SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.  20549



Form 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934



Date of Report (date of earliest event reported):  June 8, 2001



Mallon Resources Corporation
(exact name of registrant as specified in its charter)


    Colorado                       0-17267               84-1095959
(State or other                  (Commission          (I.R.S. Employer
jurisdiction                     File Number)         Identification No.)
of incorporation)



999 18th Street, Suite 1700, Denver, Colorado              80202
(address of principal executive offices)                 (zip code)



Registrant's telephone number, including area code:  (303) 293-2333



not applicable
(former name or former address, if changed since last report)
<PAGE>

Item 5.  Other Events

Mallon Resources Corporation (the "Company") issued the following press
release, dated June 8, 2001, the text of which follows:

    Denver, Colorado -- Mallon Resources Corporation (Nasdaq:  "MLRC") today
announced that its Board of Directors has declared a dividend on its shares of
Common Stock (the "Common Shares") of preferred share purchase rights as part
of a Shareholders Rights Plan.

    The Plan is designed to insure that all shareholders of the Company
receive fair value for their Common Shares in the event of any proposed
takeover of the Company and to guard against the use of partial tender offers
or other coercive tactics to gain control of the Company without offering fair
value to the Company's shareholders. At the present time, the Company knows of
no proposed or threatened takeover, tender offer or other effort to gain
control of the Company.

    George Mallon, Chief Executive Officer of the Company, said, "We believe
that this Plan protects shareholder interests in the event that the Company is
confronted with coercive or unfair takeover tactics, including offers that do
not treat all shareholder interests fairly or do not maximize the value of the
Company, including the long-term gains which the shareholders could reasonably
expect to receive if the Company remains independent."

    Mallon stressed that, "The Plan is not intended, nor will it operate, to
prevent an acquisition of the Company on terms that are favorable and fair to
all shareholders. The Plan is designed to deal with the very serious problem
of unilateral actions by hostile acquirers that are calculated to deprive the
Board and shareholders of their ability to determine the destiny of the
Company. Acquisition offers that reflect the Company's fair value and that are
made to all shareholders would not be affected by the Plan."

    Under the terms of the Plan, preferred share purchase rights (the
"Rights") will be distributed as a dividend at the rate of one Right for each
Common Share held. Shareholders will not actually receive certificates for the
Rights at this time, but the Rights will become part of each Common Share. All
Rights expire on June 30, 2006.

    Each Right will entitle the holder to buy shares of Common Stock at an
exercise price of $40.00. The Rights will be exercisable and will trade
separately from the Common Shares only if a person or group acquires
beneficial ownership of 20% or more of the Company's Common Shares or
commences a tender or exchange offer that would result in such a person or
group owning 20% or more of the Common Shares. Only when one or more of these
events occur will shareholders receive certificates for the Rights.

    If any person actually acquires 20% or more of Common Shares -- other than
through a tender or exchange offer for all Common Shares that provides a fair
price and other terms for such shares -- or if a 20%-or-more shareholder
engages in certain "self-dealing" transactions or engages in a merger or other
business combination in which the Company survives and its Common Shares
remain outstanding, the other shareholders will be able to exercise the Rights
and buy Common Shares of the Company having twice the value of the exercise
price of the Rights. Additionally, if the Company is involved in certain other
mergers where its shares are exchanged, or certain major sales of assets
occur, shareholders will be able to purchase the other party's common shares
in an amount equal to twice the value of the exercise price of the Rights.

    The Company will be entitled to redeem the Rights at $.01 per Right at any
time until the tenth day following public announcement that a person has
acquired a 20% ownership position in Common Shares of the Company. The Company
in its discretion may extend the period during which it can redeem the Rights.

    Mallon Resources Corporation is a Denver-based oil and gas exploration and
production company operating primarily in the San Juan and Delaware Basins of
New Mexico. Mallon's Common Stock is quoted on Nasdaq under the symbol "MLRC."

<PAGE>


Item 7.  Financial Statements and Exhibits

Exhibit:  Shareholders Rights Plan

SHAREHOLDERS RIGHTS AGREEMENT

    THIS SHAREHOLDERS RIGHTS AGREEMENT, dated as of June 7, 2001 (the
"Agreement"), is between Mallon Resources Corporation, a Colorado corporation
(the "Company"), and Securities Transfer Corporation, a Texas corporation (the
"Rights Agent").

Recitals

    On June 7, 2001 (the "Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each
share of common stock, $.01 par value per share, of the Company (the "Common
Stock") outstanding at the close of business on June 8, 2001 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) of this
Agreement) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date. This Agreement sets forth the terms of
the Rights.

Agreement

    The parties agree as follows:

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

    (a) "Acquiring Person" means any Person that, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan or (ii) any Person who would otherwise become an
Acquiring Person solely as a result of a reduction in the number of shares of
Common Stock outstanding due to the repurchase of shares of Common Stock by
the Company, unless and until such Person shall purchase or otherwise become
the Beneficial Owner of additional shares of Common Stock constituting one-
half of one percent or more of the then outstanding shares of Common Stock
other than pursuant to a Qualifying Offer. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of the acquisition by
such Person of newly-issued shares of Common Stock directly from the Company
(it being understood that a purchase from an underwriter or other intermediary
in connection with a public offering by the Company is not deemed for purposes
hereof to be a purchase directly from the Company); provided, however, that if
a Person shall become the Beneficial Owner of 20% or more of the shares of
Common Stock of the Company then outstanding by reason of the receipt of
newly-issued shares of Common Stock directly from the Company and shall, after
such direct issuance by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company other than pursuant to a
Qualifying Offer (and thereafter remains a Beneficial Owner of 20% or more of
the shares of Common Stock of the Company), then such Person shall be deemed
to be an "Acquiring Person;" and provided, further, that any transferee from
such Person who becomes the Beneficial Owner of 20% or more of the shares of
Common Stock of the Company then outstanding shall nevertheless be deemed to
be an "Acquiring Person."

    (b) "Act" means the Securities Act of 1933, as amended.

    (c) "Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 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.

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

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

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

        (iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided, however, that nothing in this
paragraph (d) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of 40 days after the date of
such acquisition.

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

    (f) "Close of business" on a date shall mean 5:00 P.M., Denver time, on
such date; provided, however, that if such date is not a Business Day it shall
mean 5:00 P.M., Denver time, on the next succeeding Business Day.

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

    (h) "Continuing Director" shall mean any member of the Board of Directors
of the Company who is not an Acquiring Person or an Affiliate or Associate of
an Acquiring Person or a nominee or representative of any Acquiring Person or
any such Affiliate or Associate and who was a member of the Board of Directors
of the Company before the Stock Acquisition Date, and any successor to a
Continuing Director who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or nominee or representative of an Acquiring
Person or of any such Affiliate or Associate and who was recommended for
election or elected to succeed the Continuing Director by a majority of the
Continuing Directors then on the Board of Directors of the Company.

    (i) "Distribution Date" shall mean the earlier of the following: (i) the
close of business on the tenth day after the Stock Acquisition Date (or, if
the tenth day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of business on
the tenth Business Day after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant
to any such plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding.

    (j) "Person" means any individual, firm, corporation, partnership or other
entity.

    (k) "Purchase Price" means the exercise price at which a holder of a Right
may purchase one share of Common Stock upon exercise of a Right.

    (l) "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Continuing Directors who are not
officers or employees of the Company and who are not representatives,
nominees, Affiliates or Associates of the Person making such offer, to be (a)
at a price that is fair to Shareholders (taking into account all factors that
such members of the Board deem relevant) and (b) otherwise in the best
interests of the Company and its Shareholders.

    (m) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) of this Agreement.

    (n) "Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a) of this Agreement.

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

    (p) "Subsidiary" means, with reference to any Person, any corporation of
which an amount of voting securities sufficient to elect at least a majority
of the directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.

    (q) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.

    Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms of
this Agreement, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it deems
necessary or desirable.

    Section 3. Issuance of Rights Certificates. (a) Until the Distribution
Date, (i) the Rights will be evidenced (subject to paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates,
and (ii) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
right certificates in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof at the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. On and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

    (b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto
as Exhibit B (the "Summary of Rights"), by first-class, postage prepaid mail,
to each record holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date (as defined
in Section 7 hereof), the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common Stock.

    (c) Rights shall be deemed to be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date and, in certain circumstances as provided in
Section 22 of this Agreement, after the Distribution Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for the associated Rights upon the same basis as previously
issued certificates for shares of Common Stock represent the Rights associated
with such shares. With respect to such certificates, until the earlier of (i)
the Distribution Date or (ii) the Expiration Date, the Rights associated with
the Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. If the Company acquires any
Common Stock after the Record Date but before the Distribution Date, any
Rights associated with such Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any rights associated
with Common Stock that is no longer outstanding.

    Section 4. Form of Rights Certificates. (a) The Rights Certificates (and
the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit
A hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with this Agreement, or as may be
required to comply with any applicable law, rule or regulation, including any
rule or regulation of any stock exchange or other trading facility on which
the Rights may from time to time be listed or traded, or to conform to usage.
Subject to Section 11 and Section 22 of this Agreement, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and
on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the Purchase Price,
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.

    (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by a Person described in
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:

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

    Section 5. Countersignature and Registration. (a) The Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, 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 an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. If any officer of the Company who has signed
any of the Rights Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Rights Certificates had not ceased to be
such officer of the Company. Any Rights Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement
any such person was not such an officer.

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

    Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to Sections 4(b), 7(e) and 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Sections 4(b), 7(e) and 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination or exchange
of Rights Certificates.

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

    Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of shares of Common Stock (or other securities,
cash or other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earlier of (i) the close of business
on June 30, 2006 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof or (iii) the time at
which the Rights are exchanged as provided in Section 24 hereof (the earlier
of (i), (ii) and (iii) being herein referred to as the "Expiration Date").

    (b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $40.00 and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.

    (c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the
Purchase Price per share of Common Stock (or other shares, securities, cash or
other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject
to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total number
of shares of Common Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Common
Stock issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts shall
be deposited by the transfer agent with the depository agent) and the Company
will direct the depository agent to comply with such request, (ii) requisition
from the Company the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depository receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in
cash or by certified bank check or bank draft payable to the order of the
Company. If the Company is obligated to issue other securities of the Company,
to pay cash and/or to distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.

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

    (e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an 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 that the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.

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

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

    Section 9. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will from and after such time as the Rights
become exercisable use its best reasonable efforts to cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock (and
any other securities for which the Rights become exercisable), the number of
shares of Common Stock (and/or other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit
the exercise in full of all outstanding Rights.

    (b) So long as the shares of Common Stock (and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange or authorized for quotation on the National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"),
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
authorized for such quotation or to be listed on such exchange upon official
notice of issuance upon such exercise.

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

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

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

    Section 10. Common Stock Record Date. Each person in whose name any
certificate for Common Stock (and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock (and/or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

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

    (a) (i) If the Company at any time after the Distribution Date (A)
declares a dividend on the Common Stock payable in shares of Common Stock, (B)
subdivides the outstanding Common Stock, (C) combines the outstanding Common
Stock into a smaller number of shares, or (D) issues any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the number and kind of
shares of Common Stock or capital stock, as the case may be, issuable on the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Common Stock or capital stock, as the case may be, that, if
such Right had been exercised immediately prior to such date and at a time
when the Common Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.

        (ii) If any Person becomes an Acquiring Person other than pursuant to
a transaction subject to Section 13(a) of this Agreement or a Qualifying
Offer, then, promptly following the occurrence of such event, proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with this Agreement,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of such first occurrence
(such number of shares, the "Adjustment Shares").

        (iii) If the number of shares of Common Stock authorized by the
Company's articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall: (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, 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) Common Stock or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock that the Board of Directors of the
Company has deemed to have the same value as shares of Common Stock (such
shares of preferred stock being "common stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
determines in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in full of the
Rights, the 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization
of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Stock shall be
the current market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any "common stock equivalent" shall be deemed to have the same value as the
Common Stock on such date.

    (b) If the Company fixes a record date for the issuance of rights, options
or warrants to all holders of Common Stock entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after such record
date) Common Stock (or shares having the same rights, privileges and
preferences as the shares of Common Stock ("equivalent stock")) or securities
convertible into Common Stock or equivalent stock at a price per share of
Common Stock or per share of equivalent stock (or having a conversion price
per share, if a security convertible into Common Stock or equivalent stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately before such record date by a fraction,
the numerator of which is the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock that the aggregate
offering price of the total number of shares of Common Stock and/or equivalent
stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). If such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.

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

    (d) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) and Section 24(c) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as defined below) immediately prior to such date,
for purposes of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the 10 consecutive Trading Days immediately following such date; and for
purposes of computations made pursuant to Section 24(c) hereof, the "current
market price" per share of Common Stock shall be deemed to be the closing
price per share of Common Stock on the Trading Day immediately preceding the
date of exchange pursuant to Section 24; provided, however, that if the
current market price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite 30 Trading-Day or
10 Trading-Day period, as set forth above, after 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 market price"
shall be properly adjusted to take into account ex-dividend trading. 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 shares of Common
Stock 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 shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use, or, if on any such
date the shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares 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 shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.

    (e) Notwithstanding anything in this Agreement to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of
the transaction that mandates such adjustment, or (ii) the Expiration Date.

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

    (g) All Rights originally issued by the Company after any adjustment of
the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.

    (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of shares
of Common Stock (calculated to the nearest one-thousandth) obtained by (i)
multiplying (x) the number of 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.

    (i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of shares of Common Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates have been issued, shall
be at least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.

    (j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares that were expressed in
the initial Rights Certificates issued hereunder.

    (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated or par value, if any, of the number of
shares of Common Stock issuable upon exercise of the Rights, the Company shall
take any corporate action that may, in the opinion of its counsel, be
necessary for the Company validly to issue fully paid and nonassessable such
number of shares of Common Stock at such adjusted Purchase Price.

    (l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
number of shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.

    (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares
of Common Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Common Stock or securities that by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders.

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

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

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

    Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof
(other than adjustments occurring prior to the Distribution Date or any
Triggering Event), the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Common Stock, a copy of such certificate, and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 26 hereof. Promptly after the Distribution Date or any Triggering
Event, the Company shall comply with the foregoing for any adjustment that
occurred prior to the Distribution Date or such Triggering Event. The Rights
Agent shall be fully protected in relying on any certificate delivered by the
Company pursuant to this Section 12 and on any adjustment therein contained.

    Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) If, following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which and all of which comply
with Section 11(o) hereof), then, and in each such case (except as
contemplated by Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims or restrictions, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event) by the Purchase Price in
effect immediately prior to such first occurrence, and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.

    (b) "Principal Party" shall mean

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

        (ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time or has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value.

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

        (i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date; and

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

This Section 13 shall similarly apply to successive mergers or consolidations
or sales or other transfers. If a Section 13 Event occurs at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a), subject to Section 7(e).

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

    Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights, except prior to the Distribution
Date as provided in Section 11(p) hereof, or to distribute Rights Certificates
that evidence fractional Rights. After the Distribution Date, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the 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 fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.

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

    (c) 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 of a Right, except as permitted by this Section 14.

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

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

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

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

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

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

    Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate have been exercised
in accordance with the provisions hereof.

    Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for any
action taken or suffered by the Rights Agent in connection with the acceptance
and administration of this Agreement and the exercise and performance of its
duties hereunder, including the costs and expenses of defending against and
appealing any claim of liability arising therefrom, directly or indirectly.

    (b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with its acceptance and administration of this Agreement or the exercise and
performance of its duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement,
instruction 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, or otherwise upon the advice of counsel as set forth in
Section 21 hereof.

    Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 22
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates in this Agreement.

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

    Section 20. Duties of Rights Agent. The Rights Agent shall have only the
duties and obligations expressly set forth in this Agreement. There shall be
no implied duties or obligations of the Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:

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

    (b) Whenever in the administration, exercise and performance of its duties
under this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting 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,
any Vice Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and any such certificate
shall be full authorization and protection to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

    (c) The Rights Agent shall not be liable or responsible hereunder to the
Company except for its own negligence, bad faith or willful misconduct.

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

    (e) The Rights Agent shall not have any liability or responsibility in
respect of the legality, validity or enforceability of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the legality, validity, enforceability or execution of
any Rights Certificate (except its countersignature thereof); nor shall it be
liable or responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall
it be liable or responsible for any adjustment including, without limitation,
as required under the provisions of Section 11 or 13 hereof (including any
adjustment which results in the Rights becoming void) or liable or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after
receipt of a notice or certificate pursuant to Section 12 describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or other securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.

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

    (g) The Rights Agent is hereby authorized and directed to accept
instructions or directions with respect to the administration of this
Agreement and the execution and performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable or responsible for any action taken, suffered or omitted to be taken by
it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for such instructions.

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

    (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be liable or
responsible for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss or damages to the Company or to the
holders of the Rights resulting from any such act, omission, default, neglect
or misconduct, provided reasonable care was exercised in the selection and
continued employment thereof. The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of the
Rights Certificates.

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

    (k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange, the
Certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise, transfer,
split up, combination or exchange without first consulting with the Company.

    Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock, by registered or certified mail, and, after the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of one of the United States in good
standing, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

    Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise
of stock options or warrants or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities hereafter issued by
the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.

    Section 23. Redemption and Termination. (a) The Board of Directors of the
Company may, at its option, at any time before the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date occurs before the Record Date, the close of business on
the tenth day after the Record Date), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding the foregoing, if the
Board of Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) or (ii) below, then there
must be Continuing Directors then in office and such authorization shall
require the concurrence of a majority of such Continuing Directors: (i) such
authorization occurs on or after the time a Person becomes an Acquiring
Person, or (ii) such authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if any Person who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board of Directors of the Company has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action that would
result in such Person becoming an Acquiring Person or that would cause the
occurrence of a Triggering Event. Notwithstanding anything in this Agreement
to the contrary, the Rights shall not be exercisable at any time when the
Company may redeem them pursuant to this Section 23. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
"current market price," as defined in Section 11(d) hereof, of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.

    (b) At such time as specified in the resolution of the Board of Directors
ordering redemption of the Rights (or at such time as is determined by a
committee of the Board of Directors authorized by the Board of Directors to
specify such time at the time of the Board's adoption of such resolution or
immediately upon such action of the Board of Directors if the Board does not
specify a date or so empower a committee) and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears 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 Stock. Any notice mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made. Any failure to give or inadequacy of such notice shall not
affect the validity of the redemption. The Redemption Price shall be payable
to those Persons who are record holders of the Rights at the close of business
on a date determined by the Board of Directors, which date shall be at least
eleven days after the Board of Directors orders redemption of the Rights.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time except (i) in the manner
specifically set forth in this Section 23 or in Section 24 hereof or (ii) in
connection with the purchase of Common Stock prior to the Distribution Date.

    Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time and from time to time on or after a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock then outstanding. In the event that there shall
not be sufficient Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall use its best reasonable efforts to take all
such action as may be necessary to authorize additional Common Stock for
issuance upon exchange of the Rights.

    (b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.

    (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) "common stock equivalents," (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (f) any combination of the foregoing, having an
aggregate value which a majority of the Continuing Directors and the Board of
Directors of the Company shall have determined in good faith to be equal to
the current market price of one share of Common Stock (determined pursuant to
Section 11(d) hereof).

    Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Stock, or (ii) to offer
to the holders of Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of any class
or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (iv) to effect
any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one transaction or
a series of related transactions, of more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which and all of which comply with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.

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

    Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if and when sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

          Mallon Resources Corporation
          999 18th Street, Suite 1700
          Denver, CO 80202
          Attention: Secretary

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

          Securities Transfer Corporation
          2591 Dallas Parkway, Suite 102
          Frisco, TX  75034

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

    Section 27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Rights in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder
(which lengthening or shortening, following the first occurrence of an event
set forth in clauses (i) or (ii) of the first provision to Section 23(a)
hereof, shall be effective only if there are Continuing Directors and shall
require the concurrence of a majority of such Continuing Directors), or (iv)
to change or supplement the provisions hereunder in any manner that the
Company deems necessary or desirable and that does not adversely affect the
interests of the holders of Rights Certificates (other than any Acquiring
Person); provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for
the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Without limiting the foregoing, the
Company may at any time or from time to time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 1(i) to not less than 10%. Upon the delivery of a
certificate from an appropriate officer of the Company stating that the
proposed supplement or amendment is in compliance with this Section 27, the
Rights Agent shall execute such supplement or amendment. Notwithstanding
anything in this Agreement to the contrary, no supplement or amendment shall
be made pursuant to this Section 27 that changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of shares of Common
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.

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

    Section 29. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement.
The Board of Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) shall have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
this Agreement, and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done
or made by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.

    Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).

    Section 31. Severability. If any term of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable, and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would materially adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.

    Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
Colorado law and for all purposes shall be governed by and construed in
accordance with Colorado law 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, each which shall be an original, and all of which shall together
constitute a single instrument.

    Section 34. Descriptive Headings. Descriptive headings of the Sections of
this Agreement are inserted for convenience only and shall not affect the
meaning of this Agreement.

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

ATTEST:                               MALLON RESOURCES CORPORATION


By:  /s/ Roy K. Ross                  By:    /s/ George o. Mallon, Jr.
         Secretary                        President and Chief
                                           Executive Officer


                                        SECURITIES TRANSFER CORPORATION


                                        By:    /s/ Kevin B. Halter, Jr.
                                            Kevin B. Halter, Jr.
                                            President

<PAGE>


                                    Signatures

    Pursuant to the requirements of the Securities Exchange act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    Mallon Resources Corporation



June 8, 2001                        By: __/s/ Roy K. Ross____________________
                                        Roy K. Ross, Executive Vice President
[{"type": "8-K", "sequence": "1", "filename": "stock8k.txt", "secsgml_size_bytes": 117617}]
{"company-data": {"conformed-name": "MALLON RESOURCES CORP", "cik": "0000837759", "assigned-sic": "1311", "irs-number": "841095959", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-13124", "film-number": "1657030"}, "business-address": {"street1": "999 18TH ST STE 1700", "city": "DENVER", "state": "CO", "zip": "80202", "phone": "3032932333"}, "mail-address": {"street1": "999 18TH STREET", "street2": "STE 1700", "city": "DENVER", "state": "CO", "zip": "80202"}}
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.  20549

Form 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934

Date of Report (date of earliest event reported):  June 8, 2001

Mallon Resources Corporation
(exact name of registrant as specified in its charter)

    Colorado                       0-17267               84-1095959
(State or other                  (Commission          (I.R.S. Employer
jurisdiction                     File Number)         Identification No.)
of incorporation)

999 18th Street, Suite 1700, Denver, Colorado              80202
(address of principal executive offices)                 (zip code)

Registrant's telephone number, including area code:  (303) 293-2333

not applicable
(former name or former address, if changed since last report)
Item 5.  Other Events

Mallon Resources Corporation (the "Company") issued the following press
release, dated June 8, 2001, the text of which follows:

    Denver, Colorado -- Mallon Resources Corporation (Nasdaq:  "MLRC") today
announced that its Board of Directors has declared a dividend on its shares of
Common Stock (the "Common Shares") of preferred share purchase rights as part
of a Shareholders Rights Plan.

    The Plan is designed to insure that all shareholders of the Company
receive fair value for their Common Shares in the event of any proposed
takeover of the Company and to guard against the use of partial tender offers
or other coercive tactics to gain control of the Company without offering fair
value to the Company's shareholders. At the present time, the Company knows of
no proposed or threatened takeover, tender offer or other effort to gain
control of the Company.

    George Mallon, Chief Executive Officer of the Company, said, "We believe
that this Plan protects shareholder interests in the event that the Company is
confronted with coercive or unfair takeover tactics, including offers that do
not treat all shareholder interests fairly or do not maximize the value of the
Company, including the long-term gains which the shareholders could reasonably
expect to receive if the Company remains independent."

    Mallon stressed that, "The Plan is not intended, nor will it operate, to
prevent an acquisition of the Company on terms that are favorable and fair to
all shareholders. The Plan is designed to deal with the very serious problem
of unilateral actions by hostile acquirers that are calculated to deprive the
Board and shareholders of their ability to determine the destiny of the
Company. Acquisition offers that reflect the Company's fair value and that are
made to all shareholders would not be affected by the Plan."

    Under the terms of the Plan, preferred share purchase rights (the
"Rights") will be distributed as a dividend at the rate of one Right for each
Common Share held. Shareholders will not actually receive certificates for the
Rights at this time, but the Rights will become part of each Common Share. All
Rights expire on June 30, 2006.

    Each Right will entitle the holder to buy shares of Common Stock at an
exercise price of $40.00. The Rights will be exercisable and will trade
separately from the Common Shares only if a person or group acquires
beneficial ownership of 20% or more of the Company's Common Shares or
commences a tender or exchange offer that would result in such a person or
group owning 20% or more of the Common Shares. Only when one or more of these
events occur will shareholders receive certificates for the Rights.

    If any person actually acquires 20% or more of Common Shares -- other than
through a tender or exchange offer for all Common Shares that provides a fair
price and other terms for such shares -- or if a 20%-or-more shareholder
engages in certain "self-dealing" transactions or engages in a merger or other
business combination in which the Company survives and its Common Shares
remain outstanding, the other shareholders will be able to exercise the Rights
and buy Common Shares of the Company having twice the value of the exercise
price of the Rights. Additionally, if the Company is involved in certain other
mergers where its shares are exchanged, or certain major sales of assets
occur, shareholders will be able to purchase the other party's common shares
in an amount equal to twice the value of the exercise price of the Rights.

    The Company will be entitled to redeem the Rights at $.01 per Right at any
time until the tenth day following public announcement that a person has
acquired a 20% ownership position in Common Shares of the Company. The Company
in its discretion may extend the period during which it can redeem the Rights.

    Mallon Resources Corporation is a Denver-based oil and gas exploration and
production company operating primarily in the San Juan and Delaware Basins of
New Mexico. Mallon's Common Stock is quoted on Nasdaq under the symbol "MLRC."
Item 7.  Financial Statements and Exhibits

Exhibit:  Shareholders Rights Plan

SHAREHOLDERS RIGHTS AGREEMENT

    THIS SHAREHOLDERS RIGHTS AGREEMENT, dated as of June 7, 2001 (the
"Agreement"), is between Mallon Resources Corporation, a Colorado corporation
(the "Company"), and Securities Transfer Corporation, a Texas corporation (the
"Rights Agent").

Recitals

    On June 7, 2001 (the "Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each
share of common stock, $.01 par value per share, of the Company (the "Common
Stock") outstanding at the close of business on June 8, 2001 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) of this
Agreement) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date. This Agreement sets forth the terms of
the Rights.

Agreement

    The parties agree as follows:

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

    (a) "Acquiring Person" means any Person that, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan or (ii) any Person who would otherwise become an
Acquiring Person solely as a result of a reduction in the number of shares of
Common Stock outstanding due to the repurchase of shares of Common Stock by
the Company, unless and until such Person shall purchase or otherwise become
the Beneficial Owner of additional shares of Common Stock constituting one-
half of one percent or more of the then outstanding shares of Common Stock
other than pursuant to a Qualifying Offer. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of the acquisition by
such Person of newly-issued shares of Common Stock directly from the Company
(it being understood that a purchase from an underwriter or other intermediary
in connection with a public offering by the Company is not deemed for purposes
hereof to be a purchase directly from the Company); provided, however, that if
a Person shall become the Beneficial Owner of 20% or more of the shares of
Common Stock of the Company then outstanding by reason of the receipt of
newly-issued shares of Common Stock directly from the Company and shall, after
such direct issuance by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company other than pursuant to a
Qualifying Offer (and thereafter remains a Beneficial Owner of 20% or more of
the shares of Common Stock of the Company), then such Person shall be deemed
to be an "Acquiring Person;" and provided, further, that any transferee from
such Person who becomes the Beneficial Owner of 20% or more of the shares of
Common Stock of the Company then outstanding shall nevertheless be deemed to
be an "Acquiring Person."

    (b) "Act" means the Securities Act of 1933, as amended.

    (c) "Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 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.

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

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

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

        (iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided, however, that nothing in this
paragraph (d) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of 40 days after the date of
such acquisition.

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

    (f) "Close of business" on a date shall mean 5:00 P.M., Denver time, on
such date; provided, however, that if such date is not a Business Day it shall
mean 5:00 P.M., Denver time, on the next succeeding Business Day.

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

    (h) "Continuing Director" shall mean any member of the Board of Directors
of the Company who is not an Acquiring Person or an Affiliate or Associate of
an Acquiring Person or a nominee or representative of any Acquiring Person or
any such Affiliate or Associate and who was a member of the Board of Directors
of the Company before the Stock Acquisition Date, and any successor to a
Continuing Director who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or nominee or representative of an Acquiring
Person or of any such Affiliate or Associate and who was recommended for
election or elected to succeed the Continuing Director by a majority of the
Continuing Directors then on the Board of Directors of the Company.

    (i) "Distribution Date" shall mean the earlier of the following: (i) the
close of business on the tenth day after the Stock Acquisition Date (or, if
the tenth day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of business on
the tenth Business Day after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant
to any such plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding.

    (j) "Person" means any individual, firm, corporation, partnership or other
entity.

    (k) "Purchase Price" means the exercise price at which a holder of a Right
may purchase one share of Common Stock upon exercise of a Right.

    (l) "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Continuing Directors who are not
officers or employees of the Company and who are not representatives,
nominees, Affiliates or Associates of the Person making such offer, to be (a)
at a price that is fair to Shareholders (taking into account all factors that
such members of the Board deem relevant) and (b) otherwise in the best
interests of the Company and its Shareholders.

    (m) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) of this Agreement.

    (n) "Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a) of this Agreement.

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

    (p) "Subsidiary" means, with reference to any Person, any corporation of
which an amount of voting securities sufficient to elect at least a majority
of the directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.

    (q) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.

    Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms of
this Agreement, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it deems
necessary or desirable.

    Section 3. Issuance of Rights Certificates. (a) Until the Distribution
Date, (i) the Rights will be evidenced (subject to paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates,
and (ii) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
right certificates in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof at the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. On and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.

    (b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto
as Exhibit B (the "Summary of Rights"), by first-class, postage prepaid mail,
to each record holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date (as defined
in Section 7 hereof), the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common Stock.

    (c) Rights shall be deemed to be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date and, in certain circumstances as provided in
Section 22 of this Agreement, after the Distribution Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for the associated Rights upon the same basis as previously
issued certificates for shares of Common Stock represent the Rights associated
with such shares. With respect to such certificates, until the earlier of (i)
the Distribution Date or (ii) the Expiration Date, the Rights associated with
the Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. If the Company acquires any
Common Stock after the Record Date but before the Distribution Date, any
Rights associated with such Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any rights associated
with Common Stock that is no longer outstanding.

    Section 4. Form of Rights Certificates. (a) The Rights Certificates (and
the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit
A hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with this Agreement, or as may be
required to comply with any applicable law, rule or regulation, including any
rule or regulation of any stock exchange or other trading facility on which
the Rights may from time to time be listed or traded, or to conform to usage.
Subject to Section 11 and Section 22 of this Agreement, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and
on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the Purchase Price,
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.

    (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by a Person described in
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:

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

    Section 5. Countersignature and Registration. (a) The Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, 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 an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. If any officer of the Company who has signed
any of the Rights Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Rights Certificates had not ceased to be
such officer of the Company. Any Rights Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement
any such person was not such an officer.

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

    Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to Sections 4(b), 7(e) and 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Sections 4(b), 7(e) and 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination or exchange
of Rights Certificates.

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

    Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of shares of Common Stock (or other securities,
cash or other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earlier of (i) the close of business
on June 30, 2006 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof or (iii) the time at
which the Rights are exchanged as provided in Section 24 hereof (the earlier
of (i), (ii) and (iii) being herein referred to as the "Expiration Date").

    (b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $40.00 and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.

    (c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the
Purchase Price per share of Common Stock (or other shares, securities, cash or
other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject
to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total number
of shares of Common Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Common
Stock issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts shall
be deposited by the transfer agent with the depository agent) and the Company
will direct the depository agent to comply with such request, (ii) requisition
from the Company the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depository receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in
cash or by certified bank check or bank draft payable to the order of the
Company. If the Company is obligated to issue other securities of the Company,
to pay cash and/or to distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.

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

    (e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an 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 that the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.

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

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

    Section 9. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will from and after such time as the Rights
become exercisable use its best reasonable efforts to cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock (and
any other securities for which the Rights become exercisable), the number of
shares of Common Stock (and/or other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit
the exercise in full of all outstanding Rights.

    (b) So long as the shares of Common Stock (and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange or authorized for quotation on the National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"),
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
authorized for such quotation or to be listed on such exchange upon official
notice of issuance upon such exercise.

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

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

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

    Section 10. Common Stock Record Date. Each person in whose name any
certificate for Common Stock (and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock (and/or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

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

    (a) (i) If the Company at any time after the Distribution Date (A)
declares a dividend on the Common Stock payable in shares of Common Stock, (B)
subdivides the outstanding Common Stock, (C) combines the outstanding Common
Stock into a smaller number of shares, or (D) issues any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the number and kind of
shares of Common Stock or capital stock, as the case may be, issuable on the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Common Stock or capital stock, as the case may be, that, if
such Right had been exercised immediately prior to such date and at a time
when the Common Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.

        (ii) If any Person becomes an Acquiring Person other than pursuant to
a transaction subject to Section 13(a) of this Agreement or a Qualifying
Offer, then, promptly following the occurrence of such event, proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with this Agreement,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of such first occurrence
(such number of shares, the "Adjustment Shares").

        (iii) If the number of shares of Common Stock authorized by the
Company's articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall: (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, 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) Common Stock or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock that the Board of Directors of the
Company has deemed to have the same value as shares of Common Stock (such
shares of preferred stock being "common stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
determines in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in full of the
Rights, the 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization
of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Stock shall be
the current market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any "common stock equivalent" shall be deemed to have the same value as the
Common Stock on such date.

    (b) If the Company fixes a record date for the issuance of rights, options
or warrants to all holders of Common Stock entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after such record
date) Common Stock (or shares having the same rights, privileges and
preferences as the shares of Common Stock ("equivalent stock")) or securities
convertible into Common Stock or equivalent stock at a price per share of
Common Stock or per share of equivalent stock (or having a conversion price
per share, if a security convertible into Common Stock or equivalent stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately before such record date by a fraction,
the numerator of which is the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock that the aggregate
offering price of the total number of shares of Common Stock and/or equivalent
stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). If such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.

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

    (d) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) and Section 24(c) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as defined below) immediately prior to such date,
for purposes of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the 10 consecutive Trading Days immediately following such date; and for
purposes of computations made pursuant to Section 24(c) hereof, the "current
market price" per share of Common Stock shall be deemed to be the closing
price per share of Common Stock on the Trading Day immediately preceding the
date of exchange pursuant to Section 24; provided, however, that if the
current market price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite 30 Trading-Day or
10 Trading-Day period, as set forth above, after 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 market price"
shall be properly adjusted to take into account ex-dividend trading. 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 shares of Common
Stock 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 shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use, or, if on any such
date the shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares 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 shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.

    (e) Notwithstanding anything in this Agreement to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of
the transaction that mandates such adjustment, or (ii) the Expiration Date.

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

    (g) All Rights originally issued by the Company after any adjustment of
the Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.

    (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of shares
of Common Stock (calculated to the nearest one-thousandth) obtained by (i)
multiplying (x) the number of 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.

    (i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of shares of Common Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates have been issued, shall
be at least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.

    (j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares that were expressed in
the initial Rights Certificates issued hereunder.

    (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated or par value, if any, of the number of
shares of Common Stock issuable upon exercise of the Rights, the Company shall
take any corporate action that may, in the opinion of its counsel, be
necessary for the Company validly to issue fully paid and nonassessable such
number of shares of Common Stock at such adjusted Purchase Price.

    (l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
number of shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.

    (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares
of Common Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Common Stock or securities that by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders.

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

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

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

    Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof
(other than adjustments occurring prior to the Distribution Date or any
Triggering Event), the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Common Stock, a copy of such certificate, and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 26 hereof. Promptly after the Distribution Date or any Triggering
Event, the Company shall comply with the foregoing for any adjustment that
occurred prior to the Distribution Date or such Triggering Event. The Rights
Agent shall be fully protected in relying on any certificate delivered by the
Company pursuant to this Section 12 and on any adjustment therein contained.

    Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) If, following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which and all of which comply
with Section 11(o) hereof), then, and in each such case (except as
contemplated by Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims or restrictions, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event) by the Purchase Price in
effect immediately prior to such first occurrence, and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.

    (b) "Principal Party" shall mean

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

        (ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time or has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value.

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

        (i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date; and

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

This Section 13 shall similarly apply to successive mergers or consolidations
or sales or other transfers. If a Section 13 Event occurs at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a), subject to Section 7(e).

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

    Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights, except prior to the Distribution
Date as provided in Section 11(p) hereof, or to distribute Rights Certificates
that evidence fractional Rights. After the Distribution Date, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the 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 fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.

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

    (c) 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 of a Right, except as permitted by this Section 14.

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

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

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

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

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

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

    Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate have been exercised
in accordance with the provisions hereof.

    Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for any
action taken or suffered by the Rights Agent in connection with the acceptance
and administration of this Agreement and the exercise and performance of its
duties hereunder, including the costs and expenses of defending against and
appealing any claim of liability arising therefrom, directly or indirectly.

    (b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with its acceptance and administration of this Agreement or the exercise and
performance of its duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement,
instruction 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, or otherwise upon the advice of counsel as set forth in
Section 21 hereof.

    Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 22
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates in this Agreement.

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

    Section 20. Duties of Rights Agent. The Rights Agent shall have only the
duties and obligations expressly set forth in this Agreement. There shall be
no implied duties or obligations of the Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:

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

    (b) Whenever in the administration, exercise and performance of its duties
under this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting 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,
any Vice Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and any such certificate
shall be full authorization and protection to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

    (c) The Rights Agent shall not be liable or responsible hereunder to the
Company except for its own negligence, bad faith or willful misconduct.

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

    (e) The Rights Agent shall not have any liability or responsibility in
respect of the legality, validity or enforceability of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the legality, validity, enforceability or execution of
any Rights Certificate (except its countersignature thereof); nor shall it be
liable or responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall
it be liable or responsible for any adjustment including, without limitation,
as required under the provisions of Section 11 or 13 hereof (including any
adjustment which results in the Rights becoming void) or liable or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after
receipt of a notice or certificate pursuant to Section 12 describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or other securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.

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

    (g) The Rights Agent is hereby authorized and directed to accept
instructions or directions with respect to the administration of this
Agreement and the execution and performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable or responsible for any action taken, suffered or omitted to be taken by
it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for such instructions.

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

    (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be liable or
responsible for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss or damages to the Company or to the
holders of the Rights resulting from any such act, omission, default, neglect
or misconduct, provided reasonable care was exercised in the selection and
continued employment thereof. The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of the
Rights Certificates.

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

    (k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange, the
Certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise, transfer,
split up, combination or exchange without first consulting with the Company.

    Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock, by registered or certified mail, and, after the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of one of the United States in good
standing, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

    Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise
of stock options or warrants or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities hereafter issued by
the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.

    Section 23. Redemption and Termination. (a) The Board of Directors of the
Company may, at its option, at any time before the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date occurs before the Record Date, the close of business on
the tenth day after the Record Date), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding the foregoing, if the
Board of Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) or (ii) below, then there
must be Continuing Directors then in office and such authorization shall
require the concurrence of a majority of such Continuing Directors: (i) such
authorization occurs on or after the time a Person becomes an Acquiring
Person, or (ii) such authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if any Person who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board of Directors of the Company has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action that would
result in such Person becoming an Acquiring Person or that would cause the
occurrence of a Triggering Event. Notwithstanding anything in this Agreement
to the contrary, the Rights shall not be exercisable at any time when the
Company may redeem them pursuant to this Section 23. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
"current market price," as defined in Section 11(d) hereof, of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.

    (b) At such time as specified in the resolution of the Board of Directors
ordering redemption of the Rights (or at such time as is determined by a
committee of the Board of Directors authorized by the Board of Directors to
specify such time at the time of the Board's adoption of such resolution or
immediately upon such action of the Board of Directors if the Board does not
specify a date or so empower a committee) and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears 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 Stock. Any notice mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made. Any failure to give or inadequacy of such notice shall not
affect the validity of the redemption. The Redemption Price shall be payable
to those Persons who are record holders of the Rights at the close of business
on a date determined by the Board of Directors, which date shall be at least
eleven days after the Board of Directors orders redemption of the Rights.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time except (i) in the manner
specifically set forth in this Section 23 or in Section 24 hereof or (ii) in
connection with the purchase of Common Stock prior to the Distribution Date.

    Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time and from time to time on or after a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock then outstanding. In the event that there shall
not be sufficient Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall use its best reasonable efforts to take all
such action as may be necessary to authorize additional Common Stock for
issuance upon exchange of the Rights.

    (b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.

    (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) "common stock equivalents," (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (f) any combination of the foregoing, having an
aggregate value which a majority of the Continuing Directors and the Board of
Directors of the Company shall have determined in good faith to be equal to
the current market price of one share of Common Stock (determined pursuant to
Section 11(d) hereof).

    Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Stock, or (ii) to offer
to the holders of Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of any class
or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (iv) to effect
any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one transaction or
a series of related transactions, of more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which and all of which comply with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.

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

    Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if and when sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

          Mallon Resources Corporation
          999 18th Street, Suite 1700
          Denver, CO 80202
          Attention: Secretary

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

          Securities Transfer Corporation
          2591 Dallas Parkway, Suite 102
          Frisco, TX  75034

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

    Section 27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Rights in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder
(which lengthening or shortening, following the first occurrence of an event
set forth in clauses (i) or (ii) of the first provision to Section 23(a)
hereof, shall be effective only if there are Continuing Directors and shall
require the concurrence of a majority of such Continuing Directors), or (iv)
to change or supplement the provisions hereunder in any manner that the
Company deems necessary or desirable and that does not adversely affect the
interests of the holders of Rights Certificates (other than any Acquiring
Person); provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for
the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Without limiting the foregoing, the
Company may at any time or from time to time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 1(i) to not less than 10%. Upon the delivery of a
certificate from an appropriate officer of the Company stating that the
proposed supplement or amendment is in compliance with this Section 27, the
Rights Agent shall execute such supplement or amendment. Notwithstanding
anything in this Agreement to the contrary, no supplement or amendment shall
be made pursuant to this Section 27 that changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of shares of Common
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.

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

    Section 29. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Agreement.
The Board of Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) shall have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
this Agreement, and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done
or made by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.

    Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).

    Section 31. Severability. If any term of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable, and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would materially adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.

    Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
Colorado law and for all purposes shall be governed by and construed in
accordance with Colorado law 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, each which shall be an original, and all of which shall together
constitute a single instrument.

    Section 34. Descriptive Headings. Descriptive headings of the Sections of
this Agreement are inserted for convenience only and shall not affect the
meaning of this Agreement.

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

ATTEST:                               MALLON RESOURCES CORPORATION

By:  /s/ Roy K. Ross                  By:    /s/ George o. Mallon, Jr.
         Secretary                        President and Chief
                                           Executive Officer

                                        SECURITIES TRANSFER CORPORATION

                                        By:    /s/ Kevin B. Halter, Jr.
                                            Kevin B. Halter, Jr.
                                            President
Signatures

    Pursuant to the requirements of the Securities Exchange act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    Mallon Resources Corporation

June 8, 2001                        By: __/s/ Roy K. Ross____________________
                                        Roy K. Ross, Executive Vice President