EXHIBIT 10.7


 


FIRST AMENDMENT TO RIGHTS AGREEMENT


 


FIRST AMENDMENT, dated as of October 19, 2005, to the Rights
Agreement dated as of November 20, 1998 (the “Rights Agreement”), by and
between Cutter & Buck Inc., a Washington corporation (the “Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company (as
successor to ChaseMellon Shareholder Services, L.L.C., a New Jersey limited
liability company), as rights agent (the “Rights Agent”).  Capitalized terms used in this Amendment that
are not otherwise defined have the meaning ascribed to such terms in the Rights
Agreement.


 


WITNESSETH:


 


WHEREAS, under the Rights Agreement, the Company
intended to retain the right to amend that Agreement, in its sole discretion,
at any time as the Rights are then redeemable even as to the Redemption Price
and the Final Expiration Date so long as such latter amendment is approved by a
majority of the Continuing Directors; and


 


WHEREAS, the Company also retained the right and
ability to amend the Rights Agreement as to Section 27 thereof; and


 


WHEREAS, the Company’s Board of Directors has
unanimously approved this Amendment and all actions necessary to effectuate
this Amendment, and


 


WHEREAS, the Board of Directors is not presently aware
of any pending or threatened event which would cause the Rights not to be
redeemable in accordance with the terms of the Rights Agreement; and


 


WHEREAS, the Company has determined that the best
interests of the Company’s shareholders are served by terminating the Rights
Agreement on November 18, 2005, which is prior to its original expiration
date of December 7, 2008; and


 


WHEREAS, the execution and delivery of this Amendment
by the Company has been in all respects duly authorized by the Company.


 


NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements set forth in the Rights Agreement and this
Amendment, the parties hereby agree as follows:


 


1.                                       Section 7(a) of
the Rights Agreement is hereby amended and restated in its entirety to read as
follows:


 


The Rights shall not be
exercisable until, and shall become exercisable on, the Distribution Date
(unless otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 7(e) and 23(a) hereof).  Except as otherwise provided herein, the
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon 


 





















 


surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent or the office or offices designated for such purpose,
together with payment of the Exercise Price for each Right exercised, subject
to adjustment as hereinafter provided, at or prior to the Close of Business on
the earlier of (i) November 18, 2005 (the “Final Expiration Date”),
or (ii) the date on which the Rights are redeemed as provided in Section 23
hereof (such earlier date being herein referred to as the “Expiration Date”).


 


2.                                       Exhibit A
is hereby amended to replace all references to “December 7, 2008” with “November 18,
2005” in all places where such date appears.


 


3.                                       Exhibit B
is hereby amended to replace all references to “December 7, 2008” with “November 18,
2005” in all places where such date appears.


 


4.                                       To
the extent any amendment of Section 27 of the Rights Agreement would be
required in order to effectuate the intent and purpose of this Amendment, Section 27
of the Rights Agreement shall be deemed to be so modified by virtue of this
Amendment.


 


5.                                       This
Amendment shall be deemed to be a contract made under the laws of the State of
Washington and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.


 


6.                                       This
Amendment 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 one and the same instrument.


 


7.                                       Except
as expressly set forth herein, this Amendment shall not by implication or
otherwise alter, modify or amend any of the other terms, conditions,
obligations, covenants or agreements contained in the Rights Agreement.


 


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


 


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


 


	
  CUTTER & BUCK INC.

  
	
   

  
	
   

  
	
  /s/ ERNEST R. JOHNSON

  	
   

  
	
  Ernest R. Johnson

  
	
  Chief Financial Officer and Senior Vice President

  
	
   

  
	
   

  
	
  MELLON INVESTOR SERVICES, LLC

  
	
   

  
	
   

  
	
  /s/ LISA PORTER

  	
   

  
	
  By: Lisa Porter

  
	
  Its: Client Relationship Executive

  
			



 


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