Document:

<PAGE>

                                                                    EXHIBIT 10.1

                            SMITH INTERNATIONAL, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)

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                                                                    EXHIBIT 10.1

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                PAGE
                                                                                                                ----
<S>                                                                                                           <C>
ARTICLE ONE             ESTABLISHMENT, PURPOSE AND STATUS OF THE PLAN............................................ 1

   1.1            ESTABLISHMENT OF PLAN.......................................................................... 1
   1.2            PURPOSE OF PLAN................................................................................ 1
   1.3            STATUS OF PLAN................................................................................. 1

ARTICLE TWO             DEFINITIONS.............................................................................. 2

   2.1            ACCOUNT........................................................................................ 2
   2.2            ADMINISTRATIVE COMMITTEE....................................................................... 2
   2.3            ADVANCE DISTRIBUTION ELECTION.................................................................. 2
   2.4            ACTIVE PARTICIPANT............................................................................. 2
   2.5            AFFILIATED ENTITY.............................................................................. 2
   2.6            BENEFICIARY.................................................................................... 2
   2.7            BOARD.......................................................................................... 2
   2.8            BONUS.......................................................................................... 2
   2.9            CODE........................................................................................... 2
   2.10           COMPANY........................................................................................ 2
   2.11           COMPENSATION................................................................................... 2
   2.12           COMPENSATION COMMITTEE......................................................................... 2
   2.13           DEFERRAL AGREEMENT............................................................................. 2
   2.14           DEFERRED COMPENSATION LEDGER................................................................... 3
   2.15           DETERMINATION DATE............................................................................. 3
   2.16           EMPLOYEE....................................................................................... 3
   2.17           EMPLOYMENT..................................................................................... 3
   2.18           EMPLOYER....................................................................................... 3
   2.19           ERISA.......................................................................................... 3
   2.20           EXECUTIVE STAFF PARTICIPANT.................................................................... 3
   2.21           FINANCIAL EMERGENCY............................................................................ 3
   2.22           FUNDS.......................................................................................... 4
   2.23           401(K) PLAN.................................................................................... 4
   2.24           INSOLVENT...................................................................................... 4
   2.25           INTEREST EQUIVALENTS........................................................................... 4
   2.26           INVESTMENT EXPERIENCE.......................................................................... 4
   2.27           PARTICIPANT.................................................................................... 4
   2.28           PLAN........................................................................................... 4
   2.29           PLAN YEAR...................................................................................... 4
   2.30           RETIREMENT DATE................................................................................ 5
   2.31           SUBSIDIARY..................................................................................... 5
   2.32           TOTAL AND PERMANENT DISABILITY................................................................. 5
   2.33           TRUST.......................................................................................... 5
   2.34           TRUST AGREEMENT................................................................................ 5
   2.35           TRUSTEE........................................................................................ 5
   2.36           VALUATION DATE................................................................................. 5
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                                                                    EXHIBIT 10.1

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ARTICLE THREE           ADMINISTRATION........................................................................... 5

   3.1            COMPOSITION OF ADMINISTRATIVE COMMITTEE........................................................ 5
   3.2            ADMINISTRATION OF PLAN......................................................................... 5
   3.3            ACTION BY COMMITTEE............................................................................ 6
   3.4            DELEGATION..................................................................................... 6
   3.5            RELIANCE UPON INFORMATION...................................................................... 6
   3.6            RESPONSIBILITY AND INDEMNITY................................................................... 6

ARTICLE FOUR            PARTICIPATION............................................................................ 7

   4.1            ELIGIBILITY OF EMPLOYEES....................................................................... 7
   4.2            NOTIFICATION OF ELIGIBLE EMPLOYEES............................................................. 7
   4.3            COMPENSATION AND BONUS DEFERRAL AGREEMENT...................................................... 8
   4.4            SUSPENSION OF DEFERRAL FOR FINANCIAL EMERGENCY................................................. 8
   4.5            EMPLOYER CONTRIBUTIONS......................................................................... 8
   4.6            VESTING........................................................................................12

ARTICLE FIVE            DEFERRAL OF COMPENSATION AND ALLOCATION OF INTEREST EQUIVALENTS..........................12

   5.1            DEFERRAL OF COMPENSATION AND/OR BONUS..........................................................12
   5.2            ALLOCATION OF INVESTMENT EXPERIENCE TO ACCOUNTS................................................13
   5.3            INVESTMENT OF ACCOUNTS.........................................................................13
   5.4            INTEREST EQUIVALENTS...........................................................................13
   5.5            PARTICIPANTS' RIGHTS UNDER THE TRUST...........................................................14
   5.6            DETERMINATION OF ACCOUNT.......................................................................14

ARTICLE SIX             DISTRIBUTIONS............................................................................14

   6.1            AMOUNT OF DEFERRED COMPENSATION SUBJECT TO DISTRIBUTION........................................14
   6.2            FORM OF DISTRIBUTIONS..........................................................................14
   6.3            TIMING OF DISTRIBUTIONS........................................................................15
   6.4            ADVANCE DISTRIBUTION ELECTION REQUIRED.........................................................16
   6.5            WITHDRAWAL DUE TO FINANCIAL EMERGENCY..........................................................16
   6.6            TRUST AND PAYOR OF DEFERRED COMPENSATION.......................................................17
   6.7            REIMBURSEMENT OF PARTICIPANT...................................................................17
   6.8            FACILITY OF PAYMENTS...........................................................................18
   6.9            BENEFICIARY DESIGNATIONS.......................................................................18
   6.10           WITHHOLDING OF TAXES...........................................................................18

ARTICLE SEVEN           RIGHTS OF PARTICIPANTS...................................................................19

   7.1            ANNUAL STATEMENT TO PARTICIPANTS...............................................................19
   7.2            LIMITATION OF RIGHTS...........................................................................19
   7.3            NONALIENATION OF BENEFITS......................................................................20
   7.4            CLAIMS PROCEDURES..............................................................................20
</Table>

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                                                                    EXHIBIT 10.1

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ARTICLE EIGHT           MISCELLANEOUS............................................................................21

   8.1            AMENDMENT OR TERMINATION OF THE PLAN...........................................................21
   8.2            POWERS OF THE COMPANY..........................................................................21
   8.3            ADOPTION OF PLAN BY AFFILIATED ENTITY..........................................................21
   8.4            WAIVER.........................................................................................21
   8.5            SEVERABILITY...................................................................................22
   8.6            GENDER, TENSE AND HEADINGS.....................................................................22
   8.7            GOVERNING LAW..................................................................................22
   8.8            NOTICE.........................................................................................22
   8.8            EFFECTIVE DATE.................................................................................22
</Table>

                                      iii

<PAGE>

                                                                    EXHIBIT 10.1

                            SMITH INTERNATIONAL, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)

                                   ARTICLE ONE

                  ESTABLISHMENT, PURPOSE AND STATUS OF THE PLAN

         1.1 ESTABLISHMENT OF PLAN. Smith International, Inc. (the "Company")
established, effective as of October 1, 1993, an unfunded supplemental executive
retirement plan known as the "Smith International, Inc. Supplemental Executive
Retirement Plan" (the "Plan"). The Plan was originally effective as of October
1, 1993 and it was amended and restated effective January 1, 1995, October 1,
1997, and again on January 1, 2000. The Plan is now amended and restated under
the form of this document effective as of January 1, 2001.

         1.2 PURPOSE OF PLAN. The Plan is maintained for the purpose of
advancing the interests of the Company and its stockholders by enhancing the
Company's ability to attract and retain highly qualified executives. The Company
anticipates that accomplishment of those objectives will be facilitated by
providing Participants with a mechanism through which they may provide for their
retirement by electing to defer all or a portion of their Compensation and/or
Bonuses.

         1.3 STATUS OF PLAN. The Plan is intended as an unfunded plan to be
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and as such it is intended that the
Plan be exempt from the participation and vesting, funding, and fiduciary
responsibility requirements of Title I of ERISA. The Plan is also intended to
qualify for simplified reporting under U.S. Department of Labor Regulation
Section 2530.104-23, which provides for an alternative method of compliance for
plans described in such regulation. The Plan is not intended to satisfy the
qualification requirements of Section 401 of the Internal Revenue Code.

                                       1

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                                                                    EXHIBIT 10.1

                                   ARTICLE TWO

                                   DEFINITIONS

         In addition to the terms defined in the text hereof, each term below
shall have the meaning assigned thereto for all purposes of the Plan unless the
context reasonably requires a broader, narrower or different meaning.

         2.1 ACCOUNT. "Account" means, with respect to each Participant, the
Account reflecting his interest under the Plan under the Deferred Compensation
Ledger, as established and maintained pursuant to Article Five hereof. The
Administrative Committee may establish subaccounts for Participants under their
Accounts as it may deem appropriate from time to time.

         2.2 ADMINISTRATIVE COMMITTEE. "Administrative Committee" means the
committee described in Article Three of the Plan.

         2.3 ADVANCE DISTRIBUTION ELECTION. "Advance Distribution Election"
means a separate written agreement entered into by and between the Employer and
a Participant which shall specify the Participant's election as to the date or
dates for payment of deferred amounts with credited Investment Experience, and
the method that the deferred amount is to be paid, such as lump sum or
installment payments.

         2.4 ACTIVE PARTICIPANT. "Active Participant" means a Participant who is
currently eligible to authorize a Deferral Agreement and to receive an
allocation of Employer contributions to his Account.

         2.5 AFFILIATED ENTITY. "Affiliated Entity" means an entity which is
affiliated by common ownership or control with the Company as determined and
designated by the Compensation Committee, CEO or the Administrative Committee in
its discretion.

         2.6 BENEFICIARY. "Beneficiary" means the beneficiary or beneficiaries
designated by the Participant to receive any amounts distributable under the
Plan upon his death.

         2.7 BOARD.  "Board" means the Board of Directors of the Company.

         2.8 BONUS. "Bonus" means any amount payable to the Participant during a
Plan Year as an award granted under the Smith International, Inc. Annual
Incentive Plan (or any successor thereto) or under any other bonus program
maintained by the Company or an Adopting Employer.

         2.9 CODE. "Code" means the Internal Revenue Code of 1986, as amended,
and the regulations and other authority issued thereunder by the appropriate
governmental authority. References herein to any Section of the Code shall
include references to any successor Section or provision of the Code.

         2.10 COMPANY. "Company" means Smith International, Inc. or any
successor thereto.

         2.11 COMPENSATION. "Compensation" means the salary and other cash
remuneration that is payable by the Employer to the Employee during a Plan Year
for compensatory services rendered, excluding any Bonuses and reimbursements of
business and other expenses.

         2.12 COMPENSATION COMMITTEE. "Compensation Committee" means the
Compensation Committee of the Board.

         2.13 DEFERRAL AGREEMENT. "Deferral Agreement" means a separate written
agreement entered into by and between the Employer and an Active Participant
prior to the commencement of a Plan Year, which agreement

                                       2
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                                                                    EXHIBIT 10.1

describes the terms and conditions of such Active Participant's deferred
compensation arrangement hereunder for the Plan Year. The Deferral Agreement
shall be executed and dated by the Active Participant and shall specify the
amount of Compensation and/or Bonus, by percentage or dollar amount, to be
deferred.

         2.14 DEFERRED COMPENSATION LEDGER. "Deferred Compensation Ledger" means
the appropriate accounting records maintained by the Administrative Committee
which set forth the name of each Participant and his Account transactions
reflecting (i) the amount of Compensation and Bonus deferred pursuant to Article
Four, (ii) the amount of Employer contributions made on behalf of the
Participant pursuant to Article Four, (iii) the amount of Investment Experience
credited or charged to the Participant's Account pursuant to Article Five, and
(iv) the amount of any distributions or withdrawals pursuant to Article Six. The
Deferred Compensation Ledger shall be utilized solely as a device for the
measurement and determination of the contingent amounts to be paid to
Participants under the Plan. The Deferred Compensation Ledger shall not
constitute or be treated as an escrow, trust fund, or any other type of funded
account of whatever kind for Code or ERISA purposes and, moreover, contingent
amounts credited thereto shall not be considered "plan assets" for ERISA
purposes. In addition, no economic benefit or constructive receipt of income
shall be provided to any Participant for purposes of the Code unless and until
cash payments under the Plan are actually made to the Participant. The Deferred
Compensation Ledger merely provides a record of the bookkeeping entries relating
to the contingent benefits that the Employer intends to provide to Participants
and thus reflects a mere promise to pay such amounts in the future.

         2.15 DETERMINATION DATE. "Determination Date" means, with respect to a
Participant, the termination of his Employment due to his death, Total and
Permanent Disability, retirement or another reason.

         2.16 EMPLOYEE. "Employee" means a member of a select group of
management or highly compensated employees of the Employer, as determined by the
Compensation Committee for each Plan Year.

         2.17 EMPLOYMENT. "Employment" means employment as an Employee. In this
regard, neither the transfer of a Participant from employment by the Company to
employment by an Affiliated Entity nor the transfer of a Participant from
employment by an Affiliated Entity to employment by the Company shall be deemed
to be a termination of Employment by the Participant. Moreover, the Employment
of a Participant shall not be deemed to have been terminated because of his
approved absence from active employment on account of temporary illness or
authorized vacation, or during approved and temporary leaves of absence from
active employment granted by the Employer.

         2.18 EMPLOYER. "Employer" means the Company and each Affiliated Entity
which has adopted the Plan with the consent of the Compensation Committee or the
Administrative Committee.

         2.19 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and the regulations and other authority issued thereunder
by the appropriate governmental authority. References herein to any section of
ERISA shall include references to any successor section or provision of ERISA.

         2.20 EXECUTIVE STAFF PARTICIPANT. "Executive Staff Participant" means a
Participant who is designated by the Compensation Committee, in its discretion,
as an Executive Staff Participant. An Executive Staff Participant will generally
be a senior officer of the Employer who is a member of the Employer's Executive
Staff; provided, however, only Participants so designated by the Compensation
Committee shall be deemed Executive Staff Participants for purposes of this
Plan. Executive Staff Participants shall be designated by name in resolutions
adopted by the Compensation Committee from time to time, and any Participant may
be added or deleted from the list of Executive Staff Participants by the
Compensation Committee in its absolute discretion at any time. Executive Staff
Participants are eligible to receive additional Employer contributions in
accordance with Section 4.6.

         2.21 FINANCIAL EMERGENCY. "Financial Emergency" means an unforeseeable
emergency and severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident of the Participant or of a dependent
(as defined in Section 152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the

                                       3
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                                                                    EXHIBIT 10.1

control of the Participant. The circumstances that will constitute an
unforeseeable emergency will depend upon the facts of each case, but a Financial
Emergency shall not be deemed to exist to the extent that such hardship is or
may be relieved:

                  (a)      Through reimbursement or compensation by insurance or
                           otherwise;

                  (b)      By liquidation of the Participant's assets, to the
                           extent the liquidation of such assets would not
                           itself cause severe financial hardship;

                  (c)      By cessation of Compensation or Bonus deferrals under
                           the Plan; or elective deferrals contributions made by
                           the Participant under any 401(k) plan or other
                           deferred compensation plan maintained by an Employer;
                           or

                  (d)      distributions or nontaxable loans from the Employer's
                           other plans or any other employer's plans to the
                           extent eligible.

         By way of example, the need to send a Participant's child to college or
the desire to purchase a home would not be considered a Financial Emergency.

         Withdrawals of amounts from the Participant's Account due to a
Financial Emergency, pursuant to Section 6.5, shall only be permitted to the
extent reasonably needed to satisfy the emergency need. The Administration
Committee, in its discretion, shall determine whether a Financial Emergency has
occurred and the amount needed to satisfy the emergency need. The Participant
must provide the Administrative Committee with all relevant information needed
to make these determinations.

         2.22 FUNDS. "Funds" means the investment funds designated from time to
time for the deemed investment of Accounts pursuant to Article Five.

         2.23 401(k) PLAN. "401(k) Plan" means the Smith International, Inc.
401(k) Retirement Plan, as amended from time to time.

         2.24 INSOLVENT. "Insolvent" means either (i) the Employer is unable to
pay its debts as they become due, or (ii) the Employer is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.

         2.25 INTEREST EQUIVALENTS. "Interest Equivalents" means the
hypothetical amounts credited as interest to the Participant's Account, as a
component of Investment Experience, pursuant to Section 5.4.

         2.26 INVESTMENT EXPERIENCE. "Investment Experience" means the
hypothetical amounts credited (as income, gains or appreciation on any
hypothetical investments in Funds or other investments permitted by the Trustee)
or charged (as losses or depreciation on any such hypothetical investments) to
the balances in the Participant's Account pursuant to Article Five, including,
without limitation, Interest Equivalents.

         2.27 PARTICIPANT. "Participant" means an Employee who has been selected
by the Compensation Committee to participate in the Plan. An Employee or former
Employee (or a Beneficiary thereof in the event of death) who still has an
Account balance shall be deemed a Participant hereunder regardless of whether he
is an Active Participant.

         2.28 PLAN. "Plan" means the Smith International, Inc. Supplemental
Executive Retirement Plan as set forth herein, and as it may hereafter be
amended from time to time.

         2.29 PLAN YEAR. "Plan Year" means the calendar year commencing on
January 1 and ending on December 31.

                                       4
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                                                                    EXHIBIT 10.1

         2.30 RETIREMENT DATE. "Retirement Date" means the first day of the
month coincident with or next following the sixty-fifth (65th) birthday of a
Participant (or such other retirement age specified in his Deferral Agreement)
or the date of his actual termination of Employment, if later.

         2.31 SUBSIDIARY. "Subsidiary" means any subsidiary of the Company as
defined under Section 424(f) of the Code.

         2.32 TOTAL AND PERMANENT DISABILITY. "Total and Permanent Disability"
means a physical or mental impairment which (i) renders the Participant
incapable of performing the material duties of his occupation for the Employer,
(ii) lasts for at least six consecutive months, and (iii) is a permanent and
irrevocable condition or it will last for an indefinite duration as determined
by a Physician selected or pre-approved by the Administrative Committee. The
determination of whether a Total and Permanent Disability has occurred shall be
made by the Administrative Committee in its discretion based on the advice of a
Physician.

         2.33 TRUST. "Trust" means a grantor trust, as described in Sections
671-677 of the Code, of the type commonly referred to as a "rabbi trust" which
has been created under the Trust Agreement and pursuant to which the Employer
may place assets to "informally fund" contingent benefits payable under the
Plan.

         2.34 TRUST AGREEMENT. "Trust Agreement" means the Smith International,
Inc. Supplemental Executive Retirement Plan Trust Agreement, as it may be
amended from time to time, which embodies the terms and conditions of the Trust.

         2.35 TRUSTEE. "Trustee" means the duly appointed and acting trustee of
the Trust, and any successor thereto.

         2.36 VALUATION DATE. "Valuation Date" means the last day of each
calendar quarter and any other interim date, as determined by the Administrative
Committee, for the valuation of Participants' Accounts.

                                  ARTICLE THREE

                                 ADMINISTRATION

         3.1 COMPOSITION OF ADMINISTRATIVE COMMITTEE. The Administrative
Committee shall be comprised of such officers of the Employer as chosen by the
Compensation Committee to constitute the Administrative Committee. Each member
of the Administrative Committee shall serve at the pleasure of the Compensation
Committee and the Compensation Committee may remove or replace a member of the
Administrative Committee pursuant to procedures established by the Compensation
Committee.

         A member of the Administrative Committee may also be a Participant. A
member of the Administrative Committee who is also a Participant shall not vote
or otherwise act on any matter relating solely to himself.

         The members of the Administrative Committee shall not receive any
special compensation for serving in their capacities as members of the
Administrative Committee but shall be reimbursed by the Company for any
reasonable expenses incurred in connection therewith. No bond or other security
need be required of the Administrative Committee or any member thereof.

         3.2 ADMINISTRATION OF PLAN. The Administrative Committee shall operate,
administer, interpret, construe and construct the Plan, including correcting any
defect, supplying any omission or reconciling any inconsistency. The
Administrative Committee shall have all powers necessary or appropriate to
implement and administer the terms and provisions of the Plan, including the
power to make findings of fact. The determination of the Administrative
Committee as to the proper interpretation, construction, or application of any
term or provision of the Plan shall be final, binding, and conclusive with
respect to all interested persons.

                                       5
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                                                                    EXHIBIT 10.1

         In addition, the Trustee may take investment directions from the
Administrative Committee, in which case the Administrative Committee shall
implement the provisions of Section 5.3 regarding investment of Account
balances. The Administrative Committee shall have the authority to select any
Fund or other prudent investment vehicles that are available for hypothetical
investment by Participants of their Account balances in assets held by the
Trust. Furthermore, the Administrative Committee shall direct the Trustee in
matters relating to the distribution to Participants of amounts credited to
their Accounts in accordance with the terms of the Plan.

         3.3 ACTION BY COMMITTEE. A majority of the members of the
Administrative Committee shall constitute a quorum for the transaction of
business, and the vote of a majority of those members present at any meeting at
which a quorum is present shall decide any question brought before the meeting
and shall be the act of the Administrative Committee. In addition, the
Administrative Committee may take any other action otherwise proper under the
Plan by an affirmative vote, taken without a meeting, of a majority of its
members.

         3.4 DELEGATION. The Administrative Committee may, in its discretion,
delegate one or more of its duties to its designated agents or to employees of
an Employer, but may not delegate its authority to make the determinations
specified in the first paragraph of Section 3.2.

         3.5 RELIANCE UPON INFORMATION. No member of the Administrative
Committee shall be liable for any decision, action, omission, or mistake in
judgment, provided that he acted in good faith in connection with the
administration of the Plan. Without limiting the generality of the foregoing,
any decision or action taken by the Administrative Committee in reasonable
reliance upon any information supplied to it by the Board, the Compensation
Committee, any employee of an Employer, the Employer's legal counsel, or the
Employer's independent accountants shall be deemed to have been taken in good
faith.

         The Administrative Committee may consult with legal counsel, who may be
counsel for the Employer or other counsel, with respect to its obligations or
duties hereunder, or with respect to any action, proceeding or question at law,
and shall not be liable with respect to any action taken, or omitted, in good
faith pursuant to the advice of such counsel.

         3.6 RESPONSIBILITY AND INDEMNITY. To the full extent permitted by law,
Smith International, Inc. and each other adopting Employer (collectively, the
"EMPLOYER") jointly and severally shall defend, indemnify and hold harmless each
past, present and future member of the Administrative Committee and each other
employee who acts in the capacity of an agent, delegate or representative of the
Administrative Committee under the Plan (hereafter, all such indemnified persons
shall be jointly and severally referred to as "PLAN ADMINISTRATION EMPLOYEE")
against, and each Plan Administration Employee shall be entitled without further
act on his part to indemnity from the Employer for, any and all losses, claims,
damages, judgments, settlements, liabilities, expenses and costs (and all
actions in respect thereof and any legal or other costs and expenses in giving
testimony or furnishing documents in response to a subpoena or otherwise),
including the cost of investigating, preparing or defending any pending,
threatened or anticipated action, claim, suit or other proceeding, whether or
not in connection with litigation in which the Plan Administration Employee is a
party (collectively, the "Losses"), as and when incurred, directly or
indirectly, relating to, based upon, arising out of, or resulting from his being
or having been a Plan Administration Employee; provided, however, that such
indemnity shall not include any Losses incurred by such Plan Administration
Employee (i) with respect to any matters as to which he is finally adjudged in
any such action, suit or proceeding to have been guilty of gross negligence, bad
faith or intentional misconduct in the performance of his duties as a Plan
Administration Employee, or (ii) with respect to any matter to the extent that a
settlement thereof is effected in an amount in excess of the amount approved by
the Company (which approval shall not be unreasonably withheld). The foregoing
right of indemnification shall be in addition to any liability that the Employer
may otherwise have to the Plan Administration Employee.

         THE EMPLOYER'S OBLIGATION HEREUNDER TO INDEMNIFY THE PLAN
ADMINISTRATION EMPLOYEE SHALL EXIST WITHOUT REGARD TO THE CAUSE OR CAUSES OF THE
MATTERS FOR WHICH INDEMNITY IS OWED AND EXPRESSLY INCLUDES (BUT

                                       6
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                                                                    EXHIBIT 10.1

IS NOT LIMITED TO) THE LOSSES, DIRECTLY OR INDIRECTLY, RELATING TO, BASED UPON,
ARISING OUT OF, OR RESULTING FROM ANY ONE OR MORE OF THE FOLLOWING:

                  (a)      THE SOLE NEGLIGENCE OR FAULT OF ANY PLAN
                           ADMINISTRATION EMPLOYEE OR COMBINATION OF PLAN
                           ADMINISTRATION EMPLOYEES;

                  (b)      THE SOLE NEGLIGENCE OR FAULT OF THE EMPLOYER;

                  (c)      THE SOLE NEGLIGENCE OR FAULT OF THIRD PARTIES;

                  (d)      THE CONCURRENT NEGLIGENCE OF FAULT OR ANY COMBINATION
                           OF THE PLAN ADMINISTRATION EMPLOYEE AND/OR THE
                           EMPLOYER AND/OR ANY THIRD PARTY; AND

                  (e)      ANY OTHER CONCEIVABLE OR POSSIBLE COMBINATION OF
                           FAULT OR NEGLIGENCE, IT BEING THE SPECIFIC INTENT OF
                           THE EMPLOYER TO PROVIDE THE MAXIMUM POSSIBLE
                           INDEMNIFICATION PROTECTION HEREUNDER, BUT EXCLUDING
                           ANY SUCH LOSSES THAT ARE FOUND BY A COURT OF
                           COMPETENT JURISDICTION TO HAVE RESULTED FROM THE
                           GROSS NEGLIGENCE, BAD FAITH OR INTENTIONAL MISCONDUCT
                           OF THE PLAN ADMINISTRATION EMPLOYEE.

         The Plan Administration Employee shall have the right to retain counsel
of its own choice to represent it provided that such counsel is acceptable to
the Employer, which acceptance shall not be unreasonably withheld. The Employer
shall pay the fees and expenses of such counsel, and such counsel shall to the
full extent consistent with its professional responsibilities cooperate with the
Employer and any counsel designated by it. The Employer shall be liable for any
settlement of any claim against the Plan Administration Employee made with the
written consent of the Employer which consent shall not be unreasonably
withheld.

         The foregoing right of indemnification shall inure to the benefit of
the successors and assigns, and the heirs, executors, administrators and
personal representatives of each Plan Administration Employee, and shall be in
addition to all other rights to which the Plan Administration Employee may be
entitled as a matter of law, contract, or otherwise.

                                  ARTICLE FOUR

                                  PARTICIPATION

         4.1 ELIGIBILITY OF EMPLOYEES. The Compensation Committee shall have the
sole and exclusive authority and discretion to designate Employees who are
eligible to participate in the Plan as Active Participants. Only Employees who
are members of a select group of management or highly compensated Employees
shall be eligible for selection by the Compensation Committee.

         The Compensation Committee shall also have the authority and discretion
to deem any Employee as no longer an Active Participant effective as of any
designated date; provided, however, such action shall not be effective before
the date that the Participant receives written notice of same. Any Participant
whose Employment is terminated, for whatever reason, shall not be an Active
Participant effective as of his termination of Employment date. A person who is
no longer an Active Participant shall still be considered a Participant for
other purposes hereunder until he has received a total distribution of his
Account balance.

         4.2 NOTIFICATION OF ELIGIBLE EMPLOYEES. Within thirty (30) days prior
to the beginning of each Plan Year, the Administrative Committee, as directed by
the Compensation Committee, shall notify in writing each of the Employees who
are eligible to elect to defer Compensation under the Plan. The Compensation
Committee shall also have the right to designate Employees as Active
Participants at any time during a Plan Year. Each Employee who has been
designated as an Active Participant by the Compensation Committee in any Plan
Year shall remain

                                       7
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                                                                    EXHIBIT 10.1

eligible to defer Compensation and/or Bonuses hereunder unless and until the
Compensation Committee determines that he is no longer eligible to authorize
such deferrals and notifies Employee of same. An Employee (or in the event of
his death, his Beneficiary) shall be a Participant hereunder as long as he has
any balance credited to his Account, regardless of whether he is eligible to
authorize Compensation and/or Bonus deferrals hereunder as an Active
Participant. Only Employees who are designated as Active Participants for a Plan
Year may authorize deferrals or have Employer contributions made on their
behalf.

         4.3 COMPENSATION AND BONUS DEFERRAL AGREEMENT. After an Employee has
been notified by the Administrative Committee that he is eligible to participate
in the Plan for the relevant Plan Year as an Active Participant, he must, in
order to defer Compensation with respect to such Plan Year, notify the
Administrative Committee of his deferral election by completing and executing a
Deferral Agreement. The Employee cannot defer more than fifty percent (50%) of
his Compensation for a Plan Year or the portion thereof that he is an Active
Participant. Any Deferral Agreement that is not completed and signed by the
Employee, and received and accepted by the Administrative Committee, on or prior
to the last day of the Plan Year immediately preceding the Plan Year for which
the Employee is notified that he may make a deferral election, shall be treated
as the Employee's election not to defer Compensation for that Plan Year.

         If, after the commencement of a Plan Year, an Employee is designated by
the Compensation Committee as an Active Participant for the first time, the
newly eligible Active Participant, in order to defer Compensation hereunder,
must complete and execute a Deferral Agreement and return it to the
Administrative Committee within thirty (30) days of the effective date on which
the Employee first became an Active Participant. Such Deferral Agreement shall
only apply to defer Compensation for services to be performed for the remainder
of the Plan Year by the Active Participant, provided that such services are to
be performed subsequent to receipt and approval of his Deferral Agreement by the
Administrative Committee.

         The amount of Compensation elected to be deferred pursuant to a
Deferral Agreement shall be withheld on a pro rata basis from the Active
Participant's regular payments of Compensation for each pay period during the
Plan Year or portion thereof during which such Deferral Agreement is in effect,
unless otherwise designated by the Active Participant in his Deferral Agreement.
In the event that a Trust is maintained, Compensation deferrals shall promptly
be delivered to the Trustee by the Employer.

         Regardless of any services performed during a year on behalf of the
Company, no Participant will accrue any right to receive any Bonus until it is
actually awarded to him. An Active Participant's election to defer all or any
portion of his Bonus that may be awarded with respect to any Plan Year must be
made prior to the first day of the Plan Year in which such Bonus amount become
fixed or determinable and is to be paid. An Active Participant must make a
deferral election with respect to the amount of any Bonus that may be paid
during the Plan Year when completing his Deferral Agreement for that Plan Year.

         The dollar amount or percentage of a Bonus elected to be deferred under
this Section 4.4 shall be deferred in one lump sum and shall be deemed to have
been deferred on the date the deferred portion of the Bonus would otherwise have
been paid to the Active Participant in the absence of his deferral election. Any
Bonus deferral election made hereunder shall be void and ineffective to the
extent that no Bonus is awarded to the Active Participant during the Plan Year.

         To the extent required under various payroll tax regulations, the
deferred amount of any Bonus elected hereunder may be reduced by the
Administrative Committee in order to provide taxable, non-deferred wages
sufficient to cover required withholding taxes.

         4.4 SUSPENSION OF DEFERRAL FOR FINANCIAL EMERGENCY. All deferrals of
Compensation and Bonuses hereunder for a Plan Year shall be irrevocable, except
that the Administrative Committee may, in its discretion, grant a suspension of
a Participant's deferral election for such time as the Administrative Committee
deems to be necessary upon a finding that the Participant has suffered a
Financial Emergency. A Participant who believes he has suffered a Financial
Emergency must petition the Administrative Committee in writing to request a
suspension of his deferrals hereunder.

                                       8
<PAGE>

                                                                    EXHIBIT 10.1

         4.5 EMPLOYER CONTRIBUTIONS.

                  (1) Age-Weighted Contributions. Subject to the following
         provisions of this subsection that apply to Executive Staff
         Participants, effective as of the last day of each 3-month quarter
         during a Plan Year, an Age-Weighted Contribution shall be allocated and
         credited by the Administrative Committee to the account under the
         Deferred Compensation Ledger of each Active Participant who has entered
         into a Deferral Agreement covering that quarter. The Age-Weighted
         Contribution shall be based on the Active Participant's Age-Weighted
         Contribution Percentage ("AWCP") as determined based on the schedule
         set forth below:

<Table>
<Caption>

                   AGE AS OF ANNIVERSARY OF
                  PARTICIPANT'S DATE OF BIRTH             AWCP
                  ---------------------------            ------
<S>                                                      <C>
                          Under Age                       2.00%
                          40-44                           2.50%
                          45-49                           3.00%
                          50-54                           4.00%
                          55-59                           5.00%
                          60 or older                     6.00%
</Table>

                  An Active Participant's AWCP shall change as of the first
         payroll period beginning in the month following the month in which the
         anniversary of the Active Participant's date of birth occurs. To
         compute an Active Participant's Age-Weighted Contribution for a Plan
         Year, his AWCP shall be multiplied by the difference between, for the
         Plan Year, the Active Participant's (i) "Total 401(k) Compensation"
         (defined below) and his (ii) "Net 401(k) Compensation" (defined below).

                  "Total 401(k) Compensation" means the total of all cash
         amounts payable by the Employer to or for the benefit of an Active
         Participant for services rendered or labor performed while an Active
         Participant during the Plan Year (including overtime pay, Bonuses, "per
         pay", and incentive or other supplemental pay and amounts that he could
         have received in cash (i) in lieu of an elective contribution to this
         Plan or a 401(k) Salary Deferral Contribution made under the 401(k)
         Plan and (ii) had he not entered into a salary reduction agreement
         pursuant to a cafeteria plan under Section 125 of the Code), excluding,
         however, severance pay and the proceeds from the Active Participant's
         exercise of any stock options. The Total 401(k) Compensation of any
         Active Participant taken into account for purposes of the Plan shall be
         prorated for (i) a Plan Year of less than twelve months (other than the
         first Plan Year) or (ii) in the case of an Active Participant who is
         either an Active Participant for less than the entire Plan Year or
         receives Compensation for less than the entire Plan Year. Total 401(k)
         Compensation shall not be reduced or otherwise affected by any limits
         that apply under the 401(k) Plan.

                  "Net 401(k) Compensation" means the total of all cash amounts
         payable by the Employer to or for the benefit of an Active Participant
         for services rendered or labor performed while an Active Participant
         during a Plan Year (including overtime pay, Bonuses, "per pay", and
         incentive or other supplemental pay and amounts which he could have
         received in cash (i) in lieu of a 401(k) Salary Deferral Contribution
         made under the 401(k) Plan and (ii) had he not entered into a salary
         reduction agreement pursuant to a cafeteria plan under Section 125 of
         the Code), excluding, however, (i) severance pay, (ii) the proceeds
         from the Active Participant's exercise of any stock options, and (iii)
         the Active Participant's elective deferral contributions to this Plan
         or to another deferred compensation program other than 401(k) Salary
         Deferral Contributions made under the 401(k) Plan. The "Net 401(k)
         Compensation" of any Active Participant taken into account for purposes
         of the Plan shall be limited to $150,000 for any Plan Year with such
         amount to be (i) adjusted automatically to reflect any cost-of-living
         increases authorized by Section 401(a)(17) of the Code and (ii)
         prorated for (a) a Plan Year of less than twelve months (other than the
         first

                                       9
<PAGE>

                                                                    EXHIBIT 10.1

         Plan Year) or (b) in the case of an Active Participant who is either an
         Active Participant for less than the entire Plan Year or receives
         Compensation for less than the entire Plan Year.

                  Notwithstanding the preceding provisions of this subsection,
         with respect to Plan Years beginning on and after January 1, 1995, the
         Employer's Age-Weighted Contribution ("AWC") with respect to each
         Executive Staff Participant shall be determined by the Administrative
         Committee or its delegate for each 3-month quarter during each Plan
         Year in accordance with the provisions of this paragraph. The
         Age-Weighted Contribution Percentage ("AWCP") shall be six percent (6%)
         for each Executive Staff Participant. The AWC of each Executive Staff
         Participant shall be computed in accordance with the following formula:
         (6% x A) -B = AWC. For purposes of this formula, A equals the Executive
         Staff Participant's Total 401(k) Compensation, and B equals the dollar
         amount of the age-weighted, profit sharing contribution, if any, for
         the applicable 3-month quarter that has been or will be contributed by
         the Employer on behalf of the Executive Staff Participant under the
         terms of the 401(k) Plan. Effective as of the last day of each 3-month
         quarter during a Plan Year, the AWC for each Executive Staff
         Participant shall be allocated and credited by the Administrative
         Committee to his account under the Deferred Compensation Ledger.

                  (2) Make-up Matching Contributions. The provisions of this
         subsection 4.6(2) shall apply only to those Active Participants who (i)
         have authorized elective deferral contributions under the 401(k) Plan
         during the Plan Year and (ii) have entered into a Deferral Agreement
         hereunder for the Plan Year. To the extent that an Active Participant
         authorized elective deferral contributions under the 401(k) Plan during
         a Plan Year but his account thereunder is precluded from receiving an
         allocation of any matching contributions under the 401(k) Plan that it
         otherwise would have been eligible to receive, as the result of
         non-discrimination limits imposed by the average deferral percentage
         ("ADP") test or the actual contribution percentage ("ACP") test under
         the Code, then such Active Participant shall be eligible to receive a
         "Make-up Matching Contribution" under this Plan for that Plan Year. The
         Make-up Matching Contribution shall be equal to the difference between
         (i) the total matching contributions that the Active Participant's
         account under the 401(k) Plan would have been allocated for the Plan
         Year without regard to the ADP and ACP tests, and (ii) the amount of
         matching contributions actually allocated to his account under the
         401(k) Plan for the Plan Year. The Make-up Matching Contributions shall
         be allocated and credited by the Administrative Committee to the
         affected Active Participants' Account, effective as of the last day of
         the Plan Year. Notwithstanding the preceding provisions of this
         subsection, no Make-up Matching Contribution shall be credited by the
         Administrative Committee on behalf of any Active Participant who is not
         in Employment on the last day of such Plan Year for any reason.

                  (3) Matching Contributions.

                           (a) Non-Executive Staff Participants. The provisions
                  of this subsection 4.6 (3)(a) shall apply only (i) to those
                  Active Participants who (a) have entered into a Deferral
                  Agreement for the Plan Year and (b) are not Executive Staff
                  Participants and (ii) to Plan Years in which a matching
                  contribution is made to eligible participants under the 401(k)
                  Plan. The Matching Contribution ("MC") of such an eligible
                  Participant for a Plan Year shall be computed as follows:

                               MC = The lesser of: [.015A + (.985A x B)] or
                                    [(6% x C) - (D + E)]

                  For purposes of this formula: A equals the aggregate dollar
                  amount of elective deferral contributions that the Active
                  Participant made to this Plan for the Plan Year, pursuant to
                  his Deferral Agreement, that were credited to his account
                  under the Deferred Compensation Ledger; B equals the matching
                  contribution percentage designated under Section 3.03(b) (or
                  its successor) of the 401(k) Plan for the Plan Year; C equals
                  the Active Participant's Total 401(k) Compensation (as defined
                  in Section 4.6(1)) but excluding therefrom any (i) Bonus paid
                  during the Plan Year and (ii) retention or similar payments
                  paid during the Plan Year; D equals the matching
                  contributions, if any, that were credited to the Active
                  Participant's account under the 401(k) Plan for the Plan

                                       10
<PAGE>

                                                                    EXHIBIT 10.1

                  Year; and E equals the Make-up Matching Contributions, if any,
                  that were credited to the Active Participant's Account for the
                  Plan Year pursuant to subsection 4.6(2) above. For example,
                  assume that for a Plan Year (i) the Active Participant's
                  Account was credited with elective deferral contributions of
                  $8,000 under this Plan, (ii) the matching contribution
                  percentage under Section 3.03(b) of the 401(k) Plan for such
                  Plan Year was 50%, (iii) the Active Participant's Total 401(k)
                  Compensation (excluding his Annual Incentive Plan Bonus, if
                  any) was $125,000, (iv) his account was credited with a $2,000
                  matching contribution under the 401(k) Plan, and (v) his
                  Account under this Plan was credited with a $1,000 Make-up
                  Matching Contribution.

                              MC = The lesser of: [$120 + ($7880 x 50%)] or
                                   [(6% x 125,000) - ($2,000 + $1,000)]

                              MC = The lesser of: $4,060 or $4,500
                                  (i.e., $7,500 - $3,000)

                              MC = $4,060

                           The MC shall be computed, allocated and credited by
                  the Administrative Committee to the Active Participant's
                  Account effective as of the last day of the Plan Year.
                  Notwithstanding the preceding provisions of this subsection,
                  no Matching Contribution shall be credited for a Plan Year on
                  behalf of any Active Participant who is not in Employment on
                  the last day of such Plan Year for any reason.

                           (b) Executive Staff Participants. With respect to
                  Plan Years beginning on and after January 1, 1995, the
                  Company's Matching Contribution ("MC") with respect to each
                  Executive Staff Participant shall be determined in accordance
                  with the provisions of this subsection 4.6(3)(b) which shall
                  apply regardless of whether or not (i) the Executive Staff
                  Participant is also a member of the 401(k) Plan or has entered
                  into a Deferral Agreement under this Plan, or (ii) any
                  matching contributions were credited to his 401(k) Plan
                  account during the Plan Year. The MC of an Executive Staff
                  Participant for a Plan Year shall be computed as follows:

                               X = The lesser of: (A + B) or (6% x C).

                               MC = X - (D + E).

                  For purposes of this formula: A equals the aggregate dollar
                  amount of elective deferral contributions that the Executive
                  Staff Participant made to this Plan for the Plan Year,
                  pursuant to his Deferral Agreement, that were credited to his
                  account under the Deferred Compensation Ledger; B equals the
                  aggregate dollar amount of elective deferral contributions
                  that were credited to the Executive Staff Participant's
                  Account under the 401(k) Plan for the Plan Year; C equals the
                  Executive Staff Participant's Total 401(k) Compensation (as
                  defined in Section 4.6(1)) for the Plan Year; D equals the
                  matching contributions, if any, that were credited to the
                  Executive Staff Participant's Account under the 401(k) Plan
                  for the Plan Year; and E equals the Make-up Matching
                  Contributions, if any, that were credited to the Executive
                  Staff Participant's Account for the Plan Year pursuant to
                  subsection 4.6(2) above. For example, assume that for a Plan
                  Year an Executive Staff Participant (i) earned Total 401(k)
                  Compensation of $300,000, (ii) authorized and was credited
                  with elective deferral contributions of $9,000 under the
                  401(k) Plan and $11,000 under this Plan, (iii) his account was
                  credited with a $4,500 matching contribution under the 401(k)
                  Plan, and (iv) his Account under this Plan was not credited
                  with any Make-up Matching Contributions for the Plan Year.

                                       11
<PAGE>

                                                                    EXHIBIT 10.1

                               X = the lesser of: ($9,000 + $11,000) or
                                   (6% x $300,000)

                               X = $18,000

                               MC = $18,000 - ($4,500 + 0)

                               MC = $13,500.

                           The MC shall be computed, allocated and credited by
                  the Administrative Committee to the Executive Staff
                  Participant's Account effective as of the last day of the Plan
                  Year. Notwithstanding the previous provisions of this
                  subsection, no MC shall be credited by the Administrative
                  Committee for a Plan Year on behalf of any Executive Staff
                  Participant who is not in Employment on the last day of such
                  Plan Year for any reason.

                           With respect to any Plan Year beginning after
                  December 31, 1996, the Compensation Committee may, in its
                  discretion, determine that the matching contribution
                  percentage for purposes of the preceding provisions of this
                  subsection 4.6(3)(b) shall not be 100% as described above
                  (i.e., a dollar-for-dollar match but not in excess of 6% of
                  the Executive Staff Participant's Total 401(k) Compensation);
                  for example, the Compensation Committee may determine that the
                  matching contribution percentage under the 401(k) Plan for the
                  Plan Year shall also apply under this subsection 4.6(3)(b) for
                  Executive Staff Participants. In such event, the formula at
                  subsection 4.6(3)(a) which incorporates a 100% match of the
                  first 12% of elective deferral contributions shall apply for
                  the Plan Year for Executive Staff Participants. Any such
                  determination made by the Compensation Committee shall be
                  recorded in a duly adopted resolution and communicated in
                  writing to the Executive Staff Participants prior to the
                  beginning of each applicable Plan Year.

                  (4) Discretionary Profit Sharing Contributions. The
         Compensation Committee may, in its discretion, determine the amount, if
         any, of the Employer's profit sharing contribution for a Plan Year and
         how such amount is to be allocated and credited between and among the
         Participants' Accounts. A Participant shall not be entitled to share in
         the allocation of any such Employer profit sharing contribution for a
         Plan Year if he is not in Employment on the last day of the Plan Year
         for any reason. The Compensation Committee shall have no obligation to
         authorize any such profit sharing contributions hereunder for any Plan
         Year.

         4.6 VESTING. All contributions made by Participants and the Employer
hereunder shall be fully vested and nonforfeitable at all times. All Investment
Experience credited on all contributions shall also be fully vested and
nonforfeitable at all times.

                                  ARTICLE FIVE

                     DEFERRAL OF COMPENSATION AND ALLOCATION
                             OF INTEREST EQUIVALENTS

         5.1 DEFERRAL OF COMPENSATION AND/OR BONUS. If an Active Participant has
elected to defer Compensation and/or a Bonus hereunder for a Plan Year, the
deferred amounts shall not be paid when they otherwise would have been paid in
the absence of such election. A bookkeeping entry to reflect the deferred
amounts shall be credited by the Administrative Committee to the Active
Participant's Account under the Deferred Compensation Ledger. With respect to
Compensation and Bonuses deferred hereunder for a Plan Year, each such deferred
amount shall be credited to the Active Participant's Account under the Deferred
Compensation Ledger as of the date it otherwise would have been paid to the
Active Participant and shall reflect a mere unsecured promise by the Employer to
pay such amount in the future.

                                       12
<PAGE>

                                                                    EXHIBIT 10.1

         5.2 ALLOCATION OF INVESTMENT EXPERIENCE TO ACCOUNTS. As of each
Valuation Date, the Administrative Committee or its delegate shall determine the
Investment Experience for the applicable accounting period and, as soon as
practicable after such period, shall post and credit the amount of Investment
Experience to each Participant's Account effective as of the end of such period.
Each Account for which there was a positive balance at any time during the
applicable valuation period shall be entitled to an allocation and crediting of
Investment Experience for that valuation period regardless of whether the
Participant is still an Active Participant.

         5.3 INVESTMENT OF ACCOUNTS. The Administrative Committee shall permit
each Participant to request that the amounts credited to his Account under the
Deferred Compensation Ledger be invested in any one or a combination of Funds
(or other investment vehicles) which have been designated by the Administrative
Committee as available for hypothetical investment under the Plan. However,
except as provided in the next sentence, the Trustee shall make the final
investment decision, which may or may not correspond to the Participant's
request. In the event that a Participant is serving as Trustee, the
Administrative Committee, and not the Trustee, shall make the final decision
with respect to the hypothetical investment of such Participant's Account.
Subject to Section 5.4 for Interest Equivalents, the Investment Experience
posted and credited to each Participant's Account shall be based upon the
Investment Experience of the actual investments made by the Trustee in which the
Participant's Account balance is hypothetically invested. Notwithstanding any
contrary provision of the Plan or Trust Agreement, no direct investment in
securities issued by the Company or its Affiliated Entities shall be permitted
under the Plan or Trust.

         Except as otherwise provided below, each Participant shall advise the
Administrative Committee, or any agent appointed by such Committee, of his
request with respect to the hypothetical investment of the amounts credited to
his Account. Each Participant's investment request shall be in a form and
manner, and in the minimum increments, as prescribed by the Administrative
Committee. Each Participant may, on any business day on which the applicable
financial markets are open, communicate directly with any appointed mutual fund
company, financial consultant, or other appropriate agent or delegate of the
Administrative Committee to request a change in the combination of Funds (or
other investment vehicle) in which his Account is hypothetically invested. The
Administrative Committee may direct the Trustee concerning the Funds in which
the Participant's Account shall be hypothetically invested in the absence of an
investment request from such Participant, or in the event that any such request
is not followed by the Administrative Committee or Trustee for whatever reason.

         In addition, notwithstanding any contrary provision of the Plan or
Trust Agreement, neither the Administrative Committee nor Trustee shall be bound
to follow the investment request of any Participant. Subject to Section 5.4, the
Investment Experience posted to each Participant's Account shall be based solely
on the Investment Experience of the actual Funds or other investments authorized
by the Administrative Committee or Trustee, as applicable, in which the
Participant's Account balance was hypothetically invested. Investment Experience
shall be allocated to the Participant's Account as directed by the
Administrative Committee.

         5.4 INTEREST EQUIVALENTS. To the extent that all or any portion of a
Participant's Account is deemed to have been hypothetically invested in a Fund
that is a money market mutual fund, the Participant's Account will be credited
with the Interest Equivalent described below in this Section 5.4 instead of the
actual investment return generated by the deemed investment in the money market
mutual fund. In addition, if a Trust is maintained, all deferrals of
Compensation and Bonus authorized by Participants shall be credited with
Interest Equivalents by the Employer from the date otherwise payable by the
Employer to the Participants until the date that such amounts are paid to the
Trustee for investment in Funds or other investment vehicles. Compensation and
Bonuses being deferred during a calendar quarter shall be considered to be
invested on the mid-point day of the calendar quarter during which such amounts
would otherwise have been payable to the Participant and shall be credited with
Interest Equivalents accordingly for that calendar quarter. Interest Equivalents
shall be computed by the Administrative Committee pursuant to non-discriminatory
procedures maintained by the Committee from time to time, and such amounts shall
be posted and credited to each affected Participant's Account by the Committee.

         Crediting of Interest Equivalents hereunder shall be made only to the
Accounts of those affected Participants who are current Employees. Therefore,
for example, if a Participant has terminated Employment but

                                       13
<PAGE>

                                                                    EXHIBIT 10.1

has not yet received a distribution of the entire amount credited to his Account
by the end of the month in which he is terminated, the Investment Experience
that is deemed to be credited to such Participant's Account (to the extent of
the portion of the Account that is hypothetically invested in the money market
mutual fund) after the last day of such month shall only be the actual
investment return realized by the deemed investment in the money market mutual
fund, and not the greater Interest Equivalent.

         All amounts credited to a Participant's Account, to the extent such
amounts are either (i) deemed to have been invested in a Fund that is a money
market mutual fund or (ii) withheld by the Employer from a Participant's
Compensation or Bonus but not yet paid to the Trustee for investment in any Fund
(or other investment vehicle), shall be credited quarterly with Interest
Equivalents. The rate of Interest Equivalents shall be equal to 120% of the
long-term, applicable federal rate (AFR) for quarterly compounding for the last
month of the calendar quarter immediately preceding the calendar quarter in
which the Interest Equivalents are to be credited. For example, for purposes of
crediting Interest Equivalents for the 3-month quarter ending December 31 of a
given Plan Year, 120% of the AFR rate for September of that Plan Year will be
used.

         Allocations of Interest Equivalents shall be computed and credited by
the Administrative Committee based on the balances credited to the Participant's
Account as of the last day of each calendar quarter during a Plan Year, i.e.,
March 31, June 30, September 30 and December 31. In the event of a distribution
following a Determination Date, the applicable portion of the Participant's
Account balance deemed to be invested in a Fund that is a money market fund
shall be credited with Interest Equivalents based on such applicable portion as
of the last day of the month which includes the Determination Date.

         Interest Equivalents credited to the Participant's Account shall be
compounded quarterly and shall increase the contingent benefits receivable by
the Participant in the future.

         5.5 PARTICIPANTS' RIGHTS UNDER THE TRUST. The assets of the Trust shall
be held for the benefit of the Participants in accordance with the terms of the
Plan and the Trust Agreement. In accordance with applicable provisions of the
Trust Agreement, the assets of the Trust shall remain subject to the claims of
the general creditors of the Employer, and the rights of the Participants to the
amounts in the Trust shall be limited as provided in the Plan and Trust
Agreement in the event that the Employer becomes Insolvent.

         5.6 DETERMINATION OF ACCOUNT. The aggregate amount credited to a
Participant's Account under the Deferred Compensation Ledger shall consist of
(i) the aggregate amount of deferred Compensation and/or Bonuses and Employer
Contributions made pursuant to Article Four, plus (or minus) (ii) the aggregate
amount of Investment Experience credited or charged to such Account pursuant to
Article Five, minus (iii) the aggregate amount of any distributions or
withdrawals made from such Account pursuant to Article Six.

                                   ARTICLE SIX

                                  DISTRIBUTIONS

         6.1 AMOUNT OF DEFERRED COMPENSATION SUBJECT TO DISTRIBUTION. As of the
Participant's Determination Date, the aggregate amount credited to his Account
maintained under the Deferred Compensation Ledger shall become distributable in
accordance with the provisions of Section 6.2.

         6.2 FORM OF DISTRIBUTIONS. Upon the occurrence of the Participant's
Determination Date, the amount in a Participant's Account shall become
distributable to such Participant (or to his Beneficiary in the event of
Participant's death) in one of the following forms as elected in writing by such
person:

                  (1) Lump-sum distribution of the entire balance credited to
         the Participant's Account as of the last day of the month in which the
         Determination Date occurs; or

                                       14
<PAGE>

                                                                    EXHIBIT 10.1

                  (2) If the distributable amount is at least $15,000, annual
         installments to be paid during a specified period of not less two (2)
         nor more than ten (10) years. If the distributable amount is less than
         $15,000, it shall automatically be paid in a lump sum distribution.

         6.3      TIMING OF DISTRIBUTIONS.

                  (1) Lump Sum Distribution. Lump sum distributions shall be
         made by the last day of the month immediately following the month in
         which the Determination Date occurs.

                  (2) Installment Payments. Annual installment payments shall
         commence as of the date selected by the Participant which date must be
         (i) the first day of a quarter and (ii) within one year of the
         Determination Date. Thereafter, the remaining installment payments
         shall be made as of the annual anniversary of the first installment
         date.

                  (3) Deferral of Distribution.

                           (i) Determination Date Prior to Age 55. If the
                  Participant has not attained age 55 as of his Determination
                  Date, subject to the requirements of Section 6.4, he may
                  petition the Administrative Committee in writing to request
                  that (i) his distribution hereunder be deferred until the date
                  selected by the Participant which date must be the first day
                  of any quarter between the Participant's 55th birthday and the
                  quarter next following the quarter containing his 65th
                  birthday, and (ii) the form of the distribution be either in a
                  lump sum or installment payments pursuant to subsections (1)
                  or (2) of this Section. If the Participant's request is
                  approved by the Administrative Committee in its sole
                  discretion, distribution shall be made in accordance with the
                  Participant's election.

                           (ii) Determination Date on or After Age 55. If the
                  Participant has attained age 55 as of his Determination Date,
                  subject to the requirements of Section 6.4, he may direct the
                  Administrative Committee in writing that (i) his distribution
                  hereunder be deferred until the date selected by the
                  Participant, which date must be the first day of any quarter
                  between the Participant's 55th birthday and the quarter next
                  following the quarter containing his 65th birthday, and (ii)
                  the form of the distribution be either a lump sum or
                  installment payments pursuant to subsections (1) or (2) of
                  this Section. A valid direction from the Participant in
                  accordance with the immediately preceding sentence shall be
                  followed by the Administrative Committee and does not require
                  the discretionary approval of the Administrative Committee in
                  order to be effective.

                           (iii) Account Balance must be $15,000 or More. A
                  Participant shall not be permitted to defer receipt of his
                  distribution pursuant to this subsection (3) unless, as of the
                  last day of the month which contains his Determination Date,
                  the aggregate balance in his accounts maintained under the
                  Deferred Compensation Ledger is at least $15,000.

                  (4) Immediate Distribution Due to Competition with the
         Employer. In the event that (i) a Participant has (a) incurred a
         Determination Date and (b) elected an installment payment form of
         distribution pursuant to subsection (2) above or a deferral of his
         distribution to a later date pursuant to subsection (3) above, and (ii)
         has "engaged in competition with the Employer" (as defined below) at
         any time prior to the date that he receives a complete distribution of
         his benefits, then, in the discretion of the Administrative Committee,
         the remaining balance credited to his Accounts shall be paid to such
         Participant in a lump sum distribution as soon as administratively
         practicable without any credited Investment Experience for the quarter
         in which such lump sum distribution is made.

         For purposes of the preceding paragraph, a Participant shall be
considered to be "engaged in competition with the Employer" to the extent that
the Administrative Committee in good faith determines, at any time while the
Participant has a balance credited to his Account, that such Participant
directly or indirectly, alone or with others,

                                       15
<PAGE>

                                                                    EXHIBIT 10.1

(i) engages in or has more than a 2% ownership interest in any person or entity,
whether as an employee, owner, partner, equity security holder, or otherwise,
that engages in, or participates as an employee, agent, partner, principal
shareholder or joint venturer in, any activity competitive with the business
carried on by the Employer or any Affiliated Entity as determined by the
Administrative Committee or (ii) induces or attempts to induce any employee of
the Employer or any Affiliated Entity to leave such employment or in any other
manner to detrimentally interfere with such employment, without first obtaining
the written consent of the President of the Company.

         6.4 ADVANCE DISTRIBUTION ELECTION REQUIRED. The Participant's election
as to the form and timing of his distribution hereunder must be made at least
one year prior to the date that he is eligible to receive a distribution
hereunder for any reason other than Financial Emergency, and such election shall
be irrevocable during such one-year period. If the Participant or Beneficiary,
as the case may be, (i) validly elects annual installment payments or (ii)
validly defers making a distribution election until a later date, then
Investment Experience shall continue to be credited by the Administrative
Committee to undistributed amounts allocated to the Participant's Account.
However, no further deferrals of Compensation or Bonuses shall be made by the
Participant, and no further Employer contributions shall be made on his behalf,
after his Determination Date. Pending receipt of any distribution from the Plan,
the Participant or Beneficiary shall remain subject to Section 7.2 and other
applicable provisions of the Plan.

         6.5 WITHDRAWAL DUE TO FINANCIAL EMERGENCY. A Participant who believes
he has suffered a Financial Emergency may in writing request a distribution of
the portion of his Account balance needed to satisfy the emergency need. The
Administrative Committee will review the Participant's request to determine
whether, in its discretion, a Financial Emergency has occurred and, if so, the
amount reasonably needed to satisfy the emergency need.

         In order to request a withdrawal for Financial Emergency, the
Participant must first cease all Compensation and Bonus deferral contributions
for the Plan Year. If the Administrative Committee, in its discretion,
determines that a Participant has suffered a Financial Emergency, the
Administrative Committee may direct payment to the Participant of only that
portion, if any, of his Account balance which is attributable to his
Compensation and Bonus deferral contributions and is necessary to satisfy the
emergency need.

         A Participant requesting a withdrawal for Financial Emergency must
petition the Administrative Committee in writing and provide such information as
the Administrative Committee may request to support the withdrawal request. The
Administrative Committee, in its discretion, shall determine whether a Financial
Emergency under the Plan has occurred and the minimum amount needed to satisfy
the emergency need.

         Only one withdrawal for a Financial Emergency may be made in any
24-month period. If, subject to the sole discretion of the Administrative
Committee, the petition for a suspension and/or payout is approved, suspension
shall take effect upon the date of approval and any payout shall be made within
60 days of the date of approval. A request for a withdrawal under this Section
6.5 must be accompanied by (a) a letter signed by the Participant describing all
the circumstances and the resources he has available to meet the need and a
certification that the resources listed in the definition of Financial Emergency
and all others are unavailable/insufficient/non-existent to meet the need, (b)
copies of the appropriate official documentation (e.g., bills, eviction or
foreclosure notices or documents showing that such are impending), and (c)
statement of monthly household income and expenses (with explanations for
unusual items).

         In the event that a Participant receives a withdrawal due to a
Financial Emergency, he cannot authorize any Compensation and Bonus deferral
contributions to his Account for 12 consecutive months beginning on the first
day of the month next following the date of such withdrawal. If he is then
designated as an Active Participant pursuant to Section 4.1 at the end of such
12-month restriction period, such Active Participant may authorize Compensation
and Bonus deferral contributions at that time only by completing a new Deferral
Agreement pursuant to Sections 4.3 and 4.4.

                                       16
<PAGE>

                                                                    EXHIBIT 10.1

         In its discretion, the Administrative Committee shall authorize a
distribution to the Participant in the amount reasonably necessary to satisfy
the Financial Emergency. No Interest Equivalents shall be credited to the
Participant's Account during a calendar quarter with respect to the amount
distributed to satisfy the Financial Emergency.

         6.6 TRUST AND PAYOR OF DEFERRED COMPENSATION. Benefits payable under
the Plan with respect to a Participant's Account shall be the obligation of, and
payable by, the Company; provided, however, the Company may, in its complete
discretion, obtain reimbursement from any adopting Employer which employed the
Participant. Adoption and maintenance of the Plan by the Employer shall not, for
that reason, create a joint venture or partnership relationship between or among
such entities for purposes of payment of benefits under the Plan or for any
other purpose.

         In order to meet its contingent obligations under the Plan, the
Employer shall not set aside any assets or otherwise create any type of fund in
which any Participant, or any person claiming under such Participant, has an
interest other than that of an unsecured general creditor of the Employer or
which would provide any Participant, or any person claiming under such
Participant, with a legally enforceable right to priority over any general
creditor of the Employer in the event that the Employer becomes Insolvent.

         The Employer intends for the Plan to recognize the value to the
Employer of the past and present services of Participants and to encourage and
assure their continued service with the Employer by making more adequate
provision for their future retirement security. The maintenance of the Plan is,
in part, made necessary by certain benefit limitations which are imposed on the
401(k) Plan by the Code. The Plan is intended to constitute an unfunded,
unsecured plan of deferred compensation for a select group of management or
highly compensated employees of the Employer. Plan benefits herein provided are
to be paid out of the Employer's general assets. Nevertheless, subject to the
terms hereof and of the Trust Agreement, the Employer may transfer money or
other property to the Trustee and the Trustee shall pay Plan benefits to
Participants and their beneficiaries out of the Trust fund. To the extent the
Employer transfers assets to the Trustee, the Committee may, but need not,
establish procedures for the Trustee to invest the Trust assets in Funds or
otherwise in accordance with each Participant's designated deemed investments
pursuant to Article Five, but only with respect to the portion of the Trust
assets equal to such Participant's Account balance.

         The Compensation Committee or Board may establish the Trust and direct
the Company to enter into the Trust Agreement. In such event, the Company shall
remain the owner of all assets in the Trust Fund and the assets shall be subject
to the claims of the Employer's creditors if the Employer ever becomes
Insolvent. The Chief Executive Officer of the Company and its Board shall have
the duty to inform the Trustee in writing if the Employer becomes Insolvent.
Such notice given under the preceding sentence by any party shall satisfy all of
the parties' duty to given notice. When so informed, the Trustee shall suspend
payments to the Participants and hold the assets for the benefit of the
Employer's general creditors. If the Trustee receives a written allegation that
the Employer is Insolvent, the Trustee shall suspend payments to the
Participants and hold the Trust fund for the benefit of the Employer's general
creditors, and shall determine within the period specified in the Trust
Agreement whether the Employer is Insolvent. If the Trustee determines that the
Employer is not Insolvent, the Trustee shall resume payments to the
Participants. No Participant or Beneficiary shall have any preferred claim to,
or any beneficial ownership interest in, any assets of the Trust Fund.

         During any period in which a Trust is in existence, benefits payable
under the Plan shall be payable by the Trustee in accordance with the terms,
provisions, conditions and limitations of the Plan and Trust Agreement. To the
extent that any distribution described in the immediately preceding sentence
does not fully satisfy the obligation for any benefit due under the Plan, the
Employer shall remain fully liable and obligated for full payment of any unpaid
benefit due and payable under the Plan.

         6.7 REIMBURSEMENT OF PARTICIPANT. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Participant (or any Beneficiary thereof) may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Employer, the Participant
or others

                                       17
<PAGE>

                                                                    EXHIBIT 10.1

concerning the validity or enforceability of, or liability under, any provision
of this Plan or any guarantee of performance thereof (including, without
limitation, as a result of any contest by the Participant about the amount of
any benefits due pursuant to this Plan), plus in each case interest on any
delayed payment at the applicable interest rate specified in Section 5.2 hereof.
To the extent that the Employer is found under a final decree of a court of
competent jurisdiction to have engaged in an intentional breach of contract
without good cause, bad faith or fraudulent conduct hereunder in delaying or
failing to make any payment due under this Plan, then the amount found due to
any Participant shall be doubled and paid to Participant within thirty (30)
days. The Company authorizes Participant to engage counsel of his choice to
represent him in any such dispute. This Section 6.7 shall not be construed to
limit or foreclose any court or arbitrator from imposing any other awards or
remedies.

         6.8 FACILITY OF PAYMENTS. If the Administrative Committee determines
that any person entitled to payments under the Plan is physically or mentally
incompetent to receive or properly receipt for such payments, the Company shall
make such payments or, if applicable, the Administrative Committee shall direct
the Trustee to make the payments, to the legal guardian or other personal
representative of such person for the use and benefit of such person. If the
Administrative Committee for any reason is unable to determine with reasonable
certainty the proper person to pay pursuant to the immediately preceding
sentence, the Company shall pay or, if applicable, the Administrative Committee
shall direct the Trustee to pay, any amounts due hereunder into a court of
competent jurisdiction in an interpleader proceeding for purposes of being
directed by such court as to the proper disposition of such amounts. Any such
payments so made by the Company or the Trustee, to the extent of the amounts
thereof, shall be a full and complete discharge of any liability or obligation
of the Plan, Trust, Employer, Administrative Committee, Compensation Committee,
Board and other interested parties, therefor.

         6.9 BENEFICIARY DESIGNATIONS. Each Employee, upon becoming a
Participant, shall file with the Administrative Committee (or its delegate) a
designation of one or more Beneficiaries to whom benefits otherwise payable to
the Participant shall be made in the event of his death prior to the complete
distribution of his Account balance. A completed Beneficiary designation form
shall be effective when received and acknowledged in writing by the
Administrative Committee. A Participant may, from time to time, revoke or change
his Beneficiary designation by filing a new designation with the Administrative
Committee. The last valid designation received by the Administrative Committee
shall be controlling; provided, however, that no Beneficiary designation, or
change or revocation thereof, shall be effective unless received prior to the
Participant's death, and shall not be effective as of a date prior to its
receipt and acknowledgment by the Administrative Committee. Notwithstanding any
other provision of this paragraph, no Beneficiary designation made by a married
Participant, other than one under which the lawful spouse of such Participant is
designated as the sole primary Beneficiary, shall be valid and effective without
the written consent of such spouse to the designation of another primary
Beneficiary.

         If no valid and effective Beneficiary designation exists at the time of
the Participant's death, or if no designated Beneficiary survives the
Participant, or if such designation conflicts with applicable law, the payment
of the Participant's Account balance shall be made to the Participant's
surviving lawful spouse, if any, or if there is no such surviving spouse, to the
executor or administrator of the Participant's estate. If the Administrative
Committee is in doubt as to the right of any person to receive such amount, it
may direct that the amount be paid into any court of competent jurisdiction in
an interpleader action, and such payment shall be a full and complete discharge
of any liability or obligation under the Plan or Trust Agreement to the full
extent of such payment.

         6.10 WITHHOLDING OF TAXES. The Administrative Committee shall direct
the Employer or, if appropriate, the Trustee, to withhold from the amount of
benefits payable under the Plan all federal, state and local taxes required to
be withheld under any applicable law or governmental regulation or ruling.

         For each payroll period in which an elective deferral contribution is
being withheld, the Employer shall ratably withhold from that portion of the
Active Participant's Compensation or Bonus that is not being deferred, the
Active Participant's share of FICA and other applicable employment taxes that
are required to be withheld with respect to such elective deferral
contributions.

                                       18
<PAGE>

                                                                    EXHIBIT 10.1

         With respect to Employer Contributions pursuant to Section 4.6, the
Employer shall withhold the Active Participant's required share of FICA and
other applicable employment taxes from the Active Participant's Compensation or
Bonus that is not being deferred. Such taxes shall be withheld at the same time
that the Employer Contributions are credited to the Deferred Compensation
Ledger.

                                  ARTICLE SEVEN

                             RIGHTS OF PARTICIPANTS

         7.1 ANNUAL STATEMENT TO PARTICIPANTS. As soon as practicable after the
end of each Plan Year, or at such other time as the Administrative Committee
determines to be appropriate, the Administrative Committee shall cause to be
prepared and delivered to each Participant a written statement showing the
following information and such other information that the Administrative
Committee decides is appropriate:

             (a)   The beginning balances in the Participant's Account under the
                   Deferred Compensation Ledger as of the first day of the Plan
                   Year;

             (b)   The amount of Compensation and Bonuses deferred for the Plan
                   Year and credited to the Participant's Account for the Plan
                   Year;

             (c)   The amount of Employer contributions for the Plan Year that
                   were credited to the Participant's Account for the Plan Year;

             (d)   The adjustments to the Participant's Account to reflect the
                   crediting of Investment Experience and any distributions or
                   withdrawals made during the Plan Year; and

             (e)   the ending balances in the Participant's Account as of the
                   last day of the Plan Year.

         7.2 LIMITATION OF RIGHTS. Nothing in this Plan shall be construed to:

             (a)   Give any individual who is employed by an Employer any right
                   to be a Participant unless and until such person is selected
                   by the Compensation Committee.

             (b)   Give any Participant any rights, other than as an unsecured
                   general creditor of the Employer, with respect to the
                   Compensation, Bonuses, Employer contributions and Investment
                   Experience credited to his Account under the Deferred
                   Compensation Ledger until such amounts are actually
                   distributed to him;

             (c)   Limit in any way the right of the Employer to terminate a
                   Participant's Employment with the Employer;

             (d)   Give a Participant or any other person any interest in any
                   fund or in any specific asset of the Employer;

             (e)   Give a Participant or any other person any interests or
                   rights other than those of an unsecured general creditor of
                   the Employer;

             (f)   Be evidence of any agreement or understanding, express or
                   implied, that the Employer will employ a Participant in any
                   particular position, at any particular rate of remuneration,
                   or for any particular time period; or

             (g)   Create a fiduciary relationship between the Participant and
                   the Employer, Compensation Committee, and/or Administrative
                   Committee.

                                       19
<PAGE>

                                                                    EXHIBIT 10.1

         7.3 NONALIENATION OF BENEFITS. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same will be void and without effect. No right
or benefit hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits. If any
Participant or Beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, assign, sell, pledge, encumber, or charge any right or
benefit hereunder, or if any creditor shall attempt to subject the same to a
writ of garnishment, attachment, execution, sequestration, or any other form of
process or involuntary lien or seizure, then such right or benefit shall be held
by the Company for the sole benefit of the Participant or Beneficiary, his
spouse, children, or other dependents, or any of them, in such manner as the
Administrative Committee shall deem proper, free and clear of the claims of any
party.

         The first paragraph of this Section shall not preclude (i) the
Participant from designating a Beneficiary to receive any benefit payable
hereunder upon his death, or (ii) the executors, administrators, or other legal
representatives of the Participant or his estate from assigning any rights
hereunder to the person or persons entitled thereto.

         7.4 CLAIMS PROCEDURES. When a benefit is due and payable under the
Plan, a claim should be submitted to the Administrative Committee or Trustee, as
applicable, by the Participant or by his Beneficiary in the event of
Participant's death ("Claimant" for purposes of this Section 7.4). A decision on
a Claimant's claim for benefits shall be made within twenty (20) days after
receipt of the claim. In the event there is a disagreement concerning the amount
payable to the Claimant, the Claimant shall receive written notification of the
amount in dispute and shall be entitled to a full review of his claim. A
Claimant desiring a review must submit a written request to the Compensation
Committee requesting such a review, which request should include whatever
comments or arguments that the Claimant wishes to make. Incident to the review,
the Claimant may represent himself or appoint a representative to do so, and he
shall have the right to inspect all documents pertaining to the issue. The
Compensation Committee, in its discretion, may schedule any meeting with the
Claimant and/or the Claimant's representative that it deems to be necessary or
appropriate to facilitate or expedite its review of the amount in dispute.

         A request for a review must be filed with the Compensation Committee
within sixty (60) days after notice of the disputed amount is received by the
Claimant. If no request is received within the 60-day time limit, the
determination of the amount due by the Administrative Committee or Trustee, as
applicable, will be final. However, if a request for review of a disputed amount
is timely filed, the Compensation Committee must render its decision under
normal circumstances within thirty (30) days of its receipt of the request for
review. In special circumstances the decision may be delayed if, prior to
expiration of the initial 30-day period, the Claimant is notified of the
extension, but must in any event be rendered no later than sixty (60) days after
receipt of the Claimant's request. All decisions of the Compensation Committee
shall be in writing and shall include specific reasons for whatever action has
been taken, as well as the Plan provisions on which the decision is based.

                                       20
<PAGE>

                                                                    EXHIBIT 10.1

                                  ARTICLE EIGHT

                                  MISCELLANEOUS

         8.1 AMENDMENT OR TERMINATION OF THE PLAN. The Administrative Committee
may amend or terminate the Plan at any time effective as of the date specified
by the Administrative Committee, including amendments with a retroactive
effective date; provided, however, the provisions of Section 8.2 may not be
amended without the consent of at least two-thirds of all affected Participants
and no amendment may be made which affects the rights or duties of the
Compensation Committee hereunder without its consent. In addition, unless the
particular Participant (or his Beneficiary in the event of Participant's death)
consents in writing, no such amendment or termination shall adversely affect any
rights of such Participant or Beneficiary to any amounts which are required to
be allocated and credited hereunder to his Account. However, in the event that
incident to any such amendment or termination, payment of any benefit accrued
under the Plan is accelerated, such benefit shall be paid by the Company if
payment of such benefit would otherwise be made by the Trustee from assets of
the Trust under circumstances which would at any time when the Employer is
Insolvent (i) treat the Participant, or any person claiming under the
Participant, as other than a general unsecured creditor of the Employer or (ii)
provide the Participant, or any person claiming under the Participant, with a
legally enforceable right to priority over any general unsecured creditor of the
Employer.

         8.2 POWERS OF THE COMPANY. The existence of outstanding and unpaid
benefits under the Plan shall not affect in any way the right or power of the
Employer to make or authorize any adjustments, recapitalization, reorganization
or other changes in the Employer's capital structure or in its business, or any
merger or consolidation of the Employer, or any issue of bonds, debentures,
common or preferred stock, or the dissolution or liquidation of the Employer, or
any sale or transfer of all or any part of their assets or business, or any
other act or corporate proceeding, whether of a similar character or otherwise.

         Should the Employer (or any successor thereto) elect to dissolve, enter
into a sale of its assets, or enter into any reorganization incident to which it
is not the surviving entity, unless the surviving or successor entity shall
formally agree to assume and continue the Plan, and the Trust if applicable, the
Plan shall terminate with respect to the Employer (or any successor thereto) on
the earlier of the date of closing or the effective date of such transaction. In
such event, the full amount of any remaining unpaid benefits credited to the
Account for each Participant shall immediately be paid in a single lump sum
payment of cash as if each such Participant had retired under applicable
provisions of the Plan on the date immediately prior to the earlier of the date
of closing or the effective date, whichever is applicable, of such dissolution,
liquidation, sale or other reorganization.

         Should any successor to the Company assume and continue the Plan and
Trust incident to a transaction described in the immediately preceding
paragraph, the full amount of any remaining unpaid benefits credited to
Participants' Account shall become informally funded in full. Such funding shall
be paid to the Trustee in a single lump sum in cash not later than the earlier
of date of closing or the effective date, whichever is applicable, of the
transaction or event that gave rise to such assumption and continuation of the
Plan and Trust by such successor.

         8.3 ADOPTION OF PLAN BY AFFILIATED ENTITY. Any Affiliated Entity may
adopt the Plan with the consent of the Compensation Committee or the
Administrative Committee, effective as of the date specified by the respective
Committee. Any Affiliated Entity which has adopted the Plan shall not be
responsible for the administration of the Plan and its Employees who are
eligible to participate herein shall be selected as provided herein.

         8.4 WAIVER. No term or condition of this Plan shall be deemed to have
been waived, nor shall there be an estoppel against the enforcement of any
provision of this Plan, except by written instrument of the party charged with
such waiver or estoppel. No such written waiver shall be deemed a continuing
waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a
waiver of such term or condition for the future or as to any act other than that
specifically

                                       21
<PAGE>

                                                                    EXHIBIT 10.1

waived. Any waiver by either party hereto of a breach of any provision of the
Plan by the other party shall not operate or be construed as a waiver by such
party of any subsequent breach thereof.

         8.5 SEVERABILITY. In the event that any provision of the Plan is
declared invalid and not binding on the parties hereto in a final decree or
order issued by a court of competent jurisdiction, such declaration shall not
affect the validity of the other provisions of the Plan to which such
declaration of invalidity does not relate and such other provisions shall remain
in full force and effect.

         8.6 GENDER, TENSE AND HEADINGS. Whenever the context requires, words of
the masculine gender used herein shall include the feminine and neuter, and
words used in the singular shall include the plural. The words "hereof",
"hereunder", "herein," and similar compounds of the word "here" shall refer to
the entire Plan and not to any particular term or provision of the Plan.
Headings of Articles and Sections, as used herein, are inserted solely for
convenience and reference and shall not affect the meaning, interpretation or
scope of the Plan.

         8.7 GOVERNING LAW. The Plan shall be subject to and governed by the
laws of the State of Texas (other than such laws relating to choice of laws),
except to the extent preempted by ERISA or other federal law.

         8.8 NOTICE. Any notice required or permitted to be given under this
Plan shall be sufficient if in writing and delivered via telecopier, messenger,
or overnight courier with appropriate proof of receipt, or sent by U.S.
registered or certified mail, return receipt requested, to the Company,
Administrative Committee, Compensation Committee, Participant, Beneficiary or
other appropriate person or entity at the address last furnished by such person
or entity. Such notice shall be deemed given as of the date of delivery to the
recipient or, if delivery is made by mail, as of the date shown on the receipt
for registration or certification.

         8.8 EFFECTIVE DATE. The effective date of the amended and restated Plan
shall be January 1, 2001.

         IN WITNESS WHEREOF, this amended and restated Plan is approved and
executed by a duly authorized officer of the Company, to be effective as of
January 1, 2001.

                                   SMITH INTERNATIONAL, INC.
ATTEST:

By: /s/ VIVIAN M. CLINE            By: /s/ NEAL S. SUTTON
   -----------------------------       -----------------------------------------
Name:   Vivian M. Cline            Name:   Neal S. Sutton
Title:  Assistant Secretary        Title:  Senior Vice President-Administration,
                                           General Counsel and Secretary

                                       22<PAGE>

                                                        Conformed Corrected Copy

                                                                     EXHIBIT 4.1
================================================================================

                                    EGL, INC.

                                       AND

                    COMPUTERSHARE INVESTOR SERVICES, L.L.C.,

                                  RIGHTS AGENT

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

                                RIGHTS AGREEMENT

                            DATED AS OF MAY 23, 2001

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>              <C>                                                                                         <C>
Section 1.        Certain Definitions.............................................................................1

Section 2.        Appointment of Rights Agent.....................................................................8

Section 3.        Issue of Rights Certificates....................................................................8

Section 4.        Form of Rights Certificates....................................................................10

Section 5.        Countersignature and Registration..............................................................10

Section 6.        Transfer, Split-Up, Combination and Exchange of Rights Certificates;
                  Mutilated, Destroyed, Lost or Stolen Rights Certificates.......................................11

Section 7.        Exercise of Rights; Purchase Price.............................................................12

Section 8.        Cancellation and Destruction of Rights Certificates............................................14

Section 9.        Reservation and Availability of Capital Stock..................................................14

Section 10.       Preferred Stock Record Date....................................................................15

Section 11.       Adjustment of Purchase Price, Number and Kind of Shares or Number of
                  Rights.........................................................................................16

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares.....................................23

Section 13.       Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
                  Earning Power..................................................................................23

Section 14.       Fractional Rights and Fractional Shares........................................................26

Section 15.       Rights of Action...............................................................................27

Section 16.       Agreement of Rights Holders....................................................................27

Section 17.       Rights Certificate Holder Not Deemed a Shareholder.............................................28

Section 18.       Concerning the Rights Agent....................................................................28

Section 19.       Merger or Consolidation or Change of Name of Rights Agent......................................29

Section 20.       Duties of Rights Agent.........................................................................29
</Table>

                                       -i-

<PAGE>

<Table>
<S>              <C>                                                                                          <C>
Section 21.       Change of Rights Agent.........................................................................31

Section 22.       Issuance of New Rights Certificates............................................................32

Section 23.       Redemption and Termination.....................................................................32

Section 24.       Exchange.......................................................................................33

Section 25.       Notice of Certain Events.......................................................................34

Section 26.       Notices........................................................................................35

Section 27.       Supplements and Amendments.....................................................................36

Section 28.       Successors.....................................................................................36

Section 29.       Determinations and Actions by the Board of Directors, etc......................................36

Section 30.       Benefits of this Agreement.....................................................................37

Section 31.       Severability...................................................................................37

Section 32.       Governing Law..................................................................................37

Section 33.       Counterparts...................................................................................37

Section 34.       Descriptive Headings...........................................................................37
</Table>

Exhibit A -       Form of Certificate of Designations of Series A Junior
                  Participating Preferred Stock

Exhibit  B -      Form of Rights Certificate

Exhibit  C -      Summary of Rights

                                      -ii-

<PAGE>

                                RIGHTS AGREEMENT

                  This Rights Agreement, dated as of May 23, 2001 (the
"Agreement"), between EGL, Inc., a Delaware corporation (the "Company"), and
Computershare Investor Services, L.L.C., a Delaware limited liability company
(the "Rights Agent"),

                                  WITNESSETH:

                  WHEREAS, on May 23, 2001 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
of one Right for each share of common stock, par value $.001 per share, of the
Company (the "Common Stock") outstanding at the close of business on June 4,
2001 (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 (whether originally
issued or delivered from the Company's treasury) between the Record Date and the
earlier of the Distribution Date (as hereinafter defined) and the Expiration
Date (as hereinafter defined), and, in certain circumstances provided for in
Section 22 hereof, after the Distribution Date, each Right initially
representing the right to purchase one Fractional Share (as hereinafter defined)
of Series A Junior Participating Preferred Stock of the Company, upon the terms
and subject to the conditions hereinafter set forth (the "Rights");

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

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

                  "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 any Exempt Person; provided, however, that a Person shall
not be or become an Acquiring Person if such Person, together with its
Affiliates and Associates, shall become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding solely as a result of a reduction in
the number of shares of Common Stock outstanding due to the repurchase of Common
Stock by the Company, unless and until such time as such Person together with
its Affiliates and Associates shall purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or any other Person (or Persons) who is (or
collectively are) the Beneficial Owner of shares of Common Stock constituting 1%
or more the then outstanding shares of Common Stock shall become an Affiliate or
Associate of such Person, unless, in either such case, such Person, together
with all Affiliates and Associates of such Person, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding; and
provided, further, that if the Board of Directors, with the concurrence of a
majority of the members of the Board of Directors who are not, and are not
representatives, nominees, Affiliates or Associates of, such Person or an
Acquiring Person, determines in good faith that a Person that would otherwise be
an "Acquiring Person" has become such inadvertently (including, without
limitation, because (i) such Person was unaware that

                                       -1-

<PAGE>

it beneficially owned a percentage of Common Stock that would otherwise cause
such Person to be an "Acquiring Person" or (ii) such Person was aware of the
extent of its Beneficial Ownership of Common Stock but had no actual knowledge
of the consequences of such Beneficial Ownership under this Agreement) and
without any intention of changing control of the Company, and if such Person as
promptly as practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement.

                  Notwithstanding anything in this definition of "Acquiring
Person" to the contrary (A) James R. Crane and any Affiliate or Associate
thereof shall not be or become an Acquiring Person unless and until James R.
Crane, together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 49% or more of the shares of Common Stock then outstanding;
provided, however, that James R. Crane shall not become an Acquiring Person if
such Person, together with all Affiliates and Associates of such Person, shall
become the Beneficial Owner of 49% or more of the shares of Common Stock then
outstanding solely as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of Common Stock by the Company, unless
and until such time as such Person or any Affiliate or Associate thereof shall
purchase or otherwise become the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common Stock or
any other Person (or Persons) who is (or collectively are) the Beneficial Owner
of shares of Common Stock constituting 1% or more of the then outstanding shares
of Common Stock shall become an Affiliate or Associate of such Person unless, in
either such case, such Person, together with all Affiliates and Associates of
such Person, is not then the Beneficial Owner of 49% or more of the shares of
Common Stock then outstanding (it being understood that any Person that becomes
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding as a result of being deemed to be the Beneficial Owner of shares
owned by James R. Crane is not intended to thereby become an Acquiring Person
solely as a result of such deemed Beneficial Ownership unless such Person
becomes the Beneficial Owner (including through such deemed Beneficial Ownership
through James R. Crane) of 49% or more of the shares of Common Stock then
outstanding and (B) notwithstanding anything in this definition of "Acquiring
Person" to the contrary, if, as of the date hereof, any Person, together with
all Affiliates or Associates of such Person, is the Beneficial Owner of a number
of shares of Common Stock that would otherwise cause such Person to be an
Acquiring Person, such Person shall not be or become an Acquiring Person unless
and until such time as such Person or any Affiliate or Associate of such Person
shall purchase or otherwise become the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of Common
Stock or any other Person (or Persons) who is (or collectively are) the
Beneficial Owner of shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock shall become an Affiliate or Associate of
such Person unless, in either such case, such Person, together with all
Affiliates and Associates of such Person, is not then the Beneficial Owner of a
number of shares that would otherwise cause such Person to be an Acquiring
Person.

                  At any time that the Rights are redeemable the Board of
Directors may, generally or with respect to any specified Person or Persons,
determine to increase to a specified percentage or amount greater than that set
forth herein or decrease to a specified percentage or amount lower than

                                       -2-

<PAGE>

that set forth herein or determine a number of shares to be (but in no event
less than or equal to the percentage or number of shares of Common Stock then
beneficially owned by such Person), the level of Beneficial Ownership of Common
Stock at which a Person or such Person or Persons becomes an Acquiring Person.

                  "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.

                  "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement.

                  "Associate" shall mean, with reference to any Person, (1) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a Subsidiary of the Company) of which
such Person is an officer or general partner (or officer or general partner of a
general partner) or is, directly or indirectly, the Beneficial Owner of 10% or
more of any class of equity securities, (2) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity and (3) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as
such Person.

                  A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:

                  (i) that such Person or any of such Person's Affiliates or
         Associates, directly or indirectly, is the "beneficial owner" 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) or
         otherwise has the right to vote or dispose of, 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 (i) 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 or consent
         given in response to a public (i.e., not including a solicitation
         exempted by Rule 14a-2(b)(2) of the General Rules and Regulations under
         the Exchange Act as in effect on the date of this Agreement) proxy or
         consent solicitation made pursuant to, and in accordance with, the
         applicable provisions of the General Rules and Regulations under the
         Exchange Act, (B) is not then reportable by such Person on Schedule 13D
         under the Exchange Act (or any comparable or successor report) and (C)
         does not constitute a trust, proxy, power of attorney or other device
         with the purpose or effect of allowing two or more persons, acting in
         concert, to avoid being deemed "beneficial owners" of such security or
         otherwise avoid the status of "Acquiring Person" under the terms of
         this Agreement or as part of a plan or scheme to evade the reporting
         requirements under Schedule 13D or Sections 13(d) or 13(g) of the
         Exchange Act;

                  (ii) that such Person or any of such Person's Affiliates or
         Associates, directly or indirectly, has the right or obligation to
         acquire (whether such right or obligation is exercisable or effective
         immediately or only after the passage of time or the occurrence of

                                       -3-

<PAGE>

         an event) pursuant to any agreement, arrangement or understanding
         (whether or not in writing) or upon the exercise of conversion rights,
         exchange rights, other 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, (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) or (p)
         hereof in connection with an adjustment made with respect to any
         Original Rights; or

                  (iii) that are beneficially owned, directly or indirectly, by
         (A) any other Person (or any 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 or consent as described in the proviso to subparagraph
         (i) of this definition) or disposing of any voting securities of the
         Company or (B) any group (as that term is used in Rule 13d-5(b) of the
         General Rules and Regulations under the Exchange Act, as in effect on
         the date of this Agreement) of which such Person is a member;

provided, however, that nothing in this definition 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 (including,
without limitation, securities acquired pursuant to stabilizing transactions to
facilitate a public offering in accordance with Regulation M promulgated under
the Exchange Act, or to cover overallotments created in connection with a public
offering) until the expiration of forty days after the date of such acquisition.
For purposes of this Agreement, "voting" a security shall include voting,
granting a proxy, acting by consent, making a request or demand relating to
corporate action (including, without limitation, calling a shareholder meeting),
or otherwise giving an authorization (within the meaning of Section 14(a) of the
Exchange Act, as in effect on the date of this Agreement) in respect of such
security.

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

                  "close of business" on any given date shall mean 5:00 p.m.,
New York time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 p.m., New York time, on the next succeeding
Business Day.

                  "Closing Price" of a security for any day shall mean the last
sales price, regular way, on such day or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, on such
day, in either case as reported in the principal transaction reporting

                                      -4-

<PAGE>

system with respect to securities listed or admitted to trading on the New York
Stock Exchange, or, if such security is not listed or admitted to trading on the
New York Stock Exchange, on the principal national securities exchange on which
such security is listed or admitted to trading, or, if such security is not
listed or admitted to trading on any national securities exchange but sales
price information is reported for such security, as reported by NASDAQ or such
other self-regulatory organization or registered securities information
processor (as such terms are used under the Exchange Act) that then reports
information concerning such security, or, if sales price information is not so
reported, the average of the high bid and low asked prices in the
over-the-counter market on such day, as reported by NASDAQ or such other entity,
or, if on such day such security is not quoted by any such entity, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors of the
Company. If on such day no market maker is making a market in such security, the
fair value of such security on such day as determined in good faith by the Board
of Directors of the Company shall be used.

                  "Common Stock" shall mean the common stock, par value $.001
per share, of the Company, except that "Common Stock" when used with reference
to equity interests issued by 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.

                  "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.

                  "Company" shall mean the Person named as the "Company" in the
preamble of this Agreement until a successor Person shall have become such or
until a Principal Party shall assume, and thereafter be liable for, all
obligations and duties of the Company hereunder, pursuant to the applicable
provisions of this Agreement, and thereafter "Company" shall mean such successor
Person or Principal Party.

                  "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.

                  "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.

                  "Distribution Date" shall mean the earlier of (i) the close of
business on the tenth day (or, if such Stock Acquisition Date results from the
consummation of a Permitted Offer, such later date as may be determined by the
Company's Board of Directors as set forth below before the Distribution Date
occurs) after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date) or (ii) the close of business on the tenth Business Day (or such
later date as may be determined by the Company's Board of Directors as set forth
below before the Distribution Date occurs) after the date that a tender offer or
exchange offer by any Person (other than any Exempt Person) 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 then in effect, if upon consummation
thereof, such Person would be an Acquiring Person, other than a tender or
exchange offer that is determined before the Distribution

                                       -5-

<PAGE>

Date occurs to be a Permitted Offer. The Board of Directors of the Company may,
to the extent set forth in the preceding sentence, defer the date set forth in
clause (i) or (ii) of the preceding sentence to a specified later date or to an
unspecified later date to be determined by a subsequent action or event (but in
no event to a date later than the close of business on the tenth day after the
first occurrence of a Triggering Event).

                  "Equivalent Preferred Stock" shall have the meaning set forth
in Section 11(b) hereof.

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

                  "Exchange Ratio" shall have the meaning set forth in Section
24 hereof.

                  "Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, and any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or any
Subsidiary of the Company.

                  "Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which the Rights expire pursuant to Section
13(d) hereof and (iv) the time at which all Rights then outstanding and
exercisable are exchanged pursuant to Section 24 hereof.

                  "Final Expiration Date" shall mean the close of business on
June 4, 2011.

                  "Flip-In Event" shall mean an event described in Section
11(a)(ii) hereof.

                  "Flip-In Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.

                  "Flip-Over Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof, but excluding any transaction described
in Section 13(d) hereof that causes the Rights to expire.

                  "Fractional Share" with respect to the Preferred Stock shall
mean one one-thousandth of a share of Preferred Stock.

                  "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.

                  "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner."

                  "Permitted Offer" shall mean a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined, at the time the Rights are redeemable, by at least a majority of the
members of the Board of Directors who are not, and are not

                                       -6-

<PAGE>

representatives, nominees, Affiliates or Associates of, an Acquiring Person or
the person making the offer, after receiving advice from one or more investment
banking firms, to be (a) at a price and on terms that are fair to shareholders
(taking into account all factors that such members of the Board deem relevant
including, without limitation, prices that 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.

                  "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, association, trust, unincorporated
organization or other entity or any group of Persons acting in concert.

                  "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of the Company having
the rights, powers and preferences set forth in the form of Statement of
Resolution Establishing Series of Shares attached hereto as Exhibit A 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, par value $.001 per share, of the
Company designated for such purpose containing terms substantially similar to
the terms of the Series A Junior Participating Preferred Stock.

                  "Principal Party" shall have the meaning set forth in Section
13(b) hereof.

                  "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.

                  "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.

                  "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.

                  "Rights" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.

                  "Rights Agent" shall mean the Person named as the "Rights
Agent" in the preamble of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions hereof, and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.

                  "Rights Certificates" shall mean the certificates evidencing
the Rights.

                  "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals clause at the beginning of this Agreement.

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

                  "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.

                                       -7-

<PAGE>

                  "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition and Section 23, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.

                  "Subsidiary" shall mean, with reference to any Person, any
corporation or other Person of which an amount of voting securities sufficient
to elect at least a majority of the directors or other persons performing
similar functions is beneficially owned, directly or indirectly, by such Person,
or otherwise controlled by such Person.

                  "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.

                  "Summary of Rights" shall mean the Summary of Rights sent
pursuant to Section 3(b) hereof.

                  "Trading Day" with respect to a security shall mean a day on
which the principal national securities exchange on which such security is
listed or admitted to trading is open for the transaction of business, or, if
such security is not listed or admitted to trading on any national securities
exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if
such security is not so quoted, a Business Day.

                  "Triggering Event" shall mean any Flip-In Event or any
Flip-Over Event.

                  Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent (i) to act as agent for the Company and (ii) to take
certain actions in respect of the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be the holders of
the Common Stock) (although it is expressly agreed that the Rights Agent shall
not act as agent for such holders) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co- Rights Agents as it may deem necessary or
desirable.

                  Section 3. Issue of Rights Certificates.

                  (a) Until the Distribution Date, (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the holders of the
Common Stock and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date (other than any Person referred to in the
first sentence of Section 7(e)), at the address of such holder shown on the
records of the Company, one or more 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

                                       -8-

<PAGE>

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) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C, by first-class, postage prepaid mail, to each
record holder of Common Stock as of the close of business on the Record Date, at
the address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date or the earlier surrender for transfer thereof or the
Expiration Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates for
Common Stock together with the Summary of Rights, 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, the transfer
of any of the certificates for Common Stock outstanding on the Record Date, with
or without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificates.

                  (c) Rights shall be issued in respect of all shares of Common
Stock that are issued (whether originally issued or delivered 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 issued representing such
shares of Common Stock that shall so become outstanding or shall be transferred
or exchanged after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date 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 Rights Agreement between EGL,
         Inc. (the "Company") and Computershare Investor Services, L.L.C. (the
         "Rights Agent") dated as of May 23, 2001 as it may from time to time be
         supplemented or amended (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 Company. Under certain
         circumstances, as set forth in the Rights Agreement, such Rights may be
         redeemed, may be exchanged, may expire or may be evidenced by separate
         certificates and will no longer be evidenced by this certificate. The
         Company or the Rights Agent 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
         BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR
         BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS
         SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), AND CERTAIN
         TRANSFEREES THEREOF, WILL BECOME NULL AND VOID AND WILL NO LONGER BE
         TRANSFERABLE.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock represented by such

                                       -9-

<PAGE>

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 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 quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of Fractional
Shares of Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per Fractional Share (or, as set forth in this
Agreement, for other securities), 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
Section 22 hereof that represents Rights beneficially owned by a Person
described in the first sentence of Section 7(e), and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any such Rights, shall contain (to the extent
feasible) the following legend, modified as applicable to apply to such Person:

         The Rights represented by this Rights Certificate are or were
         beneficially owned by a Person who was or became an Acquiring Person or
         an Affiliate or Associate of an Acquiring Person (as such terms are
         defined in the Rights Agreement). Accordingly, this Rights Certificate
         and the Rights represented hereby [will] [have] become null and void in
         the circumstances and with the effect specified in Section 7(e) of such
         Agreement.

The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate. The
Company shall give notice to the Rights Agent promptly after it becomes aware of
the existence of any Acquiring Person or any Associate or Affiliate thereof.

                  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,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof, which shall be attested by

                                      -10-

<PAGE>

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
Certificate 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 certificate number 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 Section 4(b), Section 7(e),
Section 13(d), Section 14 and Section 24 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of Fractional Shares 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 or Rights Certificates 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
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates 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) thereof or of the Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 4(b), Section 7(e), Section 13(d), Section 14 and Section 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 by the holder 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.

                                      -11-

<PAGE>

                  (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, subject to Section 4(b), Section
7(e), Section 13(d), Section 14 and Section 24, 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.

                  (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 Section 9(c), Section 11(a)(iii) and Section 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 completed and 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 Fractional Shares of Preferred Stock (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 Expiration Date.

                  (b) The Purchase Price for each Fractional Share of Preferred
Stock pursuant to the exercise of a Right shall initially be $120, 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 on
the reverse side thereof duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per Fractional 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 Fractional Shares 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, in its sole discretion,
shall have elected to deposit the shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing interests in such number of
Fractional Shares 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 depositary agent) and the
Company will direct the depositary 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 depositary receipts,

                                      -12-

<PAGE>

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 reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified check, cashier's or
official bank check or bank draft payable to the order of the Company or the
Rights Agent. 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) or Section 13(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 exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.

                  (d) In case the registered holder of any Rights Certificate
shall exercise fewer 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 Triggering Event, any Rights
beneficially owned by or transferred to (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person other than any such Person that became such
pursuant to a Permitted Offer and the Board of Directors during the time the
Rights are redeemable, in good faith, determines was not involved in and did not
cause or facilitate, directly or indirectly, such Triggering Event, (ii) a
direct or indirect transferee of such Rights from such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee after such Triggering
Event or (iii) a direct or indirect transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with such Triggering Event and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from such Acquiring
Person (or such Affiliate or Associate) to holders of equity interests in such
Acquiring Person (or such Affiliate or Associate) or to any Person with whom
such Acquiring Person (or such Affiliate or Associate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer that the Board of Directors of the Company determines is part of a
plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise, and
such Rights shall not be transferable. 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 its failure to make any
determinations with respect to an Acquiring Person or its 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

                                      -13-

<PAGE>

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 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
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled 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, 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 any 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 are listed on any
national securities exchange or quoted on any trading system, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange, or quoted on such system, upon official notice of issuance upon such
exercise. Following the occurrence of a Triggering Event, the Company will use
its best efforts to list (or continue the listing of) the Rights and the
securities issuable and deliverable upon the exercise of the Rights on one or
more national securities exchanges or to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by NASDAQ or such other
transaction reporting system then in use.

                  (c) The Company shall use its best efforts to (i) prepare and
file, as soon as practicable following the first occurrence of a Flip-In Event
or, if applicable, as soon as practicable following the earliest date after the
first occurrence of a Flip-In Event on which the consideration to be delivered
by the Company upon exercise of the Rights has been determined pursuant to this
Agreement (including in accordance with Section 11(a)(iii) hereof), a
registration statement on an appropriate form under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (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

                                      -14-

<PAGE>

are no longer exercisable for such securities and (B) the Expiration Date. 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. In addition, if the Company shall determine that the
Securities Act requires an effective registration statement under the Securities
Act following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as such a registration statement
has been declared effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or any required 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 Fractional Shares 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
that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of Fractional Shares 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 that 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 Fractional Shares 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 Fractional
Shares 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 Fractional Shares of Preferred Stock (or
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 such shares (fractional or otherwise) of 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

                                      -15-

<PAGE>

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, as such, 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 or
other securities subject to purchase upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.

                           (a)(i) In the event the Company shall at any time
         after the Rights Dividend Declaration Date (A) declare a dividend on
         the outstanding shares of Preferred Stock payable in shares of
         Preferred Stock, (B) subdivide the outstanding shares of Preferred
         Stock, (C) combine the outstanding shares of Preferred Stock into a
         smaller number of shares or (D) otherwise reclassify the outstanding
         shares of Preferred Stock (including any such reclassification in
         connection with a consolidation or merger in which the Company is the
         continuing or surviving corporation), except as otherwise provided in
         this Section 11(a) 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
         or other securities, 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 or other securities, 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 would have owned upon such exercise and been
         entitled to receive by virtue of such dividend, subdivision,
         combination or reclassification. If an event occurs that would require
         an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
         hereof, the adjustment provided for in this Section 11(a)(i) shall be
         in addition to, and shall be made prior to, any adjustment required
         pursuant to Section 11(a)(ii) hereof.

                           (ii) Subject to Sections 23 and 24 of this Agreement,
         in the event any Person shall, at any time after the Rights Dividend
         Declaration Date, become an Acquiring Person, unless the event causing
         such Person to become an Acquiring Person is (1) a Flip- Over Event or
         (2) an acquisition of shares of Common Stock pursuant to a Permitted
         Offer (provided that this clause (2) shall cease to apply if such
         Acquiring Person thereafter becomes the Beneficial Owner of any
         additional shares of Common Stock other than pursuant to such Permitted
         Offer or a transaction set forth in Section 13(a) or 13(d) hereof),
         then, (x) the Purchase Price shall be adjusted to be the Purchase Price
         immediately prior to the first occurrence of a Flip-In Event multiplied
         by the number of Fractional Shares of Preferred

                                      -16-

<PAGE>

         Stock for which a Right was exercisable immediately prior to such first
         occurrence and (y) each holder of a Right (except as provided below in
         Section 11(a)(iii) and in Section 7(e) hereof) shall thereafter have
         the right to receive, upon exercise thereof at a price equal to the
         Purchase Price in accordance with the terms of this Agreement, in lieu
         of the shares of Preferred Stock otherwise purchasable thereunder, such
         number of shares of Common Stock of the Company as shall equal the
         result obtained by dividing the Purchase Price by 50% of the Current
         Market Price per share of Common Stock on the date of such first
         occurrence (such number of shares, the "Adjustment Shares"); provided
         that the Purchase Price and the number of Adjustment Shares shall be
         further adjusted as provided in this Agreement to reflect any events
         occurring after the date of such first occurrence.

                           (iii) In the event that the number of shares of
         Common Stock that are authorized by the Company's certificate of
         incorporation but not outstanding or reserved for issuance for purposes
         other than upon exercise of the Rights is 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, to the
         extent permitted by applicable law and regulation, (A) determine the
         excess of (1) the value of the Adjustment Shares issuable upon the
         exercise of a Right (computed using the Current Market Price used to
         determine the number of Adjustment Shares) (the "Current Value") over
         (2) the Purchase Price (such excess is herein referred to as the
         "Spread"), and (B) with respect to each Right, make adequate provision
         to substitute for the Adjustment Shares, upon the exercise of the
         Rights and payment of the applicable Purchase Price, (1) 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 (including, without limitation, the
         Preferred Stock) that the Board of Directors of the Company has
         determined to have the same value as shares of Common Stock (such
         shares of preferred stock are herein 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, where such aggregate value has been determined by
         the Board of Directors of the Company based upon the advice of a
         nationally recognized investment banking firm selected by the Board of
         Directors of the Company; provided, however, 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 Flip-In 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 "Flip-In 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.
         If the Board of Directors of the Company shall determine 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 Flip-In Trigger Date, in
         order that the Company may seek shareholder approval for the
         authorization of such additional shares (such period, as it may be
         extended, the "Substitution Period"). To the extent that the Company or
         the Board of Directors determines that some action need be taken
         pursuant to the first and/or second sentences of this Section
         11(a)(iii), the Company (x) shall

                                      -17-

<PAGE>

         provide, subject to Section 7(e) hereof, that such action shall apply
         uniformly to all outstanding Rights, and (y) may suspend the
         exercisability of the Rights until the expiration of the Substitution
         Period in order to seek any authorization of additional shares and/or
         to decide the appropriate form of distribution to be made pursuant to
         such 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 the Common Stock shall be the Current Market
         Price per share of the Common Stock on the Flip-In Trigger Date and the
         value of any Common Stock Equivalent shall be deemed to have the same
         value as the Common Stock on such date.

                  (b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or shares having
substantially the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred
Stock or per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the Current Market Price per 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 that 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 adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that 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 or surviving 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

                                      -18-

<PAGE>

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 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) 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 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 that 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 of a Person 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 Common Stock is
determined during a period following the announcement of (A) a dividend or
distribution on such Common Stock other than a regular quarterly cash dividend
or the dividend of 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. 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 of the
Company, 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 Fractional 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 (or Fractional 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 1000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations 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 of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the Current Market Price of a

                                      -19-

<PAGE>

Fractional Share of Preferred Stock shall be equal to the Current Market Price
of one share of Preferred Stock divided by 1000.

                  (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 that 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 ten-thousandth of a share of Common Stock or
other share or to the nearest ten-thousandth of a Fractional Share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.

                  (f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive in respect of such Right 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 Sections 11(a), (b), (c), (e), (f), (g), (h), (i), (j), (k) and (m)
hereof, 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 Fractional Shares 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) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Fractional Shares of Preferred Stock (calculated to the nearest one
ten-thousandth of a Fractional Share) obtained by (i) multiplying (x) the number
of Fractional Shares of Preferred Stock 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 Fractional Shares of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of
Fractional Shares 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 ten-thousandth) obtained by dividing the Purchase
Price in effect

                                      -20-

<PAGE>

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 Fractional Shares 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 Fractional Share and the
number of Fractional Shares that 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 par value, if any, or the stated
capital of the number of Fractional Shares of Preferred Stock or of the number
of shares of Common Stock or other securities issuable upon exercise of a Right,
the Company shall take any corporate action that 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 Fractional Shares of Preferred Stock
or such number of shares of Common Stock or other securities 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 Fractional Shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Fractional Shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(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 reductions in the
Purchase Price, in addition to those adjustments expressly

                                      -21-

<PAGE>

required by this Section 11, as and to the extent that in their 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 that 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.

                  (n) The Company covenants and agrees that it shall not, at any
time that there is an Acquiring Person, (i) consolidate with any other Person,
(ii) merge with or into, convert into or be acquired pursuant to a share
exchange by any other Person, or (iii) sell, lease or transfer (or permit one or
more Subsidiaries to sell, lease 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, if (x) at the time of or immediately after such
consolidation, merger, conversion, share exchange, sale, lease or transfer there
are any rights, warrants or other instruments or securities of the Company or
any other Person outstanding or agreements, arrangements or understandings in
effect that would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously with or
immediately after such consolidation, merger, conversion, share exchange, sale,
lease or transfer, the shareholders or other equity owners of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates, or (z) the identity, form or
nature of organization of the Principal Party (including, without limitation,
the selection of the Person that will be the Principal Party as a result of the
Company's entering into one or more consolidations, mergers, conversions, share
exchanges, sales, leases, transfers or transactions with more than one party)
would preclude or limit the exercise of Rights or otherwise diminish
substantially or eliminate the benefits intended to be afforded by the Rights.

                  (o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 24 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if the
purpose of such action is to, or if at the time such action is taken it is
reasonably foreseeable that such action will, diminish substantially or
eliminate the benefits intended to be afforded by the Rights.

                  (p) Notwithstanding Section 3(c) hereof or any other provision
of this Agreement to the contrary, 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 Common Stock,
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares or (iv) otherwise reclassify the outstanding shares of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Common Stock then outstanding, or
issued or delivered thereafter with Rights, 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

                                      -22-

<PAGE>

immediately prior to such event by a fraction (the "Adjustment Fraction"), the
numerator of 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. In lieu of such adjustment
in the number of Rights associated with one share of Common Stock, the Company
may elect to adjust the number of Fractional Shares of Preferred Stock
purchasable upon the exercise of one Right and the Purchase Price. If the
Company makes such election, the number of Rights associated with one share of
Common Stock shall remain unchanged, and the number of Fractional Shares of
Preferred Stock purchasable upon exercise of one Right and the Purchase Price
shall be proportionately adjusted so that (i) the number of Fractional Shares of
Preferred Stock purchasable upon exercise of a Right following such adjustment
shall equal the product of the number of Fractional Shares of Preferred Stock
purchasable upon exercise of a Right immediately prior to such adjustment
multiplied by the Adjustment Fraction and (ii) the Purchase Price following such
adjustment shall equal the product of the Purchase Price immediately prior to
such adjustment multiplied by the Adjustment Fraction.

                  Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
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 registered holder of a Rights
Certificate (or, if prior to the Distribution Date, to each registered 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, Cash Flow or Earning Power.

                  (a) In the event that, from and after the time an Acquiring
Person has become such, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, convert into, any other Person, and
the Company shall not be the continuing or surviving corporation of such
consolidation, merger, or conversion, (y) any Person shall consolidate with, or
merge with or into, or convert into the Company, and the Company shall be the
continuing or surviving corporation of such consolidation, merger, or
conversion, or the Company shall be party to a share exchange, and, in
connection with such consolidation, merger, conversion or share exchange, 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 (z) the Company shall sell, lease or otherwise
transfer (or one or more of its Subsidiaries shall sell, lease or otherwise
transfer), in one transaction or a series of related transactions, assets, cash
flow or earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any wholly owned Subsidiary of the
Company or any combination thereof in one or more transactions each of which
complies (and all of which together comply) with Section 11(o) hereof), then,
and in each such case (except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) the Purchase Price shall be adjusted
to be the Purchase Price immediately prior to the first occurrence of a
Triggering

                                      -23-

<PAGE>

Event multiplied by the number of Fractional Shares of Preferred Stock for which
a Right was exercisable immediately prior to such first occurrence; (ii) on and
after the Distribution Date, 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 Purchase Price in accordance with the terms of this
Agreement, in lieu of shares of Preferred Stock or Common Stock of the Company,
such number of validly authorized and issued, fully paid, nonassessable and
freely tradeable 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
dividing the Purchase Price by 50% of the Current Market Price per share of the
Common Stock of such Principal Party on the date of consummation of such
Flip-Over Event; provided that the Purchase Price and the number of shares of
Common Stock of such Principal Party issuable upon exercise of each Right shall
be further adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence of a Triggering Event or after
the date of such Flip-Over Event, as applicable; (iii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iv) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Flip- Over Event; (v) 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 (vi) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the occurrence of
any Flip-Over Event.

                  (b) "Principal Party" shall mean

                  (i) in the case of any transaction described in clause (x) or
         (y) of the first sentence of Section 13(a), (A) the Person that is the
         issuer of any securities into which shares of Common Stock of the
         Company are converted in such merger, consolidation, conversion or
         share exchange, or, if there is more than one such issuer, the issuer
         the Common Stock of which has the greatest aggregate market value, or
         (B) if no securities are so issued, (x) the Person that survives such
         consolidation or is the other party to the merger and survives such
         merger, or, if there is more than one such Person, the Person the
         Common Stock of which has the greatest aggregate market value or (y) if
         the Person that is the other party to the merger does not survive the
         merger, the Person that does survive the merger (including the Company
         if it survives); and

                  (ii) in the case of any transaction described in clause (z) of
         the first sentence of Section 13(a), the Person that is the party
         receiving the greatest portion of the assets or earning power
         transferred pursuant to such transaction or transactions, or, if each
         Person that is a party to such transaction or transactions receives the
         same portion of the assets or earning power so transferred, or if the
         Person receiving the greatest portion of the assets or earning power
         cannot be determined, the Person the Common Stock of which has the
         greatest aggregate market value;

                                      -24-

<PAGE>

provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act, and if (1) 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; (2) such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all 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; and (3) such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.

                  (c) The Company shall not consummate any Flip-Over Event
unless each Principal Party (or Person that may become a Principal Party as a
result of such Flip-Over Event) shall have a sufficient number of authorized
shares of its Common Stock that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and each 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 such Flip-Over Event,
the Principal Party at its own expense 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;

                  (ii) use its best efforts to qualify or register the Rights
         and the securities purchasable upon exercise of the Rights under the
         "blue sky" laws of such jurisdictions as may be necessary or
         appropriate;

                  (iii) use its best efforts, if the Common Stock of the
         Principal Party is or shall become listed on a national securities
         exchange, to list (or continue the listing of) the Rights and the
         securities purchasable upon exercise of the Rights on such securities
         exchange and, if the Common Stock of the Principal Party shall not be
         listed on a national securities exchange, to cause the Rights and the
         securities purchasable upon exercise of the Rights to be reported by
         NASDAQ or such other transaction reporting system then in use; and

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

                                      -25-

<PAGE>

The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
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 (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Permitted 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 Common Stock whose shares were purchased pursuant to such Permitted
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 Permitted 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 or scrip evidencing fractional
Rights. 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
Closing Price of one Right for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.

                  (b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than, except as provided in Section 7(c)
hereof, fractions that are integral multiples of a Fractional Share of Preferred
Stock) upon exercise of the Rights or to distribute certificates or scrip
evidencing fractional shares of Preferred Stock (other than, except as provided
in Section 7(c) hereof, fractions that are integral multiples of a Fractional
Share of Preferred Stock). Interests in fractions of shares of Preferred Stock
in integral multiples of a Fractional Share of Preferred Stock may, at the
election of the Company in its sole discretion, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of a Fractional 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 one one-thousandth of the Closing Price of
a share of Preferred Stock 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 or scrip evidencing
fractional shares of Common Stock. In lieu of fractional shares of

                                      -26-

<PAGE>

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 Closing Price of one share of Common
Stock for the Trading Day immediately prior to the date of such exercise.

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

                  Section 15. Rights of Action. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock) and, where applicable, the Company; 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 own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such 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.
After a Triggering Event, holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred by them in
any action to enforce the provisions of 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 not be
evidenced by Rights Certificates and will be transferable only in connection
with the transfer of Common Stock;

                  (b) after the Distribution Date, the Rights Certificates will
be 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 form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and fully executed;

                  (c) subject to Section 6(a) and Section 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

                                      -27-

<PAGE>

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
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 Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
Fractional Shares of Preferred Stock or any other securities of the Company that
may at any time be issuable upon 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 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 counsel fees and
disbursements and other reasonable disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.

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

                                      -28-

<PAGE>

                  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 stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any 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. In case 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 in case 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) In case 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 in
case 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 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 Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

                                      -29-

<PAGE>

                  (c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct. In no event shall the Rights
Agent be liable for special, indirect or consequential 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 and regardless
of the form of action.

                  (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 adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of actual knowledge of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or Common Stock or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or Common Stock or other securities will, when so issued, be
validly authorized and issued, fully paid and nonassessable.

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

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

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

                                      -30-

<PAGE>

                  (i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, omission, default, neglect or misconduct; provided, however, that
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 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

                  Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the registered holders, if any, of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent (with or without cause) 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 the Preferred Stock, by registered
or certified mail, and to the registered holders of the Rights Certificates, if
any, 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. Notwithstanding the foregoing provisions of this
Section 21, in no event shall the resignation or removal of a Rights Agent be
effective until a successor Rights Agent shall have been appointed and have
accepted such appointment. 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 registered holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the Rights Agent or the 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 (a) a corporation or limited liability
company organized and doing business under the laws of the United States or of
the State of New York (or of any other state of the United States so long as
such corporation is authorized to conduct a stock transfer or corporate trust
business in the State of New York), in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the

                                      -31-

<PAGE>

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, if any, 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 Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement granted
or awarded on or prior to the Distribution Date, or upon the exercise,
conversion or exchange of securities issued by the Company on or prior to the
Distribution Date, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, 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,
by action of a majority of the whole Board of Directors at any time prior to the
earlier of (i) the close of business on the tenth day following the first date
of public announcement of the occurrence of a Flip-In Event (or, if such date
shall have occurred prior to the Record Date, the close of business on the tenth
day following the Record Date) and (ii) the Expiration Date, cause the Company
to redeem all but not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be appropriately adjusted, if
necessary, to reflect any stock split, stock dividend or similar transaction
occurring after the Rights Dividend Declaration Date (such redemption price
being hereinafter referred to as the "Redemption Price"); provided, however,
that if there is an Acquiring Person the Rights may not be redeemed (i) if from
and after the time a Person became an Acquiring Person, an Acquiring Person has
caused the composition of the Board of Directors to be changed with the result
that a majority of its members are representatives, nominees, designees,
Affiliates or Associates of an Acquiring Person (including the Acquiring Person
as a designee of the Acquiring Person, or (ii)

                                      -32-

<PAGE>

following any merger to which the Company is a party that was not approved (x)
prior to the time such Person became an Acquiring Person, by the Board of
Directors of the Company and (y) prior to such merger, by the shareholders of
the Company at a shareholders' meeting. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Flip-In 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 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 effectiveness of the action of the
Board of Directors of the Company ordering the redemption of the Rights (the
effectiveness of which action may be conditioned on the occurrence of one or
more events or on the existence of one or more facts or may be effective at some
future time), evidence of which shall be 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
effectiveness of 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 registered holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Company for the Common Stock. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.

                  Section 24. Exchange.

                  (a) The Board of Directors of the Company, at any time that
the Rights are redeemable, may, at its option, at any time and from time to time
after the occurrence of a Flip-In Event, 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 or Common Stock Equivalents or any combination thereof, at an
exchange ratio of one share of Common Stock, or such number of Common Stock
Equivalents or units representing fractions thereof as would be deemed to have
the same value as one share of Common Stock, per Right, appropriately adjusted,
if necessary, to reflect any stock split, stock dividend or similar transaction
occurring after the Rights Dividend Declaration Date (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors may not effect such exchange at any time after (i) any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding or (ii) the occurrence of a Flip-Over
Event.

                  (b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to and in accordance with subsection (a) of this Section 24 (the effectiveness
of which action may be conditioned on the occurrence of one or more events or on
the existence of one or more facts or may be effective at some future time) and

                                      -33-

<PAGE>

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 and/or Common Stock
Equivalents 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 registered holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock and/or Common Stock Equivalents for Rights will be effected and, in the
event of any partial exchange, the number of Rights that will be exchanged. Any
partial exchange shall be effected as nearly pro rata as possible based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.

                  (c) In the event that the number of shares of Common Stock
that are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company may, at its option, take all such
action as may be necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights.

                  (d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates or scrip evidencing
fractional shares of Common Stock upon exchange of the Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered
holders of Rights with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
value of a whole share of Common Stock. For purposes of this Section 24, the
value of a whole share of Common Stock shall be the Closing Price per share of
Common Stock for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24, and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Stock on such date.

                  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,
conversion or merger into or with any other Person (other than a wholly owned
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), or to effect any sale, lease or other transfer of all or substantially
all the Company's assets, cash flow or earning power to any other Person or
Persons (other than a wholly

                                      -34-

<PAGE>

owned Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to be acquired pursuant to a share exchange, then, in each
such case, the Company shall give to each holder of record 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, lease, 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. The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.

                  (b) In case any Flip-In Event or Flip-Over Event shall occur,
then (i) the Company shall as soon as practicable thereafter give to each
registered holder of a Rights Certificate (or if occurring prior to the
Distribution Date, the registered holders of Common Stock), 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) or Section 13(a) 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:

                  EGL, Inc.
                  15350 Vickery Drive
                  Houston, Texas 77032
                  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:

                  Computershare Investor Services, L.L.C.
                  12039 West Alameda Pkwy., Suite Z-2
                  Lakewood, Colorado  80228
                  Attention: Reorg Department

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

                                      -35-

<PAGE>

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
the address of such holder as shown on the registry books of the Company.

                  Section 27. Supplements and Amendments. Except as provided in
the last sentence of this Section 27, at any time when the Rights are then
redeemable, the Company may in its sole and absolute discretion and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of Rights or
holders of Common Stock. At any time when the Rights are not redeemable, except
as provided in the last sentence of this Section 27, the Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable; provided that no such amendment or supplement shall materially
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); and further
provided that this Agreement may not be supplemented or amended pursuant to this
sentence to lengthen (A) a time period relating to when the Rights may be
redeemed or (B) any other time period unless the lengthening of such other time
period is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than any Acquiring Person
and its Affiliates and Associates). 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; provided, however, that the Rights
Agent may, but shall not be obligated to, enter into any such supplement or
amendment that affects the Rights Agent's own rights, duties or immunities under
this Agreement. Action by the Company to approve any amendment or supplement to
this Agreement must be approved by the majority of the whole Board of Directors.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that decreases the Redemption Price.

                  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)(1)(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 (or, as set forth herein,
certain specified members thereof) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for

                                      -36-

<PAGE>

the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) 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 such 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, then, unless there is an Acquiring Person and there
has occurred either a change in composition of the Board of Directors or a
merger in either case of the type referred to in the proviso to the first
sentence of Section 23(a), 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 day following the date of such determination by the Board of Directors
of the Company or, if earlier, immediately prior to any such change in
composition or merger. Without limiting the foregoing, if any provision
requiring that a determination be made by less than the entire Board of
Directors of the Company is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then be
made by the entire Board of Directors of the Company.

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

                  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.

                                      -37-

<PAGE>

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

                                   EGL, INC.

                                   By:    /s/Elijio Serrano
                                          -------------------------------------
                                   Name:  Elijio Serrano
                                   Title: Chief Financial Officer

                                   COMPUTERSHARE INVESTOR SERVICES, L.L.C.

                                   By:    /s/Kellie Gwinn
                                          -------------------------------------
                                   Name:  Kellie Gwinn
                                   Title: Vice President

                                   By:    /s/Deborah Sorheim
                                          -------------------------------------
                                   Name:  Deborah Sorheim
                                   Title: Secretary/Treasurer

                                      -38-

<PAGE>

                                                                       Exhibit A

                                     FORM OF
              STATEMENT OF RESOLUTION ESTABLISHING SERIES OF SHARES

                                   designated

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                    EGL, INC.

         Pursuant to Article 2.13D of the Texas Business Corporation Act

                  Pursuant to the provisions of Article 2.13D of the Texas
Business Corporation Act, the undersigned corporation submits the following
statement for the purpose of establishing and designating a series of shares of
Preferred Stock, par value $0.01 per share, designated as "Series A Junior
Participating Preferred Stock" and fixing and determining the relative rights
and preferences thereof:

                  1. The name of the corporation is EGL, Inc. (the
"Corporation").

                  2. The following resolution, establishing and designating a
series of shares and fixing and determining the relative rights and preferences
thereof, was duly adopted by all necessary action on the part of the
Corporation, consisting of due adoption by the Board of Directors of the
Corporation at a meeting duly held on May 23, 2001;

                  RESOLVED, that pursuant to the authority vested in the Board
         of Directors of this Corporation in accordance with the provisions of
         the Restated Articles of Incorporation, a series of Preferred Stock,
         par value $.001 per share, of the Corporation be and hereby is created,
         and that the designation and number of shares thereof and the
         preferences, limitations and relative rights, including voting and
         rights of the shares of such series and the qualifications, limitations
         and restrictions thereof are as follows:

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                  1. Designation and Amount. There shall be a series of
Preferred Stock that shall be designated as "Series A Junior Participating
Preferred Stock," and the number of shares constituting such series shall be
200,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, however, that no decrease shall reduce the
number of shares of Series A Junior Participating Preferred Stock to less than
the number of shares then issued and outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.

                                       A-1

<PAGE>

                  2. Dividends and Distributions.

                  (A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of any class or series of stock of
the Corporation ranking junior to the Series A Junior Participating Preferred
Stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 15th day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $20 or (b) subject to the provision for adjustment
hereinafter set forth, the Adjustment Number (as defined below) times the
aggregate per share amount of all cash dividends, and the Adjustment Number
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $.001 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. The "Adjustment Number" shall initially be
1000. In the event the Corporation shall at any time after May 23, 2001 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

                  (B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $20 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

                  (C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for

                                       A-2

<PAGE>

the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.

                  3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:

                  (A) Each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to the
Adjustment Number on all matters submitted to a vote of the shareholders of the
Corporation.

                  (B) Except as otherwise provided herein, in the Restated
Articles of Incorporation or by law, the holders of shares of Series A Junior
Participating Preferred Stock, the holders of shares of any other class or
series entitled to vote with the Common Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of shareholders of the Corporation.

                  (C)(i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") that shall extend until
such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, (1) the
number of Directors shall be increased by two, effective as of the time of
election of such Directors as herein provided, and (2) the holders of Preferred
Stock (including holders of the Series A Junior Participating Preferred Stock)
upon which these or like voting rights have been conferred and are exercisable
(the "Voting Preferred Stock") with dividends in arrears in an amount equal to
six quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect such two Directors.

                  (ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of shareholders, and thereafter at annual
meetings of shareholders, provided that such voting right shall not be exercised
unless the holders of at least one-third in number of the shares of Voting
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Voting Preferred Stock of such voting right. At any meeting at which
the holders of Voting Preferred Stock shall exercise such voting right initially
during an

                                       A-3

<PAGE>

existing default period, they shall have the right, voting as a class, to elect
Directors to fill such vacancies, if any, in the Board of Directors as may then
exist up to two Directors or, if such right is exercised at an annual meeting,
to elect two Directors. If the number that may be so elected at any special
meeting does not amount to the required number, the holders of the Voting
Preferred Stock shall, to the extent not inconsistent with the Restated Articles
of Incorporation, have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of the required
number. After the holders of the Voting Preferred Stock shall have exercised
their right to elect Directors in any default period and during the continuance
of such period, the number of Directors shall not be increased or decreased
except by vote of the holders of Voting Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or pari passu
with the Series A Junior Participating Preferred Stock.

                  (iii) Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent of the total
number of shares of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of Voting Preferred
Stock, which meeting shall thereupon be called by the Chairman of the Board, the
President, a Vice President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Voting Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Voting Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or, in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the aggregate not
less than ten percent of the total number of shares of Voting Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the shareholders.

                  (iv) In any default period, after the holders of Voting
Preferred Stock shall have exercised their right to elect Directors voting as a
class, (x) the Directors so elected by the holders of Voting Preferred Stock
shall continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in
the Board of Directors may (except as provided in paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class or classes of stock which
elected the Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular class or
classes of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.

                  (v) Immediately upon the expiration of a default period, (x)
the right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Restated Articles of Incorporation
or By-Laws irrespective of any increase made pursuant to the provisions of
paragraph (C) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the

                                       A-4

<PAGE>

Restated Articles of Incorporation or By-Laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.

                  (D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.

                  4. Certain Restrictions.

                  (A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not

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

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

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

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

                                       A-5

<PAGE>

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

                  6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $1000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Junior Participating Preferred Stock Liquidation
Preference"). Following the payment of the full amount of the Series A Junior
Participating Preferred Stock Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Junior Participating
Preferred Stock Liquidation Preference by (ii) the Adjustment Number. Following
the payment of the full amount of the Series A Junior Participating Preferred
Stock Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall, subject to the prior rights of all
other series of Preferred Stock, if any, ranking prior thereto, receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Series A Junior
Participating Preferred Stock and Common Stock, on a per share basis,
respectively.

                  (B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Junior Participating
Preferred Stock Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, that rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.

                  (C) Neither the merger or consolidation of the Corporation
into or with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
6, but the sale, lease or conveyance of all or substantially all the
Corporation's assets shall be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this Section 6.

                  7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination, share exchange or other
transaction in which the shares of

                                       A-6

<PAGE>

Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A Junior
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged.

                  8. Redemption. (A) The Corporation, at its option, may redeem
shares of the Series A Junior Participating Preferred Stock in whole at any time
and in part from time to time, at a redemption price equal to the Adjustment
Number times the current per share market price (as such term is hereinafter
defined) of the Common Stock on the date of the mailing of the notice of
redemption, together with unpaid accumulated dividends to the date of such
redemption. The "current per share market price" on any date shall be deemed to
be the average of the closing price per share of such Common Stock for the ten
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per share
market price of the Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on the Common Stock other than a
regular quarterly cash dividend 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 such ten
Trading Day period, then, and in each such case, the current per share market
price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sales 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
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange but sales price information is reported for such security,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other self-regulatory organization or
registered securities information processor (as such terms are used under the
Securities Exchange Act of 1934, as amended) that then reports information
concerning the Common Stock, or, if sales price information is not so reported,
the average of the high bid and low asked prices in the over-the- counter market
on such day, as reported by NASDAQ or such other entity, or, if on any such date
the Common Stock is not quoted by any such entity, 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 Corporation. If on
any such date no such market maker is making a market in the Common Stock, the
fair value of the Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange but is quoted by NASDAQ, a day on which NASDAQ
reports trades, or, if the Common Stock is not so quoted, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close.

                                       A-7

<PAGE>

                  (B) In the event that fewer than all the outstanding shares of
the Series A Junior Participating Preferred Stock are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method that may be
determined by the Board of Directors in its sole discretion to be equitable.

                  (C) Notice of any such redemption shall be given by mailing to
the holders of the shares of Series A Junior Participating Preferred Stock to be
redeemed a notice of such redemption, first class postage prepaid, not later
than the fifteenth day and not earlier than the sixtieth day before the date
fixed for redemption, at their last address as the same shall appear upon the
books of the Corporation. Each such notice shall state: (i) the redemption date;
(ii) the number of shares to be redeemed and, if fewer than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on the close of business on such redemption date. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the shareholder received such notice, and failure duly to
give such notice by mail, or any defect in such notice, to any holder of Series
A Junior Participating Preferred Stock shall not affect the validity of the
proceedings for the redemption of any other shares of Series A Junior
Participating Preferred Stock that are to be redeemed. On or after the date
fixed for redemption as stated in such notice, each holder of the shares called
for redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If fewer than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.

                  (D) The shares of Series A Junior Participating Preferred
Stock shall not be subject to the operation of any purchase, retirement or
sinking fund.

                  9. Ranking. The Series A Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters.

                  10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Articles of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.

                  11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.

                                       A-8

<PAGE>

                  IN WITNESS WHEREOF, EGL, Inc. has caused this Statement to be
executed on its behalf by the undersigned officer on _______, 2001.

                                     EGL, INC.

                                     ----------------------------------
                                     Vice President

                                       A-9

<PAGE>

                                                                     Exhibit B

                          [Form of Rights Certificate]

Certificate No. R-                                             ________ Rights

NOT EXERCISABLE AFTER JUNE 4, 2011 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.

                               RIGHTS CERTIFICATE

                                    EGL, INC.

                  This certifies that _____________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of May 23, 2001 as it may from time
to time be supplemented or amended (the "Rights Agreement"), between EGL, Inc.,
a Delaware corporation (the "Company"), and Computershare Investor Services,
L.L.C., a national banking association (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 p.m. (New York time) on June 4, 2011 at
the principal office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-thousandth of a fully paid,
nonassessable share (a "Fractional Share") of Series A Junior Participating
Preferred Stock, par value $.001 per share (the "Preferred Stock"), of the
Company, at a purchase price of $120 per one one- thousandth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate set forth on the
reverse hereof duly executed. The Purchase Price may be paid in cash or by
certified check, cashier's or official bank check or bank draft payable to the
order of the Company or the Rights Agent. The number of Rights evidenced by this
Rights Certificate (and the number of shares that may be purchased upon exercise
thereof) set forth above, and the Purchase Price per Fractional Share set forth
above, are the number and Purchase Price as of May 23, 2001, based on the
Preferred Stock as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such term is defined
in the Rights Agreement) that a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.

                                       B-1

<PAGE>

                  From and after the first occurrence of a Triggering Event (as
such term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by or transferred to (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who, concurrently with or
after such transfer, became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person, such Rights shall, with certain exceptions, become null and
void in the circumstances set forth in the Rights Agreement, and no holder
hereof shall have any rights whatsoever with respect to such Rights from and
after the occurrence of such Triggering Event.

                  As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities or assets
that may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.

                  This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Company or the Rights Agent.

                  This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of Fractional Shares of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.01 per Right, payable, at the election of the
Company, in cash or shares of Common Stock or such other consideration as the
Board of Directors may determine, at any time prior to the earlier of the close
of business on (a) the tenth day following the first public announcement of the
occurrence of a Flip-In Event (as such time period may be extended or shortened
pursuant to the Rights Agreement) and (b) the Expiration Date (as such term is
defined in the Rights Agreement) or (ii) may be exchanged in whole or in part
for shares of Common Stock and/or other equity securities of the Company deemed
to have the same value as shares of Common Stock, at any time prior to a
person's becoming the beneficial owner of 50% or more of the shares of Common
Stock outstanding or the occurrence of a Flip-Over Event.

                                       B-2

<PAGE>

                  No fractional shares of Preferred Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby (other than,
except as set forth above, fractions that are integral multiples of a Fractional
Share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment may be
made, as provided in the Rights Agreement.

                  No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
shares of Preferred Stock or of any other securities of the Company that may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a 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 the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.

                  This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.

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

Dated as of June 4, 2001

ATTEST:                                              EGL, INC.

                                            By
--------------------------------              --------------------------------
Secretary                                     Title:

Countersigned:

COMPUTERSHARE INVESTOR SERVICES, L.L.C.

By
  ------------------------------
  Authorized Signature

                                       B-3

<PAGE>

                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

         (To be executed by the registered holder if such holder desires
          to transfer any Rights evidenced by the Rights Certificate.)

FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
______________________________________________________________________________

                  (Please print name and address of transferee)

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

Dated:                  , 200
       -----------------     --

                                             ---------------------------------
                                             Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                       B-4

<PAGE>

                                   CERTIFICATE

                  The undersigned hereby certifies by checking the appropriate
boxes that:

                  (1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);

                  (2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or who is a direct or
indirect transferee of an Acquiring Person or of an Affiliate or Associate of an
Acquiring Person.

Dated:              , 200
       -------------     --

                                           ------------------------------------
                                           Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                     NOTICE

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

                                       B-5

<PAGE>

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise
                 Rights represented by the Rights Certificate.)

To:      EGL, INC.

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

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

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

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

Dated:             , 200
       ------------     ---

                                             ---------------------------------
                                             Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                       B-6

<PAGE>

                                   CERTIFICATE

                  The undersigned hereby certifies by checking the appropriate
boxes that:

                  (1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);

                  (2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or who is a direct or indirect
transferee of an Acquiring Person or of an Affiliate or Associate of an
Acquiring Person.

Dated:             , 200
       ------------     ---

                                             ---------------------------------
                                             Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                     NOTICE

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

                                       B-7

<PAGE>

                                                                     Exhibit C

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

                                SUMMARY OF RIGHTS

                  On May 23, 2001, the Board of Directors of EGL, Inc. (the
"Company") declared a dividend of one right ("Right") for each outstanding share
of the Company's Common Stock, par value $.001 per share ("Common Stock"), to
shareholders of record at the close of business on June 4, 2001. Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one one-thousandth of a share (a "Fractional Share") of Series A Junior
Participating Preferred Stock,par value $.001 per share (the "Preferred Stock"),
at a purchase price of $120 per Fractional Share, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set forth in a
Rights Agreement dated as of May 23, 2001 as it may from time to time be
supplemented or amended (the "Rights Agreement") between the Company and
Computershare Investor Services, L.L.C., as Rights Agent.

                  Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate certificates
for the Rights ("Rights Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date" will occur, with
certain exceptions, upon the earlier of (i) ten days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the date of
the announcement being the "Stock Acquisition Date"), or (ii) ten business days
following the commencement of a tender offer or exchange offer that would result
in a person's becoming an Acquiring Person. James R. Crane will not become an
Acquiring Person, unless and until he and his affiliates and associates become
the beneficial owner of 49% or more of the Common Stock. In certain
circumstances, the Distribution Date may be deferred by the Board of Directors.
Certain inadvertent acquisitions will not result in a person's becoming an
Acquiring Person if the person promptly divests itself of sufficient Common
Stock. If at the time of the adoption of the Rights Agreement, any person or
group of affiliated or associated persons is the beneficial owner of a number of
shares that would otherwise cause such person or group to be an Acquiring
Person, such person shall not become an Acquiring Person unless and until
certain increases in such person's beneficial ownership occur or are deemed to
occur. Until the Distribution Date, (a) the Rights will be evidenced by the
Common Stock certificates (together with a copy of this Summary of Rights or
bearing the notation referred to below) and will be transferred with and only
with such Common Stock certificates, (b) new Common Stock certificates issued
after June 4, 2001 will contain a notation incorporating the Rights Agreement by
reference and (c) the surrender for transfer of any certificate for Common Stock
(with or without a copy of this Summary of Rights) will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.

                  The Rights are not exercisable until the Distribution Date and
will expire at the close of business on June 4, 2011, unless earlier redeemed or
exchanged by the Company as described below.

                                       C-1

<PAGE>

                  As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of the close
of business on the Distribution Date and, from and after the Distribution Date,
the separate Rights Certificates alone will represent the Rights. All shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date in connection with
certain employee benefit plans or upon conversion of certain securities will be
issued with Rights. Except as otherwise determined by the Board of Directors, no
other shares of Common Stock issued after the Distribution Date will be issued
with Rights.

                  In the event (a "Flip-In Event") that a person becomes an
Acquiring Person (except pursuant to a tender or exchange offer for all
outstanding shares of Common Stock at a price and on terms that a majority of
the independent directors of the Company determines, at the times the Rights are
redeemable, to be fair to and otherwise in the best interests of the Company and
its shareholders (a "Permitted Offer")), each holder of a Right will thereafter
have the right to receive, upon exercise of such Right, a number of shares of
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a Current Market Price (as defined in the Rights
Agreement) equal to two times the exercise price of the Right. Notwithstanding
the foregoing, following the occurrence of any Triggering Event, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by or transferred to an Acquiring Person (or by certain
related parties) will be null and void in the circumstances set forth in the
Rights Agreement. However, Rights are not exercisable following the occurrence
of any Flip-In Event until such time as the Rights are no longer redeemable by
the Company as set forth below.

                  In the event (a "Flip-Over Event") that, at any time from and
after the time an Acquiring Person becomes such, (i) the Company is acquired in
a merger or other business combination transaction (other than certain mergers
that follow a Permitted Offer), or (ii) 50% or more of the Company's assets,
cash flow or earning power is sold or transferred, each holder of a Right
(except Rights that are voided as set forth above) shall thereafter have the
right to receive, upon exercise, a number of shares of common stock of the
acquiring company having a Current Market Price equal to two times the exercise
price of the Right. Flip-In Events and Flip-Over Events are collectively
referred to as "Triggering Events."

                  The number of outstanding Rights associated with a share of
Common Stock, or the number of Fractional Shares of Preferred Stock issuable
upon exercise of a Right and the Purchase Price, are subject to adjustment in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock occurring prior to the Distribution Date.
The Purchase Price payable, and the number of Fractional Shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution in the event of
certain transactions affecting the Preferred Stock.

                  With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares of Preferred Stock that are not integral
multiples of a Fractional Share are required to be issued upon exercise of
Rights and, in lieu thereof, an adjustment in cash may be made based on the
market price

                                       C-2

<PAGE>

of the Preferred Stock on the last trading date prior to the date of exercise.
Pursuant to the Rights Agreement, 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
will be issued.

                  At any time until ten days following the first date of public
announcement of the occurrence of a Flip-In Event, the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right, payable, at the
option of the Company, in cash, shares of Common Stock or such other
consideration as the Board of Directors may determine. After a person becomes an
Acquiring Person, the right of redemption is subject to certain limitations in
the Rights Agreement. Immediately upon the effectiveness of the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $0.01
redemption price. The Rights Plan does not prevent a shareholder from conducting
a proxy contest to remove and replace the Board with directors who then vote to
redeem the Rights, if such actions are taken prior to the time that such
shareholder becomes an Acquiring Person.

                  At any time after the occurrence of a Flip-In Event and prior
to a person's becoming the beneficial owner of 50% or more of the shares of
Common Stock then outstanding or the occurrence of a Flip-Over Event, the
Company (if the Rights are then redeemable) may exchange the Rights (other than
Rights owned by an Acquiring Person or an affiliate or an associate of an
Acquiring Person, which will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, and/or other equity securities
deemed to have the same value as one share of Common Stock, per Right, subject
to adjustment.

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

                  Other than the redemption price, any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the Company as long
as the Rights are redeemable. Thereafter, the provisions of the Rights Agreement
other than the redemption price may be amended by the Board of Directors in
order to cure any ambiguity, defect or inconsistency, to make changes that do
not materially adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, that no amendment to
lengthen the time period governing redemption shall be made at such time as the
Rights are not redeemable.

                  A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a Form 8-K. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.

                                       C-3

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