Certificate of Designation of Series A Junior Participating Preferred Stock of SCOLR, Inc.

Summary

This document is a Certificate of Designation filed by SCOLR, Inc. to establish a new class of preferred stock called Series A Junior Participating Preferred Stock. The certificate sets out the number of shares authorized, dividend rights, voting rights, and other preferences and limitations for this series. Holders of these shares are entitled to specific dividend payments and voting rights, and the terms can be adjusted by the board of directors. The certificate is filed in accordance with Delaware law and is binding on the company and its shareholders.

EX-4.2 2 exhibit_4-2.htm CERTIFICATE OF DESIGNATION OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK exhibit_4-2.htm

Exhibit 4.2

FORM

CERTIFICATE OF DESIGNATION

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

SCOLR, INC.

____________________________________________________

(Pursuant to Section 151 of the Delaware General Corporation Law)

____________________________________________________

SCOLR, Inc., a corporation organized and existing under the

General Corporation Law of the State of Delaware (hereinafter called the

"Corporation"), hereby certifies that the following resolution was adopted by

the Board of Directors of the Corporation as required by Section 151 of the

General Corporation Law at a meeting duly called and held on November 1, 2002:

RESOLVED, that pursuant to the authority granted to and vested in

the Board of Directors of this Corporation (hereinafter called the "Board of

Directors" or the "Board") in accordance with the provisions of the Certificate

of Incorporation of the Corporation (the "Certificate of Incorporation"), the

Board of Directors hereby creates a series of Preferred Stock, par value $0.01

per share (the "Preferred Stock"), of the Corporation and hereby states the

designation and number of shares, and fixes the relative rights, preferences,

and limitations thereof as follows:

Section 1. Designation and Amount. The shares of this series

shall be designated as "Series A Junior Participating Preferred Stock" (the

"Series A Preferred Stock") and the number of shares constituting the Series A

Preferred Stock shall be 30,000. Such number of shares may be increased or

decreased by resolution of the Board of Directors; provided, that no decrease

shall reduce the number of shares of Series A Preferred Stock to a number less

than the number of shares then outstanding plus the number of shares reserved

for

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issuance upon the exercise of outstanding options, rights or warrants or

upon the conversion of any outstanding securities issued by the Corporation

convertible into Series A Preferred Stock.

Section 2. Dividends and Distributions.

(A) Subject to the rights of the holders of any shares of

any series of Preferred Stock (or any other stock) ranking prior and superior to

the Series A Preferred Stock with respect to dividends, the holders of shares of

Series A Preferred Stock shall be entitled to receive, when, as and if declared

by the Board of Directors out of funds legally available for the purpose,

quarterly dividends payable in cash on the last day of March, June, September

and December in each year (each such date being referred to herein as a

"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend

Payment Date after the first issuance of a share or fraction of a share of

Series A Preferred Stock, in an amount (if any) per share (rounded to the

nearest cent), subject to the provision for adjustment hereinafter set forth,

equal to 1000 times the aggregate per share amount of all cash dividends, and

1000 times the aggregate per share amount (payable in kind) of all non-cash

dividends or other distributions, other than a dividend payable in shares of

Common Stock, par value $0.001 per share (the "Common Stock"), of the

Corporation or a subdivision of the outstanding shares of Common Stock (by

reclassification or otherwise), declared on the Common Stock since the

immediately preceding Quarterly Dividend Payment Date or, with respect to the

first Quarterly Dividend Payment Date, since the first issuance of any share or

fraction of a share of Series A Preferred Stock. In the event the Corporation

shall at any time declare or pay any dividend on the Common Stock payable in

shares of Common Stock, or effect a subdivision or combination or consolidation

of the outstanding shares of Common Stock (by reclassification or otherwise than

by payment of a dividend in shares of Common Stock) into a greater or lesser

number of shares of Common Stock, then in each such case the amount to which

holders of shares of Series A Preferred Stock were entitled immediately prior to

such event under the preceding sentence shall be adjusted by multiplying such

amount by a fraction, the numerator of which is the number of shares of Common

Stock outstanding immediately after such event and the denominator of which is

the number of shares of Common Stock that were outstanding immediately prior to

such event.

(B) The Corporation shall declare a dividend or

distribution on the Series A Preferred Stock as provided in paragraph (A) of

this Section immediately after it declares a dividend or distribution on the

Common Stock (other than a dividend payable in shares of Common Stock).

Section shall begin to accrue and be cumulative on outstanding shares of Series

A Preferred Stock from the Quarterly Dividend Payment Date next preceding the

date of issue of such shares, unless the date of issue of such shares is prior

to the record date for the first Quarterly Dividend Payment Date, in which case

dividends on such shares shall begin to accrue from the date of issue of such

shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a

date after the record date for the determination of holders of shares of Series

A Preferred Stock entitled to receive a quarterly dividend and before such

Quarterly Dividend Payment Date, in either of which events such dividends shall

begin to accrue and be cumulative from such Quarterly Dividend Payment Date.

Accrued but unpaid dividends shall not bear interest. Dividends paid

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on the shares of Series A Preferred Stock in an amount less than the total

amount of such dividends at the time accrued and payable on such shares shall be

allocated pro rata on a share-by-share basis among all such shares at the time

outstanding. The Board of Directors may fix a record date for the determination

of holders of shares of Series A Preferred Stock entitled to receive payment of

a dividend or distribution declared thereon, which record date shall be not more

than 60 days prior to the date fixed for the payment thereof.

Section 3. Voting Rights. The holders of shares of Series A

Preferred Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter

set forth, each share of Series A Preferred Stock shall entitle the holder

thereof to 1000 votes on all matters submitted to a vote of the stockholders of

the Corporation. In the event the Corporation shall at any time declare or pay

any dividend on the Common Stock payable in shares of Common Stock, or effect a

subdivision or combination or consolidation of the outstanding shares of Common

Stock (by reclassification or otherwise than by payment of a dividend in shares

of Common Stock) into a greater or lesser number of shares of Common Stock, then

in each such case the number of votes per share to which holders of shares of

Series A Preferred Stock were entitled immediately prior to such event shall be

adjusted by multiplying such number by a fraction, the numerator of which is the

number of shares of Common Stock outstanding immediately after such event and

the denominator of which is the number of shares of Common Stock that were

outstanding immediately prior to such event.

(B) Except as otherwise provided in the Certificate of

Incorporation, including any other Certificate of Designations creating a series

of Preferred Stock or any similar stock, or by law, the holders of shares of

Series A Preferred Stock and the holders of shares of Common Stock and any other

capital stock of the Corporation having general voting rights shall vote

together as one class on all matters submitted to a vote of stockholders of the

Corporation.

by law, holders of Series A Preferred Stock shall have no special voting rights

and their consent shall not be required (except to the extent they are entitled

to vote with holders of Common Stock as set forth herein) for taking any

corporate action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or

distributions payable on the Series A Preferred Stock as provided in Section 2

are in arrears, thereafter and until all accrued and unpaid dividends and

distributions, whether or not declared, on shares of Series A Preferred Stock

outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends, or make any other

distributions, on any shares of stock ranking junior (either as to dividends or

upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

(ii) declare or pay dividends, or make any other

distributions, on any shares of stock ranking on a parity (either as to

dividends or upon liquidation, dissolution or winding up) with the Series A

Preferred Stock, except dividends paid ratably on the Series A

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Preferred Stock and all such parity stock on which dividends are payable or in

arrears in proportion to the total amounts to which the holders of all such

shares are then entitled; or

(iii) redeem or purchase or otherwise acquire

for consideration shares of any stock ranking junior (either as to dividends or

upon liquidation, dissolution or winding up) to the Series A Preferred Stock,

provided that the Corporation may at any time redeem, purchase or otherwise

acquire shares of any such junior stock in exchange for shares of any stock of

the Corporation ranking junior (as to dividends and upon dissolution,

liquidation or winding up) to the Series A Preferred Stock.

(B) The Corporation shall not permit any subsidiary of the

Corporation to purchase or otherwise acquire for consideration any shares of

stock of the Corporation unless the Corporation could, under paragraph (A) of

this Section 4, purchase or otherwise acquire such shares at such time and in

such manner.

Section 5. Reacquired Shares. Any shares of Series A Preferred

Stock purchased or otherwise acquired by the Corporation in any manner

whatsoever shall be retired and canceled promptly after the acquisition thereof.

All such shares shall upon their cancellation become authorized but unissued

shares of Preferred Stock and may be reissued as part of a new series of

Preferred Stock subject to the conditions and restrictions on issuance set forth

herein or in the Certificate of Incorporation, including any Certificate of

Designations creating a series of Preferred Stock or any similar stock, or as

otherwise required by law.

Section 6. Liquidation, Dissolution or Winding Up. Upon any

liquidation, dissolution or winding up of the Corporation the holders of shares

of Series A Preferred Stock shall be entitled to receive an aggregate amount per

share, subject to the provision for adjustment hereinafter set forth, equal to

1000 times the aggregate amount to be distributed per share to holders of shares

of Common Stock plus an amount equal to any accrued and unpaid dividends. In the

event the Corporation shall at any time declare or pay any dividend on the

Common Stock payable in shares of Common Stock, or effect a subdivision or

combination or consolidation of the outstanding shares of Common Stock (by

reclassification or otherwise than by payment of a dividend in shares of Common

Stock) into a greater or lesser number of shares of Common Stock, then in each

such case the aggregate amount to which holders of shares of Series A Preferred

Stock were entitled immediately prior to such event under the preceding sentence

shall be adjusted by multiplying such amount by a fraction the numerator of

which is the number of shares of Common Stock outstanding immediately after such

event and the denominator of which is the number of shares of Common Stock that

were outstanding immediately prior to such event.

Section 7. Consolidation, Merger, Etc. In case the Corporation

shall enter into any consolidation, merger, combination or other transaction in

which the shares of Common Stock are exchanged for or changed into other stock

or securities, cash and/or any other property, then in any such case each share

of Series A Preferred Stock shall at the same time be similarly exchanged or

changed into an amount per share, subject to the provision for adjustment

hereinafter set forth, equal to 1000 times the aggregate amount of stock,

securities, cash and/or any other property (payable in kind), as the case may

be, into which or for which each share of Common Stock is changed or exchanged.

In the event the Corporation shall at any time declare

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or pay any dividend on the Common Stock payable in shares of Common Stock, or

effect a subdivision or combination or consolidation of the outstanding shares

of Common Stock (by reclassification or otherwise than by payment of a dividend

in shares of Common Stock) into a greater or lesser number of shares of Common

Stock, then in each such case the amount set forth in the preceding sentence

with respect to the exchange or change of shares of Series A Preferred Stock

shall be adjusted by multiplying such amount by a fraction, the numerator of

which is the number of shares of Common Stock outstanding immediately after such

event and the denominator of which is the number of shares of Common Stock that

were outstanding immediately prior to such event.

Section 8. Amendment. The Certificate of Incorporation shall not

be amended in any manner, including in a merger or consolidation, which would

alter, change, or repeal the powers, preferences or special rights of the Series

A Preferred Stock so as to affect them adversely without the affirmative vote of

the holders of at least two-thirds of the outstanding shares of Series A

Preferred Stock, voting together as a single class.

Section 9. Rank. The Series A Preferred Stock shall rank, with

respect to the payment of dividends and upon liquidation, dissolution and

winding up, junior to all series of Preferred Stock.

IN WITNESS WHEREOF, this Certificate of Designation is executed

on behalf of the Corporation by its duly authorized officer this 1st day of

November, 2002.

SCOLR, INC.

By: _______________________________

Name: David T. Howard

Title: President,

Chief Executive Officer

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EXHIBIT B

Form of Right Certificate

Certificate No. R-_______ _____ Rights

NOT EXERCISABLE AFTER NOVEMBER 1, 2012 OR EARLIER IF REDEMPTION OR

EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER

RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR

BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR

AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)

OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

Right Certificate

SCOLR, INC.

This certifies that ___________________________, or registered assigns, is the

registered owner of the number of Rights set forth above, each of which entitles

the owner thereof, subject to the terms, provisions and conditions of the Rights

Agreement, dated as of November 1, 2002 (the "Rights Agreement"), between SCOLR,

Inc., a Delaware corporation (the "Company"), and OTR, Inc. (the "Rights

Agent"), to purchase from the Company at any time after the Distribution Date

(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,

eastern time, on November 1, 2012, at the principal office of the Rights Agent,

or at the office of its successor as Rights Agent, one one-thousandth of a fully

paid non-assessable share of Series A Junior Participating Preferred Stock, par

value $0.01 per share (the "Preferred Shares"), of the Company, at a purchase

price of $15.00 per one one-thousandth of a Preferred Share (the "Purchase

Price"), upon presentation and surrender of this Right Certificate with the

certification and the Form of Election to Purchase duly executed. The number of

Rights evidenced by this Right Certificate (and the number of one

one-thousandths of a Preferred Share which may be purchased upon exercise

hereof) set forth above, and the Purchase Price set forth above, are the number

and Purchase Price as of November 12, 2002, based on the Preferred Shares as

constituted at such date. As provided in the Rights Agreement, the Purchase

Price and the number of one one-thousandths of a Preferred Share which may be

purchased upon the exercise of the Rights evidenced by this Right Certificate

are subject to modification and adjustment upon the happening of certain events.

From and after the occurrence of an event described in Section

11(a)(ii) of the Rights Agreement, if the Rights evidenced by this Right

Certificate are or were at any time on or after the earlier of (x) the date of

such event and (y) the Distribution Date (as such term is defined in the Rights

Agreement) acquired or beneficially owned by an Acquiring Person or an

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Associate or Affiliate of an Acquiring Person (as such terms are defined in the

Rights Agreement), such Rights shall become void, and any holder of such Rights

shall thereafter have no right to exercise such Rights.

This Right Certificate is subject to all of the terms, provisions

and conditions of the Rights Agreement, which terms, provisions and conditions

are hereby incorporated herein by reference and made a part hereof and to which

Rights Agreement reference is hereby made for a full description of the rights,

limitations of rights, obligations, duties and immunities hereunder of the

Rights Agent, the Company and the holders of the Right Certificates. Copies of

the Rights Agreement are on file at the principal executive offices of the

Company and the offices of the Rights Agent.

This Right Certificate, with or without other Right Certificates,

upon surrender at the principal office of the Rights Agent, may be exchanged for

another Right Certificate or Right Certificates of like tenor and date

evidencing Rights entitling the holder to purchase a like aggregate number of

Preferred Shares as the Rights evidenced by the Right Certificate or Right

Certificates surrendered shall have entitled such holder to purchase. If this

Right Certificate shall be exercised in part, the holder shall be entitled to

receive upon surrender hereof another Right Certificate or Right Certificates

for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, at the

Company's option, the Rights evidenced by this Certificate (i) may be redeemed

by the Company at a redemption price of $0.001 per Right or (ii) may be

exchanged in whole or in part for shares of the Company's Common Stock, par

value $0.001 per share, or Preferred Shares.

No fractional Preferred Shares will be issued upon the exercise

of any Right or Rights evidenced hereby (other than fractions which are integral

multiples of one one-thousandth of a Preferred Share, which may, at the election

of the Company, be evidenced by depositary receipts), but in lieu thereof a cash

payment will be made, as provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled to vote or

receive dividends or be deemed for any purpose the holder of the Preferred

Shares or of any other securities of the Company which may at any time be

issuable on the exercise hereof, nor shall anything contained in the Rights

Agreement or herein be construed to confer upon the holder hereof, as such, any

of the rights of a stockholder of the Company or any right to vote for the

election of directors or upon any matter submitted to stockholders at any

meeting thereof, or to give or withhold consent to any corporate action, or to

receive notice of meetings or other actions affecting stockholders (except as

provided in the Rights Agreement), or to receive dividends or subscription

rights, or otherwise, until the Right or Rights evidenced by this Right

Certificate shall have been exercised as provided in the Rights Agreement.

This Right Certificate shall not be valid or obligatory for any

purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the

Company and its corporate seal. Dated as of ____________, _____.

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Attest: SCOLR, INC.

________________________________ By: _____________________________

Countersigned:

OTR, Inc.,

Rights Agent

By: __________________________

Authorized Signature

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Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires

to transfer the Right Certificate.)

FOR VALUE RECEIVED ___________________________________ hereby

sells, assigns and transfers unto ___________________________________________

__________________________________________________________________

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and

does hereby irrevocably constitute and appoint _______________________________,

Attorney, to transfer the within Right Certificate on the books of the

within-named Company, with full power of substitution.

Date: ______________ __, _______

__________________________________

Signature

Signature Guaranteed:

Signatures should be guaranteed by an eligible guarantor

institution (bank, stock broker or savings and loan association with membership

in an approved signature medallion program).

_________________________________________________

The undersigned hereby certifies that the Rights evidenced by

this Right Certificate are not beneficially owned by an Acquiring Person or an

Affiliate or Associate thereof (as defined in the Rights Agreement).

__________________________________

Signature

_________________________________________________

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Form of Reverse Side of Right Certificate -- continued

FORM OF ELECTION TO PURCHASE

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

To: SCOLR, INC.:

The undersigned hereby irrevocably elects to exercise

_______________ Rights represented by this Right Certificate to purchase the

Preferred Shares issuable upon the exercise of such Rights and requests that

certificates for such Preferred Shares be issued in the name of:

Please insert social security

or other identifying number

_______________________________________________________________________________

(Please print name and address)

_______________________________________________________________________________

If such number of Rights shall not be all the Rights evidenced by this Right

Certificate, a new Right Certificate for the balance remaining of such Rights

shall be registered in the name of and delivered to:

Please insert social security

or other identifying number

_______________________________________________________________________________

(Please print name and address)

_______________________________________________________________________________

Dated: _____________ __, ______

________________________________

Signature

Signature Guaranteed:

Signatures should be guaranteed by an eligible guarantor

institution (bank, stock broker or savings and loan association with membership

in an approved signature medallion program).

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Form of Reverse Side of Right Certificate -- continued

_______________________________

The undersigned hereby certifies that the Rights evidenced by

this Right Certificate are not beneficially owned by an Acquiring Person or an

Affiliate or Associate thereof (as defined in the Rights Agreement).

______________________________

Signature

________________________________

NOTICE

The signature in the foregoing Forms of Assignment and Election

must conform to the name as written upon the face of this Right Certificate in

every particular, without alteration or enlargement or any change whatsoever.

In the event the certification set forth above in the Form of

Assignment or the Form of Election to Purchase, as the case may be, is not

completed, the Company and the Rights Agent will deem the beneficial owner of

the Rights evidenced by this Right Certificate to be an Acquiring Person or an

Affiliate or Associate thereof (as defined in the Rights Agreement) and such

Assignment or Election to Purchase will not be honored.

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EXHIBIT C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

On November 1, 2002, the Board of Directors of SCOLR, Inc.

(the "Company") declared a dividend of one preferred share purchase right (a

"Right") for each outstanding share of Common Stock, par value $0.001 per share

(the "Common Shares") outstanding on November 12, 2002 (the "Record Date")

to the stockholders of record on that date. Each Right entitles the registered

holder to purchase from the Company one one-thousandth of a share of Series A

Junior Participating Preferred Stock, par value $0.01 per share (the "Preferred

Shares"), of the Company, at a price of $15.00 per one one-thousandth of a

Preferred Share (the "Purchase Price"), subject to adjustment. The description

and terms of the Rights are set forth in a Rights Agreement (the "Rights

Agreement") between the Company and OTR, Inc., as Rights Agent (the "Rights

Agent").

Until the earlier to occur of (i) 10 days following a public

announcement that a person or group of affiliated or associated persons (an

"Acquiring Person") has acquired beneficial ownership of 15% or more of the

outstanding Common Shares or (ii) 10 business days (or such later date as may be

determined by action of the Board of Directors prior to such time as any Person

becomes an Acquiring Person) following the commencement of, or announcement of

an intention to make, a tender offer or exchange offer the consummation of which

would result in the beneficial ownership by a person or group of 15% or more of

the outstanding Common Shares (the earlier of such dates being called the

"Distribution Date"), the Rights will be evidenced, with respect to any of the

Common Share certificates outstanding as of the Record Date, by such Common

Share certificate with a copy of this Summary of Rights attached thereto.

The Rights Agreement provides that, until the Distribution Date,

the Rights will be transferred with and only with the Common Shares. Until the

Distribution Date (or earlier redemption or expiration of the Rights), new

Common Share certificates issued after the Record Date or upon transfer or new

issuance of Common Shares will contain a notation incorporating the Rights

Agreement by reference. Until the Distribution Date (or earlier redemption or

expiration of the Rights), the surrender for transfer of any certificates for

Common Shares outstanding as of the Record Date, even without such notation or a

copy of this Summary of Rights being attached thereto, will also constitute the

transfer of the Rights associated with the Common Shares represented by such

certificate. As soon as practicable following the Distribution Date, separate

certificates evidencing the Rights ("Right Certificates") will be mailed to

holders of record of the Common Shares as of the Close of Business on the

Distribution Date and such separate Right Certificates alone will evidence the

Rights.

The Rights are not exercisable until the Distribution Date. The

Rights will expire on November 1, 2012 (the "Final Expiration Date"),

unless the Final Expiration Date is extended or unless the Rights are earlier

redeemed by the Company, in each case, as described below.

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The Purchase Price payable, and the number of Preferred Shares or

other securities or property issuable, upon exercise of the Rights are subject

to adjustment from time to time to prevent dilution (i) in the event of a stock

dividend on, or a subdivision, combination or reclassification of, the Preferred

Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights

or warrants to subscribe for or purchase Preferred Shares at a price, or

securities convertible into Preferred Shares with a conversion price, less than

the then current market price of the Preferred Shares or (iii) upon the

distribution to holders of the Preferred Shares of evidences of indebtedness or

assets (excluding regular periodic cash dividends paid out of earnings or

retained earnings or dividends payable in Preferred Shares) or of subscription

rights or warrants (other than those referred to above).

The number of outstanding Rights and the number of one

one-thousandths of a Preferred Share issuable upon exercise of each Right are

also subject to adjustment in the event of a stock split of the Common Shares or

a stock dividend on the Common Shares payable in Common Shares or subdivisions,

consolidations or combinations of the Common Shares occurring, in any such case,

prior to the Distribution Date.

Preferred Shares purchasable upon exercise of the Rights will not

be redeemable. Each Preferred Share will be entitled to a quarterly dividend

payment of 1000 times the dividend declared per Common Share. In the event of

liquidation, the holders of the Preferred Shares will be entitled to an

aggregate payment of 1000 times the aggregate payment made per Common Share.

Each Preferred Share will have 1000 votes, voting together with the Common

Shares. In the event of any merger, consolidation or other transaction in which

Common Shares are exchanged, each Preferred Share will be entitled to receive

1000 times the amount received per Common Share. These rights are protected by

customary antidilution provisions.

Because of the nature of the Preferred Shares' dividend,

liquidation and voting rights, the value of the one one-thousandth interest in a

Preferred Share purchasable upon exercise of each Right should approximate the

value of one Common Share.

From and after the time any Person becomes an Acquiring Person,

if the Rights evidenced by this Right Certificate are or were at any time on or

after the earlier of (x) the date of such event and (y) the Distribution Date

(as such term is defined in the Rights Agreement) acquired or beneficially owned

by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as

such terms are defined in the Rights Agreement), such Rights shall become void,

and any holder of such Rights shall thereafter have no right to exercise such

Rights.

In the event that, at any time after a Person becomes an

Acquiring Person, the Company is acquired in a merger or other business

combination transaction or 50% or more of its consolidated assets or earning

power are sold, proper provision will be made so that each holder of a Right

will thereafter have the right to receive, upon the exercise thereof at the then

current exercise price of the Right, that number of shares of common stock of

the acquiring company which at the time of such transaction will have a market

value of two times the exercise price of the Right. In the event that any person

becomes an Acquiring Person, proper provision shall be made so that each holder

of a Right, other than Rights beneficially owned by the Acquiring Person and its

Affiliates and Associates (which will thereafter be void), will thereafter have

the right to receive upon exercise that number of Common Shares having a market

value of

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two times the exercise price of the Right. If the Company does not have

sufficient Common Shares to satisfy such obligation to issue Common Shares, or

if the Board of Directors so elects, the Company shall deliver upon payment of

the exercise price of a Right an amount of cash or securities equivalent in

value to the Common Shares issuable upon exercise of a Right; provided that, if

the Company fails to meet such obligation within 30 days following the date a

Person becomes an Acquiring Person, the Company must deliver, upon exercise of a

Right but without requiring payment of the exercise price then in effect, Common

Shares (to the extent available) and cash equal in value to the difference

between the value of the Common Shares otherwise issuable upon the exercise of a

Right and the exercise price then in effect. The Board of Directors may extend

the 30-day period described above for up to an additional 60 days to permit the

taking of action that may be necessary to authorize sufficient additional Common

Shares to permit the issuance of Common Shares upon the exercise in full of the

Rights.

At any time after any Person becomes an Acquiring Person and

prior to the acquisition by any person or group of a majority of the outstanding

Common Shares, the Board of Directors of the Company may exchange the Rights

(other than Rights owned by such person or group which have become void), in

whole or in part, at an exchange ratio of one Common Share per Right (subject to

adjustment).

With certain exceptions, no adjustment in the Purchase Price will

be required until cumulative adjustments require an adjustment of at least 1% in

such Purchase Price. No fractional Preferred Shares will be issued (other than

fractions which are integral multiples of one one-thousandth of a Preferred

Share, which may, at the election of the Company, be evidenced by depositary

receipts) and in lieu thereof, an adjustment in cash will be made based on the

market price of the Preferred Shares on the last trading day prior to the date

of exercise.

At any time prior to the time any Person becomes an Acquiring

Person, the Board of Directors of the Company may redeem the Rights in whole,

but not in part, at a price of $0.001 per Right (the "Redemption Price"). The

redemption of the Rights may be made effective at such time, on such basis and

with such conditions as the Board of Directors in its sole discretion may

establish. Immediately upon any redemption of the Rights, the right to exercise

the Rights will terminate and the only right of the holders of Rights will be to

receive the Redemption Price.

The terms of the Rights may be amended by the Board of Directors

of the Company without the consent of the holders of the Rights, except that

from and after such time as any person becomes an Acquiring Person no such

amendment may adversely affect the interests of the holders of the Rights (other

than the Acquiring Person and its Affiliates and Associates).

Until a Right is exercised, the holder thereof, as such, will

have no rights as a stockholder of the Company, including, without limitation,

the right to vote or to receive dividends.

A copy of the Rights Agreement has been filed with the Securities

and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A

dated November 6, 2002. A copy of the Rights Agreement is available free of

charge from the Company. This summary

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description of the Rights does not purport to be complete and is qualified in

its entirety by reference to the Rights Agreement, which is hereby incorporated

herein by reference.

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