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Exhibit 4.1    
    


 
 

RIGHTS AGREEMENT
  
    dated as of April 30, 2003
  
    by and between
  
    MAGNETEK, INC.
  
    and
  
    THE BANK OF NEW YORK
  
    as Rights Agent    










  



 
 

TABLE OF CONTENTS    
    



	 
	 	 
	 	Page

	Section 1.	 	Certain Definitions	 	1
	

Section 2.	
 	

Appointment of Rights Agent	
 	

5
	

Section 3.	
 	

Issuance of Right Certificates	
 	

5
	

Section 4.	
 	

Form of Right Certificates	
 	

7
	

Section 5.	
 	

Countersignature and Registration	
 	

7
	

Section 6.	
 	

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

7
	

Section 7.	
 	

Exercise of Rights	
 	

8
	

Section 8.	
 	

Cancellation and Destruction of Right Certificates	
 	

9
	

Section 9.	
 	

Reservation and Availability of Capital Stock	
 	

9
	

Section 10.	
 	

Securities Record Date	
 	

10
	

Section 11.	
 	

Adjustment of Exercise Price, Number of Shares Issuable Upon Exercise of Rights or Number of Rights	
 	

10
	

Section 12.	
 	

Certificate of Adjusted Exercise Price or Number of Shares Issuable Upon Exercise of Rights	
 	

14
	

Section 13.	
 	

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

15
	

Section 14.	
 	

Fractional Rights and Fractional Shares	
 	

16
	

Section 15.	
 	

Rights of Action	
 	

17
	

Section 16.	
 	

Agreement of Right Holders	
 	

17
	

Section 17.	
 	

Right Holder and Right Certificate Holder Not Deemed a Stockholder	
 	

17
	

Section 18.	
 	

Concerning the Rights Agent	
 	

18
	

Section 19.	
 	

Merger or Consolidation or Change of Name of Rights Agent	
 	

18
	

Section 20.	
 	

Duties of Rights Agent	
 	

19
	

Section 21.	
 	

Change of Rights Agent	
 	

20
	

Section 22.	
 	

Issuance of New Right Certificates	
 	

21
	

Section 23.	
 	

Redemption of Rights	
 	

21
	

Section 24.	
 	

Exchange of Rights	
 	

21
	

Section 25.	
 	

Notice of Certain Events	
 	

22
	

Section 26.	
 	

Notices	
 	

22
	

Section 27.	
 	

Supplements and Amendments	
 	

23
	

Section 28.	
 	

Certain Covenants	
 	

23
	

Section 29.	
 	

Successors	
 	

24
	

Section 30.	
 	

Benefits of this Agreement	
 	

24
	 	 	 	 	 





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Section 31.	
 	

Severability	
 	

24
	

Section 32.	
 	

Governing Law	
 	

24
	

Section 33.	
 	

Counterparts	
 	

24
	

Section 34.	
 	

Descriptive Headings	
 	

24
	


 TABLE OF EXHIBITS
	

Exhibit A	
 	

Form of Right Certificate	
 	

 




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RIGHTS AGREEMENT    
    



        This Rights Agreement ("Agreement") is made and entered into as of the 30th day of April, 2003, by and between Magnetek, Inc., a Delaware corporation (the
"Company"), and The Bank of New York (the "Rights Agent"). 


        WHEREAS,
the Board of Directors of the Company has authorized and declared a dividend of one preferred stock purchase right (a "Right") for each Common Share (as hereinafter defined) of
the Company, which dividend is payable on May 12, 2003 (the "Record Date") to the holders of record of Common Shares as of the Close of Business (as hereinafter defined) on such date; 


        WHEREAS,
the Board of Directors of the Company has further authorized and directed the issuance of one (subject to adjustment of such number as provided in this Agreement) Right for
(A) each Common Share that shall be issued by the Company at any time after the Record Date and prior to the earliest of the date of the first Section 11(a)(ii) Event, the date of
the first Section 13(a) Event, the Redemption Date or the Expiration Date (as such terms are hereinafter defined), and (B) each Common Share that shall be issued by the Company at any
time on or after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date or the
Expiration Date pursuant to the exercise of conversion rights, exchange rights, rights (other than Rights), warrants or options that shall have been issued or granted prior to the earlier of the date
of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event, unless the Board of Directors shall provide otherwise at the time of the issuance or grant of
such conversion rights, exchange rights, rights (other than Rights), warrants or options; and 


        WHEREAS,
in connection with the matters referred to herein, the Company desires to appoint the Rights Agent to act on behalf of the Company for the benefit of the holders of Rights, and
the Rights Agent is willing so to act; 


        NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual agreements set forth herein, and for the benefit of the holders of Rights, the parties hereto hereby agree as
follows: 


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


        (a)   "Affiliate"
and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect
on the date hereof. 


        (b)   A
Person shall be deemed the "Beneficial Owner" of and shall be deemed to "Beneficially Own": 



          (i)  any
securities that such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the
Exchange Act and Rule 13d-3 promulgated under the Exchange Act, in each case as in effect on the date hereof; 


         (ii)  any
securities that such Person or any of such Person's Affiliates or Associates has the right to acquire (whether such right is exercisable immediately, or only after
the passage of time, compliance with regulatory requirements, the fulfillment of a condition, or otherwise) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise, provided that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities
tendered pursuant to a tender offer or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or
exchange; 


        (iii)  any
securities that such Person or any of such Person's Affiliates or Associates has the right to vote, alone or in concert with others, pursuant to any agreement,
arrangement or understanding, provided that a Person shall not be deemed the Beneficial Owner of, or to 



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Beneficially
Own, any security if the agreement, arrangement or understanding to vote such security (A) arises solely from a revocable proxy given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy solicitation made pursuant to and in accordance with the applicable rules and regulations of the Exchange Act, and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); 



        (iv)  any
securities that 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 for the purpose of acquiring, holding, voting (other than voting pursuant to a revocable proxy as described in the proviso to
Section 1(b)(iii) hereof) or disposing of any securities of the Company; and 


         (v)  on
any day on or after the Distribution Date, all Rights that prior to such date were represented by certificates for Common Shares that such Person Beneficially Owns on
such day. 




        Notwithstanding
anything to the contrary in this Section 1(b), a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of, or
to Beneficially Own, any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such
acquisition. 


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


        (d)   "Close
of Business" on any given date shall mean 5:00 o'clock 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 o'clock p.m., New York City time, on the next succeeding Business Day. 


        (e)   "Closing
Price" of a stock or other security on any day shall be the last sale price, regular way, per share of such stock or unit of such other security on such day or,
in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock Exchange or, if such stock or other security is not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such stock or other security is listed or admitted
to trading or, if such stock or other security is not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use or, if on any such date such stock or other security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker that makes a market in such stock or other security and that is selected by the Board of Directors of the Company. 


        (f)    "Common
Share" shall mean one share of the Common Stock, par value $.01 per share, of the Company, unless used with reference to a Person other than the Company, in
which case it shall mean one share of the class of capital stock (or equity interest) of such other Person having the greatest voting power per share or, if such Person is a Subsidiary of another
Person, of the Person that ultimately controls such Person. 


        (g)   "Common
Share Equivalent" shall have the meaning ascribed to it in Section 11(a)(iii) hereof. 


        (h)   "Current
Market Price" per share of a stock or unit of any other security on any date shall mean the average of the daily Closing Prices of such stock or other security
for the 30 consecutive Trading Days through and including the Trading Day immediately preceding the date in question; 


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 provided, however, that if any event shall have caused the Closing Price on any Trading Day during such 30-day period not to be fully comparable with the Closing
Price on the date in question (or, if no Closing Price is available on the date in question, on the Trading Day immediately preceding the date in question), then each such noncomparable Closing Price
so used shall be appropriately adjusted by the Board of Directors of the Company in order to make the Closing Price on each Trading Day during the period used for the determination of the Current
Market Price fully comparable with the Closing Price on such date in question (or, if applicable, the immediately preceding Trading Day). "Current Market Price" per share of any stock or unit of such
other security that is not publicly held or so listed or traded, and "Current Market Price" of any other property, shall mean the fair value per share of such stock or unit of such other security, or
the fair value of such other property, respectively, as determined in good faith by the Board of Directors of the Company based upon such appraisals or valuation reports of such independent experts as
the Board of Directors shall in good faith determine appropriate, which determination shall be described in a statement filed by the Company with the Rights Agent. Notwithstanding the foregoing, for
purposes of Section 11 hereof "Current Market Price Per Share" as to Preferred Shares shall be determined as set forth in Section 11(d). 


        (i)    "Distribution
Date" shall have the meaning ascribed to it in Section 3 hereof. 


        (j)    "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended. 


        (k)   "Exchange
Ratio" shall have the meaning ascribed to it in Section 24(a) hereof. 


        (l)    "Exempt
Person" shall mean the Company, any wholly-owned Subsidiary of the Company, any employee benefit plan of the Company or of a Subsidiary of the Company, and any
Person holding Voting Shares for or pursuant to the terms of any such employee benefit plan. 


        (m)  "Exercise
Price" shall have the meaning ascribed to it in Section 7(c) hereof. 


        (n)   "Expiration
Date" shall mean April 30, 2013, unless the Distribution Date shall occur on or prior to such date, in which case "Expiration Date" shall mean the
tenth anniversary of the Distribution Date. 


        (o)   "Person"
shall mean any individual, firm, partnership, corporation, association, group (as such term is used in Rule 13d-5 promulgated under the
Exchange Act as in effect on the date hereof) or other entity, and shall include any successor (by merger or otherwise) of such entity. 



        (p)   "Preferred
Share" shall mean one share of the Series A Junior Participating Cumulative Preferred Stock, par value $1.00 per share, of the Company, which has the
rights and preferences set forth in the Certificate of Designations filed with the Secretary of State of the State of Delaware on November 15, 1993. 


        (q)   "Preferred
Share Equivalents" shall have the meaning ascribed to it in Section 11(b) hereof. 


        (r)   "Record
Date" shall have the meaning ascribed to it in the recitals hereto. 


        (s)   "Redemption
Date" shall mean the date of the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to
Section 23(a) hereof or the exchange of the Rights pursuant to Section 24(a) hereof. 


        (t)    "Redemption
Price" shall have the meaning ascribed to it in Section 23(a) hereof. 


        (u)   "Right"
shall have the meaning ascribed to it in the recitals hereto. 


        (v)   "Rights
Agent" shall have the meaning ascribed to it in the recitals hereto. 


        (w)  "Section 11(a)(ii) Event"
shall have the meaning ascribed to it in Section 11(a)(ii) hereof. 


        (x)   "Section 13(a)
Event" shall have the meaning ascribed to it in Section 13(a) hereof. 


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


        (z)   "Subsidiary"
of any Person shall mean any corporation or other Person of which equity securities or equity interests representing a majority of the voting power are
owned, directly or indirectly, or which is effectively controlled, by such Person. 


        (aa) "Surviving
Person" shall have the meaning ascribed to it in Section 13(a) hereof. 



        (bb) "Trading
Day" shall mean, as to any stock or other security, a day on which the principal national securities exchange on which such stock or other security is listed
or admitted to trading is open for the transaction of business or, if such stock or other security is not listed or admitted to trading on any national securities exchange, a Business Day. 


        (cc) "Unavailable
Adjustment Shares" has the meaning ascribed to it in Section 11(a)(iii) hereof. 


        (dd) "Voting
Share" shall mean (i) a Common Share of the Company and (ii) any other share of capital stock of the Company entitled to vote generally in the
election of directors or entitled to vote together with the Common Shares in respect of any merger, consolidation, sale of all or substantially all of the Company's assets, liquidation, dissolution or
winding up. References in this Agreement to a percentage or portion of the outstanding Voting Shares shall be deemed a reference to the percentage or portion of the total votes entitled to be cast by
the holders of the outstanding Voting Shares. 


        (ee) "15%
Ownership Date" shall mean the first date after the declaration by the Board of Directors referred to in the first recital hereto 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 a 15% Stockholder containing the facts by
virtue of which a Person has become a 15% Stockholder. 


        (ff)  "15%
Stockholder" shall mean any Person that, together with all Affiliates and Associates of such Person, hereafter becomes the Beneficial Owner of such number of
Voting Shares of the Company as constitutes a percentage of the then outstanding Voting Shares that is equal to or greater than 15%; provided, however,
that the term "15% Stockholder" shall not include: (i) an Exempt Person (ii) any Person if such Person would not otherwise be a 15% Stockholder but for a reduction in the number of
outstanding Voting Shares resulting from a stock repurchase program or other similar plan of the Company or from a self-tender offer of the Company, which plan or tender offer commenced on
or after the date hereof; provided, however,that the term "15% Stockholder" shall include such Person from and after the first date upon which
(A) such Person, since the date of the commencement of such plan or tender offer, shall have acquired Beneficial Ownership of, in the aggregate, a number of Voting Shares of the Company equal
to 1% or more of the Voting Shares of the Company then outstanding and (B) such Person, together with all Affiliates and Associates of such Person, shall Beneficially Own 15% or more of the
Voting Shares of the Company then outstanding; (iii) any Person that would not otherwise be a 15% Stockholder but for its Beneficial Ownership of Rights; (iv) any Person that is the
Beneficial Owner of 15% or more of the outstanding Voting Shares of the Company as of April 30, 2003 and thereafter has continued to be the Beneficial Owner of at least 15% of the Voting Shares
of the Company then outstanding; provided, however, that the term "15% Stockholder" shall include such Person from and after the first date upon which
(A) such Person, since April°30,°2003, shall have acquired, without the prior approval of the Board of Directors of the Company, Beneficial Ownership of additional
Voting Shares equal to 1% of the then outstanding Voting Shares of the Company and (B) such Person, together with all Affiliates and Associates of such Person, shall Beneficially Own more than
15% or more of the Voting Shares of the Company then outstanding; or (v) any Person that is the Beneficial Owner of 15% or more of the outstanding Voting Shares of the Company solely as the
result of the operation of clause (iv) of the definition of "Beneficial Owner" and "Beneficially Own" if and during such period as the Board of Directors shall have determined that the
operation of such clause should be waived in the best interest of the Company and its stockholders; provided,  however, that any 


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determination
pursuant to this clause (v) shall have been made prior to any change in the composition of the Board of Directors following the date that such Person shall have become the
Beneficial Owner of such Voting Shares if such change in composition involved the election of three or more new members of the Board of Directors. In calculating the percentage of the outstanding
Voting Shares that are Beneficially Owned by a Person for purposes of this subsection (ff), Voting Shares that are Beneficially Owned by such Person shall be deemed outstanding, and Voting Shares that
are not Beneficially Owned by such Person and that are subject to issuance upon the exercise or conversion of outstanding conversion rights, exchange rights, rights (other than Rights), warrants or
options shall not be deemed outstanding. Notwithstanding the foregoing, (a) if the Board of Directors of the Company determines in good faith that a Person that would otherwise be a 15%
Stockholder pursuant to the foregoing provisions of this Section 1(ff) and Section 1(b) hereof has become such inadvertently, and such Person either divests of a sufficient number of
Voting Shares so that such Person would no longer be a 15% Stockholder, or enters into such agreement, arrangement or understanding as the Board shall determine to be consistent with the purposes of
this Plan or the best interests of the Company and its stockholders or (b) if the Board of Directors determines in good faith that it would not be consistent with the purposes of this Plan or
the best interests of the Company and its stockholders for a Person that would otherwise be a 15% Stockholder pursuant to the foregoing provisions of this Section 1(ff) solely by reason of
Section 1(b)(iv) to be deemed a 15% Stockholder, then such Person shall not be deemed to be a 15% Stockholder for any purposes of this Agreement. Any determination made by the Board of
Directors of the Company as to whether any Person is or is not a 15% Stockholder shall be conclusive and binding upon all holders of Rights. 


        Section 2.    Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable, upon ten days' prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent. 


        Section 3.    Issuance of Right Certificates. 


        (a)   "Distribution
Date" shall mean the date, after the date hereof, that is the earliest of (i) the tenth Business Day (or such later day as shall be designated by
the Board of Directors of the Company) following the date of the commencement of, or the first public announcement of the intent of any Person, other than an Exempt Person, to commence a tender offer
or exchange offer, the consummation of which would cause any Person to become a 15% Stockholder, (ii) the date of the first Section 11(a)(ii) Event or (iii) the date of the
first Section 13(a) Event. 


        (b)   Until
the Distribution Date, (i) the Rights shall be represented by certificates for Common Shares (all of which certificates for Common Shares shall be deemed to
be Right Certificates) and not by separate Right Certificates, (ii) the record holder of the Common Shares represented by each of such certificates shall be the record holder of the Rights
represented thereby and (iii) the Rights shall be transferable only in connection with the transfer of Common Shares. Until the earliest of the Distribution Date, the Redemption Date or the
Expiration Date, the surrender for transfer of such certificates for Common Shares shall also constitute the surrender for transfer of the Rights represented thereby. 


        (c)   As
soon as practicable after the Distribution Date, and after notification by the Company, the Rights Agent shall send, at the Company's expense, by first-class,
postage-prepaid mail to each record holder of Common Shares, as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right
Certificate substantially in the form of Exhibit A hereto representing one Right for each Common Share so held. From and after the Distribution Date, the Rights shall be represented solely by
such Right Certificates and may only be transferred by the 


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transfer
of such Right Certificates, and the holders of such Right Certificates, as listed in the records of the Company or any transfer agent or registrar for such Rights, shall be the record holders
of such Rights. 


        (d)   Certificates
for Common Shares issued at any time after the Record Date and prior to the earliest of the Distribution Date, the Redemption Date or the Expiration Date,
shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 



        "This
certificate also represents Rights that entitle the holder hereof to certain rights as set forth in a Rights Agreement dated as of April 30, 2003 by and between the
Corporation and The Bank of New York, as Rights Agent (the "Rights Agreement"), the terms and conditions of which are hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Corporation. 


        Under
certain circumstances specified in the Rights Agreement, such Rights will be represented by separate certificates and will no longer be represented by this certificate. Under
certain circumstances specified in the Rights Agreement, Rights beneficially owned by certain persons may become null and void. The Corporation will mail to the record holder of this certificate a
copy of the Rights Agreement without charge promptly following receipt of a written request therefor." 




        (e)   Certificates
for Common Shares issued at any time on or after the Distribution Date and prior to the earlier of the Redemption Date or the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following legend: 



        "This
certificate does not represent any Right issued pursuant to the terms of a Rights Agreement dated as of April 30, 2003 by and between the Corporation and The Bank of New
York, as Rights Agent." 




        (f)    In
the event that at any time on or after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the Company shall issue any Common Shares pursuant to the exercise of conversion rights, exchange rights, rights (other than
Rights), warrants or options that shall have been issued or granted prior to the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event, then, unless the Board of Directors of the Company shall have provided otherwise at the time of the issuance or grant of such conversion rights, exchange rights, rights (other than Rights),
warrants or options, the Rights Agent shall, as soon as practicable after the date of such event, send by first-class, postage-prepaid mail to the record holder of such Common Shares, at the address
of such holder as shown on the records of the Company, a Right Certificate substantially in the form of Exhibit A hereto representing one Right for each Common Share so issued. 



        (g)   Notwithstanding
the foregoing provisions of this Section 3, the Rights Agent shall not send any Right Certificate to any 15% Stockholder or any of its Affiliates
or Associates or to any Person if the Rights held by such Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or Associates. Any determination made by the Board of Directors of
the Company as to whether any Common Shares are or were Beneficially Owned at any time by a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder shall be conclusive and binding upon all
holders of Rights. 


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        Section 4.    Form of Right Certificates.    The Right Certificates and the form of assignment, including
certificate, and the form of election to purchase, including certificate, printed on the reverse thereof, when, as and if issued, shall be substantially the same as Exhibit A hereto, and may
have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange upon which the Rights or
the securities of the Company issuable upon exercise of the Rights may from time to time be listed, or to conform to usage. Subject to Section 22 hereof, Right Certificates, whenever issued,
that are issued in respect of Common Shares that were issued and outstanding as of the Close of Business on the Distribution Date, shall be dated as of the Distribution Date. 


        Section 5.    Countersignature and Registration. 



        (a)   The
Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer or any Vice President, either manually or by
facsimile signature, and may have affixed thereto the Company's seal or a facsimile thereof attested by its Secretary or any Assistant Secretary, either manually or by facsimile signature. The Right
Certificates shall be countersigned by an authorized signatory of the Rights Agent (which need not be the same authorized signatory for all of the Right Certificates) and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates may nevertheless be countersigned by an authorized signatory of 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. Any Right Certificate may be signed on behalf of the Company by
any person who at the actual date of such execution shall be a proper officer of the Company to sign such Right Certificate, even though such person was not such an officer at the date of the
execution of this Agreement. 


        (b)   Following
the Distribution Date, the Rights Agent shall keep or cause to be kept at its offices in New York, New York, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of Right Certificates, the number of Rights represented on its face by each Right Certificate and
the date of each Right Certificate. 


        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 6(c), 7(d) and 14 hereof, at any time after the Close of Business on the Distribution Date, and so long as the Rights represented
thereby remain outstanding, any one or more Right Certificates may be transferred, split up, combined or exchanged for one or more Right Certificates representing the same aggregate number of Rights
as the Right Certificates surrendered. Any registered holder desiring to transfer, split up, combine or exchange one or more Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed and such other and further documentation as the Rights Agent may reasonably request. Thereupon, the Rights Agent shall
countersign and deliver to the person entitled thereto one or more Right Certificates, 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. 


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        (b)   Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them and, 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 such Right Certificate, if mutilated, along with signature guarantees and such other and further documentation
as the Rights Agent may reasonably request, the Company shall issue and deliver to the Rights Agent for delivery to the record holder of such Right Certificate a new Right Certificate of like tenor in
lieu of such lost, stolen, destroyed or mutilated Right Certificate. 


        (c)   Notwithstanding
anything to the contrary in this Section 6, the Rights Agent shall not countersign and deliver a Right Certificate to any Person if such Right
Certificate represents, or would represent when held by such Person, Rights that had become or would become null and void pursuant to Section 7(d) hereof. 



        Section 7.    Exercise of Rights. 


        (a)   Until
the Distribution Date, no Right may be exercised. 


        (b)   Subject
to Section 7(d) and (g) hereof and the other provisions of this Agreement, 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 Expiration Date, the registered holder of any Right Certificate may exercise the Rights represented thereby in whole or in
part upon surrender of such Right Certificate, with the form of election to purchase, including certificate, on the reverse side thereof completed and duly executed, to the Rights Agent at the office
of the Rights Agent in New York, New York, along with a signature guarantee and such other and further documentation as the Rights Agent may reasonably request, together with payment of the Exercise
Price for each Right exercised. Upon the exercise of an exercisable Right and payment of the Exercise Price in accordance with the provisions of this Agreement, the holder of such Right shall be
entitled to receive, subject to adjustment as provided herein, one one-thousandth of a Preferred Share (or, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares, other securities cash and/or other property in accordance with the provisions of this Agreement). 


        (c)   The
Exercise Price for the exercise of each Right shall initially be $25 (twenty-five dollars) and shall be payable in lawful money of the United States of
America in accordance with Section 7(f) hereof. The Exercise Price and the number of Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares, cash and/or other property in accordance with the provisions of this Agreement) to be acquired upon exercise of a Right shall be subject to adjustment from
time to time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement. 


        (d)   Notwithstanding
anything in this Agreement to the contrary, from and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the
first Section 13(a) Event, any Rights that are or were Beneficially Owned by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at any time on or after the Distribution Date
shall be null and void, and for all purposes of this Agreement such Rights shall thereafter be deemed not to be outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter have no right to exercise such Rights. 


        (e)   Prior
to the Distribution Date, if the Board of Directors of the Company shall have determined that such action adequately protects the interests of the holders of
Rights, the Company may, in its discretion, substitute for all or any portion of the Preferred Shares that would otherwise be issuable (after the Close of Business on the Distribution Date) upon the
exercise of each Right and payment of the Exercise Price, (i) cash, (ii) other equity securities of the Company, (iii) debt securities 


8





 



of
the Company, (iv) other property or (v) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the
Preferred Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 7(e), such action shall apply
uniformly to all outstanding Rights. 


        (f)    Upon
receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase, including certificate, completed and duly executed, with
signature guaranteed, accompanied by payment of the Exercise Price for each Right to be exercised and an amount equal to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check or cashier's check payable to the order of the Company, the Rights Agent shall thereupon promptly (i) requisition from
the transfer agent of the Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares, other securities, cash and/or other
property in accordance with the provisions of this Agreement), certificates for the number of Preferred Shares (or such other securities) to be purchased, and the Company hereby irrevocably authorizes
such transfer agent to comply with all such requests, and/or, as provided in Section 14 hereof, requisition from the depositary agent described therein depositary receipts representing such
number of one-thousandths of a Preferred Share (or such other securities) as are to be purchased (in which case certificates for the Preferred Shares (or such other securities) represented
by such receipts shall be deposited by the transfer agent with such depositary agent) and the Company hereby directs such 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 Preferred Shares (or such other securities) in accordance with Section 14 hereof, (iii) after
receipt of such certificates, depositary receipts or cash, 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 thereof, deliver such cash to or upon the order of the registered holder of such Right Certificate. 


        (g)   Notwithstanding
the foregoing provisions of this Section 7, the exercisability of the Rights shall be suspended for such period as shall reasonably be necessary
for the Company to register under the Securities Act and any applicable securities law of any jurisdiction the Preferred Shares to be issued pursuant to the exercise of the Rights;  provided, however,
that nothing contained in this Section 7 shall relieve the Company of its obligations under Section 9(c) hereof.
 


        (h)   In
case the registered holder of any Right Certificate shall exercise less than all of the Rights represented thereby, a new Right Certificate representing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof. 


        Section 8.    Cancellation and Destruction of Right Certificates.    All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company. 


        Section 9.    Reservation and Availability of Capital Stock. 


        (a)   Subject
to Section 7(e) hereof, the Company shall cause to be reserved and kept available out of its authorized and unissued equity securities (or out of its
authorized and issued equity securities held in its treasury), the number of such equity securities that will from time to time be sufficient to permit the exercise in full of all outstanding Rights. 


9





 



        (b)   In
the event that any securities issuable upon exercise of the Rights are listed on any national securities exchange, the Company shall use its best efforts, from and
after such time as the Rights become exercisable, to cause all such securities issued or reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise. 



        (c)   If
necessary to permit the issuance of securities upon exercise of the Rights, the Company shall use its best efforts, from and after the Distribution Date, to register
such securities under the Securities Act and any applicable state securities laws and to keep such registration effective until the earlier of the Redemption Date or the Expiration Date. 


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



        (e)   The
Company shall pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the issuance or delivery of the
Right Certificates or of any securities upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax that may be payable in respect of any transfer or delivery of a
Right Certificate to a Person other than, or the issuance or delivery of a certificate for securities in respect of a name other than that of, the registered holder of the Right Certificate
representing Rights surrendered for exercise, or to issue or deliver any certificate for securities upon the exercise of any Right until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due. 


        (f)    With
respect to the Common Shares and/or other securities issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be
applicable only upon and following the occurrence of a Section 11(a)(ii) Event. 


        Section 10.    Securities Record Date.    Each person in whose name any certificate for securities of the
Company is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the securities represented thereby on, and such certificate shall be dated, the
date
upon which the Right Certificate representing such Rights was duly surrendered and payment of the Exercise 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 securities transfer books of the Company are closed, such person shall be deemed to have become
the record holder of such securities on, and such certificate shall be dated, the next succeeding Business Day on which the securities transfer books of the Company are open. 


        Section 11.    Adjustment of Exercise Price, Number of Shares Issuable Upon Exercise of Rights or Number of
Rights.    The Exercise Price, the number and kind of securities that may be purchased upon exercise of a Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11. 



     (a)(i)  In
the event that the Company shall at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption
Date or the Expiration Date (A) declare or pay any dividend on the Preferred Shares payable in Preferred Shares or Voting Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue Preferred Shares or Voting Shares in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and upon each such event, the number and kind
of Preferred Shares or other securities issuable upon the exercise of a Right on the date of such event shall be proportionately adjusted so that the holder of any Right exercised on or after such 



10





 

date
shall be entitled to receive, upon the exercise thereof and payment of the Exercise Price, the aggregate number and kind of Preferred Shares or other securities or other property, as the case may
be, that, if such Right had been exercised immediately prior to such date and at a time when such Right was exercisable and the transfer books of the Company were open, such holder would have owned
upon such exercise and would have been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs that would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof. 


         (ii)  In
the event (a "Section 11(a)(ii) Event") that a 15% Ownership Date shall have occurred and neither the Redemption Date nor the Expiration Date shall
have occurred prior to the tenth Business Day following such 15% Ownership Date, then, and effective as of the end of such tenth Business Day, proper provision shall be made so that except as provided
in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the terms of this Agreement and payment of the then
current Exercise Price, in lieu of the securities or other property otherwise purchasable upon such exercise, such number of Common Shares of the Company as shall equal the result obtained by
multiplying the then current Exercise Price by the then number of one-thousandths of a Preferred Share for which a Right was exercisable (or, if the Distribution Date shall not have
occurred prior to the date of such Section 11(a)(ii) Event, the number of one-thousandths of a Preferred Share for which a Right would have been exercisable
if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii) Event,
and dividing that product by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) of a Common Share on the date of occurrence of the relevant
Section 11(a)(ii) Event (such number of shares being hereinafter referred to as the "Adjustment Shares"). Successive adjustments shall be made pursuant to this paragraph each time a
Section 11(a)(ii) Event occurs. 


        (iii)  In
the event that on the date of a Section 11(a)(ii) Event the aggregate number of Common Shares that are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is less than the aggregate number of Adjustment Shares thereafter issuable
upon the exercise in full of the Rights in accordance with Section 11(a)(ii) hereof (the excess of such number of Adjustment Shares over and above such number of Common Shares being
hereinafter referred to as the "Unavailable Adjustment Shares"), then, and upon each such event, the Company shall substitute for the pro rata portion of the Unavailable Adjustment Shares that would
otherwise be issuable thereafter upon the exercise of each Right and payment of the Exercise Price, (A) cash, (B) other equity securities of the Company (including, without limitation,
shares of preferred stock of the Company or units of such shares having the same Current Market Price as one Common Share (a "Common Share Equivalent")), (C) debt securities of the Company,
(D) other property or (E) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Unavailable
Adjustment Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 11(a)(iii), such action shall
apply uniformly to all outstanding Rights. 




        (b)   In
the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date
or the Expiration Date, fix a record date prior to the earlier of the Redemption Date or the Expiration Date for the issuance of rights, options or warrants to all holders of Preferred Shares
entitling them initially to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares ("Preferred Share Equivalents")) or
securities convertible into Preferred Shares or 


11





 

Preferred
Share Equivalents, at a price per Preferred Share or Preferred Share Equivalent (or having a conversion price per share, if a security convertible into Preferred Shares or Preferred Share
Equivalents) less than the Current Market Price per Preferred Share on such record date, then, and upon each such event, the Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal to the sum of the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares that the aggregate offering price of the total number of Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the aggregate
initial conversion price of the convertible securities to be so offered) would purchase at such Current Market Price, and the denominator of which shall be equal to the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares and/or Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities
to be so offered are initially convertible); provided, however, that if such rights, options or warrants are not exercisable immediately upon issuance
but become exercisable only upon the occurrence of a specified event or the passage of a specified period of time, then the adjustment to the Exercise Price shall be made and become effective only
upon the occurrence of such event or such passage of time, and such adjustment shall be made as if the record date for the issuance of such rights, options or warrants had been the business day
immediately preceding the date upon which such rights, options or warrants became exercisable. 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 to the Exercise Price shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued,
the Exercise Price shall be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed. 


        (c)   In
the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date
or the Expiration Date, fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in
which the Company is the surviving corporation) of securities or assets (other than a distribution of securities for which an adjustment is required under Section 11(a)(i) or
(b) hereof or a regular quarterly cash dividend), then the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be equal to the excess of the Current Market Price per Preferred Share on such record date over and above the fair market value of
the portion of the securities or assets to be so distributed with respect to one Preferred Share, and the denominator of which shall be equal to such Current Market Price per Preferred Share. Such
adjustments shall be made successively whenever such a record date is fixed, and in the event that such a distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price
that would then be in effect if such record date had not been fixed. 


        (d)   For
the purpose of any computation under this Section 11, if the Preferred Shares are not publicly held or traded, the "Current Market Price" per Preferred Share
shall be conclusively deemed to be the Current Market Price per Common Share multiplied by 1,000. 


        (e)   No
adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price;  provided, however, that any adjustments that by
reason of this Section 11(e) are not required to be made shall be cumulated 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-thousandth of a Common Share or other share or
one-millionth of a Preferred Share, as the case may be. 


        (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
securities of the Company other than Preferred Shares, the number of such other securities so receivable upon exercise of any Right shall be 


12





 



subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Preferred Shares contained in this Section 11, and the
other provisions of this Agreement with respect to Preferred Shares shall apply on like terms to any such other securities. 


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


        (h)   Unless
the Company shall have exercised its election as provided in Section 11(i) below, upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter represent the right to purchase, at the adjusted
Exercise Price, that number of one-thousandths of a Preferred Share (calculated to the nearest one-millionth of a Preferred Share) obtained by multiplying (i) the number
of one-thousandths of a Preferred Share purchasable upon the exercise of one Right immediately prior to such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment. 



        (i)    The
Company may elect, on or after the date of any adjustment of the Exercise Price, to adjust the number of Rights instead of making any adjustment in the number of
Preferred Shares 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-thousandths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one one-thousandth of a Right) obtained by dividing the Exercise Price in effect immediately prior to the adjustment of the
Exercise Price by the Exercise Price in effect immediately after such adjustment of the Exercise Price. The Company shall make a public announcement of its election to adjust the number of Rights
pursuant to this Section 11(i), indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the
Exercise Price is adjusted or any day thereafter, but, if separate Right Certificates have been issued, it shall be at least 10 days after the date of such public announcement. If separate
Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates representing, 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, 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 such adjustment, and upon surrender thereof if required by the Company, new Right Certificates representing all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Exercise Price) and
shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 


        (j)    Irrespective
of any adjustment or change in the Exercise Price or the number of one-thousandths of a Preferred Share issuable upon the exercise of one Right,
the Right Certificates theretofore and thereafter issued may continue to express the Exercise Price per one one-thousandth of a Preferred Share and the number of Preferred Shares issuable
upon the exercise of one Right that were expressed in the initial Right Certificates issued hereunder. 


        (k)   Before
taking any action that would cause an adjustment reducing the Exercise Price below one one-thousandth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the 


13





 



Rights,
the Company shall take any corporate action that may, in the advice or opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable
one one-thousandths of a Preferred Share at such adjusted Exercise Price. 


        (l)    In
any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer, until the occurrence of such event, the issuance to the holder of any Right exercised after such record date of the number of one-thousandths of a Preferred
Share and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one-thousandths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate instrument representing 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 further adjustments in the number of
one-thousandths of a Preferred Share that may be purchased upon exercise of one Right, and such further adjustments in the Exercise 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 (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the Current Market Price thereof, (iii) issuance wholly for cash of Preferred Shares or securities that by
their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares or (v) issuance of rights, options or warrants
referred to Section 11(b) hereof, hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such stockholders. 


        (n)   In
the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earliest of the date of the
first Section 11(a)(ii) Event, the date of the first Section 13(a) Event, the Redemption Date or the Expiration Date, (i) pay any dividend on the Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the outstanding Common Shares into a smaller number of Common Shares or (iv) issue Common Shares in a
reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and upon
each such event, the Exercise Price to be in effect after such event shall be determined by multiplying the Exercise Price in effect immediately prior to such event by a fraction, the numerator of
which shall be equal to the number of Common Shares outstanding immediately prior to such event and the denominator of which shall be equal to the number of Common Shares outstanding immediately after
such event. Successive adjustments shall be made pursuant to this Section 11(n) each time such a dividend is paid or such a subdivision, combination or reclassification is effected. If an event
occurs that would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 


        Section 12.    Certificate of Adjusted Exercise Price or Number of Shares Issuable Upon Exercise of
Rights.    Whenever an adjustment is made as provided in Section 11 hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts giving rise to such adjustment, (b) file with the Rights Agent and with each transfer agent for the securities issuable upon exercise of the Rights
a copy of such certificate and (c) mail a brief summary thereof to each holder of Rights in accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to make such certification or to give such notice shall not affect the validity or the force and effect of such adjustment. Any adjustment to be made pursuant to Sections 11 or 13 hereof shall
be effective as of the date of the event giving rise to such adjustment. 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 such adjustment unless and until it shall have received
such certificate. 


14







   
        Section 13.    Consolidation, Merger, or Sale or Transfer of Assets or Earning Power. 


        (a)   In
the event (a "Section 13(a) Event") that, at any time on or after the 15% Ownership Date and prior to the earlier of the Redemption Date or the Expiration
Date, (1) the Company shall, directly or indirectly, consolidate with or merge with and into any other Person and the Company shall not be the continuing or surviving corporation in such
consolidation or merger, (2) any Person shall, directly or indirectly, consolidate with or merge with and into the Company and the Company shall be the continuing or surviving corporation in
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 Person or cash or any other property, or
(3) the Company and/or any one or more of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer, in one or more transactions (other than transactions in the ordinary course
of business), assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or
one or more of its wholly owned Subsidiaries (such Persons, together with the Persons described in clauses (1) and (2) above shall be collectively referred to in this Section 13
as the "Surviving Person"), then, and in each such case, proper provision shall be made so that: 



          (i)  except
as provided in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement and payment of the then current Exercise Price, in lieu of the securities or other property otherwise purchasable upon such exercise, such number of validly authorized and
issued, fully paid and nonassessable Common Shares of the Surviving Person as shall be equal to a fraction, the numerator of which is the product of the then current Exercise Price multiplied by the
number of one-thousandths of a Preferred Share purchasable upon the exercise of one Right immediately prior to the first Section 13(a) Event (or, if the Distribution Date shall not
have occurred prior to the date of such Section 13(a) Event, the number of one-thousandths of a Preferred Share that would have been so purchasable if the Distribution Date had
occurred on the Business Day immediately preceding the date of such Section 13(a) Event, or, if a Section 11(a)(ii) Event has occurred prior to such Section 13(a) Event,
the product of the number of one-thousandths of a Preferred Share purchasable upon the exercise of a Right (or, if the Distribution Date shall not have occurred prior to the date of such
Section 11(a)(ii) Event, the number of one-thousandths of a Preferred Share that would have been so purchasable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii) Event, multiplied by the Exercise Price in effect immediately
prior to such Section 11(a)(ii) Event), and the denominator of which is 50% of the Current Market Price per Common Share of the Surviving Person on the date of consummation of such
Section 13(a) Event; 


         (ii)  the
Surviving Person shall thereafter be liable for and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; 


        (iii)  the
term, "Company," shall thereafter be deemed to refer to the Surviving Person; and 


        (iv)  the
Surviving Person shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to ensure that the provisions hereof shall thereafter be applicable to its Common Shares thereafter deliverable upon
the exercise of Rights. 




        (b)   Notwithstanding
the foregoing, if the Section 13(a) Event is the sale or transfer in one or more transactions of assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a whole), but less than 100% thereof, then each Person acquiring all or a portion thereof shall assume the obligations of
the Company as to a fraction of each of the Rights equal to the fraction of the assets of the Company and its Subsidiaries (taken as a whole) acquired by such Person, and the obligations of the
Company as to the remaining fraction of each of the Rights shall continue to be the obligations of the Company. 


15





 

        (c)   The
Company shall not consummate a Section 13(a) Event unless prior thereto the Company and the Surviving Person shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Surviving Person shall, upon consummation of such Section 13(a) Event, assume this Agreement in accordance with Section 13 hereof,
that all rights of first refusal or preemptive rights in respect of the issuance of Common Shares of such Surviving Person upon exercise of outstanding Rights have been waived and that such
Section 13(a) Event shall not result in a default by such Surviving Person under this Agreement, and further providing that, as soon as practicable after the date of consummation of such
Section 13(a) Event, such Surviving Person shall: 



          (i)  prepare
and file a registration statement under the Securities Act 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, 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 Expiration Date, and similarly comply with all applicable state securities laws; 


         (ii)  use
its best efforts to list (or continue the listing of) the Rights and the Common Shares of the Surviving Person purchasable upon exercise of the Rights on a national
securities exchange, or use its best efforts to cause the Rights and such Common Shares to meet the eligibility requirements for quotation on NASDAQ; and 


        (iii)  deliver
to holders of the Rights historical financial statements for such Surviving Person that comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act. 




        (d)   In
the event that at any time after the occurrence of a Section 11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant to
Section 11 hereof prior to the date of a Section 13(a) Event, such Rights shall thereafter be exercisable only in the manner described in Section 13(a) hereof. In the event that a
Section 11(a)(ii) Event occurs on or after the date of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11 hereof but shall instead be exercisable
pursuant to, and only pursuant to, this Section 13. 


        (e)   The
provisions of this Section 13 shall apply to each successive merger, consolidation, sale or other transfer constituting a Section 13(a) Event. 


        Section 14.    Fractional Rights and Fractional Shares. 



        (a)   The
Company shall not be required to issue fractions of Rights or to distribute Right Certificates that represent fractional Rights. If the Company shall determine not
to issue such fractional Rights, the Company shall pay to the registered holders of the Right Certificates with respect to which such fractional Rights would otherwise be issuable, at the time such
fractional Rights would otherwise have been issued as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Right on the Business Day immediately prior
to the date upon which such fractional Rights would otherwise have been issuable. 


        (b)   The
Company shall not be required to issue fractions of Common Shares or Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of Rights, or to distribute certificates that represent fractional Common Shares or Preferred Shares (other than fractions that are
integral multiples of one one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-thousandth of a Preferred Share may, at the
election of the Company, be represented 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 Preferred Shares. If the Company shall determine
not to issue fractional Common Shares or Preferred Shares (or depositary receipts in lieu of Preferred 


16





 



Shares),
the Company shall pay to the registered holders of Right Certificates with respect to which such fractional Common Shares or Preferred Shares would otherwise be issuable, at the time such
Rights are exercised as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Common Share or Preferred Share, as the case may be. For purposes of this
Section 14(b), the Current Market Price of a whole Common Share or Preferred Share shall be the Closing Price per share for the Trading Day immediately prior to the date of such exercise. 



        (c)   The
holder of a Right, by the acceptance of such Right, expressly waives such holder's right to receive any fractional Rights or any fractional Common Shares or
Preferred Shares upon exercise of such Right, except as permitted by this Section 14. 


        Section 15.    Rights of Action.    All rights of action in respect of this Agreement, except 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 certificates for Common Shares representing Rights, and
any registered holder of any Right Certificate or of such certificate for Common Shares, without the consent of the Rights Agent or of the holder of any other Right Certificate or any other
certificate for Common Shares may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, such holder's right to exercise the Rights represented by such Right Certificate or by such certificate for Common Shares in the manner provided in such Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and shall be entitled to specific performance, and injunctive relief against actual or threatened violations, of the obligations of any Person under 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 every other holder of a Right that: 


        (a)   prior
to the Distribution Date, the Rights shall be represented by certificates for Common Shares registered in the name of the holders of such Common Shares (which
certificates for Common Shares shall also constitute Right Certificates), and each such Right shall be transferable only in connection with the transfer of such Common Shares; 



        (b)   after
the Distribution Date, the Right Certificates shall only be transferable on the registry books of the Rights Agent if surrendered at the principal stock transfer
office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer along with a signature guarantee and such other and further documentation as the Rights Agent may reasonably
request; 


        (c)   the
Company and the Rights Agent may deem and treat the person in whose name the Right Certificate is registered as the absolute owner thereof and of the Rights
represented thereby (notwithstanding any notations of ownership or writing on the Right Certificate by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary; and 


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


        Section 17.    Right Holder and Right Certificate Holder Not Deemed a Stockholder.    No holder, as such, of
any Right or Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the securities of the Company that may at any time be issuable upon the exercise 


17





 



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 or Right Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, to give or withhold consent to any corporate
action, to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, in each
case until such Right or the Rights represented 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 the compensation agreed to in writing by the Company and the Rights Agent for all services rendered by it hereunder, as
well as its reasonable out-of-pocket expenses. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the costs and expenses of defending against any claim of liability arising under this Agreement. The provisions of this
Section 18(a) shall survive the expiration of the Rights and the termination of this Agreement. 


        (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 Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed and executed by the proper person
or persons, or otherwise upon the advice of its 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 all or substantially all the corporate trust or stock transfer
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any instrument 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. If, 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 if at that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right Certificates, and in this Agreement. 


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


18





 



        Section 20.    Duties of Rights Agent.    The Rights Agent undertakes the duties and obligations expressly
imposed by this Agreement (and no implied duties or obligations shall be read into this Agreement against the Rights Agent) upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance of the Rights, shall be bound: 


        (a)   The
Rights Agent may consult with legal counsel of its selection (who may be legal counsel for the Company), and the advice or 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 advice or opinion. 


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


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



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


        (e)   The
Rights Agent is serving as an administrative agent and accordingly, shall not be under any responsibility in respect of the legality or validity of any of the
provisions of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor 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 any Rights becoming null and void pursuant to Section 7(d) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in Sections 7, 11, 13 and 23 hereof, or the ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights represented by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of any Preferred Shares or Common Shares or other securities to be issued pursuant to this Agreement or any Right
Certificate, or as to whether any Preferred Shares or Common Shares 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. 


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


19





 



        (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 the
Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. 


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



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


        (k)   The
Company agrees to give the Rights Agent prompt notice of any event or ownership which would prohibit the exercise or transfer of the Right Certificates. 



        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. 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 and Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting as such, 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 such holder's Right Certificate for inspection by
the Company), then the Company shall become the Rights Agent and 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 of the States of New
York or Tennessee (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the States of New York or Tennessee), in good
standing, having a principal office in New York or Tennessee, that 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 that has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000. 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 of this Agreement
and so that the successor Rights Agent may appropriately act as Rights Agent hereunder. 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 and Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be. 


20







   
        Section 22.    Issuance of New Right Certificates.    Notwithstanding any of the provisions of this Agreement
or of the Right Certificates to the contrary, the Company may, at its option (subject to Section 4 hereof), issue new Right Certificates in such form as may be approved by the Board of
Directors in order to reflect any adjustment or change in the Exercise Price and the number or kind or class of shares or other securities or property purchasable upon exercise of the Rights in
accordance with the provisions of this Agreement. 


        Section 23.    Redemption of Rights. 


        (a)   Until
the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or
(iii) the Expiration Date, the Board of Directors of the Company may, at its option, authorize and direct the redemption of all, but not less than all, of the then outstanding Rights at a
redemption price of $.001 per Right, as such redemption price shall be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after April 30, 2003
(the "Redemption Price"), and the Company shall so redeem the Rights. 


        (b)   Immediately
upon the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to subsection (a) of this
Section 23, or at such time and date thereafter as it may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price. Within 10 Business Days after the date of such action, the Company shall give notice of such redemption to the holders of
Rights by mailing such notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives such notice, but neither the failure to
give any such notice nor any defect therein shall affect the legality or validity of such redemption. Each such notice of redemption shall state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may, directly or indirectly, redeem, acquire or purchase for value any Rights in any manner other than that specifically set
forth in Section 24 hereof or in this Section 23, and other than in connection with the purchase of Common Shares prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event. 


        (c)   The
Company may, at its option, pay the Redemption Price in cash, Common Shares, Preferred Shares, other equity securities of the Company, debt securities of the
Company, other property or any combination of the foregoing, in each case having an aggregate Current Market Price on the Redemption Date equal to the Redemption Price. 


        Section 24.    Exchange of Rights. 


        (a)   At
any time after the 15% Ownership Date and prior to the first date thereafter upon which a 15% Stockholder, together with all Affiliates and Associates of such 15%
Stockholder, shall be the Beneficial Owner of 50% or more of the Voting Shares then outstanding, the Board of Directors of the Company may, at its option, authorize and direct the exchange of all, but
not less than all, of the then outstanding Rights for Common Shares at an exchange ratio (the "Exchange Ratio") per Right, equal to that number of Common Shares which, as of the date of the Board of
Directors' action, has a Current Market Price equal to the difference between the Exercise Price and the Current Market Price of the Common Shares that each holder of a Right would otherwise have the
right to receive upon the exercise of a Right on such date. 


        (b)   Immediately
upon the action of the Board of Directors of the Company authorizing and directing the exchange of the Rights pursuant to subsection (a) of this
Section 24, or at such time and date thereafter as it may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive 


21





 



a
number of Common Shares equal to the Exchange Ratio. Within 10 Business Days after the date of such action, the Company shall give notice of such exchange to the holders of Rights by mailing such
notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives such notice, but neither the failure to give any such notice
nor any defect therein shall affect the legality or validity of such exchange. Each such notice of exchange shall state the method by which the Rights will be exchanged for Common Shares. Neither the
Company nor any of its Affiliates or Associates may, directly or indirectly, redeem, acquire or purchase for value any Rights in any manner other than (i) as specifically set forth in
Section 23 hereof, (ii) as specifically set forth in this Section 24 or (iii) in connection with the purchase of Common Shares prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event. 


        (c)   In
any exchange pursuant to this Section 24, the Company, at its option, may substitute (i) cash, (ii) other equity securities of the Company
(including, but not limited to, Common Share Equivalents), (iii) debt securities of the Company, (iv) other property or (v) any combination of the foregoing for the Common Shares
exchangeable for Rights, as appropriately adjusted. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 24, such action shall apply
uniformly to all outstanding Rights. 


        Section 25.    Notice of Certain Events. 


        (a)   In
the event that the Company shall propose (i) to declare or pay any dividend payable on or make any distribution with respect to its Common Shares or Preferred
Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Common Shares or Preferred Shares options, rights or warrants to subscribe for or to purchase any
additional shares thereof or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Common Shares or Preferred Shares (other than a
reclassification involving only the subdivision of outstanding shares), (iv) to effect any consolidation or merger with or into, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to,
any other Person or Persons, or (v) to effect the liquidation, dissolution or winding up of the Company, then and in each such case, the Company shall give to each holder of a Right Certificate
and to the Rights Agent, in accordance with Section 26 hereof, a notice of such proposed action, that shall specify the record date for the purpose of such dividend or distribution, or the date
upon which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of record of the
Common Shares or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least
20 days prior to the record date for determining holders of the Common Shares or Preferred Shares for purposes of such action, and in the case of any such other action, at least 20 days
prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares or Preferred Shares, whichever date shall be the earlier. The failure
to give the notice required by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action. 


        (b)   Upon
the occurrence of each Section 11(a)(ii) Event and each Section 13(a) Event, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate and to the Rights Agent, in accordance with Section 26 hereof, a notice of the occurrence of such event, specifying the event and the consequences of the event to
holders of Rights under Sections 11 and 13 hereof. 


        Section 26.    Notices.    Notices or demands authorized by this Agreement to be given or made by the Rights
Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently 


22





 



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: 




Magnetek, Inc.

10900 Wilshire Boulevard, Suit 850

Los Angeles, California 90024

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) to the principal stock
transfer office of the Rights Agent as follows: 




The
Bank of New York

Stock Transfer Administration

101 Barclay Street—11E

New York, New York 10286

Attention: Robert Rinaudo, Assistant Vice President 





        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. 


        (a)   The
Board of Directors of the Company may, from time to time, before and after the Distribution Date, without the approval of any holders of Rights, supplement or amend
any provision of this Agreement in any manner, whether or not such supplement or amendment is adverse to any holder of Rights, and direct the Rights Agent so to supplement or amend such provision, and
the Rights Agent shall so supplement or amend such provision; provided, however, that from and after the earliest of (i) the date of the first
Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration Date, this Agreement shall not be
supplemented or amended in any manner that would materially and adversely affect any holder of outstanding Rights other than a 15% Stockholder or a Surviving Person. 



        (b)   From
and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of
the Redemption Date or the Expiration Date, the Company shall not effect any amendment to the Certificate of Designations for the Preferred Shares that would materially and adversely affect the
rights, privileges or preferences of the Preferred Shares without the prior approval of the holders of two-thirds or more of the then outstanding Rights. 


        (c)   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, the Rights Agent shall execute such supplement or amendment. Notwithstanding any other provision hereof, the Rights Agent's consent must be obtained regarding any amendment or supplement
pursuant to this Section 27 which alters the Rights Agent's rights or duties. 


        Section 28.    Certain Covenants.    Subject to Section 27 hereof and the other provisions of this
Agreement, from and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date
or the Expiration Date, the Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell, to a 15% Stockholder or a Surviving Person, or any Affiliate or Associate of a 15%
Stockholder or a Surviving Person, or any Person holding Voting Shares of the Company that are Beneficially Owned by a 15% Stockholder or a 


23





 



Surviving
Person, (i) any rights, options, warrants or convertible securities on terms similar to, or that materially adversely affect the value of, the Rights or (ii) Preferred Shares,
Common Shares or shares of any other class of capital stock, if such sale is intended to or would materially adversely affect the value of the Rights, or (b) take any other action that is
intended to or would materially adversely affect the value of the Rights. 



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


        Section 30.    Benefits of this Agreement.    Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent, the registered holders of the Right Certificates (other than those representing Rights that have become null and void) and the certificates for Common
Shares representing Rights (other than those Rights that have become null and void) any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent, such registered holders of Right Certificates and such certificates for Common Shares representing Rights. 


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



        Section 32.    Governing Law.    This Agreement and each Right Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts made and performed
entirely within such state; provided, however that with respect solely to matters regarding the rights and obligations of the Rights Agent hereunder,
the laws of the State of New York shall govern. 


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


        Section 34.    Descriptive Headings.    Descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 



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



	 
	 
	 
	 

	 	MAGNETEK, INC.
	

 	

By:	

/s/  DAVID P. REILAND      
 David P. Reiland, Senior Vice President and

Chief Financial Officer
	

 	

 	

THE BANK OF NEW YORK

as Rights Agent
	

 	

By:	

/s/  JAMES DIMINO      

	 	 	Name:	James Dimino

	 	 	Title:	Vice President





24







 
 

EXHIBIT A
  
    FORM OF RIGHT CERTIFICATE
  
    Certificate
No. R-                        Rights    
    





NOT
EXERCISABLE AFTER APRIL 30, 2013 OR THE TENTH ANNIVERSARY OF THE DISTRIBUTION DATE (AS DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEEMED OR EXCHANGED. THE RIGHTS ARE SUBJECT TO EARLIER
EXPIRATION, REDEMPTION AND EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. 





 
 

Right Certificate
  
    MAGNETEK, INC.    
    


        This certifies that                        , or registered assigns,
 is the registered owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms and conditions of a Rights Agreement (the "Rights Agreement") dated as of April 30, 2003 by and between Magnetek, Inc., a Delaware corporation (the
"Company"), and The Bank of New York (the "Rights Agent"), to purchase from the Company at any time prior to the earlier of the Redemption Date (as such term is defined in the Rights Agreement) or
5:00 o'clock p.m., Nashville time, on the later of April 30, 2013 or the tenth anniversary of the Distribution Date, at the office or agency of the Rights Agent at the office of the
Rights Agent designated for such purpose in a written instrument delivered to the Company and the holder of this Right Certificate, or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid and nonassessable share of Series A Junior Participating Cumulative Preferred Stock, par value $1.00 per share, of the Company (a "Preferred Share")
or, in certain circumstances, other securities or other property, at a purchase price of $25.00 (twenty-five dollars) per one one-thousandth of a Preferred Share (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase, including Certificate, on the reverse side hereof completed and duly executed, with signature
guaranteed. 


        The
number of Rights represented by this Right Certificate and the Exercise Price set forth above are the number of Rights and the Exercise Price as of April 30, 2003, based upon
the Preferred Shares as constituted on such date. As provided in the Rights Agreement, the Exercise Price and the number of Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Right Certificate are subject to modification and adjustment upon the occurrence of certain events. 


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



        This
Right Certificate, with or without other Right Certificates, upon presentation and surrender at the above-mentioned offices of the Rights Agent, with the Form of Assignment,
including Certificate, on the reverse side hereof completed and duly executed, with signature guaranteed, may be exchanged for another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate number of Preferred Shares or, in certain circumstances, other securities or other property, as the Rights represented 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 the surrender hereof
with the Form of Election to Purchase, including Certificate, on the reverse side hereof completed and duly executed, with signature guaranteed, another Right Certificate or Right Certificates for the
number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights represented by this Right Certificate may be redeemed by the Company, at its option, at a redemption
price of $.001 per Right or, upon the occurrence of certain events, the Company, at its option, may exchange such Rights for fully paid and nonassessable shares of Common Stock, par value $.01 per
share, of the Company at an exchange ratio, per Right, of that number of Common Shares (as defined in the Rights Agreement) which, as of the date of the Board of Directors' action, has a Current
Market Price (as defined in the Rights Agreement) equal to the difference between the Exercise Price and the Current Market Price of the Common Shares which each holder of a Right would have a right
to receive upon the exercise of a Right on such date. 


        No
fractional securities shall be issued upon the exercise of any Right or Rights represented hereby (other than fractions of Preferred Shares that are integral multiples of one
one-thousandth of a Preferred Share, that may, at the option of the Company, be
represented by depository receipts), but in lieu thereof, a cash payment shall 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 Shares or other securities of the
Company that may at any time be issuable on the exercise hereof, nor shall anything contained 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, until the Right or Rights represented 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. 


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


Attest:
MAGNETEK, INC. 



	 
	 	 
	 	 
	 	 
	 	 
	 	 

	By	 	 	 	 	 	By	 	 	 	 
	 	 	
	 	 	 	

	 	 	Name:

Title:	 	 	 	 	 	Name:

Title:	 	 
	

Countersigned:	
 	

 	
 	

 
	

THE BANK OF NEW YORK	
 	

 	
 	

 
	

By	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	
	 	 	 	 	 	 
	 	 	Name:

Title:	 	 	 	 	 	 	 	 




2





 
 
 

Form of Reverse Side of Right Certificate
  
    FORM OF ASSIGNMENT    
    


        (To be executed by the registered holder if such holder desires to transfer any or all of the Rights represented by this Right Certificate) 



        FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                        



	 
	 	 

	
 (Name, address and social security or other identifying number of transferee)	 	 





                                        
        ,
(                        ) of the Rights represented by this Right Certificate, together with all right, title and interest in and
to said Rights, and hereby irrevocably constitutes and
appoints                        attorney to transfer said Rights on the books of Magnetek, Inc. with full power of
substitution. 



	 
	 
	 
	 
	 	 

	Dated:	 	,	 	 	 
	 	
	 	
	 	

	 	 	 	 	 	(Signature)





Signature
Guaranteed: 


3





 
 
 

Certificate
  
    (to be completed, if true)    
    



        The undersigned hereby certifies that the Rights represented by this Right Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the Rights Agreement). 



	 
	 
	 
	 
	 	 

	Dated:	 	,	 	 	 
	 	
	 	
	 	

	 	 	 	 	 	(Signature)





Signature
Guaranteed: 


4





 
 
 

Form of Reverse Side of Right Certificate
  
    (continued)
  
    NOTICE    
    


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


        In
the event that the foregoing Certificate is not duly executed, with signature guaranteed, the Company may deem the Rights represented by this Right Certificate to be Beneficially
Owned by a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder (as such capitalized terms are defined in the Rights Agreement), and not issue any Right Certificate or Right Certificates
in exchange for this Right Certificate. 


5





 
 
 

Form of Reverse Side of Right Certificate
  
    (continued)
  
    FORM OF ELECTION TO PURCHASE    
    


        (To be executed by the registered holder if such holder desires to exercise any or all of the Rights represented by this Right Certificate) 


        To
Magnetek, Inc.: 


        The
undersigned hereby irrevocably elects to
exercise                                        
        (                        ) of the Rights represented by this Right Certificate to
purchase the following:
 


        (Check
one of the following boxes) 


	o
	the
Preferred Shares or other securities or property issuable upon the exercise of said number of Rights pursuant to Section 7(c) of
the Rights Agreement.



	o
	the
shares of the Common Stock, par value $.01 per share, of the Company, or other securities or property issuable upon the exercise of
said number of Rights pursuant to Section 11(a)(ii) of the Rights Agreement.



	o
	the
securities issuable upon the exercise of said number of Rights pursuant to Section 13(a) of the Rights Agreement. 



        The
undersigned hereby requests that any such property and a certificate for any such securities be issued in the name of and delivered to: 



	 
	 	 

	
 (Name, address and social security or other identifying number of transferee)	 	 





        The
undersigned hereby further requests that if said number of Rights shall not be all the Rights represented by this Right Certificate, a new Right Certificate for the remaining balance
of such Rights be issued in the name of and delivered to: 



	 
	 	 

	
 (Name, address and social security or other identifying number of transferee)	 	 





	 
	 
	 
	 
	 	 

	Dated:	 	,	 	 	 
	 	
	 	
	 	

	 	(Signature)	 	 	 	 





Signature
Guaranteed: 


6





 
 
 

Form of Reverse Side of Right Certificate
  
    (continued)
  
    Certificate
  
    (to be completed, if true)    
    



        The undersigned hereby certifies that the Rights represented by this Right Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the Rights Agreement). 



	 
	 
	 
	 
	 	 

	Dated:	 	,	 	 	 
	 	
	 	
	 	

	 	 	 	 	 	(Signature)





Signature
Guaranteed: 


 
 

NOTICE    
    


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



        In
the event that the foregoing Certificate is not duly executed, with signature guaranteed, the Company may deem the Rights represented by this Right Certificate to be Beneficially
Owned by a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder (as such capitalized terms are defined in the Rights Agreement), and not issue any property or certificate for securities
upon the exercise of this Right Certificate or issue any new Right Certificate for any remaining balance of unexercised Rights represented by this Right Certificate. 


7









QuickLinks



Exhibit 4.1


RIGHTS AGREEMENT dated as of April 30, 2003 by and between MAGNETEK, INC. and THE BANK OF NEW YORK as Rights Agent



TABLE OF CONTENTS


RIGHTS AGREEMENT


EXHIBIT A FORM OF RIGHT CERTIFICATE Certificate No. R- Rights

Right Certificate MAGNETEK, INC.

Form of Reverse Side of Right Certificate FORM OF ASSIGNMENT

Certificate (to be completed, if true)

Form of Reverse Side of Right Certificate (continued) NOTICE

Form of Reverse Side of Right Certificate (continued) FORM OF ELECTION TO PURCHASE

Form of Reverse Side of Right Certificate (continued) Certificate (to be completed, if true)

NOTICE