any manner other than pursuant to the Option
Agreement, KLM shall no longer be deemed an "Exempt Person" for purposes of this Agreement. 


        (k)   "Final
Expiration Date" shall have the meaning set forth in Section 7 hereof. 


        (l)    "Institutional
Investor" shall mean a Person who, as of May 1, 1998, was the Beneficial Owner of 10% or more of the Common Shares then outstanding and had a 



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Schedule 13G
on file with the Securities and Exchange Commission pursuant to the requirements of Rule 13d-1 under the Exchange Act with respect to such holdings, so long as
such Person (i) is principally engaged in the business of managing investment funds for unaffiliated securities investors and, as part of such Person's duties as agent for fully managed
accounts, holds or exercises voting or dispositive power over shares of Common Stock of the Company, (ii) such Person acquires Beneficial Ownership of shares of Common Stock of the Company
pursuant to trading activities undertaken in the ordinary course of such Person's business and not with the purpose nor the effect, either alone or in concert with any Person, of exercising the power
to direct or cause the direction of the management and policies of the Company or of otherwise changing or influencing the control of the Company, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to Rule 13d- 3(b) of the Exchange Act, and (iii) if such Person is
a Person included in Rule 13d-1(b)(ii) of the Exchange Act, such Person is not obligated to, and does not, file a Schedule 13D with respect to the securities of
the Company. 


        (m)  "Investment
Agreement" shall mean the Investment Agreement, dated as of January 25, 1998, as amended by Amendment No. 1, dated as of February 27,
1998, and Amendment No. 2, dated as of November 20, 1998, among the Company, Old Northwest, Air Partners, L.P., a Texas limited partnership (the "Partnership"), the partners of the
Partnership signatory thereto, 1998 CAI Partners, L.P., a Texas limited partnership, Bonderman Family Limited Partnership, a Texas limited partnership, 1992 Air, Inc., a Texas corporation, and
Air Saipan, Inc., a CNMI corporation. 



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        (n)   "KLM"
shall mean Koninklijke Luchtvaart Maatschappij N.V., a Netherlands corporation. 


        (o)   "NASDAQ
Stock Market" shall mean the stock market operated by the National Association of Securities Dealers, Inc. 


        (p)   "Option
Agreement" shall mean the Northwest Airlines Corporation Common Stock Option Agreement, dated as of May 1, 1998, between Old Northwest and KLM. 


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



        (r)   "Preferred
Stock" shall mean the Series D Junior Participating Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A. 


        (s)   "Redemption
Date" shall have the meaning set forth in Section 7 hereof. 


        (t)    "Securities
Act" shall mean the Securities Act of 1933, as amended. 


        (u)   "Stock
Acquisition Date" shall mean the first date of public announcement (which for purposes of this definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person. 


        (v)   "Stockholders
Agreement" shall mean the Second Amended and Restated Investor Stockholders' Agreement, as amended, dated as of December 23, 1993, as in effect on
the date of this Agreement. 



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        (w)  "Subsidiary"
of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person, and any corporation or other entity that is otherwise
controlled by such Person. 




 
 

           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 Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary or desirable. 


 
 

           Section 3.    Issue of Right Certificates.     (a) Until the earlier of (i) the tenth day
after the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than an Exempt Person) of, or of
the first public announcement of the intention of such Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in any Person becoming the
Beneficial Owner of a number of Common Shares equal to 19% or more of the number of Common Shares then outstanding (including any such date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for Common Shares registered in the names of the holders thereof and not by separate Right Certificates, and (y) the 


11





 

Rights
will be transferable only in connection with the transfer of the Common Shares. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to adjustment as provided herein) for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 


        (b)   On
the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially the
Form of Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the close of business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates for Common Shares outstanding
as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certif icate for Common Shares outstanding on the Record Date, with or without
a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. 


12









  





        (c)   Certificates issued for Common Shares (including, without limitation, upon conversion of the Series C Preferred Stock, disposition of Common Shares out of
treasury stock or issuance or reissuance of Common Shares out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 




This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between Northwest Airlines Corporation and Norwest Bank Minnesota, N.A., dated as of
November 20, 1998 as the same may be amended from time to time (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Northwest Airlines Corporation. 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. Northwest Airlines Corporation 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, as set forth in the Rights Agreement, Rights owned by or transferred to any Person who becomes an Acquiring Person (as defined in the Rights Agreement) and
certain transferees thereof will become null and void and will no longer be transferable. 


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




13





 


deemed
cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. 





        Notwithstanding
this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. 


 
 

           Section 4.    Form of Right Certificates.     The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall be substantially in the form
set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of
the NASDAQ Stock Market or of any other stock exchange or automated quotation system on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Sections
11, 13 and 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at
the price per one one-hundredth of a share of Preferred Stock set forth therein (the "Purchase Price"), but the number of such one one-hundredths of a share of Preferred Stock
and the Purchase Price shall be subject to adjustment as provided herein. 



 
 

          Section 5.    Countersignature and Registration.     (a) The Right Certificates shall be executed
on behalf of the Company by the President, any of the Vice Presidents, the Treasurer or the Controller of the
Company, either manually or by facsimile signature, shall have affixed thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right 


14





 

Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, neverthe less, 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 Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of the execution of this Agreement any such Person was not such an officer. 


        (b)   Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates. 


 
 

          Section 6.    Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right  Certificates.
    (a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof, at any time after the close of business on the Distribution Date, and prior
to the close of business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a share of Preferred Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to 


15





 

transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. 


        (b)   Subject
to the provisions of Section 11(a)(ii) hereof, at any time after the Distribution Date and prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of
like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 


 
 

           Section 7.    Exercise of Rights, Purchase Price; Expiration Date of Rights.     (a) Except as
otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right
Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate,
with the form of election to purchase 


16





 

on
the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a share of Preferred Stock as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the earliest of (i) the close of
business on November 16, 2005 (the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the "Redemption Date") or
(iii) the time at which such Rights are exchanged as provided in Section 24 hereof. 


        (b)   The
Purchase Price shall be initially $150 for each one one-hundredth of a share of Preferred Stock purchasable upon the exercise of a Right. The Purchase
Price and the number of one one-hundredths of a share of Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7. 



        (c)   Except
as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Stock certificates for the number of shares of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing interests in such number of one
one-hundredths 


17





 

of
a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. 


        (d)   Except
as otherwise provided herein, 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 exercisable Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof. 


        (e)   Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of assignment or election to purchase set forth on the reverse side of the Rights Certificate surrendered for such transfer or
exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. 


18





 

 
 

           Section 8.    Cancellation and Destruction of Right Certificates.     All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in 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 Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company. 


 
 

           Section 9.    Availability of Shares 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 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 (and, following the time that a Person becomes an Acquiring Person, Common Shares and other securities) issuable upon the
exercise of Rights may be listed or admitted to trading on the NASDAQ Stock Market or listed on any other national securities exchange or quotation system, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on the NASDAQ Stock Market or listed on any other exchange
or quotation system upon official notice of issuance upon such exercise. 



        (c)   From
and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of shares of Preferred Stock
(and 


19





 

following
the time that a Person first becomes an Acquiring Person, Common Shares and other securities) upon the exercise of Rights, to register and qualify such shares of Preferred Stock (and
following the time that a Person first becomes an Acquiring Person, Common Shares and other securities) under the Securities Act and any applicable state securities or "Blue Sky" laws (to the extent
exemptions therefrom are not available), cause such registration statement and qualifications to become effective as soon as possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer exercisable for such securities and the Final Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension
is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective. 


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


20





 

        (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 or of any shares of Preferred Stock (or Common Shares or other securities) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Stock (or Common Shares or other securities) in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for Preferred Stock (or Common Shares or other securities) upon the exercise of any Rights until any such tax shall have been paid (any such
tax being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable satisfaction that no such tax is due. 


 
 

           Section 10.    Preferred Stock Record Date.     Each Person in whose name any certificate for 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 any 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 certificate shall be dated, the next succeeding Business Day on which the Preferred Stock
transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate 


21





 

shall
not be entitled to any rights of a holder of Preferred Stock for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 


 
 

           Section 11.    Adjustment of Purchase Price, Number of Shares and Number of Rights.     The Purchase
Price, the number of shares of Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11. 



        (a)   (i) In
the event 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 Preferred Stock or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), 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, the holder would have owned upon such 



22







  



exercise
and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. 


        (ii)   Subject
to Section 24 of this Agreement and except as otherwise provided in this Section 11(a)(ii), in the event any Person becomes an Acquiring Person,
each holder of a Right shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths
of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of Common Shares (or at the
option of the Company, such number of one one-hundredths of shares of Preferred Stock) as shall equal the result obtained by (x) 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 and dividing that product by (y) 50% of the then current per share market price of
the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event; provided, however, that the Purchase Price and the number of Common Shares
so receivable upon exercise of a Right shall thereafter be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to
the contrary, however, from and after the time (the "invalidation time") when any Person first becomes an Acquiring Person, any 



23





 

Rights
that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or any such Affiliate
or Associate) who becomes a transferee after the invalidation time or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or
concurrently with the invalidation time pursuant to either (I) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding which has
the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be void without any further action and any holder of such Rights shall thereafter
have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the invalidation time, no Right Certificate shall be issued pursuant to Section 3 or Section 6
hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have
become void pursuant to the provisions of this paragraph shall be cancelled. From and after the occurrence of an event specified in Section 



24





 

13(a)
hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii). 


        (iii)  The
Company may at its option substitute for a Common Share issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) such number
or fractions of shares of Preferred Stock having an aggregate current market value equal to the current per share market price of Common Shares. In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Board of Directors shall, to the
extent permitted by applicable law and any material agreements then in effect to which the Company is a party (A) determine the excess of (1) the value of the Common Shares issuable upon
the exercise of a Right in accordance with the foregoing subparagraph (ii) (the "Current Value") over (2) the then current Purchase Price multiplied by the number of one
one-hundredths of shares of Preferred Stock for which a Right was exercisable immediately prior to the time that the Acquiring Person became such (such excess, the "Spread"), and
(B) with respect to each Right (other than Rights which have become void pursuant to Section 11(a)(ii)), make adequate provision to substitute for the Common Shares issuable in
accordance with subparagraph (ii) upon exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) shares of
Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of 



25





 

shares
of preferred stock which, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the Common Shares, are deemed in good faith by the Board of Directors
to have substantially the same value as the Common Shares (such shares of preferred stock and shares or fractions of shares of preferred stock are hereinafter referred to as "Common Share
equivalents"), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having a value which, when added to the value of the Common Shares
actually issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally recognized investment banking firm selected in good faith by the Board of Directors; provided, however, if the Company shall not
make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the date that the Acquiring Person became such (the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect to which the
Company is a party, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), and then, if necessary, such number or
fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon the date any Person
becomes an Acquiring Person, the Board of Directors shall determine in good faith that it is likely that sufficient additional 



26





 

Common
Shares could be authorized for issuance upon exercise in full of the Rights, then, if the Board of Directors so elects, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken
pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such second sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any "Common Share equivalent" shall be deemed to equal the
current per share market price of the Common Shares. The Board of Directors of the Company may, but shall not be required to, establish procedures to allocate the right to 



27





 

receive
Common Shares upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii). 


        (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 (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or equivalent preferred shares at a price per share of Preferred Stock or equivalent preferred shares (or having a conversion price per share,
if a security convertible into shares of Preferred Stock or equivalent preferred shares) less than the then current per share market price of the Preferred Stock (determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and equivalent preferred shares outstanding on such record date plus the number of shares of
Preferred Stock and equivalent preferred shares which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred
Stock and equivalent preferred shares outstanding on such record date plus the number of additional shares of Preferred Stock and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in 



28





 

no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. Shares of Preferred Stock and equivalent preferred shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 


        (c)   In
case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) 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 



29





 

described
in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share
of Preferred Stock, and the denominator of which shall be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed. 



        (d)   (i) Except
as otherwise provided herein, for the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such 



30





 

Security.
The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in
either case as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NASDAQ Stock Market or, if the Security is not listed
or admitted to trading on the NASDAQ Stock Market, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter market or such other system then in use, or, if on any such date the Security is not quoted by
any organization in the over-the-counter market, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. 


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



31





 

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


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


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



32







  




13
and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. 



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


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


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



33





 

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



        (j)    Irrespective
of any adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon the exercise
of 



34





 

the
Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a share of Preferred Stock which
were expressed in the initial Right Certificates issued hereunder. 



        (k)   Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the Preferred Stock or other shares of capital
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 or other such shares at such adjusted Purchase Price. 


        (l)    In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the 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. 


        (m)  Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision 



35





 

of
the Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the current market price, issuance wholly for cash or Preferred Stock or securities which by their terms
are convertible into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in shares of Preferred Stock or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders. 


        (n)   Anything
in this Agreement to the contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares or (ii) effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of a dividend payable in Common Shares) into a greater or lesser number of Common Shares, then in any such case, the number of Rights associated with each
Common Share then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated with each Common Share immediately prior to such event by a fraction the numerator of which shall be the total number of
Common Shares outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of Common Shares outstanding immediately following the occurrence of
such event. 


        (o)   The
Company agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is taken it is 



36





 

reasonably
foreseeable that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights. 




 
 

           Section 12.    Certificate of Adjusted Purchase Price or Number of Shares.     Whenever an adjustment
is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred 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 (if so required under Section 25 hereof). The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate. 


 
 

           Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earnings Power.     (a) In
the event, directly or indirectly, at any time after any Person has become an Acquiring Person, (i) the Company shall merge with and into any
other Person, (ii) any Person shall consolidate with the Company, or any Person shall 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 Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or more of its wholly-owned
Subsidiaries), then upon the first occurrence of such event, proper provision shall be made so that: (A) each 


37





 

holder
of record of a Right (other than Rights which have become void pursuant to Section 11(a)(ii)) shall thereafter have the right to receive, upon the exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable (whether or not such Right was then
exercisable) immediately prior to the time that any Person first became an Acquiring Person (each as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b), 11(c), 11(h),
11(i) and 11(m)), in accordance with the terms of this Agreement and in lieu of Preferred Stock, such number of validly issued, fully paid and non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as defined herein) not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the time
that any Person first became an Acquiring Person (as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)) and (2) dividing that product
by 50% of the then current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d)(i) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; provided that the Purchase Price and the number of shares of Common Stock of such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in Section 11(f) of this Agreement to reflect any events occurring in respect of such Principal
Party after the date of the such consolidation, merger, sale or transfer; (B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger,
sale ortransfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to such Principal Party; and
(D) such Principal Party shall take such steps 


38





 

(including,
but not limited to, the reservation of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property. 


        (b)   "Principal
Party" shall mean 



        (i)    in
the case of any transaction described in (i) or (ii) of the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which the shares of Common Shares are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger,
or, if there is more than one such Person, the Person the shares of Common Stock of which have the greatest aggregate market value of shares outstanding or (y) if the 



39





 

Person
that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company if it survives) or (z) the Person resulting from the
consolidation; and 


        (ii)   in
the case of any transaction described in (iii) of the first sentence in Section 13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons as is the issuer of Common Stock
having the greatest aggregate market value of shares outstanding; 


provided,
however, that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, the term "Principal Party" shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one Person and the
Common Stocks of all of such Persons have been so registered, the term "Principal Party" shall refer to whichever of such Persons is the issuer of Common Stock having the greatest aggregate market
value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary
of both or all of such joint 



40





 

venturers,
and the Principal Party in each such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such
interests. 




        (c)   The
Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or transfer of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the
Principal Party will: 



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


        (ii)   use
its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the NASDAQ Stock Market or on another national securities
exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the NASDAQ Stock Market or such securities exchange, or, if
the Common Stock of the Principal Party shall 



41





 

not
be listed or admitted to trading on the NASDAQ Stock Market or a national securities exchange, to cause the Rights and the securities receivable upon exercise of the Rights to be reported by such
other system then in use; 


        (iii)  deliver
to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act; and 


        (iv)  obtain
waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of
outstanding Rights. 




        (d)   In
case the Principal Party has 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 (other than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common Stock of such Principal Party at less than the then current market price per
share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock of such Principal Party at less than such then current market price,
or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions of Section 13,
then, in such event, the Company hereby agrees with each holder of Rights that it 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 


42





 

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)   The
Company covenants and agrees that it shall not, at any time after a Person first becomes an Acquiring Person, enter into any transaction of the type contemplated by
(i)—(iii) of Section 13(a) hereof if (x) at the time of or immediately after such consolidation, merger, sale, transfer or other transaction 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,
(y) prior to, simultaneously with or immediately after such consolidation, merger, sale, transfer of other transaction, the stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (z) the form
or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. 


 
 

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


43







  





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


        (b)   The
Company shall not be required to issue fractions of Preferred 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). Interests in fractions 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 selected by it; provided, that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a 


44





 

share
of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one share of Preferred Stock. For the purposes of this Section 14(b), the current market value of a share of Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. 



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


 
 

           Section 15.    Rights of Action.     All rights of action in respect of this Agreement, excepting the
rights of action given to the Rights Agent under 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 Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), on his own behalf and for his own benefit, may 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 (or, prior to the Distribution Date, such Common Shares) in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the 


45





 

obligations
under, and injunctive relief against actual or threatened violations of, the obligations 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 the Common Shares; 


        (b)   after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office or agency of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and 


        (c)   the
Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Share 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 Common Share certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. 




 
 

           Section 17.    Right Certificate Holder Not Deemed a Stockholder.     No holder, as such, of any Right
Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred 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 


46





 

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


 
 

           Section 18.    Concerning the Rights Agent.     (a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and 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 arising therefrom, directly or indirectly. 


        (b)   The
Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Stock or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where 


47





 

necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 


 
 

           Section 19.    Merger or Consolidation or Change of Name of Rights Agent.     (a) Any corporation
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of
the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in this Agreement. 


        (b)   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 


48





 

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


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


        (d)   The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates 



49





 

(except
its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 


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


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



50





 

        (g)   The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by
the Rights Agent to be one of the President, the Chief Financial Officer or the Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. Any
application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent
under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of,
the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted. 



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



51





 

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)    If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof), the Rights
Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 




 
 

           Section 21.    Change of Rights Agent.     The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Shares or Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall 


52





 

otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or any
State thereof, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred
Stock, and, following the Distribution Date, 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 ofthe resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 


53





 

 
 

           Section 22.    Issuance of New Right Certificates.     Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing
Rights in such forms as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares following the Distribution Date
and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company may with respect to such Common Shares so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company in each case existing prior to the Distribution Date, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or
sale. 


 
 

           Section 23.    Redemption.     (a) The Board of Directors of the Company may, at any time prior to
such time as any Person first becomes an Acquiring Person, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the
redemption price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash, Common Shares (based on the current market price of the Common Shares at the time of
redemption) or any other form of consideration deemed appropriate by the Board of Directors. 


54





 

        (b)   Immediately
upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later
time as the Board of Directors may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights (or
such later time as the Board of Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. 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 shall state the method by which the payment of the
Redemption Price will be made. 


 
 

           Section 24.    Exchange.     (a) The Board of Directors of the Company, may, at its option, at any
time after any Person first becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares (or, at the
Company's option, Preferred Stock) at an exchange ratio of one Common Share (or one one-hundredth of a share of Preferred Stock) per Right, (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 (1) after any Person (other than an 


55





 

Exempt
Person), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of a number of Common Shares equal to 50% or more of the number of Common Shares then
outstanding or (2) after the occurrence of an event specified in Section 13(a) hereof. 


        (b)   Immediately
upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common
Shares 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 shall promptly mail a notice of any such exchange to all of the holders of the Rights so exchanged 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 Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights. 


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


56









  





effort, be unable to take such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, to the extent of such insufficiency, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fractions thereof (or equivalent preferred shares as such term is defined in Section 11(b)) having
an aggregate current per share market price (determined pursuant to Section 11(d) hereof) equal to the current per share market price of Common Shares (determined pursuant to
Section 11(d) hereof) as of the date of issuance of such shares of Preferred Stock or fractions thereof (or equivalent preferred shares). 


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


 
 

           Section 25.    Notice of Certain Events.     (a) In case the Company shall at any time after the
earlier of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its 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, 


57





 

rights
or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the Company, or (v) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred 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 10 days prior to the record date for determining
holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred Stock, whichever shall be the earlier. 


        (b)   In
case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Shares) in accordance with Section 26 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) and Section 13 hereof. 


58





 

 
 

           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: 






Northwest
Airlines Corporation

2700 Lone Oak Parkway

Eagan, Minnesota 55121

Attention: Secretary 







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






Norwest
Bank Minnesota, N.A.

161 North Concord Exchange

P.O. Box 738

Eagan, Minnesota 55121

Attention: Secretary 







        Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 



 
 

          Section 27.    Supplements and Amendments.     Except as otherwise provided in this Section 27, for
so long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights are
no longer redeemable, except as otherwise provided in this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, 


59





 

supplement
or amend this Agreement without the approval of any holders of Rights Certificates in order to (i) cure any ambiguity, (ii) correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein, (iii) shorten or lengthen any time period hereunder, or (iv) change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable; provided that no such supplement or amendment shall adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such amendment may cause the rights again to become redeemable or cause the Agreement again to become amendable other than
in accordance with this sentence. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made that decreases the Redemption Price. Upon the delivery
of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. 


 
 

          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.    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 Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares). 


60





 

 
 

           Section 30.    Severability.     If any term, provision, covenant or restriction of this Agreement or
applicable to 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 af fected,
impaired or invalidated. 


 
 

           Section 31.    Governing Law.     This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 



 
 

          Section 32.    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 33.    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. 


61





 

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



	Attest:	 	NORTHWEST AIRLINES CORPORATION
	

By	
 	

/s/  MICHAEL L. MILLER      
	
 	

By	
 	

/s/  DOUGLAS M. STEENLAND      

	 	 	Name:	 	Michael L. Miller	 	 	 	Name:	 	Douglas M. Steenland
	 	 	Title:	 	Associate General Counsel

and Assistant Secretary	 	 	 	Title:	 	Executive Vice President,

General Counsel and Secretary
	

Attest:	
 	

NORWEST BANK MINNESOTA, N.A.
	

By	
 	

/s/  SUZANNE SWITS      
	
 	

By	
 	

/s/  KENNETH P. SWANSON      

	 	 	Name:	 	Suzanne Swits	 	 	 	Name:	 	Kenneth P. Swanson
	 	 	Title:	 	Assistant Secretary	 	 	 	Title:	 	Vice President




62






  



 
 

Exhibit A    
    


FORM  


 OF  


 CERTIFICATE OF DESIGNATIONS  


 OF  


 SERIES D JUNIOR PARTICIPATING PREFERRED STOCK  


 OF  


 NEWBRIDGE PARENT CORPORATION  


 (which shall be renamed Northwest Airlines Corporation)  


 (Pursuant to Section 151 of the

General Corporation Law of the State of Delaware)  


        Newbridge Parent Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the "Company"),
hereby certifies that the following resolution was duly adopted by the Board of Directors of the Company as required by Section 151 of the General Corporation Law of the State of Delaware at a
meeting duly called and held on November 20, 1998: 


        RESOLVED,
that pursuant to the authority granted to and vested in the Board of Directors of the Company (hereinafter called the "Board of Directors" or the "Board") in accordance with
the provisions of the Company's Certificate of Incorporation, as amended to date (hereinafter called the "Certificate of Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company and hereby states the designation and number of shares, and fixes the relative rights, powers and preferences thereof, and the
limitations thereof, as follows: 


        Section 1.    Designation and Amount.    The shares of such series shall be designated as "Series D
Junior Participating Preferred Stock" (the "Series D Preferred Stock") and the number of shares constituting the Series D Preferred Stock shall be 3,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series D Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series D Preferred Stock. 


A-1





 

        Section 2.    Dividends and Distributions.    



        (A)  Subject
to the rights of the holders of any shares of any series of Preferred Stock of the Company (the "Preferred Stock") (or any similar stock) ranking prior and
superior to the Series D Preferred Stock with respect to dividends, the holders of shares of Series D Preferred Stock, in preference to the holders of Common Stock, par value $.01 per
share of the Company (the "Common Shares") and of any other stock of the Company ranking junior to the Series D 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 last day of January, April, July, and October in each year (each such date being referred
to herein as a "Dividend Payment Date"), commencing on the first Dividend Payment Date after the first issuance of a share or fraction of a share of Series D Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1 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 Common Shares, declared on
the Common Shares since the immediately preceding Dividend Payment Date or, with respect to the first Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series D Preferred Stock. In the event the Company shall at any time after November 20, 1998, declare or pay any dividend on the Common Shares payable in Common Shares, or effect a
subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event. 


        (B)  The
Company shall declare a dividend or distribution on the Series D Preferred Stock as provided in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Shares (other than a dividend payable in shares of Common Shares); provided that, in the event no dividend or distribution shall have been declared on
the Common Shares during the period between any Dividend Payment Date and the next subsequent Dividend Payment Date, a dividend of $1 per share on the Series D Preferred Stock shall
nevertheless be payable, when, as and if declared, on such subsequent Dividend Payment Date. 


        (C)  Dividends
shall begin to accrue and be cumulative, whether or not earned or declared, on outstanding shares of Series D Preferred Stock from the Dividend Payment
Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Dividend Payment Date or is a date after the record date for the determination of holders of shares of
Series D Preferred Stock entitled to receive a quarterly dividend and before such Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative 


A-2





 

from
such Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series D Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of Series D Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment thereof. 


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



        (A)  Subject
to the provision for adjustment hereinafter set forth and except as otherwise provided in the Certificate of Incorporation or required by law, each share of
Series D Preferred Stock shall entitle the holder thereof to 100 votes on all matters upon which the holders of the Common Shares of the Company are entitled to vote. In the event the Company
shall at any time after November 20, 1998, declare or pay any dividend on the Common Shares payable in Common Shares, or effect a subdivision or combination or consolidation of the outstanding
Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the number of votes per share
to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the
number of Common Shares outstanding immediately after such event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event. 


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



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


A-3





 

        (i)    declare
or pay dividends, or make any other distributions, on any shares of stock ranking junior (as to dividends) to the Series D Preferred Stock; 



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


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


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




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


        Section 5.    Reacquired Shares.    Any shares of Series D Preferred Stock purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. 


        Section 6.    Liquidation, Dissolution or Winding Up.    Upon any liquidation, dissolution or winding up of the
Company, no distribution shall be made (A) to the holders of the Common Shares or of shares of any other stock of the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series D Preferred Stock unless, prior thereto, the holders of shares of Series D Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not earned or declared, to the date of such payment, provided that the holders of shares of Series D 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 


A-4





 

holders
of Common Shares, or (B) to the holders of shares of stock ranking on a parity upon liquidation, dissolution or winding up with the Series D Preferred Stock, except
distributions made ratably on the Series D Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at any time after November 20, 1998 declare or pay any dividend on the Common Shares payable in Common Shares, or effect a
subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the aggregate amount to which holders of shares of Series D Preferred Stock were entitled immediately prior to such event under the proviso in clause (A)
of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of Common Shares outstanding immediately after such event and the denominator
of which is the number of Common Shares that were outstanding immediately prior to such event. 


        Section 7.    Consolidation, Merger, etc.    In case the Company shall enter into any consolidation, merger,
combination or other transaction in which the Common Shares are converted into, exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each
share of Series D Preferred Stock shall at the same time be similarly converted into, exchanged for or
changed into an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each Common Share is converted, exchanged or converted. In the event the Company shall at any time after November 20, 1998 declare or pay
any dividend on the Common Shares payable in Common Shares, or effect a subdivision or combination or consolidation of the outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common Shares, then in each such case the amount set forth in the preceding sentence with respect to the conversion, exchange or
change of shares of Series D Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares that were outstanding immediately prior to such event. 


        Section 8.    No Redemption.    The shares of Series D Preferred Stock shall not be redeemable from any
holder. 


        Section 9.    Rank.    The Series D Preferred Stock shall rank, with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up of the Company, junior to all other series of Preferred Stock and senior to the Common Shares. 


        Section 10.    Amendment.    If any proposed amendment to the Certificate of Incorporation (including this
Certificate of Designations) would alter, change or repeal any of the preferences, powers or special rights given to the Series D Preferred Stock so as to affect the Series D Preferred
Stock adversely, then the holders of the Series D Preferred Stock shall be entitled to vote separately as a class upon such amendment, and the affirmative vote of two-thirds 


A-5





 

of
the outstanding shares of the Series D Preferred Stock, voting separately as a class, shall be necessary for the adoption thereof, in addition to such other vote as may be required by the
General Corporation Law of the State of Delaware. 


A-6





 

        IN
WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Company by its President and Chief Executive Officer and attested by its Secretary this 20th day of
November, 1998. 



	

 	
 	

 
	

 	
 	

 President and Chief Executive Officer
	

Attest:	
 	

 
	

 	
 	

 
	

 Secretary	
 	

 




A-7






  



 
 

Exhibit B    
    


Form of Right Certificate  



	Certificate No. R-             	 	              Rights





NOT
EXERCISABLE AFTER NOVEMBER 16, 2005 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 


Right Certificate  


NORTHWEST AIRLINES CORPORATION  


        This certifies that                          or registered
assigns, is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of November 20, 1998, as the same may be amended from time to time (the
"Rights Agreement"), between Northwest Airlines Corporation, a Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A. (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on November 16, 2005 at the office or agency of the Rights Agent
designated for such purpose, or of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series D Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company, at a purchase price of $150 per one one-hundredth of a share of Preferred Stock (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 Rights Certificate (and the number of one
one-hundredths of a share of Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of
November 16, 1995, based on the Preferred Stock as constituted at such date (it being understood that at such date the Preferred Stock was a security of Old Northwest (as defined in the Rights
Agreement) and not the Company). As provided in the Rights Agreement, the Purchase Price, the number of one one-hundredths of a share of Preferred Stock (or other securities or property)
which may be purchased upon the exercise of the Rights and the number of 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 


B-1





 

Agreement
are on file at the principal executive offices of the Company and the above-mentioned office or agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a
copy of the Rights Agreement without charge after receipt of a written request therefor. 


        This
Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent designated for such purpose, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of 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 (i) may be redeemed by the Company at a redemption price of $.01 per Right or
(ii) may be exchanged in whole or in part for shares of Preferred Stock or shares of the Company's Common Stock, par value $.01 per share. 


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


        No
holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the 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





 

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



	Dated:	 	 	 	 
	

ATTEST:	

 	
 	

NORTHWEST AIRLINES CORPORATION
	

By	

NORWEST BANK MINNESOTA, N.A.	

 	
 	

By	


	

Countersigned:	

 	
 	

 	

 
	

	

,	
 	

 	

 
	as Rights Agent	 	 	 	 
	

By	

	

 	
 	

 	

 
	 	Authorized Signature	 	 	 	 




B-3





 
Form of Reverse Side of Right Certificate  


 FORM OF ASSIGNMENT  


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


        FOR VALUE RECEIVED                          hereby sells,
assigns and transfer unto                         
 




(Please
print name and address of transferee) 





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



	Dated:	
	 	 
	

 	

 	
 	


	 	 	 	Signature





Signature
Guaranteed: 


        Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States. 




(To
be completed) 


        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and are not being assigned
to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 



	

 	
 	

 Signature




B-4





 
FORM OF ELECTION TO PURCHASE  


 (To be executed if holder desires to exercise

Rights represented by the Rights Certificate)  


        To
Northwest Airlines Corporation: 


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




(Please
print name and address) 





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


Please
insert social security

or other identifying number 




(Please
print name and address) 






	

Dated:	

	
 	


	 	 	 	Signature





(Signature
must conform to holder specified on Right Certificate) 


Signature
Guaranteed: 


        Signature
must be guaranteed by a member of firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States. 


B-5





 
(To be completed)  





        The
undersigned certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, and were not acquired by the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) 



	

 	
 	

 Signature




NOTICE  


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


        In
the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such Assignment or Election to
Purchase will not be honored. 


B-6






  



 
 

Exhibit C    
    


UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 


SUMMARY OF RIGHTS TO PURCHASE

Shares of Preferred Stock  


        On November 20, 1998, the Board of Directors of Northwest Airlines Corporation, a Delaware corporation (formerly Newbridge Parent Corporation) (the
"Company"), authorized and declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of Common Stock, par value $.01 per share, of the Company (the "Common
Shares"). The dividend is payable to the stockholders of record as of the time of filing of the Amended and Restated Agreement and Plan of Merger, dated as of October 30, 1998, among Northwest
Airlines Holdings Corporation, a Delaware corporation (formerly Northwest Airlines Corporation), the Company and Newbridge Merger Corporation, a Delaware corporation, is filed with the Secretary of
State of the State of Delaware (the "Record Date"). Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series D Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred Stock") of the Company at a price of $150 per one one-hundredth of a share of Preferred Stock (as the same may be
adjusted, the "Purchase Price"). The description and terms of the Rights are set forth in a Rights Agreement dated as of November 20, 1998, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and Norwest Bank Minnesota, N.A., as Rights Agent (the "Rights Agent"). 


        Until
the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of a number of Common Shares equal to 19% or more (25% or more in the case of certain Institutional Investors (as such term is defined in the Rights Agreement)) of the sum of
(a) the Common Shares then issued and outstanding, (b) all Common Shares issuable upon conversion of all the shares of Series C Preferred Stock, par value $.01 per share
("Series C Preferred Stock"), then issued and
outstanding, (c) all Common Shares issuable upon the exercise of all employee stock options issued and outstanding as of November 16, 1995 and (d) any other Common Shares not then
actually issued and outstanding but which such Person would be deemed to beneficially own under the Rights Agreement (together, the "outstanding Common Shares"); provided, however, that if a Person
would be deemed an Acquiring Person upon the adoption of the Rights Agreement, such Person will not be deemed an "Acquiring Person" for any purposes of the Rights Agreement unless and until such
Person acquires beneficial ownership of any additional Common Shares after the date of the adoption of the Rights Agreement unless upon the consummation of the acquisition of such additional Common
Shares such Person does not beneficially own a number of Common Shares equal to 19% or more (25% or more in the case of certain Institutional Investors) of the outstanding Common Shares or
(ii) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of a
number of Common Shares equal to 19% or more (25% or 


C-1





 

more
in the case of certain Institutional Investors) of the number of outstanding Common Shares (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record Date, by such Common Share certificate together with a copy of the Summary of Rights distributed to each holder of Common
Shares (the "Summary of Rights"). 


        The
Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Share certificates issued after the Record Date upon transfer or new issuances of Common Shares (including
pursuant to the conversion of Series C Preferred Stock) will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common Shares outstanding as of the Record Date, even without such notation or a copy of the Summary of Rights, will also constitute
the transfer of the Rights associated with the Common Shares represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the
Rights. 


        The
Rights are not exercisable until the Distribution Date. The Rights will expire on November 16, 2005 (the "Final Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the Company, in each case as described below. 


        The
Purchase Price payable, and the number of shares 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 or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the
then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic
cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). 


        The
number of outstanding Rights are also subject to adjustment in the event of a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in any such case, prior to the Distribution Date. 



        Shares
of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to an aggregate dividend of 100 times the dividend declared per share of Common Stock. In the event of liquidation, the
holders of the Preferred Stock will be entitled to a minimum preferential 


C-2





 

liquidation
payment of $100 per share (plus any accrued but unpaid dividends) but will be entitled to an aggregate payment of 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. Finally, in the event of any merger, consolidation or other transaction in which shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to receive 100 times the amount received per share of Common Stock. These rights are protected by customary antidilution provisions. 


        In
the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right at the then current exercise price of the Right, that number of Common Shares (or one
one-hundredths of a share of Preferred Stock) having a market value of two times the exercise price of the Right. 



        In
the event that, after a person or group has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have become void)
will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the person with whom the Company has
engaged in the foregoing
transaction (or its parent), which number of shares at the time of such transaction will have a market value of two times the exercise price of the Right. 



        At
any time after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of beneficial ownership of a number of Common Shares equal to 50%
or more of the number of outstanding Common Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will have become void), in
whole or in part, at an exchange ratio of one Common Share, or one one-hundredth of a share of Preferred Stock (or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to adjustment). 


        With
certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional
shares of Preferred Stock will be issued (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company,
be evidenced by depositary receipts) 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 prior to the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Immediately upon any redemption of the Rights, the right to 


C-3





 

exercise
the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 


        For
so long as the Rights are then redeemable, the Company may amend the Rights in any manner except that it may not decrease the redemption price. After the Rights are no longer
redeemable the Company may, except with respect to the Redemption Price, amend the Rights in any manner that does not adversely affect the interests of holders of the Rights. 



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


        A
copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by reference. 


C-4