Document:

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                                                                     EXHIBIT 4.5

                              OFFICER'S CERTIFICATE
                     (UNDER SECTION 301 OF THE INDENTURE OF
                             PPL ENERGY SUPPLY, LLC

            The undersigned ______________, ____________ of PPL ENERGY SUPPLY,
LLC (the "Company"), in accordance with Section 301 of the Indenture, dated as
of October 1, 2001, as heretofore supplemented (the "Indenture", capitalized
terms used herein and not defined herein having the meanings specified in the
Indenture), of the Company to JPMorgan Chase Bank, N.A. (formerly known as The
Chase Manhattan Bank), as Trustee (the "Trustee"), does hereby establish for the
series of Securities established in Supplemental Indenture No. [3], dated as of
________________ (the "Supplemental Indenture"), the following terms and
characteristics (the lettered clauses set forth below corresponding to the
lettered clauses of Section 301 of the Indenture):

               (a) the title of the Securities of such series shall be "Senior
            Notes, ___% Series due ___" (the "Notes");

               (b) the aggregate principal amount of Notes which may be
            authenticated and delivered under the Indenture shall be limited to
            $___________, except as contemplated in Section 301(b) and the last
            paragraph of Section 301 of the Indenture;

               (c) interest on the Notes shall be payable as provided in the
            form of Note attached hereto and hereby authorized and approved;

               (d) the date or dates on which the principal of the Notes shall
            be payable shall be as provided in the form of Note attached hereto
            and hereby authorized and approved; [the Company shall not have the
            right to extend the Maturity of the Notes, as contemplated by
            Section 301(d) of the Indenture;]

               (e) the Notes shall bear interest as provided in the form of Note
            attached hereto and hereby authorized and approved, and the Interest
            Payment Dates and Regular Record Dates shall be such dates as are
            specified in such form; [the Company shall not have the right to
            extend any interest payment periods for the Notes, as contemplated
            by Sections 301(e) and 312 of the Indenture];

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               (f) the Corporate Trust Office of the Trustee in New York, New
            York shall be the office or agency of the Company at which the
            principal of and any premium and interest, on the Notes shall be
            payable, at which registration of transfer and exchange of Notes may
            be effected and at which notices and demands to or upon the Company
            in respect of the Notes and the Indenture may be served; provided,
            however, that the Company reserves the right to change, by one or
            more Officer's Certificates supplemental to this Officer's
            Certificate, any such office or agency; and provided, further, that
            the Company reserves the right to designate, by one or more
            Officer's Certificates supplemental to this Officer's Certificate,
            its principal office in Allentown, Pennsylvania, as any such office
            or agency; the Trustee shall be the Security Registrar and Paying
            Agent for the Notes; provided, that the Company reserves the right,
            by one or more Officer's Certificates supplemental to this Officer's
            Certificate, to designate a different Security Registrar or a
            different or an additional Paying Agent (which in each case, may be
            the Company or any Affiliate of the Company) and to remove any
            Security Registrar or Paying Agent;

               (g) the Notes shall be redeemable, in whole or in part, at the
            option of the Company as and to the extent provided in the form of
            Note attached hereto and hereby authorized and approved;

               (h) [not applicable];

               (i) the Notes shall be issued in denominations of $1,000 or any
            amount in excess thereof that is an integral multiple of $1,000,
            unless otherwise authorized by the Company;

               (j) [not applicable];

               (k) [not applicable];

               (l) [not applicable];

               (m) [not applicable]; [see clause (e) with respect to the
            interest rate or rates on the Notes;]

               (n) [not applicable];

               (o) reference is hereby made to the provisions of Supplemental
            Indenture No. [3] for an Event of Default in addition to those
            specified in Section 801 of the Indenture, and for certain covenants
            of the Company for the benefit of the Holders of the Notes;

               (p) [not applicable];

               (q) the only obligations or instruments which shall be considered
            Eligible Obligations in respect of the Notes shall be Government
            Obligations; and the provisions of Section 701 of the Indenture and
            Section 2 of Article One of the Supplemental Indenture shall apply
            to the Notes;

                                       2

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               (r) [the Notes may be issued in global form (the "Global Notes")
            and the depository for the Global Notes shall initially be The
            Depository Trust Company ("DTC"); provided, that the Company
            reserves the right to provide for another depository, registered as
            a clearing agency under the Exchange Act, to act as depository for
            the Global Notes (DTC and any such successor depository, the
            "Depositary"); beneficial interests in Notes issued in global form
            may not be exchanged in whole or in part for individual certificated
            Notes in definitive form, and no transfer of a Global Note in whole
            or in part may be registered in the name of any Person other than
            the Depositary or its nominee except that if the Depositary (A) has
            notified the Company that it is unwilling or unable to continue as
            depository for the Global Notes or (B) has ceased to be a clearing
            agency registered under the Exchange Act and, in either case, a
            successor depository is not appointed by the Company within 90 days
            after such notice or cessation, the Company will execute, and the
            Trustee, upon receipt of a Company Order for the authentication and
            delivery of definitive Notes, will authenticate and deliver Notes in
            definitive certificated form in an aggregate principal amount equal
            to the principal amount of the Global Note representing such Notes
            in exchange for such Global Note, such definitive Notes to be
            registered in the names provided by the Depositary; each Global Note
            (i) shall represent and shall be denominated in an amount equal to
            the aggregate principal amount of the outstanding Notes to be
            represented by such Global Note, (ii) shall be registered in the
            name of the Depositary or its nominee, (iii) shall be delivered by
            the Trustee to the Depositary, its nominee, any custodian for the
            Depositary or otherwise pursuant to the Depositary's instruction and
            (iv) shall bear a legend restricting the transfer of such Global
            Note to any person other than the Depositary or its nominee; none of
            the Company, the Trustee, any Paying Agent or any Authenticating
            Agent will have any responsibility or liability for any aspect of
            the records relating to, or payments made on account of, beneficial
            ownership interests in a Global Note or for maintaining, supervising
            or reviewing any records relating to such beneficial ownership
            interests];

               (s) [not applicable];

               (t) reference is made to clause (r) above; no service charge
            shall be made for the registration of transfer or exchange of Notes;
            provided, however, that the Company may require payment of a sum
            sufficient to cover any tax or other governmental charge payable in
            connection with the exchange or transfer;

               (u) [not applicable];

               (v) except as otherwise determined by the proper officers of the
            Company and communicated to the Trustee in a Company Order or as
            established in one or more Officers' Certificates supplemental to
            this Officers' Certificate, the Notes shall be substantially in the
            form of Note attached hereto and hereby authorized and approved and
            shall have such further terms as are set forth in such form; and

               (w) [other provisions, if any].

                                       3

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            IN WITNESS WHEREOF, I have hereunto signed my name this day of
______________.

                                            PPL ENERGY SUPPLY, LLC

                                            ____________________________________
                                            Name:
                                            Title:

                                       4

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                                                                  [FORM OF NOTE]

            UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
TO BE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

                                  ------------
                             PPL ENERGY SUPPLY, LLC
                        SENIOR NOTE, [___]% SERIES [___]

Original Issue Date:          [Redeemable: Yes__ No__]

Stated Maturity:              [Initial Redemption Date:]

Interest Rate:                [ Initial Redemption Price:]

Interest Payment Dates:       [Annual Redemption Percentage Reduction: %]

First Interest Payment Date:  [Repayable at Option of the Holder: Yes__ No__]

Regular Record Dates:         [Optional Repayment Date(s):]

Issue Price (_%):             [Repayment Price: %]
                              Other/Additional Provisions:

                 This Security is not a Discount Security within
                  the meaning of the within-mentioned Indenture
                      -------------------------------------

Principal Amount                                                  No. [   ]
$[     ]                                                          CUSIP [      ]

      PPL ENERGY SUPPLY, LLC, a limited liability company duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor under the Indenture referred to below), for
value received, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] ($[ ]) on the Stated Maturity specified above, and to pay
interest thereon from the Original Issue Date specified above or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, [semi-annually] in arrears on the Interest Payment Dates specified above in
each year, commencing [ ], and at Maturity, at the Interest Rate per annum
specified above, until the principal hereof is paid or duly provided for. The
interest so payable, and paid or duly provided for, on any Interest Payment Date
shall, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or

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more Predecessor Securities) is registered at the close of business on the
Regular Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date. Notwithstanding the foregoing, interest
payable at Maturity shall be paid to the Person to whom principal shall be paid.
Except as otherwise provided in said Indenture, any such interest not so paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice of which shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture. Interest on this Security shall be
computed on the basis of a 360-day year consisting of twelve 30-day months, and
with respect to any period less than a full calendar month, on the basis of
actual days elapsed during such period.

      [Insert provisions, if any, relating to alternative interest rate
formula.]

      Payment of the principal of and premium, if any, on this Security and
interest hereon at Maturity shall be made upon presentation of this Security at
the corporate trust office of JPMorgan Chase Bank, N.A. in New York, New York or
at such other office or agency as may be designated for such purpose by the
Company from time to time. Payment of interest, if any, on this Security (other
than interest at Maturity) shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register,
except that (a) if such Person shall be a securities depositary, such payment
may be made by such other means in lieu of check as shall be agreed upon by the
Company, the Trustee or other Paying Agent and such Person and (b) if such
Person is a Holder of $10,000,000 or more in aggregate principal amount of
Securities of this series such payment may be in immediately available funds by
wire transfer to such account as may have been designated in writing by the
Person entitled thereto as set forth herein in time for the Paying Agent to make
such payments in accordance with its normal procedures. Any such designation for
wire transfer purposes shall be made by filing the appropriate information with
the Trustee at its Corporate Trust Office in The City of New York not less than
fifteen calendar days prior to the applicable payment date and, unless revoked
by written notice to the Trustee received on or prior to the Regular Record Date
immediately preceding the applicable Interest Payment Date, shall remain in
effect with respect to any further interest payments (other than interest
payments at Maturity) with respect to this Security payable to such Holder.
Payment of the principal of and premium, if any, and interest, if any, on this
Security, as aforesaid, shall be made in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.

      This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and issuable in one or more
series under an Indenture, dated as of October 1, 2001 (such Indenture as
originally executed and delivered and as supplemented or amended from time to
time thereafter, together with any constituent instruments establishing the
terms of particular Securities, being herein called the "Indenture"), between
the Company and JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan
Bank), as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
respective rights, limitations of rights, duties and immunities of the Company,
the Trustee and the Holders of the Securities thereunder and of the terms and
conditions upon which the Securities are, and are to be, authenticated and
delivered. The acceptance of this Security shall be deemed to constitute the
consent and agreement by the Holder hereof to all of the terms and provisions of
the Indenture. This Security is one of the series designated above.

      If any Interest Payment Date, any Redemption Date, any Optional Repayment
Date or the Stated Maturity shall not be a Business Day (as hereinafter
defined), payment of the amounts due on this Security on such date may be made
on the next succeeding Business Day, and, if such payment is made or duly
provided for on such next succeeding Business Day, no interest shall accrue on
such amounts for the period from and after such Interest Payment Date,
Redemption Date, Optional Repayment Date or Stated Maturity, as the case may be,
to such Business Day.

                                       2

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      [If, as specified above, this Security is redeemable, this Security is
subject to redemption at any time on or after the Initial Redemption Date
specified above, in whole or in part in increments of $1,000, at the election of
the Company, at the applicable redemption price (as described below) plus
accrued interest to the date fixed for redemption. Such redemption price shall
be the Initial Redemption Price specified above for the twelve-month period
commencing on the Initial Redemption Date and shall decline for the twelve-month
period commencing on each anniversary of the Initial Redemption Date by a
percentage of principal amount equal to the Annual Redemption Percentage
Reduction specified above until such redemption price is 100% of the principal
amount of this Security to be redeemed.]

      [Insert provisions, if any, for redemption pursuant to a sinking fund or
other mandatory redemption or purchase provisions or other put or call
provisions.]

      Notice of redemption (other than at the option of the Holder) shall be
given by mail to Holders of Securities, not less than 30 days nor more than 60
days prior to the date fixed for redemption, all as provided in the Indenture.
As provided in the Indenture, notice of redemption at the election of the
Company as aforesaid may state that such redemption shall be conditional upon
the receipt by the applicable Paying Agent or Agents of money sufficient to pay
the principal of and premium, if any, and interest, if any, on this Security on
or prior to the date fixed for such redemption; a notice of redemption so
conditioned shall be of no force or effect if such money is not so received and,
in such event, the Company shall not be required to redeem this Security.

      In the event of redemption of this Security in part only, a new Security
or Securities of this series, of like tenor, representing the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.

      [If this Security is specified on the face hereof to be repayable at the
option of the Holder, this Security will be so repaid in whole or in part in
increments of $1,000, provided that the remaining principal amount of any
Security surrendered for partial repayment shall be at least $1,000, on any
Optional Repayment Date (as stated on the face hereof), at the option of the
Holder, at 100% of the principal amount to be repaid, plus accrued interest, if
any, to the repayment date. In order for the exercise of the option to be
effective and the Security to be repaid, the Company must receive at the
applicable address of the Trustee set forth below, or at such other place or
places of which the Company shall from time to time notify the Holder of this
Security, on or before the thirtieth, but not earlier than the sixtieth calendar
day, or, if such day is not a Business Day, the next succeeding Business Day,
prior to the repayment date, either (i) this Security, with the form below
entitled "Option to Elect Repayment" duly completed, or (ii) a telegram, telex,
facsimile transmission, or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States of America setting forth (a) the
name, address, and telephone number of the Holder of this Security, (b) the
principal amount of this Security and the amount of this Security to be repaid,
(c) a statement that the option to elect repayment is being exercised thereby,
and (d) a guarantee stating that the Trustee on behalf of the Company will
receive this Security, with the form below entitled "Option to Elect Repayment"
duly completed, not later than five Business Days after the date of such
telegram, telex, facsimile transmission, or letter (and this Security and form
duly completed are received by the Trustee on behalf of the Company by such
fifth Business Day). Any such election shall be irrevocable. The address to
which such deliveries are to be made is JPMorgan Chase Bank, N.A., Attention:
Worldwide Securities Services, 4 New York Plaza, New York, New York 10004 (or,
at such other places as the Company shall notify the Holders of the Securities).
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for repayment will be determined by the Company,
whose determination will be final and binding.]

                                       3

<PAGE>

      If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of this Security may be declared due and
payable in the manner and with the effect provided in the Indenture.

      The Indenture permits, with certain exceptions as therein provided, the
Trustee to enter into one or more supplemental indentures for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all series then
Outstanding under the Indenture, considered as one class; provided, however,
that if there shall be Securities of more than one series Outstanding under the
Indenture and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that the Indenture permits the Trustee to enter into one or more supplemental
indentures for limited purposes without the consent of any Holders of
Securities. The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.

      No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest, if any, on this Security at the times, place and rate, in the coin or
currency, and in the manner, herein prescribed.

      As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Security or any portion of the principal amount
hereof will be deemed to have been paid for all purposes of the Indenture and to
be no longer Outstanding thereunder, and, at the election of the Company, the
Company's entire indebtedness in respect thereof will be satisfied and
discharged, if there has been irrevocably deposited with the Trustee or any
Paying Agent (other than the Company), in trust, money in an amount which will
be sufficient and/or Eligible Obligations, the principal of and interest on
which when due, without any regard to reinvestment thereof, will provide moneys
which, together with moneys so deposited, will be sufficient to pay when due the
principal of and premium, if any, and interest, if any, on this Security when
due.

      The Indenture contains terms, provisions and conditions relating to the
consolidation or merger of the Company with or into, and the conveyance or other
transfer, or lease, of assets to, another Person, to the assumption by such
other Person, in certain circumstances, of all of the obligations of the Company
under the Indenture and on the Securities and to the release and discharge of
the Company in certain circumstances, from such obligations.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office of JPMorgan Chase Bank, N.A. in New York, New York or such other office
or agency as

                                       4

<PAGE>

may be designated by the Company from time to time, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series of authorized denominations and of like tenor and aggregate
principal amount, will be issued to the designated transferee or transferees.

      The Securities of this series are issuable only as registered Securities,
without coupons, and in denominations of $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of the same series and Tranche, of any authorized
denominations, as requested by the Holder surrendering the same, and of like
tenor upon surrender of the Security or Securities to be exchanged at the office
of JPMorgan Chase Bank, N.A. in New York, New York or such other office or
agency as may be designated by the Company from time to time.

      The Company shall not be required to execute and the Security Registrar
shall not be required to register the transfer of or exchange of (a) Securities
of this series during a period of 15 days immediately preceding the date notice
is given identifying the serial numbers of the Securities of this series called
for redemption or (b) any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

      No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

      Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the absolute owner
hereof for all purposes (subject to Sections 305 and 307 of the Indenture),
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

      The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York (including, without
limitation, Section 5-1401 of the New York General Obligations Law or any
successor to such statute), except to the extent that the Trust Indenture Act
shall be applicable.

      As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is not a day on which banking institutions or trust companies are
generally authorized or required by law, regulation or executive order to close
in The City of New York or other city in which is located any Paying Agent for
the Securities of this series. All other terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.

      As provided in the Indenture, no recourse shall be had for the payment of
the principal of or premium, if any, or interest on any Securities or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any member, officer, director or manager, as
such, past, present or future of the Company or of any predecessor or successor
of the Company (either directly or through the Company or a predecessor or
successor of the Company), whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that the Indenture and this
Security are solely obligations of the Company and that any such personal

                                       5

<PAGE>

liability is hereby expressly waived and released as a condition of, and as part
of the consideration for, the execution of the Indenture and the issuance of
this Security.

      Unless the certificate of authentication hereon has been executed by the
Trustee or an Authenticating Agent by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

                                       6

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                                            PPL ENERGY SUPPLY, LLC

[SEAL]                                      By: ________________________________
                                                         Treasurer

Attested:

By:________________________
          Secretary

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

Dated: ________________________             JPMORGAN CHASE BANK, N.A.,
                                              AS TRUSTEE

                                            By: ________________________________
                                                        Authorized Officer

                                       7

<PAGE>

                            OPTION TO ELECT REPAYMENT
                 [TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
                   AT THE OPTION OF THE HOLDER AND THE HOLDER
                         ELECTS TO EXERCISE SUCH RIGHTS]

The undersigned hereby irrevocably requests and instructs the Company to repay
the within Security (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, together with interest to the
repayment date, to the undersigned, at

           (Please print or type name and address of the undersigned)

For this Security to be repaid the Company must receive at the Corporate Trust
Office of the Trustee in The City of New York or at such other place or places
of which the Company shall from time to time notify the Holder of the within
Security, on or before the thirtieth, but not earlier than the sixtieth,
calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) this Security, with this "Option
to Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth (a) the name, address, and
telephone number of the Holder of the Security, (b) the principal amount of the
Security and the amount of the Security to be repaid, (c) a statement that the
option to elect repayment is being exercised thereby, and (d) a guarantee
stating that the Security to be repaid with this form duly completed will be
received by the Trustee on behalf of the Company not later than five Business
Days after the date of such telegram, telex, facsimile transmission, or letter
(and such Security and form duly completed are received by the Trustee on behalf
of the Company by such fifth Business Day). Exercise of the repayment option by
the Holder shall be irrevocable.

If less than the entire principal amount of the within Security is to be repaid,
specify the portion thereof (which shall be an integral multiple of $1,000)
which the Holder elects to have repaid: ________________________; and specify
the denomination or denominations (which shall be $1,000 or an integral multiple
thereof) of the Security or Securities to be issued to the Holder for the
portion of the within Security or Securities not being repaid (in the absence of
any specification, one such Security will be issued for the portion not being
repaid):

                                                              Date: ____________
___________________________________
Notice: The signature to this
Option to Elect Repayment must
correspond with the name as written
upon the face of the Security in
every particular without alteration
or enlargement or any other change
whatsoever.

                                       8

<PAGE>

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

________________________________________________________________________________
     [please insert social security or other identifying number of assignee]

________________________________________________________________________________
            [please print or typewrite name and address of assignee]

________________________________________________________________________________

the within Security of PPL ENERGY SUPPLY, LLC and does hereby irrevocably
constitute and appoint___________ , Attorney, to transfer said Security on the
books of the within-mentioned Company, with full power of substitution in the
premises.

Dated: ______________

                       _________________________________

Notice: The signature to this assignment must correspond with the name as
written upon the face of the Security in every particular without alteration or
enlargement or any change whatsoever.

                                       9<PAGE>

                                                                     EXHIBIT 4.1

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

                                   Coach, Inc.

                                       and

                          Mellon Investor Services LLC

                                 as Rights Agent

                   First Amended and Restated Rights Agreement

                          Dated as of February 2, 2005

================================================================================
<PAGE>

                   FIRST AMENDED AND RESTATED RIGHTS AGREEMENT

            First Amended and Restated Rights Agreement, dated as of February 2,
2005, between Coach, Inc., a Maryland corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent
(the "Rights Agent").

                                    RECITALS

            WHEREAS, the Company and the Rights Agent entered into a Rights
Agreement, dated as of May 3, 2001 (the "Original Rights Agreement").

            WHEREAS, on May 3, 2001, the Board of Directors of the Company
authorized and declared a dividend of one right (a "Right") for each Common
Share (as defined in Section 1.6) of the Company outstanding at the close of
business on May 22, 2001 (the "Record Date") and has authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with respect to
each Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date and the Expiration Date (as such terms are
defined in Sections 3.1 and 7.1), each Right initially representing the right to
purchase one Common Share of the Company, upon the terms and subject to the
conditions hereinafter set forth PROVIDED, HOWEVER, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.

            WHEREAS, on October 12, 2004, the Board of Directors of the Company
approved certain amendments to the Original Rights Agreement, and authorized the
amendment and restatement of the Original Rights Agreement as set forth in this
Agreement.

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

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

            1.1. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 10% or more of the Common Shares
of the Company then outstanding but shall not include (i) an Exempt Person or
(ii) any Existing Holder, unless and until such time as such Existing Holder
shall become the Beneficial Owner of (A)15% or more of the Common Shares of the
Company then outstanding or (B) less than 10% of the Common Shares of the
Company then outstanding. "Existing Holder" shall mean Fidelity Management &
Research and Wellington Management Company, LLP, together with all of their
respective Affiliates and Associates. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 10% (or, in the case of an Existing Holder, 15%) or more of the Common Shares
of the Company then outstanding; PROVIDED, HOWEVER, that if a Person shall
become the Beneficial Owner of 10% (or, in the case of an Existing Holder, 15%)
or more of the Common Shares of

<PAGE>

the Company then outstanding solely by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the Beneficial
Owner of one or more additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person." Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this Section 1.1, has become such inadvertently (including,
without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) 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 in any such
case without any intention of changing or influencing control of the Company,
and such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this Section 1.1, then such Person shall
not be deemed to be or have become an "Acquiring Person" at any time for any
purposes of this Agreement. For all purposes of this Agreement, any calculation
of the number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares 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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.

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

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

                  (i) which such Person or any of such Person's Affiliates or
   Associates beneficially owns, directly or indirectly (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);

                  (ii) which such Person or any of such Person's Affiliates or
   Associates, directly or indirectly, has (A) the right to acquire (whether
   such right is exercisable immediately, or only after the passage of time,
   compliance with regulatory requirements, fulfillment of a condition or
   otherwise) pursuant to any agreement, arrangement or understanding, whether
   or not in writing (other than customary agreements with and between
   underwriters and selling group members with respect to a bona fide public
   offering of securities), or upon the exercise of conversion rights, exchange
   rights, rights, warrants or options, or otherwise; PROVIDED, HOWEVER, that a
   Person shall not be deemed the Beneficial Owner of, or to beneficially own,
   (w) securities tendered pursuant to a tender or exchange offer made by or on
   behalf of such Person or any of such Person's Affiliates or Associates until
   such tendered securities are accepted for purchase or exchange, (x)
   securities which such Person has a right to acquire upon the exercise of
   Rights at any time prior to the time that any Person becomes an Acquiring
   Person, (y) securities issuable upon the exercise

                                       2
<PAGE>

   of Rights from and after the time that any Person becomes an Acquiring Person
   if such Rights were acquired by such Person or any of such Person's
   Affiliates or Associates prior to the Distribution Date or pursuant to
   Section 3.1 or Section 22 ("Original Rights") or pursuant to Section 11.9 or
   Section 11.15 with respect to an adjustment to Original Rights or (z)
   securities which such Person or any of such Person's Affiliates or Associates
   may acquire, does or do acquire or may be deemed to acquire or may be deemed
   to have the right to acquire, pursuant to any merger or other acquisition
   agreement between the Company and such Person (or one or more of such
   Person's Affiliates or Associates) if prior to such Person becoming a
   Acquiring Person the Board of Directors of the Company has approved such
   agreement and determined that such Person shall not be or be deemed to be the
   beneficial owner of such securities within the meaning of this Section 1.3;
   or (B) the right to vote 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 clause (B) if the agreement, arrangement or understanding
   to vote such security (1) arises solely from a revocable proxy or consent
   given to such Person in response to a public proxy or consent solicitation
   made pursuant to, and in accordance with, the applicable rules and
   regulations of the Exchange Act and (2) is not also then reportable on
   Schedule 13D under the Exchange Act (or any comparable or successor report);
   or

                  (iii) which are beneficially owned, directly or indirectly, by
   any other Person (or any Affiliate or Associate thereof) and with respect to
   which such Person or any of such Person's Affiliates or Associates has any
   agreement, arrangement or understanding (other than customary agreements with
   and between underwriters and selling group members with respect to a bona
   fide public offering of securities), 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 Section 1.3(ii)(B)) or disposing of
   any securities of the Company; PROVIDED, HOWEVER, that no Person who is an
   officer, director or employee of an Exempt Person shall be deemed, solely by
   reason of such Person's status or authority as such, to be the "Beneficial
   Owner" of, to have "Beneficial Ownership" of or to "beneficially own" any
   securities that are "beneficially owned" (as defined in this Section 1.3),
   including, without limitation, in a fiduciary capacity, by an Exempt Person
   or by any other such officer, director or employee of an Exempt Person.

            1.4. "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.

            1.5. "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.

            1.6. "Common Shares" when used with reference to the Company shall
mean the shares of common stock, $0.01 par value per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such other Person or, if such Person is a Subsidiary (as

                                       3
<PAGE>

such term is hereinafter defined) of another Person, the Person or Persons which
ultimately control such first-mentioned Person, and which has issued and
outstanding such capital stock, equity securities or equity interest.

            1.7. "Exempt Person" shall mean the Company, any Subsidiary of the
Company, in each case including, without limitation, its fiduciary capacity, or
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity or trustee holding shares of capital stock of the Company for or
pursuant to the terms of any such plan, or for the purpose of funding other
employee benefits for employees of the Company or any Subsidiary of the Company.

            1.8. "Person" shall mean any individual, partnership, joint venture,
limited liability company, firm, corporation, unincorporated association, trust
or other entity, and shall include any successor (by merger or otherwise) of
such entity.

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

            1.10. "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, of record or beneficially, directly or indirectly,
by such Person.

            1.11. A "Trigger Event" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.

            1.12. The following terms shall have the meanings defined for such
terms in the Sections set forth below:

<TABLE>
<CAPTION>
Term                                                                  Section
----                                                                  -------
<S>                                                                   <C>
Adjustment Shares                                                     11.1.2
common stock equivalent                                               11.1.3
Company                                                               Recitals
current per share market price                                        11.4
Current Value                                                         11.1.3
Distribution Date                                                     3.1
Exchange Act                                                          1.1
Exchange Consideration                                                27
Existing Holder                                                       1.1
Expiration Date                                                       7.1
Final Expiration Date                                                 7.1
Nasdaq                                                                9
Original Rights                                                       1.3
</TABLE>

                                       4
<PAGE>
<TABLE>
<S>                                                                   <C>
Principal Party                                                       13.2
Purchase Price                                                        4
Record Date                                                           Recitals
Redemption Date                                                       7.1
Redemption Price                                                      23.1
Right                                                                 Recitals
Right Certificate                                                     3.1
Rights Agent                                                          Recitals
Security                                                              11.4
Spread                                                                11.1.3
Substitution Period                                                   11.1.3
Summary of Rights                                                     3.2
Trading Day                                                           11.4
</TABLE>

      Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agent shall
be as the Company shall determine. Contemporaneously with such appointment, if
any, the Company shall notify the Rights Agent thereof. Notwithstanding the
foregoing, the Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such co-Rights Agent.

      Section 3. Issuance of Right Certificates.

            3.1. Rights Evidenced by Share Certificates. Until the earlier of
the close of business on (i) the tenth day after the Shares Acquisition Date or
(ii) the tenth Business Day after the date of the commencement of, or first
public announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in
any Person (other than an Exempt Person) becoming the Beneficial Owner of Common
Shares aggregating 10% or more of the then outstanding Common Shares of the
Company (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced (subject to the provisions of Section 3.2) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only in connection
with the transfer of the underlying Common Shares. The preceding sentence
notwithstanding, prior to the occurrence of a Distribution Date specified as a
result of an event described in clause (ii) (or such later Distribution Date as
the Board of Directors of the Company may select pursuant to this sentence), the
Board of Directors may postpone, one or more times, the Distribution Date which
would occur as a result of an event described in clause (ii) beyond the date set
forth in such clause (ii). The Company shall promptly notify the Rights Agent in
writing of any such postponement. Nothing herein shall permit such a
postponement of a Distribution Date after a Person becomes an Acquiring Person,
except as a result of the operation of the third sentence of Section 1.1 or as
permitted by Section 23.1. As soon as practicable after the Distribution Date,

                                       5
<PAGE>

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

            3.2. Summary of Rights. On the Record Date or as soon as practicable
thereafter, the Company sent or caused to be sent a copy of a Summary of Rights
to Purchase Common Shares, in substantially the form attached as Exhibit B to
the Original Rights Agreement (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date at the address of such holder shown on the records
of the Company. With respect to certificates for Common Shares outstanding as of
the close of business on the Record Date, until the Distribution Date (or the
earlier Expiration Date), the Rights will be evidenced by such certificates for
Common Shares registered in the names of the holders thereof together with a
copy of the Summary of Rights and the registered holders of the Common Shares
shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier Expiration Date), the surrender for transfer
of any certificate for Common Shares outstanding at the close of business on the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.

            3.3. New Certificates After Record Date. Certificates for Common
Shares which become outstanding (whether upon issuance out of authorized but
unissued Common Shares or transfer or exchange of outstanding Common Shares)
after the Record Date but prior to the earliest of the Distribution Date or the
Expiration Date, shall have impressed, printed, stamped, written or otherwise
affixed onto them the following legend:

            This certificate also evidences and entitles the holder hereof to
            certain rights as set forth in an Agreement between Coach, Inc. (the
            "Company") and Mellon Investor Services LLC, as Rights Agent, dated
            as of May 3, 2001, as the same may be amended from time to time (the
            "Agreement"), the terms of which are hereby incorporated herein by
            reference and a copy of which is on file at the principal executive
            offices of the Company. Under certain circumstances, as set forth in
            the Agreement, such Rights will be evidenced by separate
            certificates and will no longer be evidenced by this certificate.
            The Company will mail to the holder of this certificate a copy of
            the Agreement without charge after receipt of a written request
            therefor. AS DESCRIBED IN THE AGREEMENT, RIGHTS WHICH ARE OWNED BY,
            TRANSFERRED TO OR HAVE BEEN OWNED BY ACQUIRING PERSONS OR ASSOCIATES
            OR AFFILIATES THEREOF (AS DEFINED IN THE AGREEMENT) SHALL BECOME
            NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                       6
<PAGE>

With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date), the Rights associated with
the Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificates,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.

            Notwithstanding this Section 3.3, the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

      Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares, certification and assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit A hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate (but which
do not affect the rights, duties or responsibilities of the Rights Agent) 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 trading
system on which the Rights may from time to time be listed or quoted, or to
conform to usage. Subject to the terms and conditions hereof, the Right
Certificates, whenever issued, shall be dated as of the Record Date, and shall
show the date of countersignature by the Rights Agent, and on their face shall
entitle the holders thereof to purchase such number of Common Shares as shall be
set forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.

      Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board of Directors,
the Chief Executive Officer, 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 the Secretary or any Assistant
Secretary, or the Treasurer or any Assistant Treasurer, of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same
signatory to countersign all of the Right Certificates hereunder. No Right
Certificate shall be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
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 Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.

                                       7
<PAGE>

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

      Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 11.1.2 and Section 14, 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 Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become null and void pursuant
to Section 11.1.2 or that have been exchanged pursuant to Section 27) may be
transferred, split up or combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Common Shares as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up or combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender, together with any
required form of assignment and certificate duly completed, the Right
Certificate or Right Certificates to be transferred, split up or combined or
exchanged at the office 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 Right
Certificate or Right Certificates until the registered holder shall have
properly completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate or Right Certificates
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request. Thereupon
the Rights Agent shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holders of Right Certificates of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up or combination or exchange of such Right
Certificates. The Rights Agent shall have no duty or obligation to take any
action under any Section of this Agreement which requires the payment by a
Rights holder of applicable taxes and governmental charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been paid.

            Subject to the provisions of Section 11.1.2 , at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and, at the
Company's or the Rights Agent's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.

                                       8
<PAGE>

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

            7.1. Exercise of Rights. Subject to Section 11.1.2 and except as
otherwise provided herein, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certification on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price for each
Common Share (or other securities, cash or other assets) as to which the Rights
are exercised, at or prior to the time (the "Expiration Date") that is the
earliest of (i) the close of business on May 2, 2011 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
(the "Redemption Date"), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type described
in Section 13.3, at which time the Rights are deemed terminated, or (iv) the
time at which the Rights are exchanged as provided in Section 27.

            7.2. Purchase. The Purchase Price for each Common Share pursuant to
the exercise of a Right shall be initially $170.00, shall be subject to
adjustment from time to time as provided in Sections 11, 13 and 26 and shall be
payable in lawful money of the United States of America in accordance with
Section 7.3.

            7.3. Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the aggregate Purchase
Price for the total number of Common Shares to be purchased and an amount equal
to any applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9, in cash or by certified or cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i)(A) requisition from any transfer agent of the Common
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Common Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of Common Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing interests in such number of Common Shares as are to be purchased
(in which case certificates for the Common Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with all such requests,
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of fractional shares in accordance with Section 14
or otherwise in accordance with Section 11.1.3, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. In the event that the Company
is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11.1.3, 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 necessary to
comply with this Agreement.

                                       9
<PAGE>

            7.4. Partial Exercise. In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14.

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

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

      Section 9. Reservation and Availability of Capital Stock. The Company
covenants and agrees that from and after the Distribution Date it will cause to
be reserved and kept available out of its authorized and unissued Common Shares
the number of Common Shares (and, following the occurrence of a Trigger Event,
Common Shares and/or other securities) that will be sufficient to permit the
exercise in full of all outstanding Rights.

            So long as the Common Shares (and, following the occurrence of a
Trigger Event, Common Shares and/or other securities) issuable upon the exercise
of Rights may be listed on any national securities exchange or traded in the
over-the-counter market and quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System ("Nasdaq") (including the National
Market or Small Cap Market), the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed or admitted to trading on such exchange or quoted
on Nasdaq upon official notice of issuance upon such exercise.

            The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other securities) delivered
upon exercise of Rights shall, at the time of

                                       10
<PAGE>

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 shares.

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

            The Company further covenants and agrees that it will pay when due
and payable any and all taxes and governmental charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any Common
Shares (or Common Shares and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any tax
or charge which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
for the Common Shares (or Common Shares and/or other securities, as the case may
be) in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for Common Shares (or Common Shares 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 any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax or charge is due.

      Section 10. Common Shares Record Date. Each Person in whose name any
certificate for Common Shares (or Common Shares and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes and charges) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Common Shares (or
Common Shares 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 Common Shares

                                       11
<PAGE>

(or Common Shares and/or other securities, as the case may be) transfer books of
the Company are open.

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

            11.1. Post Execution Events.

            11.1.1 Corporate Dividends, Reclassifications, Etc. In the event the
Company shall at any time after the date of the Original Rights Agreement (A)
declare and pay a dividend on the Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares, (C) combine the outstanding Common
Shares into a smaller number of Common Shares or (D) issue any shares of its
capital stock in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11.1, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the Common
Shares 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; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. If an event occurs which would require an adjustment
under both Section 11.1.1 and Section 11.1.2, the adjustment provided for in
this Section 11.1.1 shall be in addition to, and shall be made prior to, the
adjustment required pursuant to, Section 11.1.2.

            11.1.2 Acquiring Person Events; Triggering Events. Subject to
Sections 23.1 and 27, in the event that a Trigger Event occurs, then, from and
after the first occurrence of such event, each holder of a Right, except as
provided below, shall thereafter have a right to receive, upon exercise thereof
at a price per Right equal to the then current Purchase Price multiplied by the
number of Common Shares for which a Right is then exercisable (without giving
effect to this Section 11.1.2), in accordance with the terms of this Agreement,
such number of Common Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable (without giving effect to this Section 11.1.2)
and (y) dividing that product by 50% of the current per share market price of
the Common Shares (determined pursuant to Section 11.4) on the first of the date
of the occurrence of, or the date of the first public announcement of, a Trigger
Event (the "Adjustment Shares"); PROVIDED that the Purchase Price and the number
of Adjustment Shares shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11.6; PROVIDED, FURTHER, that nothing
contained in this Section 11.1.2 shall limit or otherwise diminish the power of
the Board of Directors to postpone the Distribution Date pursuant to Section 3.1
or to extend the period during which the Rights may be redeemed pursuant to
Section 23.1. Notwithstanding the

                                       12
<PAGE>

foregoing, upon the occurrence of a Trigger Event, any Rights that are or were
acquired or beneficially owned by (1) any Acquiring Person or any Associate or
Affiliate thereof, (2) a transferee of any Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of any Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of this Section 11.1.2, and
subsequent transferees, shall become null and void without any further action,
and any holder (whether or not such holder is an Acquiring Person or an
Associate or Affiliate of an Acquiring Person) of such Rights shall thereafter
have no right to exercise such Rights under any provision of this Agreement or
otherwise. From and after the Trigger Event, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 that represents Rights that are or
have become null and void pursuant to the provisions of this paragraph, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become null and void pursuant to the provisions of this paragraph shall
be canceled.

            The Company shall notify the Rights Agent when this Section 11.1.2
applies and shall use all reasonable efforts to ensure that the provisions of
this Section 11.1.2 are complied with, but neither the Company nor the Rights
Agent shall have any liability to any holder of Right Certificates or other
Person as a result of the Company's failure to make any determinations with
respect to any Acquiring Person or its Affiliates, Associates or transferees
hereunder.

            From and after the occurrence of an event specified in Section 13.1,
any Rights that theretofore have not been exercised pursuant to this Section
11.1.2 shall thereafter be exercisable only in accordance with Section 13 and
not pursuant to this Section 11.1.2.

            11.1.3 Insufficient Shares. In the event that upon the occurrence of
a Trigger Event there shall not be sufficient Common Shares authorized but
unissued to permit the exercise in full of the Rights in accordance with the
foregoing Section 11.1.2, the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise of
the Rights, PROVIDED, HOWEVER, that if the Company determines that it is unable
to cause the authorization of a sufficient number of additional Common Shares,
then, in the event the Rights become exercisable, the Company, with respect to
each Right and to the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date of the Original Rights Agreement
to which it is a party, shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value"),
over (2) the Purchase Price (such excess, the "Spread") and (B) with respect to
each Right (other than Rights which have become null and void pursuant to
Section 11.1.2), make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction
in the Purchase Price, (3) shares of preferred stock or other equity securities
of the Company (including, without limitation, shares, or fractions of shares,
of preferred stock which, by virtue of having dividend, voting and liquidation
rights

                                       13
<PAGE>

substantially comparable to those of the Common Shares, the Board of Directors
of the Company has deemed in good faith to have substantially the same value as
Common Shares) (each such share of preferred stock or fractions of shares of
preferred stock constituting a "common stock equivalent")), (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 in good faith by the
Board of Directors of the Company; PROVIDED, HOWEVER, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the occurrence of a Trigger Event, then the
Company shall be obligated to deliver, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on the date of the
Original Rights Agreement to which it is a party, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and then, if necessary, 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 unlikely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above may
be extended and re-extended to the extent necessary, but not more than ninety
(90) days following the occurrence of a Trigger Event, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period as may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the second
and/or third sentences of this Section 11.1.3, the Company (x) shall provide
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 and the
Company shall promptly provide the Rights Agent copies of such announcements.
For purposes of this Section 11.1.3, the value of a Common Share shall be the
current per share market price (as determined pursuant to Section 11.4) on the
date of the occurrence of a Trigger Event and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Shares on such
date. The Board of Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive Common Shares upon the
exercise of the Rights among holders of Rights pursuant to this Section 11.1.3.

            11.2. Dilutive Rights Offering. In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Shares (or
securities convertible into Common Shares or common stock equivalents) at a
price per Common Share (or having a conversion or exercise price per Common
Share, if a security convertible into or exercisable for Common Shares or common
stock equivalents) less than the current per share market price of the Common
Shares (as determined pursuant to Section 11.4) 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 Common Shares or
common stock equivalents outstanding on such record date plus the number of
Common Shares or common

                                       14
<PAGE>

stock equivalents which the aggregate offering price of the total number of
Common Shares or common stock equivalents to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current per share market price and the denominator of which
shall be the number of Common Shares or common stock equivalents outstanding on
such record date plus the number of additional Common Shares or common stock
equivalents to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. In case such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Common Shares and/or common stock
equivalents owned by or held for the account of the Company or any Subsidiary of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.

            11.3. Distributions. In case the Company shall fix a record date for
the making of a distribution to all holders of the Common Shares (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, securities or assets (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or a dividend payable in
Common Shares (which dividend, for purposes of this Agreement, shall be subject
to the provisions of Section 11.1.1(A))) or convertible securities, or
subscription rights or warrants (excluding those referred to in Section 11.2),
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 per share market
price of the Common Shares (as determined pursuant to Section 11.4) 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) of the portion of the cash, assets,
securities or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Common Share and the
denominator of which shall be such current per share market price of the Common
Shares (as determined pursuant to Section 11.4); PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.

            11.4. Current Per Share Market Value. For the purpose of any
computation

                                       15
<PAGE>

hereunder, the "current per share market price" of any security (a "Security"
for the purpose of this Section 11.4) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined) immediately
prior to but not including such date; PROVIDED, HOWEVER, that in the event that
the current per share market price of the Security is determined during any
period following the announcement by the issuer of such Security of (i) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of thirty (30)
Trading Days after but not including the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current per share market
price" shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Security is not publicly held or not so listed or traded, or if on any such date
the Security is not so quoted and no such market maker is making a market in the
Security, "current per share market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company.

            11.5. Insignificant Changes. 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. Any adjustments which by reason of this
Section 11.5 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 Common
Share or other share or security, as the case may be.

            11.6. Shares Other Than Common Shares. If as a result of an
adjustment made pursuant to Section 11.1, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Common Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in Sections 11.1, 11.2,
11.3, 11.5,

                                       16
<PAGE>

11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Common Shares shall apply on like terms to any such other shares.

            11.7. Rights Issued Prior to Adjustment. 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 Common Shares purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

            11.8. Effect of Adjustments. Unless the Company shall have exercised
its election as provided in Section 11.9, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11.2 and 11.3, 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
Common Shares (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of Common Shares 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.

            11.9. Adjustment in Number of Rights. The Company may elect on or
after the date of any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number Common Shares issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of Common
Shares 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 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, and shall
promptly give the Rights Agent a copy of such announcement. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11.9, the Company may, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein (and 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 Right Certificates on the
record date specified in the public announcement.

                                       17
<PAGE>

            11.10. Right Certificates Unchanged. Irrespective of any adjustment
or change in the Purchase Price or the number of Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per share and the number of Common
Shares which were expressed in the initial Right Certificates issued hereunder.

            11.11. Par Value Limitations. Before taking any action that would
cause an adjustment reducing the Purchase Price below the then par value, if
any, of the Common Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Purchase Price.

            11.12. Deferred Issuance. 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 (and shall
give prompt written notice of such election to the Rights Agent) until the
occurrence of such event the issuance to the holder of any Right exercised after
such record date of that number of Common Shares and shares of other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the Common Shares and shares of other capital stock or other securities,
assets or cash of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER,
that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.

            11.13. Reduction in Purchase Price. Anything in this Section 11 to
the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any consolidation or subdivision
of the Common Shares, issuance wholly for cash of any of the Common Shares at
less than the current market price, issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for Common
Shares, stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Common Shares shall not be taxable to such shareholders.

            11.14. Company Not to Diminish Benefits of Rights. The Company
covenants and agrees that after the earlier of the Shares Acquisition Date or
Distribution Date it will not, except as permitted by Section 23, Section 26 or
Section 27, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.

            11.15. Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that the Company shall at any time after the date of the Original Rights
Agreement and prior to the Distribution Date (i) declare or pay any dividend on
the outstanding Common Shares payable in Common Shares, (ii) effect a
subdivision or consolidation of the outstanding Common Shares

                                       18
<PAGE>

(by reclassification or otherwise than by the payment of dividends payable in
Common Shares), or (iii) combine the outstanding Common Shares into a greater or
lesser number of Common Shares, then in any such case, the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter but prior to the Distribution Date or in accordance with Section 22,
shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction, the numerator of which
shall be the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11.15 shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.

      Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 or 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the computations and facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate.

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

            13.1. Certain Transactions. In the event that, from and after the
first occurrence of a Trigger Event, directly or indirectly, (A) the Company
shall consolidate with, or merge with and into, any other Person and the Company
shall not be the continuing or surviving corporation, (B) any Person shall
consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of the Company or any other
Person or cash or any other property, or (C) the Company shall sell, exchange,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall sell,
exchange, mortgage or otherwise transfer), in one or more transactions, assets
or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more wholly-owned Subsidiaries of the Company
in one or more transactions each of which complies with Section 11.14), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right (other than Rights which have become null and void pursuant to Section
11.1.2) shall thereafter have the right to receive, upon the exercise thereof at
a price per Right equal to the then current Purchase Price multiplied by the
number of Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Trigger Event (as subsequently adjusted pursuant to
Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the terms
of this Agreement and in lieu of Common Shares, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable Common
Shares of the Principal Party (as such term is hereinafter defined) not subject

                                       19
<PAGE>

to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (x) multiplying the then current
Purchase Price by the number of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a Trigger Event (as subsequently
adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and (y)
dividing that product by 50% of the then current per share market price of the
Common Shares of such Principal Party (determined pursuant to Section 11.4) on
the date of consummation of such consolidation, merger, sale or transfer;
PROVIDED, that the price per Right so payable and the number of Common Shares of
such Principal Party so receivable upon exercise of a Right shall thereafter be
subject to further adjustment as appropriate in accordance with Section 11.6 to
reflect any events covered thereby occurring in respect of the Common Shares of
such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (iv)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; PROVIDED that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13.1, such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Shares of the Principal Party receivable upon the exercise of a Right pursuant
to this Section 13.1, and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be necessary to
permit the subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property. The Company shall
not consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement confirming that the requirements of
this Section 13.1 and Section 13.2 shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to this Section
13.1 and Section 13.2 and providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the Principal Party, at its own
expense, shall

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

                                       20
<PAGE>

                  (2) use its best efforts, if the Common Shares of the
      Principal Party shall be listed or admitted to trading on the New York
      Stock Exchange or on another national securities exchange, to list or
      admit to trading (or continue the listing of) the Rights and the
      securities purchasable upon exercise of the Rights on the New York Stock
      Exchange or such securities exchange, or, if the Common Shares of the
      Principal Party shall not be listed or admitted to trading on the New York
      Stock Exchange or a national securities exchange, to cause the Rights and
      the securities receivable upon exercise of the Rights to be authorized for
      quotation on Nasdaq or on such other system then in use;

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

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

            In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, Common Shares or
common stock equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11.4) or
securities exercisable for, or convertible into, Common Shares or common stock
equivalents of such Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13), or (ii) providing
for any special payment, taxes or similar provision in connection with the
issuance of the Common Shares of such Principal Party pursuant to the provision
of Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

            The Company covenants and agrees that it shall not, at any time
after the Trigger Event, enter into any transaction of the type described in
clauses (A) through (C) of this Section 13.1 if (i) at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (ii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the shareholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13.2 shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates or (iii) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights. The provisions of this Section 13 shall similarly apply to
successive transactions of the type described in clauses (A) through (C) of this
Section 13.1.

                                       21
<PAGE>

            13.2. Principal Party. "Principal Party" shall mean:

                  (i) in the case of any transaction described in (A) or (B) of
the first sentence of Section 13.1: (i) the Person that is the issuer of the
securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (ii) if no securities are so issued, (x) the Person that is the other party
to the merger, if such Person survives said merger, or, if there is more than
one such Person, the Person the Common Shares of which have the greatest
aggregate market value of shares outstanding 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) or (z) the Person
resulting from the consolidation; and

                  (ii) in the case of any transaction described in (C) of the
first sentence in Section 13.1, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Shares having the greatest aggregate market value of shares
outstanding; PROVIDED, HOWEVER, that in any such case described in the foregoing
clause (i) or (ii) of this Section 13.2, if the Common Shares of such Person are
not at such time or have not been continuously over the preceding 12 month
period registered under Section 12 of the Exchange Act, then (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Shares of which
are and have been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Shares having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
ventures, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.

            13.3. Approved Acquisitions. Notwithstanding anything contained
herein to the contrary, upon the consummation of any merger or other acquisition
transaction of the type described in clause (A), (B) or (C) of Section 13.1
involving the Company pursuant to a merger or other acquisition agreement
between the Company and any Person (or one or more of such Person's Affiliates
or Associates) which agreement has been approved by the Board of Directors of
the Company prior to any Person becoming an Acquiring Person, this Agreement and
the rights of holders of Rights hereunder shall be terminated in accordance with
Section 7.1.

                                       22
<PAGE>

      Section 14. Fractional Rights and Fractional Shares.

            14.1. Cash in Lieu of Fractional Rights. The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which
evidence fractional Rights (except prior to the Distribution Date in accordance
with Section 11.15). In lieu of such fractional Rights, there shall be paid to
the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes of
this Section 14.1, the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the current market
value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board of Directors of the Company.

            14.2. Cash In Lieu of Fractional Common Shares. The Company shall
not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares upon the exercise or
exchange of Rights. In lieu of such fractional Common Shares, the Company shall
pay to the registered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common Share
(as determined in accordance with Section 14.1) for the Trading Day immediately
prior to the date of such exercise or exchange.

            14.3. Waiver of Right to Receive Fractional Rights or Shares. The
holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise or exchange
of a Right, except as permitted by this Section 14.

            14.4 Rights Agents Duties Regarding Fractional Shares. Whenever a
payment for fractional Rights or fractional shares is to be made by the Rights
Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such payment
and the prices and/or formulas utilized in calculating such payments, and (ii)
provide sufficient monies to the Rights Agent in the form of fully collected
funds to make such payments. The Rights Agent shall be fully protected in
relying upon such a

                                       23
<PAGE>

certificate and shall have no duty with respect to, and shall not be deemed to
have knowledge of any payment for fractional Rights or fractional shares under
any Section of this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.

      Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce this Agreement, and may institute and maintain any suit, action
or proceeding against the Company to enforce this Agreement, or otherwise
enforce or act in respect of his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person (including, without limitation, the Company) subject to this
Agreement.

      Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:

                  (a) prior to the Distribution Date, the Rights will be
      transferable only in connection with the transfer of the Common Shares;

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

                  (c) the Company and the Rights Agent may deem and treat the
      Person in whose name the Right Certificate (or, prior to the Distribution
      Date, the associated Common Shares certificate) is registered as the
      absolute owner thereof and of the Rights evidenced thereby
      (notwithstanding any notations of ownership or writing on the Right
      Certificates or the associated Common Shares certificate made by anyone
      other than the Company or the Rights Agent) for all purposes whatsoever,
      and neither the Company nor the Rights Agent shall be affected by any
      notice to the contrary.

      Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of

                                       24
<PAGE>

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
24), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.

      Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
in accordance with a fee schedule to be mutually agreed upon and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the preparation,
execution, delivery, amendment and administration 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, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction), for any
action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company. The provisions of
this Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation or
removal of the Rights Agent.

            The Rights Agent shall be authorized and protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Agreement in reliance
upon any Right Certificate or certificate for the Common Shares or the Common
Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons. The Rights
Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take any action in
connection therewith unless and until it has received such notice in writing.

      Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any Person 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 that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent

                                       25
<PAGE>

and deliver such Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.

            In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

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

            20.1. Legal Counsel. The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the advice or
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent, and the Rights Agent shall incur no liability for or in
respect of, any action taken, suffered or omitted by it in accordance with such
advice or opinion.

            20.2. Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it under the provisions of this Agreement in
reliance upon such certificate.

            20.3. Standard of Care. The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful misconduct (each as
determined by a final, nonappealable order, judgment, decree or ruling of a
court of competent jurisdiction). Anything to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage. Any liability of the Rights Agent under this
Rights Agreement will be limited to the amount of fees paid by the Company to
the Rights Agent.

                                       26
<PAGE>

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

            20.5. No Responsibility as to Certain Matters. The Rights Agent
shall not be under any responsibility or have any liability in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
null and void pursuant to Section 11.1.2) or any adjustment required under the
provisions of Sections 3, 11, 13, 23 or 27 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 Right Certificates after actual notice of any such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Common
Shares or other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.

            20.6. Further Assurance by Company. 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.

            20.7. Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties under this Agreement, and such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in accordance with instructions of any
such officer or for any delay in acting while waiting for these instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable to the Company for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after
the date specified therein (which date shall not be less than three business
days after the date any such officer actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking of any such action (or the effective date in the

                                       27
<PAGE>

case of omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.

            20.8. Freedom to Trade in Company Securities. The Rights Agent and
any shareholder, affiliate, 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.

            20.9. Reliance on Attorneys and Agents. 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,
absent gross negligence, bad faith or willful misconduct (each as determined by
a final, non-appealable order, judgment, decree or ruling of a court of
competent jurisdiction) in the selection and continued employment thereof.

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

            20.11. Rights Holders List. At any time and from time to time after
the Distribution Date, and no more often than quarterly upon the reasonable
request of the Company, the Rights Agent shall promptly deliver to the Company a
list, as of the most recent practicable date (or as of such earlier date as may
be specified by the Company), of the holders of record of Rights.

            20.12. Assurance to Rights Agent. 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 it believes that repayment of such funds or
adequate indemnification against such risk or liability is not assured to it.

      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 thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares, as applicable, by registered or certified
mail. Following the Distribution Date, the Company shall promptly notify the
holders of the Right Certificates by first-class mail of any such resignation.
The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares, as applicable, by registered or certified

                                       28
<PAGE>

mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the resigning, removed, or incapacitated Rights Agent shall remit to the
Company, or to any successor Rights Agent designated by the Company, all books,
records, funds, certificates or other documents or instruments of any kind then
in its possession which were acquired by such resigning, removed or
incapacitated Rights Agent in connection with its services as Rights Agent
hereunder, and shall thereafter be discharged from all duties and obligations
hereunder. Following notice of such removal, resignation or incapacity, the
Company shall appoint a successor to such Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (i) a Person organized and doing
business under the laws of the United States or any other state of the United
States so long as such Person is duly qualified and authorized to do business,
authorized to exercise stock transfer powers and 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 $10
million or (ii) an affiliate of such Person referenced in clause (i) above.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares,
as applicable, and, following the Distribution Date, mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity 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 Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such 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 Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
Expiration Date, the Company shall, with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded, or upon exercise, conversion or exchange of
securities hereinafter issued by the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; PROVIDED, HOWEVER, that (i)
no such Right 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 Right Certificate would be issued and (ii) no such Right

                                       29
<PAGE>

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.

            23.1. Right to Redeem. The Board of Directors of the Company may, at
its option, at any time prior to the close of business on the tenth day
following the Shares Acquisition Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend, recapitalization or similar
transaction occurring after the date of the Original Rights Agreement (such
redemption price being hereinafter referred to as the "Redemption Price"), and
the Company may, at its option, pay the Redemption Price in Common Shares (based
on the "current per share market price," determined pursuant to Section 11.4, of
the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The preceding
sentence notwithstanding, prior to the expiration of the period during which the
Rights may be redeemed as specified therein (or such longer period as the Board
of Directors of the Company may select pursuant to this sentence), the Board of
Directors of the Company may extend, one or more times, the period during which
the Rights may be redeemed beyond the close of business on the tenth day
following the Shares Acquisition Date. The redemption of the Rights by the Board
of Directors may be made effective at such time, on such basis and subject to
such conditions as the Board of Directors in its sole discretion may establish.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable following a transaction or event described in Section
11.1.2 prior to the expiration or termination of the Company's right of
redemption hereunder.

            23.2. Redemption Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the redemption of the Rights (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. The Company shall promptly give public notice of such redemption (as well
as prompt written notice thereof to the Rights Agent); PROVIDED, HOWEVER, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. The Company shall promptly give, or cause the
Rights Agent to give, notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 27, and other
than in connection with the purchase, acquisition or redemption of Common Shares
prior to the Distribution Date.

      Section 24. Notice of Certain Events. In case the Company shall propose at
any time after the earlier of the Shares Acquisition Date and the Distribution
Date (a) to pay any dividend payable in stock of any class to the holders of
Common Shares or to make any other distribution

                                       30
<PAGE>

to the holders of Common Shares (other than a regular periodic cash dividend at
a rate not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income
per share of the Company for the four quarters ended immediately prior to the
payment of such dividends, or a stock dividend on, or a subdivision, combination
or reclassification of the Common Shares), or (b) to offer to the holders of
Common Shares rights or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Common Shares (other than
a reclassification involving only the subdivision of outstanding Common Shares),
or (d) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person (other than pursuant to a merger or other acquisition
agreement of the type described in Section 1.3(ii)(A)(z)), or (e) to effect the
liquidation, dissolution or winding up of the Company, or (f) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 25, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(a) or (b) above at least ten (10) days prior to the record date for determining
holders of the Common Shares for purposes of such action, and in the case of any
such other action, at least ten (10) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
Common Shares, whichever shall be the earlier.

            In case any event set forth in Section 11.1.2 or Section 13 shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 25, a notice of the occurrence of such event, which
notice shall describe the event and the consequences of the event to holders of
Rights under Section 11.1.2 and Section 13.

            Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Agreement and no other
notice need be given.

      Section 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage-prepaid, addressed (until another address is filed in writing with
the Rights Agent) or by facsimile transmission as follows:

                  Coach, Inc.
                  516 West 34th Street

                                       31
<PAGE>

                  New York, NY 10001
                  Attention: General Counsel
                  Facsimile No.: 212-629-2398

Subject to the provisions of Section 21 and Section 24, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage-prepaid, addressed (until another
address is filed in writing with the Company) or by facsimile transmission as
follows:

                  Mellon Investor Services LLC
                  120 Broadway, 13th Floor
                  New York, New York 10271
                  Attention: Relationship Manager
                  Facsimile No.: (917) 320-6318

            with a copy to:

                  Mellon Investor Services LLC
                  85 Challenger Road
                  Ridgefield Park, NJ 07660
                  Attention: General Counsel
                  Facsimile No.: (201) 296-4004

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing Common
Shares) 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 26. Supplements and Amendments. For so long as the Rights are
redeemable, the Board of Directors may in its sole and absolute discretion, and
the Rights Agent shall, if the Board of Directors (or an appropriate officer of
the Company acting at the direction of the Board of Directors) so directs but
subject to the other provisions of this Section, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of Rights or Common Shares. From and after the time that the Rights are no
longer redeemable, the Board of Directors may, and the Rights Agent shall, if
the Board of Directors so (or an appropriate officer of the Company acting at
the direction of the Board of Directors) directs but subject to the other
provisions of this Section, from time to time supplement or amend this Agreement
without the approval of any holders of Rights (i) to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (ii) to shorten or lengthen any
time period hereunder or (iii) to make any other changes or provisions in regard
to matters or questions arising hereunder which the Board of Directors may deem
necessary or desirable, including but not limited to extending the Final
Expiration Date; PROVIDED, HOWEVER, that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such supplement or amendment may cause the Rights again to

                                       32
<PAGE>

become redeemable or cause this Agreement again to become amendable other than
in accordance with this sentence; PROVIDED FURTHER, that the right of the Board
of Directors to extend the Distribution Date or the Redemption Date shall not
require any amendment or supplement hereunder. 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
26, and provided, such supplement or amendment does not change or increase the
Rights Agent's rights, duties, liabilities or obligations, the Rights Agent
shall execute such supplement or amendment.

      Section 27. Exchange.

            27.1. Exchange of Common Shares for Rights. The Board of Directors
of the Company may, at its option, at any time after the occurrence of a Trigger
Event, exchange Common Shares for all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 11.1.2) by exchanging at an exchange
ratio of one Common Share per Right or that number of Common Shares having an
aggregate value equal to the Spread (with such value being based on the current
per share market price (as determined pursuant to Section 11.4) on the date of
the occurrence of a Trigger Event) per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
of the Original Rights Agreement (such amount per Right being hereinafter
referred to as the "Exchange Consideration"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Acquiring Person shall have become the Beneficial Owner of 50% or more
of the Common Shares then outstanding. From and after the occurrence of an event
specified in Section 13.1, any Rights that theretofore have not been exchanged
pursuant to this Section 27.1 shall thereafter be exercisable only in accordance
with Section 13 and may not be exchanged pursuant to this Section 27.1. The
exchange of the Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.

            27.2. Exchange Procedures. Immediately upon the action of the Board
of Directors of the Company ordering the exchange for any Rights pursuant to
Section 27.1 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a the
holders of such Rights shall be to receive the Exchange Consideration. The
Company shall promptly give public notice of any such exchange (as well as
prompt written notice thereof to the Rights Agent); PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear 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 shall state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
the Rights that have become null and void pursuant to the provisions of Section
11.1.2) held by each holder of Rights.

                                       33
<PAGE>

            27.3. Insufficient Shares. The Company shall not be required to
issue fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Rights Certificates with regard to
which such fractional Common Shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this Section 27.3, the current market value of a
whole Common Share shall be the current per share market price (as determined
pursuant to Section 11.4) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 27.

      Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

      Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).

      Section 30. Determination and Actions by the Board of Directors; General
Limitations on Redemption, Modification or Termination of Rights or Amendment to
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) redeem, modify or terminate the
Rights, (ii) amend this Agreement in any way, (iii) interpret the provisions of
this Agreement and (iv) make all determinations deemed necessary or advisable
for the administration of this Agreement. All Board of Director actions
(including, for purposes of clause (y) below, all omissions with respect to
Board of Director actions) 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
Persons, and (y) not subject the Board of Directors to any liability to the
holders of the Rights. The Rights Agent shall always be entitled to assume that
the Company's Board of Directors acted in good faith and shall be fully
protected and incur no liability in reliance thereon.

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

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

                                       34
<PAGE>

governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

      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 Heading. 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.

                           [INTENTIONALLY LEFT BLANK]

                                       35
<PAGE>

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

                                           COACH, INC.

                                           By: _________________________________
                                               Name: ___________________________
                                               Title: __________________________

                                           MELLON INVESTOR SERVICES LLC

                                           By: _________________________________
                                               Name: ___________________________
                                               Title: __________________________

                                       36
<PAGE>

                                                                       EXHIBIT A

                           [Form of Right Certificate]

Certificate No. R)                                                _______ Rights

      NOT EXERCISABLE AFTER THE CLOSE OF BUSINESS ON MAY 2, 2011, OR EARLIER IF
      NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR
      ACQUIRED PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION
      1.3(ii)(A)(z) OF THE AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
      $.001 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.
      UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE
      AGREEMENT), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING
      PERSON (AS DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH
      RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                Right Certificate

                                   COACH, 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 First
Amended and Restated Rights Agreement, dated as of February 2, 2005, as the same
may be amended from time to time (the "Agreement"), between Coach, Inc., a
Maryland corporation (the "Company"), and Mellon Investor Services LLC, a New
Jersey limited liability company, as Rights Agent (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date and prior to
5:00 P.M. (New York City time) on May 2, 2011, at the offices of the Rights
Agent, or its successors as Rights Agent, designated for such purpose, one fully
paid, nonassessable common share (the "Common Shares") of the Company, at a
purchase price of $170.00 per share, subject to adjustment (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase and certification duly executed. The number of Rights
evidenced by this Right Certificate (and the number of Common Shares which may
be purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of ________, ____ based on the
Common Shares as constituted at such date. Capitalized terms used in this Right
Certificate without definition shall have the meanings ascribed to them in the
Agreement. As provided in the Agreement, the Purchase Price and the number of
Common Shares which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.

            This Right Certificate is subject to all of the terms, provisions
and conditions of the Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Agreement reference is hereby made for a full

                                      A-1
<PAGE>

description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Agreement are on file at the offices of the
Company.

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

            Subject to the provisions of the Agreement, the Board of Directors
may, at its option, (i) redeem the Rights evidenced by this Right Certificate at
a redemption price of $.001 per Right at any time prior to the close of business
on the tenth day after the Shares Acquisition Date, (ii) exchange Common Shares
for the Rights evidenced by this Certificate, in whole or in part or (iii)
extend the period during which redemption of the Rights is permitted.

            No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Agreement.

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

            If any term, provision, covenant or restriction of the 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 the Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.

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

                                      A-2
<PAGE>

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

Attest:                                                COACH, INC.

By: __________________________________     By: _________________________________
    Title: ___________________________         Title: __________________________

Countersigned:

MELLON INVESTOR SERVICES LLC, as Rights Agent

By: _________________________________
    Authorized Signature

                                      A-3
<PAGE>

                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED ____________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
________________________________________________________________________________

                         (Please print name and address
                                 of transferee)

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

Dated: ________________

                                                ________________________________
                                                Signature

Signature Guaranteed:

_________________________________

            Signatures must be guaranteed by an "eligible guarantor institution"
as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.

                                      A-4
<PAGE>

________________________________________________________________________________

The undersigned hereby certifies that:

            (1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and

            (2) after due inquiry and to the best knowledge of the undersigned,
the undersigned did not acquire the Rights evidenced by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.

Dated: ________________

                                                ________________________________
                                                Signature

                                      A-5
<PAGE>

                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                        exercise the Right Certificate.)

To: COACH, INC.

            The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights (or such other securities or property
of the Company or of any other Person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the name
of:

______________________________________________________
(Please print name and address)

______________________________________________________

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

Please insert social security
or other identifying number

______________________________________________________
(Please print name and address)

______________________________________________________

______________________________________________________

Dated: ________________

                                                ________________________________
                                                Signature

Signature Guaranteed:

___________________________________

            Signatures must be guaranteed by an "eligible guarantor institution"
as defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of
1934, as amended.

                                      A-6
<PAGE>

The undersigned hereby certifies that:

            (1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and

            (2) after due inquiry and to the best knowledge of the undersigned,
the undersigned did not acquire the Rights evidenced by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.

Dated: ________________

                                                ________________________________
                                                Signature

________________________________________________________________________________

                                     NOTICE

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

            In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company will
deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate hereof and such Assignment
or Election to Purchase will not be honored.

                                      A-7
<PAGE>

                                                                       EXHIBIT B

         As described in the Rights Agreement, Rights which are held by
      or have been held by an Acquiring Person or Associates or Affiliates
      thereof (as defined in the Rights Agreement) and certain transferees
     thereof shall become null and void and will no longer be transferable.

                          SUMMARY OF RIGHTS TO PURCHASE
                                  COMMON SHARES

            On May 3, 2001 the Board of Directors of Coach, Inc. (the "Company")
authorized and declared a dividend of one right (a "Right") for each share of
common stock, $0.01 par value per share (the "Common Shares"), of the Company
outstanding at the close of business on May 22, 2001 (the "Record Date"). As
long as the Rights are attached to the Common Shares, the Company will issue one
Right (subject to adjustment) with each new Common Share so that all such shares
will have attached Rights. When exercisable, each Right will entitle the
registered holder to purchase from the Company one Common Share at a price of
$170.00 per Common 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 3, 2001, as the same may be amended from time to time (the
"Agreement"), between the Company and Mellon Investor Services LLC, as Rights
Agent (the "Rights Agent").

            Until the earlier to occur of (i) either ten (10) days following a
public announcement that, or the date on which a majority of the Board becomes
aware that, a person or group of affiliated or associated persons has acquired,
or obtained the right to acquire, beneficial ownership of 10% or more of the
Common Shares (an "Acquiring Person") or (ii) ten (10) business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of the Common Shares
(the earlier of (i) and (ii) being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate together
with a copy of this Summary of Rights.

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

                                       B-1
<PAGE>

Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.

            The Rights are not exercisable until the Distribution Date. The
Rights will expire on the close of business on May 2, 2011, subject to the
Company's right to extend such date (the "Final Expiration Date"), unless
earlier redeemed or exchanged by the Company or terminated.

            The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights or
warrants to subscribe for or purchase Common Shares or convertible securities at
less than the current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness, cash,
securities or assets (excluding regular periodic cash dividends at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income
per share of the Company for the four quarters ended immediately prior to the
payment of such dividend, or dividends payable in Common Shares (which dividends
will be subject to the adjustment described in clause (i) above)) or of
subscription rights or warrants (other than those referred to above).

            In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an Acquiring Person or
any affiliate or associate of an Acquiring Person and the Common Shares were not
changed or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then current
Purchase Price of the Right. In the event that, after a person has become an
Acquiring Person, the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the then current Purchase Price of the Right.

            At any time after a Person becomes an Acquiring Person and prior to
the earlier of one of the events described in the last sentence of the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which will
have become void), in whole or in part, for Common Shares at an exchange rate of
one Common Share per Right (subject to adjustment).

            No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Common Shares will be issued and in lieu thereof, a payment
in cash will be made based on the market price of the Common Shares on the last
trading date prior to the date of exercise.

                                       B-2
<PAGE>

            The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the close of business on the tenth day following either the public
announcement that, or the date on which a majority of the Board becomes aware
that, a Person has become an Acquiring Person. Redeeming the Rights would
require the approval of a majority of the Board members. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.

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

            Any of the provisions of the Agreement may be amended by the Board
of Directors of the Company.

            A copy of the Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the
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 Agreement, which is incorporated herein by reference.

                                       B-3

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