Exhibit 10.1


 


KEY TECHNOLOGY, INC.


(an Oregon corporation)


 


 


and


 


 


AMERICAN STOCK TRANSFER & TRUST COMPANY


Rights Agent


 


 


First Amended and Restated


Rights Agreement


 


Dated as of April 1, 2001


 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Certain Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Appointment of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Issue of Rights Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Form of Rights Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Countersignature and Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Exercise of Rights; Purchase Price;
  Expiration Date of Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Cancellation and Destruction of Rights
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Reservation and Availability of Capital
  Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Preferred Stock Record Date

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Certificate of Adjusted Purchase Price or
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

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

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Fractional Rights and Fractional Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Rights of Action

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Agreement of Rights Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Rights Holder and Rights Certificate Holder
  Not Deemed a Shareholder

  	
   

  



 


i

















 


	
  18.

  	
  Concerning the Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Merger or Consolidation or Change of Name
  of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Duties of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Change of Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Issuance of New Rights Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Redemption and Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Exchange

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Notice of Certain Events

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Supplements and Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Determinations and Actions by the Board of
  Directors, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Benefits of This Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Descriptive Headings

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Designation of Terms of Series A Junior Participating Preferred Stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  —

  	
  Form of Rights Certificate

  	
   

  
						



 


ii

















 


TABLE OF DEFINED TERMS


 


	
  Term Defined

  	
   

  	
  Section

  
	
   

  	
   

  
	
  Acquiring Person

  	
  1(a)

  
	
   

  	
   

  
	
  Adjustment Shares

  	
  11(a)(ii)

  
	
   

  	
   

  
	
  Adverse Person

  	
  1(b)

  
	
   

  	
   

  
	
  Affiliate

  	
  1(c)

  
	
   

  	
   

  
	
  Agreement

  	
  Intro

  
	
   

  	
   

  
	
  Associate

  	
  1(c)

  
	
   

  	
   

  
	
  Beneficial Owner; beneficially own

  	
  1(d)

  
	
   

  	
   

  
	
  Board of Directors

  	
  Intro

  
	
   

  	
   

  
	
  Business Day

  	
  1(e)

  
	
   

  	
   

  
	
  Close of Business

  	
  1(f)

  
	
   

  	
   

  
	
  Common Stock

  	
  Intro;1(g)

  
	
   

  	
   

  
	
  Common Stock Equivalents

  	
  11(a)(iii)

  
	
   

  	
   

  
	
  Company (Key Technology, Inc.)

  	
  Intro

  
	
   

  	
   

  
	
  Company (following a Section 13 Event)

  	
  13(a)

  
	
   

  	
   

  
	
  Current Value

  	
  11(a)(iii)

  
	
   

  	
   

  
	
  Distribution Date

  	
  3(a)

  
	
   

  	
   

  
	
  equivalent preferred stock

  	
  11(b)

  
	
   

  	
   

  
	
  Exchange Act

  	
  1(a)

  
	
   

  	
   

  
	
  Exchange Date

  	
  7(a)

  
	
   

  	
   

  
	
  Exchange Ratio

  	
  24(a)

  
	
   

  	
   

  
	
  Expiration Date

  	
  7(a)

  
	
   

  	
   

  
	
  Final Expiration Date

  	
  7(a)

  
	
   

  	
   

  
	
  Nasdaq

  	
  11(d)(i)

  
	
   

  	
   

  
	
  Original Rights

  	
  1(d)

  
	
   

  	
   

  
	
  Person

  	
  1(h)

  
	
   

  	
   

  
	
  Preferred Stock

  	
  Intro; 11(a)(ii)

  
	
   

  	
   

  
	
  Principal Party

  	
  13(b)

  
	
   

  	
   

  
	
  Purchase Price

  	
  1(j); 11(a)(ii)

  
	
   

  	
   

  
	
  Qualifying Offer

  	
  11(a)(ii)(A)

  
	
   

  	
   

  
	
  Record Date

  	
  Intro

  
	
   

  	
   

  
	
  Redemption Date

  	
  7(a)

  
	
   

  	
   

  
	
  Redemption Price

  	
  23(a)

  
	
   

  	
   

  
	
  Restated Articles of Incorporation

  	
  11(a)(iii)

  
	
   

  	
   

  
	
  Rights

  	
  Intro

  
	
   

  	
   

  
	
  Rights Agent

  	
  Intro

  
	
   

  	
   

  
	
  Rights Certificates

  	
  3(a)

  
	
   

  	
   

  
	
  Rights Dividend Declaration Date

  	
  Intro

  
	
   

  	
   

  
	
  Section 11(a)(ii) Event

  	
  11(a)(ii)

  
	
   

  	
   

  
	
  Section 11(a)(ii) Trigger Date

  	
  11(a)(iii)

  
	
   

  	
   

  
	
  Section 13 Event

  	
  13(a)

  



 

















 


FIRST AMENDED AND RESTATED


RIGHTS AGREEMENT


 


FIRST AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of April 1, 2001
(the “Agreement”), between Key Technology, Inc., an Oregon corporation (the
“Company”), and American Stock Transfer & Trust Company, a New York banking
corporation (the “Rights Agent”).


 


W I T N E S E T H


 


WHEREAS, on May 4, 1998 (the “Rights Dividend Declaration Date”), the Board
of Directors of the Company (the “Board of Directors”) authorized and declared
a dividend distribution of one Right for each share of the Company’s common
stock, par value $.01 per share (the “Common Stock”), outstanding at the close
of business on June 30, 1998 (the “Record Date”), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each share of Common Stock of
the Company issued between the Record Date and the Distribution Date, each
Right initially representing the right to purchase 1/1,000 of a share of the
Company’s Series A Junior Participating Preferred Stock (the “Preferred Stock”)
having the rights, powers and preferences set forth in Exhibit A attached
hereto, upon the terms and subject to the conditions hereinafter set forth (the
“Rights”);


 


WHEREAS, the Company
entered into a Rights Agreement with ChaseMellon Shareholder Services, L.L.C.,
a New Jersey limited liability company (“ChaseMellon”) dated June 20, 1998 and
appointed ChaseMellon as the initial rights agent;


 


WHEREAS, pursuant to
Section 21 of the Rights Agreement the Company removed ChaseMellon as the
rights agent and appointed American Stock Transfer & Trust Company as the
successor rights agent, and the Company desires to appoint the Rights Agent to
act on behalf of the Company in connection with the Rights, and the Rights
Agent is willing to accept such appointment.


 


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


 


Section 1.                                            Certain
Definitions.


 


For purposes of this Agreement, the following
terms have the meanings indicated:


 


(a)                                  “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include:


 

















 


(i)                                     the
Company;


 


(ii)                                  any
Subsidiary of the Company;


 


(iii)                               any
employee benefit plan of the Company or of any Subsidiary of the Company;


 


(iv)                              any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan; or


 


(v)                                 any
such Person who has reported or is required to report Beneficial Ownership of
15% or more (but less than 25%) of the shares of Common Stock then outstanding
on Schedule l3G under the Exchange Act of 1934, as amended (the “Exchange Act”)
(or any comparable or successor report), or on Schedule 13D under the Exchange
Act (or any comparable or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified in Item 4 of
such Schedule (other than the disposition of the Common Stock) and, within 10
Business Days of being requested by the Company to advise it regarding the
same, certifies to the Company that such Person acquired shares of Common Stock
in excess of l4.9% inadvertently or without knowledge of the terms of the
Rights or consequences of such Beneficial Ownership under this Agreement and
who, together with all Affiliates and Associates, thereafter does not acquire
additional shares of Common Stock while the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding; provided, however,
that if the Person requested to so certify fails to do so within 10 Business
Days, then such Person shall become an Acquiring Person immediately after such
10 Business Day Period.


 


Notwithstanding the foregoing, no Person shall become an “Acquiring
Person” solely as the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by a Person to l5% or more of
the Common Stock of the Company then outstanding as determined above; provided,
however, that if a Person becomes the Beneficial Owner of l5% or more of
the Common Stock of the Company then outstanding (as determined above) solely
by reason of acquisitions of Common Stock by the Company and shall, after such
acquisitions by the Company, become the Beneficial Owner of any additional
shares of Common Stock by any means whatsoever, then such Person shall be
deemed to be an “Acquiring Person.” Any determination made by the Board of
Directors as to whether any Person is or is not an “Acquiring Person” shall be
conclusive and binding upon all holders of Rights.


 


(b)                                 “Adverse
Person” shall mean any Person declared to be an Adverse Person by the Board of
Directors upon determination that the criteria set forth in
Section 11(a)(ii)(B) apply to such Person; provided, however,
that the Board of Directors shall not declare any Person who is the Beneficial
Owner of 10% or more of the outstanding Common Stock of the Company to be an
Adverse Person if such Person has reported or is required to report such
ownership on Schedule 13G under the Exchange Act (or any comparable or
successor


 

















 


report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which Schedule
13D does not state any intention to or reserve the right to control or
influence the management or policies of the Company or engage in any of the
actions specified in Item 4 of such Schedule (other than the disposition of the
Common Stock) so long as such Person neither reports nor is required to report
such ownership other than as described in this paragraph (b).


 


(c)                                  “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement.


 


(d)                                 A
Person shall be deemed the “Beneficial Owner” of, and shall be deemed to
“beneficially own,” any securities:


 


(i)                                     which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
the “Beneficial Owner” of, or to “beneficially own:”  (A) securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person’s Affiliates or Associates
until such tendered securities are accepted for purchase or exchange; or
(B) securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event; or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights were
acquired by such Person or any of such Person’s Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
“Original Rights”) or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;


 


(ii)                                  which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership”
of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding:  (A) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or


 


(iii)                               which
are beneficially owned, directly or indirectly, by any other Person (or an
Affiliate or Associate thereof) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement or understanding
(whether or


 

















 


not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any voting securities of the Company; provided, however,
that nothing in this paragraph (c) shall cause a person engaged in business as
an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired through such person’s participation
in good faith in a firm commitment underwriting until the expiration of
40 days after the date of such acquisition.


 


(e)                                  “Business
Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in the state of Oregon are authorized or obligated by law or
executive order to close.


 


(f)                                    “Close
of Business” on any given date shall mean 5 p.m., Pacific time, on such
date; provided, however, that if such date is not a Business Day
it shall mean 5 p.m., Pacific time, on the next succeeding Business Day.


 


(g)                                 “Common
Stock” shall mean the common stock, par value $.01 per share, of the Company, except
that “Common Stock” when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.


 


(h)                                 “Person”
shall mean any individual, firm, corporation, partnership, limited liability
company or other entity.


 


(i)                                     “Preferred
Stock” shall mean shares of Series A Junior Participating Preferred Stock of
the Company, and, to the extent that there is not a sufficient number of shares
of Series A Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series A Junior Participating Preferred Stock.


 


(j)                                     “Purchase
Price” shall mean the price to be paid for each 1/1,000 of a share of Preferred
Stock pursuant to the exercise of a Right, which price is, as of the date
hereof, as set forth in Section 7(b) hereof.  The Purchase Price is subject to adjustment from time to time as
set forth in Sections 11 and 13 hereof.


 


(k)                                  “Section
11(a)(ii) Event” shall mean any event described in Section 11(a)(ii) hereof.


 


(l)                                     “Section
13 Event” shall mean any event described in clauses (i),(ii) or (iii) of
Section 13(a) hereof.


 


(m)                               “Stock
Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report


 

















 


filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.


 


(n)                                 “Subsidiary”
shall mean, with reference to any Person, any corporation of which an amount of
voting securities sufficient to elect at least a majority of the directors of
such corporation is beneficially owned, directly


 


or indirectly, by such Person, or otherwise controlled by such Person.


 


(o)                                 “Triggering
Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event.


 


Section 2.                                            Appointment
of Rights Agent.


 


The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. 
The Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable.  The
Rights Agent shall in no way be held responsible for the actions of any such
Co-Rights Agent.


 


Section 3.                                            Issue
of Rights Certificates.


 


(a)                                  Until
the earliest of:  (i) the Close of
Business on the tenth Business Day after the Stock Acquisition Date;
(ii) the Close of Business on the tenth Business Day (or such later date
as the Board of Directors shall determine) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement,
if upon consummation thereof, such Person would be the Beneficial Owner of l5%
or more of the shares of Common Stock then outstanding; or (iii) the Close
of Business on the tenth Business Day after the Board of Directors determines,
pursuant to the criteria set forth in Section 11(a)(ii)(B) hereof, that a
Person is an Adverse Person (the earliest of (i), (ii) and (iii) being herein
referred to as the “Distribution Date”), then the following shall apply:  (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).  As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, postage prepaid
mail, to each holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more right certificates, in substantially the form of Exhibit B
hereto (the “Rights Certificates”), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein.  In the event that an adjustment in the
number of Rights per share of Common Stock has been made


 

















 


pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights.  As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.


 


(b)                                 With
respect to certificates for the shares of Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights.  Until the earlier of the Distribution Date
or the Expiration Date (as such term is defined in Section 7 hereof), the
transfer of any certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.


 


(c)                                  Rights
shall be issued in respect of all shares of Common Stock which are issued
(whether originally issued or from the Company’s treasury) after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date
or in certain circumstances provided in Section 22 hereof, after the
Distribution Date.  Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:


 


This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the First Amended and Restated Rights Agreement
between Key Technology, Inc. (the “Corporation”) and American Stock Transfer
& Trust Company (the “Rights Agent”), dated as of April 1, 2001, as amended
from time to time (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Corporation. 
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate.  The
Corporation will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. 
Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring Person or
an Adverse Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void.


 


With respect to certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered


 

















 


holders of Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.


 


Section 4.                                            Form
of Rights Certificates.


 


(a)                                  The
Rights Certificates (and the forms of election to purchase and of assignment to
be printed on the reverse thereof), when, as and if issued, shall each be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Rights may from time to time be listed or traded, or to conform to
usage.  Subject to the provisions of
Sections 11 and 22 hereof, the Rights Certificates, whenever issued, which
are issued in respect of Common Stock which was issued and outstanding as of
the Close of Business on the Distribution Date, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of 1/1,000s of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price per 1/1,000
of a share, the “Purchase Price”), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.


 


(b)                                 Any
Rights Certificate issued pursuant to Section 3(a) or 22 hereof that represents
Rights beneficially owned by: 
(i) an Acquiring Person or Adverse Person or any Associate or
Affiliate of an Acquiring Person or Adverse Person; (ii) a transferee of
an Acquiring Person or Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person or Adverse Person becomes
such; or (iii) a transferee of an Acquiring Person or Adverse Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person with whom
such Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:


 


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


 

















 


the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.


 


Section 5.                                            Countersignature
and Registration.


 


(a)                                  The
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President or any Vice President, manually or by facsimile
signature, and shall have affixed thereto the Company’s seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature.  The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
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 Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.


 


(b)                                 Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate place for surrender
of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder.  Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.


 


Section 6.                                            Transfer,
Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.


 


(a)                                  Subject
to the provisions of Sections 4(b), 7(e) and l4 hereof, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate (other than a Rights
Certificate representing Rights that have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate, entitling the registered holder to purchase a like number of
1/1,000s of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be) as
the Rights Certificate surrendered then entitled such holder (or former holder
in the case of a transfer) to purchase. 
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate to be transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent designated for such purpose.  Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of any such surrendered Rights Certificate until the registered holder shall
have


 

















 


completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or Rights Agent shall reasonably
request.  Thereupon the Rights Agent
shall, subject to Sections 4(b), 7(e), 14 and 24 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested.  The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.


 


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


 


Section 7.                                            Exercise
of Rights; Purchase Price; Expiration Date of Rights.


 


(a)                                  Subject
to Section 7(e) hereof, the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Sections 9(c), 11(a)(iii) and 23(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of 1/1,000s of a
share (or other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the earliest
of:  (i) the Close of Business on
November 14, 2007 (the “Final Expiration Date”); (ii) the time at which
the Rights are redeemed (the “Redemption Date”), as provided in Section 23
hereof; or (iii) the time at which such Rights are exchanged (the
“Exchange Date”), as provided in Section 24 hereof (the earliest of (i),
(ii) and (iii) being herein referred to as the “Expiration Date”).


 


(b)                                 The
Purchase Price for each 1/1,000 of a share of Preferred Stock pursuant to the
exercise of a Right shall initially be $45, and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.


 


(c)                                  Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price per
1/1,000 of a share of Preferred Stock (or other shares, securities, cash or
other assets, as the case may be) to be


 

















 


purchased as set forth below
and an amount equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly:  (i)(A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of 1/1,000s of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of 1/1,000s of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depository agent)
and the Company will direct the depository agent to comply with such request;
(ii) requisition from the Company the amount of cash, if any, to be paid
in lieu of fractional shares in accordance with Section 14 hereof;
(iii) after receipt of such certificates or depository receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder; and (iv) after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate.  The payment of the Purchase Price (as such
amount may be adjusted pursuant to Section 11(a)(iii) hereof) shall be made in
cash or by certified bank check or bank draft payable to the order of the
Company.  In the event that the Company
is obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.  The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.  Notwithstanding the foregoing provisions of this
Section 7(c), the Company may suspend the issuance of Preferred Stock upon
exercise of Rights for a reasonable period, not in excess of 90 days,
during which the Company seeks to register under the Securities Act of 1933, as
amended (the “Securities Act”), and any applicable securities law of any
jurisdiction, the Preferred Stock to be issued pursuant to the Rights; provided,
however, that nothing contained in this Section 7(c) shall relieve
the Company of its obligations under Section 9(c) hereof.


 


(d)                                 In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.


 


(e)                                  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person or Adverse Person or an Associate or Affiliate of an Acquiring Person or
Adverse Person, (ii) a transferee of an Acquiring Person or Adverse Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person or Adverse Person becomes such, or (iii) a transferee of an Acquiring
Person or Adverse Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring


 

















 


Person or Adverse Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or Adverse Person
to holders of equity interests in such Acquiring Person or Adverse Person or to
any Person with whom the Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, and no holder of such Rights (whether or not such holder is
an Acquiring Person or an Adverse Person or an Affiliate or Associate of an Acquiring
Person or Adverse Person) shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise.  The Company shall use all reasonable efforts
to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of the Company’s failure to make any determination
with respect to an Acquiring Person or Adverse Person or any of their respective
Affiliates, Associates or transferees hereunder.


 


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


 


Section 8.                                            Cancellation
and Destruction of Rights Certificates.


 


All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any provision of this Agreement.  The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. 
The Rights Agent shall deliver all cancelled Rights Certificates to the
Company or shall, at the written request of the Company, destroy such cancelled
Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.


 


Section 9.                                            Reservation
and Availability of Capital Stock.


 


(a)                                  The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering


 

















 


Event, Common Stock and/or
other securities) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.


 


(b)                                 So
long as the shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange or included for quotation on any transaction reporting
system, the Company shall use its best efforts to cause, from and after such time
as the Rights become exercisable (but only to the extent that it is reasonably
likely that the Rights will be exercised), all shares reserved for such
issuance to be listed on such exchange or included for quotation on such
transaction reporting system upon official notice of issuance upon such
exercise.


 


(c)                                  The
Company shall use its best efforts to: 
(i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement under
the Securities Act with respect to the securities purchasable upon exercise of
the Rights on an appropriate form; (ii) cause such registration statement
to become effective as soon as practicable after such filing; and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights.  The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or “blue sky” laws of the various states in connection with the exercisability
of the Rights.  The Company may
temporarily suspend, for a period of time not to exceed 90 days after the date
set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. 
Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in
effect.  In addition, if the Company
shall determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.  Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or a registration statement shall not have been declared effective.


 


(d)                                 The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all 1/1,000s of a share of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.


 


(e)                                  The
Company further covenants and agrees that it will pay when due and payable any
and all federal and state transfer taxes and charges which may be payable in


 

















 


respect of the issuance or
delivery of the Rights Certificates and of any certificates for a number of
1/1,000s of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights.  The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of 1/1,000s of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number
of 1/1,000s of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company’s satisfaction that
no such tax is due.


 


Section 10.                                      Preferred
Stock Record Date.


 


Each Person in whose name any certificate for a number of 1/1,000s of a
share of Preferred Stock (or for Common Stock and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and
all applicable transfer taxes) was made; provided, however, that
if the date of such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books of
the Company are open.  Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.


 


Section 11.                                      Adjustment of
Purchase Price, Number and Kind of Shares or Number of Rights.


 


The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.


 


(a)                                  (i)                                     In
the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection with
a


 

















 


consolidation or merger in
which the Company is the continuing or surviving corporation), then and in each
such event, except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the
Company were open, he or she would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification.  If an event occurs
which 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 that:


 


(A) 
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its Affiliates
and Associates, shall become an Acquiring Person, unless the event causing the
Person to become an Acquiring Person is (l) a transaction set forth in Section
13(a) hereof or (2) an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of the members of the
Board of Directors who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring Person,
after receiving advice from one or more investment banking firms, to be (a) at
a price which is fair to shareholders (taking into account all factors which
such members of the Board of Directors deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its shareholders (a
“Qualifying Offer”); or


 


(B) 
The Board of Directors of the Company shall declare any Person to be an
Adverse Person, upon a determination that such Person, alone or together with
its Affiliates and Associates, has, at any time after this Agreement has been
filed with the Securities and Exchange Commission as an exhibit to a filing
under the Securities Act or Exchange Act, become the Beneficial Owner of a
number of shares of Common Stock which the Board of Directors of the Company
determines to be substantial (which number of shares shall in no event
represent less than l0% of the outstanding shares of Common Stock) and a
determination by the Board of Directors of the Company, after reasonable
inquiry and investigation, including consultation with such persons as such
directors shall


 

















 


deem appropriate and consideration of such factors as are permitted by
applicable law, that (a) such Beneficial Ownership by such Person is intended
to cause the Company to repurchase the shares of Common Stock beneficially
owned by such Person or to cause pressure on the Company to take action or
enter into a transaction or series of transactions intended to provide such
Person with short-term financial gain under circumstances where the Board of
Directors determines that the best long-term interests of the Company would not
be served by taking such action or entering into such transaction or series of
transactions at the time or (b) such Beneficial Ownership is causing or reasonably
likely to cause a material adverse impact (including, but not limited to,
impairment of relationships with customers or impairment of the Company’s
ability to maintain its competitive position) on the business or prospects of
the Company;


 


then, promptly following the occurrence of any event described in
Section 11(a)(ii)(A) or (B) hereof (a “Section 11(a)(ii) Event”), proper
provision shall be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of 1/1,000s of a share of
Preferred Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of 1/1,000s of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the “Purchase Price” for each Right and for
all purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the “Adjustment Shares”).


 


(iii)                               In
the event that the number of shares of Common Stock which are authorized by the
Company’s Restated Articles of Incorporation, as amended at the time (the
“Restated Articles of Incorporation”), but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall:  (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the “Current Value”);
and (B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase Price:
(l) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock, such as the Preferred Stock,
which the Board has deemed to have essentially the same value or economic
rights as shares of Common Stock (such shares of preferred stock being referred
to as “Common Stock Equivalents”)), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value (less the amount of any reduction in
the Purchase Price), where such aggregate value has been determined by the
Board of Directors based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors; provided, however,
that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the later of (x) the
first occurrence of a Section 11(a)(ii) 


 

















 


Event and (y) the date on which
the Company’s right of redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger
Date”), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread.  For purposes of the preceding sentence, the
term “Spread” shall mean the excess of (i) the Current Value over (ii) the
Purchase Price.  If the Board determines
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent necessary, but not
more than 90 days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such 30-day period, as it may be extended, is herein called
the “Substitution Period”).  To the
extent that action is to be taken pursuant to the first and/or third sentences
of this Section 11(a)(iii), the Company (l) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding Rights,
and (2) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek such shareholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the value
thereof.  In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii), the
value of each Adjustment Share shall be the Current Market Price per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and the per-share or
per-unit value of any Common Stock Equivalent shall be deemed to equal the
Current Market Price per share of the Common Stock on such date.


 


(b)                                 In
case the Company shall fix a record date for the issuance of rights (other than
the Rights), options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within 45 calendar
days after such record date) Preferred Stock (or shares having the same rights,
privileges as the shares of Preferred Stock (“equivalent preferred stock”)) or
securities convertible into Preferred Stock or equivalent preferred stock at a
price per share of Preferred Stock or per share of equivalent preferred stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred stock so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible).  In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such


 

















 


consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.  Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation.  Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.


 


(c)                                  In
case the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock.  Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price shall
be adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.


 


(d)                                 (i)                                     For
the purpose of any computation hereunder, other than computations made pursuant
to Section 11(a)(iii) hereof, the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the 30 consecutive Trading Days
immediately prior to such date, and for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the 10 consecutive Trading Days immediately
following such date; provided, however, that in the event that
the Current Market Price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall not
have occurred prior to the commencement of the requisite 30 Trading Day or 10
Trading Day period, as set forth above, then, and in each such case, the
Current Market Price shall be properly adjusted to take into


 

















 


account ex-dividend trading or
the subdivision, combination or reclassification, as the case may be.  The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
(“Nasdaq”) or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the
Company.  If on any such date no market
maker is making a market in the Common Stock, the fair va1ue of the Common
Stock on such date as determined in good faith by the Board of Directors shall
be used.  The term “Trading Day” shall
mean a day on which the principal national securities exchange or principal
transaction reporting system on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares
of Common Stock are not listed or admitted to trading on any national
securities exchange or transaction reporting system, a Business Day.  If the Common Stock is not publicly held or
not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.


 


(ii)                                  For
the purpose of any computation hereunder, the Current Market Price per share
(or per 1/1,000 of a share) of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof).  If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events as stock splits,
stock dividends, combinations, reclassifications, recapitalizations and similar
transactions with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the Common
Stock.  If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or traded, Current Market
Price per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.


 


(e)                                  Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this
Section 11 shall be made to


 

















 


the nearest cent or to the
nearest 1/10,000 of a share of Common Stock or other share or 1/1,000,000 of a
share of Preferred Stock, as the case may be.


 


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


 


(g)                                 All
Rights originally issued by the Company subsequent to any adjustment made to
the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of 1/1,000s of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.


 


(h)                                 Unless
the Company shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made
in Sections 11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of 1/1,000s of a share of Preferred
Stock (calculated to the nearest 1/1,000,000) obtained by (i) multiplying (x)
the number of 1/1,000s of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.


 


(i)                                     The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of
1/1,000s of a share of Preferred Stock purchasable upon the exercise of a
Right.  Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of 1/1,000s of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest
1/10,000) obtained by dividing the Purchase Price in effect immediately prior
to adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. 
The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.  This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement.  If Rights
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 Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be


 

















 


entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment.  Rights Certificates so to
be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record
of Rights Certificates on the record date specified in the public announcement.


 


(j)                                     Irrespective
of any adjustment or change in the Purchase Price or the number of 1/1,000s of
a share of Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per 1/1,000 of a share and the number of 1/1,000s of a share
which were expressed in the initial Rights Certificates issued hereunder.


 


(k)                                  Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then stated value, if any, of the number of 1/1,000s of a share of
Preferred Stock issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable such number of 1/1,000s of a share of Preferred Stock at such
adjusted Purchase Price.


 


(l)                                     In
any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of 1/1,000s
of a share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
1/1,000s of a share of Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares
(fractional or otherwise) or securities 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 1/1,000s of a share
of Preferred Stock which may be acquired upon exercise of the Rights, and such
adjustments in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its good faith
judgment the Board of Directors of the Company shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this Section
11, hereafter


 

















 


made by the Company to holders
of its Preferred Stock shall not be taxable to such shareholders or shall
reduce the taxes payable by such holders.


 


(n)                                 The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in
one transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the “Principal Party” for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates; provided, however,
that this Section 11(n) shall not affect the ability of any Subsidiary of
the Company to consolidate with, merge with or into, or sell or transfer assets
or earning power to, any other Subsidiary of the Company.


 


(o)                                 The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.


 


(p)                                 Anything
in this Agreement to the contrary notwithstanding, in the event that the
Company shall at any time after the Rights Dividend Declaration Date and prior
to the Distribution Date (i) declare a dividend on the outstanding shares
of Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights associated
with each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share of Common
Stock following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.


 


(q)                                 The
failure of the Board of Directors of the Company to declare a Person to be an
Adverse Person following such Person becoming the Beneficial Owner of shares of
Common Stock representing 10% or more of the outstanding shares of Common Stock
shall


 

















 


not imply that such Person is
not an Adverse Person or limit the Board of Directors’ right at any time in the
future to declare such Person to be an Adverse Person.


 


Section 12.                                      Certificate
of Adjusted Purchase Price or Number of Shares.


 


Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall: 
(a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment;
(b) promptly file with the Rights Agent, and with each transfer agent for
the Preferred Stock and the Common Stock, a copy of such certificate; and
(c) mail a brief summary thereof to each holder of a Rights Certificate
(or, if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 26 hereof.  The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.


 


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


 


(a)                                  In
the event that, following the Stock Acquisition Date, directly or indirectly,
(i) the Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) any Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other Person or
cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof) (any event described in clauses (i),
(ii) or (iii) of this Section 13(a) being a “Section 13 Event”),
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that:  (A) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of 1/1,000s of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of
a Section 13 Event, multiplying the number of such 1/1,000s of a share for
which a Right was exercisable immediately prior to the first occurrence of such
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following the first
occurrence of a


 

















 


Section 13 Event, shall be
referred to as the “Purchase Price” for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (B) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (C) the term “Company” shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof apply only to such Principal Party following the first
occurrence of a Section 13 Event; (D) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (E) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.


 


(b)                                 “Principal
Party” shall mean


 


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


 


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


 


provided, however, that in any such
case, (1) if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, “Principal Party” shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
“Principal Party” shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.


 


(c)                                  The
Company shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any
consolidation, merger, or sale or transfer mentioned in paragraph (a) of
this Section 13, the Principal Party will:


 

















 


(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,
and will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly comply with applicable
state securities laws;


 


(ii)                                  use its best efforts
to list (or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities exchange or to meet the
eligibility requirements for quotation on Nasdaq or such other system then in
use; and


 


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


 


The provisions of this Section 13 shall similarly apply to
successive consolidations, mergers, sales or other transfers.  In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).


 


(d)                                 Notwithstanding
anything in this Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs (i) and (ii) of
Section 13(a) if:  (i) such transaction
is consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Qualifying Offer (or a wholly owned Subsidiary of any such Person
or Persons); (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
tender offer or exchange offer; and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer.  Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.


 


Section 14.                                      Fractional
Rights and Fractional Shares.


 


(a)                                  The
Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights (i.e., Rights to acquire less
than 1/1,000 of a share of Preferred Stock). 
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. 
For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such


 

















 


fractional Rights would have
been otherwise issuable.  The closing
price of the Rights for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the principal national securities exchange on which the
Rights are listed or admitted to trading, or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices, as
reported by Nasdaq or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.


 


(b)                                 The
Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of 1/1,000 of a share of
Preferred Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock (other than fractions which
are integral multiples of 1/1,000 of a share of Preferred Stock).  In lieu of fractional shares of Preferred
Stock that are not integral multiples of 1/1,000 of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of 1/1,000 of a share of
Preferred Stock.  For purposes of this
Section 14(b), the current market value of 1/1,000 of a share of Preferred
Stock shall be 1/1,000 of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.


 


(c)                                  Following
the occurrence of a Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock.  In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one share of Common
Stock.  For purposes of this
Section 14(c), the current market value of one share of Common Stock shall
be the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.


 


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


 


Section 15.                                      Rights of
Action.


 


All rights of action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered


 

















 


holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his or her own behalf and for his or her own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his or her
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement.  Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement.


 


Section 16.                                      Agreement
of Rights Holders.


 


Every holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:


 


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


 


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


 


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


 


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


 

















 


however,
the Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.


 


Section 17.                                      Rights
Holder and Rights Certificate Holder Not Deemed a Shareholder.


 


No holder, as such, of any Right or Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the number of 1/1,000s of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Right or Rights
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.


 


Section 18.                                      Concerning
the Rights Agent.


 


(a)                                  The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and attorney fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability or expense,
incurred without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability arising
therefrom.  Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.


 


(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 Rights Certificate or
certificate representing Preferred Stock or Common Stock or other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by the Rights Agent to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
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 the corporate trust or
shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of either
of the parties hereto; provided, however, 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 Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights 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 Rights Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and if at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.


 


Section 20.                                      Duties
of Rights Agent.


 


The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:


 


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


 


(b)                                 Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person or Adverse Person and the
determination of “current market price”) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed
by the Chairman of the Board, the President, any Vice President, the Chief
Financial


 

















 


Officer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.


 


(c)                                  The
Rights Agent shall be liable hereunder only for its own negligence, bad faith
or willful misconduct.


 


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


 


(e)                                  The
Rights Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights 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 Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 7(e) hereof); nor shall it be
responsible for any adjustment required under the provisions of
Section 11, 13 or 24 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after actual notice of any such
adjustment or change in exercisability); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.


 


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


 


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


 


(h)                                 The
Rights Agent and any shareholder, director, officer, member or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as


 

















 


though it were not Rights Agent
under this Agreement.  Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.


 


(i)                                     The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerab1e 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, however, reasonable care was
exercised in the selection and continued employment thereof.


 


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


 


(k)                                  If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause l and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.


 


Section 21.                                      Change
of Rights Agent.


 


The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. 
The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days’ notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail.  If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights
Agent.  If the Company shall fail to
make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent.  Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a corporation organized and doing business under the laws
of the United States or any state of the United States, so long as such
corporation is authorized to do business as a banking institution, is
authorized to exercise corporate trust powers, is in good standing, is subject
to supervision or examination by federal or state authority, and has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least


 

















 


$100 million, or (b) an
affiliate of such a corporation.  After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights
Certificates.  Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.


 


Section 22.                                      Issuance
of New Rights Certificates.


 


Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement.  In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.


 


Section 23.                                      Redemption
and Termination.


 


(a)                                  The
Board of Directors of the Company may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following
the Stock Acquisition Date, or (ii) the Close of Business on the Final
Expiration Date, redeem all, but not less than all, the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). 
The Board of Directors may not redeem any Rights following a
determination pursuant to Section 11(a)(ii)(B) that any Person is an Adverse
Person.  Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be


 

















 


exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company’s
right of redemption hereunder has expired. 
The Company may, at its option, pay the Redemption Price in cash, shares
of Common Stock (based on the Current Market Price, as defined in Section
11(d)(i) hereof, of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.


 


(b)                                 Immediately
upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held.  Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder’s
last address as it appears on the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock.  Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.  Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.


 


Section 24.                                      Exchange.


 


(a)                                  The
Board of Directors of the Company may, at its option, at any time after any
Person becomes an Acquiring Person or is determined to be an Adverse Person
pursuant to Section 11(a)(ii)(B), exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the “Exchange Ratio”). 
Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Common Stock then outstanding.


 


(b)                                 Immediately
upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to Section 24(a) hereof and without any further
action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly give public
notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange.  The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear on the registry books of the Rights
Agent.  Any notice which is mailed in the
manner herein provided shall be deemed given,


 

















 


whether or not the holder
receives the notice.  Each such notice
of exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.


 


(c)                                  In
any exchange pursuant to this Section 24, the Company, at its option, may
substitute shares of Preferred Stock (or equivalent preferred stock, as such
term is defined in Section 11(b) hereof) for shares of Common Stock
exchangeable for Rights, at the initial rate of 1/1,000 of a share of Preferred
Stock (or equivalent preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to Section 3(A) of the rights, powers and preferences
attached hereto as Exhibit A, so that the fraction of a share of Preferred
Stock delivered in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.


 


(d)                                 In
the event that there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights.


 


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


 


Section 25.                                      Notice
of Certain Events.


 


(a)                                  In
case the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (iv) to effect any consolidation
or merger into or with any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), 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 transaction or a series of related
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 (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
20 days prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Preferred Stock, whichever shall be the earlier.


 


(b)                                 If
any Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common
Stock and/or, if appropriate, other securities.


 


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


 


	
  Key Technology, Inc.

  150 Avery Street

  Walla Walla, WA 99362

  
	
  Attention: Chief Financial Officer

  



 


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


 


	
  American Stock Transfer & Trust Company

  59 Maiden Lane

  Plaza Level

  New York, NY 10038

  
	
  Attention: Diane Strong

  



 

















 


Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at his or her
address as shown on the registry books of the Company.


 


Section 27.                                      Supplements
and Amendments.


 


Prior to the Distribution Date and subject to the penultimate sentence
of this Section 27, the Company may by action of the Board of Directors,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any manner without the approval of any holders
of Common Stock.  From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company may by action of the Board of Directors, and the
Rights Agent shall if directed by the Company, from time to time, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
herein or (iv) to change or supplement any other provisions herein in any
manner which the Board of Directors may deem necessary or desirable so long as
the interests of the holders of the Rights or Rights Certificates (other than an
Acquiring Person or Adverse Person or any Affiliate or Associate of an
Acquiring Person or Adverse Person) shall not be materially and adversely
affected thereby; provided, however, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time
and the Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or Adverse Person or any Affiliate or Associate of an
Acquiring Person or Adverse Person). 
Upon the delivery of a certificate from an appropriate officer of the
Company, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. 
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock of
the Company.


 


Section 28.                                      Successors.


 


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


 


Section 29.                                      Determinations
and Actions by the Board of Directors, Etc.


 


For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(l)(i) of the


 

















 


General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.  The Board of Directors of the Company have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(a) interpret provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend this Agreement).  All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors in good faith, shall (i) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board of Directors
to any liability to the holders of the Rights.


 


Section 30.                                      Benefits
of This Agreement.


 


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


 


Section 31.                                      Severability.


 


If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the contrary, if any term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day
following the date of such determination by the Board of Directors.  Without limiting the foregoing, if any
provision requiring a majority of the members of the Board of Directors who are
not officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person to act is held by any court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
such determination shall be made by the Board of Directors of the Company in
accordance with applicable law and the Company’s Restated Articles of
Incorporation and Restated Bylaws, as in effect at that time.


 

















 


Section 32.                                      Governing Law.


 


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


 


Section 33.                                      Counterparts.


 


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


 


Section 34.                                      Descriptive
Headings.


 


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


 


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


 


 


	
   

  	
  KEY TECHNOLOGY, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   /s/ Gordon Wicher

  	
   

  	
  By

  	
  /s/ Thomas C. Madsen 

  	
   

  
	
  Secretary

  	
   

  	
  Title

  	
  Chairman & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN
  STOCK TRANSFER & TRUST COMPANY

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   
  /s/ S. Silber

  	
   

  	
  By

  	
  /s/ Herbert J. Lemmer

  	
   

  
	
  Secretary

  	
   

  	
  Title

  	
  Vice President