UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 8-K

                                 CURRENT REPORT
                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

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

      Date of Report (Date of earliest event reported): September 15, 2005
                               ------------------


                           THERMO ELECTRON CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)



                                                                                  

Delaware                                               1-8002                                04-2209186
- -------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction                  (Commission File Number)                  (IRS Employer
        of Incorporation)                                                               Identification No.)



                     81 Wyman Street, Waltham, MA 02454-9046
               (Address of Principal Executive Offices) (Zip code)

       Registrant's telephone number, including area code: (781) 622-1000

     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_|  Written  communications  pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_|  Pre-commencement  communications  pursuant to Rule 14d-2(b)  under the
Exchange Act (17 CFR 240.14d-2(b))

     |_|  Pre-commencement  communications  pursuant to Rule 13e-4(c)  under the
Exchange Act (17 CFR 240.13e-4(c))


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         Item 1.01.  Entry into a Material Definitive Agreement.

     On September 15, 2005, that certain Rights  Agreement,  dated as of October
29,  2001  (the  "2001  Rights  Agreement"),  by  and  between  Thermo  Electron
Corporation, a Delaware corporation (the "Company"), and American Stock Transfer
& Trust Company, a New York banking corporation,  as rights agent, as amended by
Amendment  No. 1 thereto  dated as of  February 7, 2002,  was amended  effective
September  15, 2005.  Such  amendment  provides  that the 2001 Rights  Agreement
expired on the close of business on September 15, 2005.

     On  September  15, 2005,  the Board of Directors of the Company  declared a
dividend distribution of one preferred stock purchase right (a "Right") for each
outstanding  share of the Company's common stock, par value $1.00 per share (the
"Common Stock"), to stockholders of record at the close of business on September
29, 2005. Each Right entitles the registered holder to purchase from the Company
a unit consisting of one  one-hundred-thousandth of a share (a "Unit") of Series
B Junior Participating Preferred Stock, par value $100 per share (the "Preferred
Stock"),  at a purchase  price of $200 in cash per Unit,  subject to  adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth in
a Rights  Agreement  (the "Rights  Agreement")  dated as of  September  15, 2005
between the Company and American Stock Transfer & Trust Company, as rights agent
(the "Rights  Agent").  The Rights  Agreement  replaces the  Company's  existing
Rights Agreement which expired on September 15, 2005. The following  description
of the terms of the Rights  Agreement  does not  purport to be  complete  and is
qualified in its entirety by reference to the Rights Agreement which is attached
hereto as an exhibit and is incorporated herein by reference.

     Initially,  the Rights will be attached  to all Common  Stock  certificates
representing  shares  then  outstanding,  and no  separate  rights  certificates
("Rights  Certificates") will be distributed.  The Rights will separate from the
Common  Stock and a  distribution  date will occur  upon the  earlier of (i) the
close of business on the tenth business day following a public announcement that
a person or group of affiliated or associated  persons (an  "Acquiring  Person")
has acquired,  or obtained the right to acquire,  beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock  Acquisition  Date"),
or (ii) the close of business on the tenth  business  day (or such later date as
may be  determined by the  Company's  Board of Directors)  after the date that a
tender or exchange offer is commenced by any person,  the  consummation of which
could result in the beneficial  ownership by a person or group of 15% or more of
the shares of Common Stock then  outstanding  (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date").

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of business on  September  29,  2015,  unless  earlier  redeemed or
exchanged by the Company as described below.

     In the event that a person becomes the  beneficial  owner of 15% or more of
the then outstanding shares of Common Stock, except pursuant to an offer for all
outstanding  shares of Common  Stock that at least 75% of the Board of Directors
determines to be fair to, and otherwise in the best  interests of,  stockholders
(a "Permitted Offer"),  each holder of a Right will thereafter have the right to
receive,  upon  exercise,  that number of shares of Common Stock (or, in certain
circumstances,  Units of Preferred Stock, cash,  property or other securities of




                                       3


the Company) which equals the exercise price of the Right divided by one-half of
the  current  market  price (as defined in the Rights  Agreement)  of the Common
Stock  at the date of the  occurrence  of the  event.  However,  Rights  are not
exercisable  following  the event set forth  above until such time as the Rights
are no longer redeemable by the Company as set forth below.  Notwithstanding any
of the foregoing,  following the occurrence of such event,  all Rights that are,
or  (under  certain  circumstances  specified  in the  Rights  Agreement)  were,
beneficially  owned by any Acquiring Person will be null and void. The event set
forth in this paragraph is referred to as "Section 11(a)(ii) Event."

     For example,  at an exercise price of $200 per Right,  each Right not owned
by an Acquiring  Person (or by certain related  parties)  following an event set
forth in the preceding  paragraph  would entitle its holder to purchase for $200
such number of shares of Common Stock (or other  consideration,  as noted above)
as equals $200  divided by one-half of the current  market  price (as defined in
the Rights Agreement) of the Common Stock.  Assuming that the Common Stock had a
per share  value of $50 at such time,  the holder of each valid  Right  would be
entitled to purchase 8 shares of Common Stock for $200.

     In the event  that,  at any time after any  person has become an  Acquiring
Person,  (i) the Company is acquired in a merger or other  business  combination
transaction in which the Company is not the surviving  corporation or its Common
Stock is changed or  exchanged  (other than a merger  which  follows a Permitted
Offer),  or (ii) 50% or more of the Company's assets or earning power is sold or
transferred,  each holder of a Right (except Rights which  previously  have been
voided as set forth  above)  shall  thereafter  have the right to receive,  upon
exercise,  that number of shares of common stock of the acquiring  company which
equals the exercise price of the Right divided by one-half of the current market
price of such common stock at the date of the occurrence of the event.

     For example,  at an exercise price of $200 per Right,  each Right following
an event  set forth in the  preceding  paragraph  would  entitle  its  holder to
purchase for $200 such number of shares of common stock of the acquiring company
as equals $200  divided by one-half of the current  market  price (as defined in
the Rights Agreement) of such common stock.  Assuming that such common stock had
a per share  value of $50 at such time,  the holder of each valid Right would be
entitled to purchase 8 shares of common stock of the acquiring company for $200.

     At any time after the occurrence of a Section 11(a)(ii) Event, the Board of
Directors  of the Company may  exchange  the Rights  (other than Rights owned by
such  Acquiring  Person  that  have  become  void),  in whole or in part,  at an
exchange ratio of one share of Common Stock, or one  one-hundred-thousandth of a
share of  Preferred  Stock (or of a share of a class or series of the  Company's
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).

     The number of Rights  associated  with each  share of Common  Stock is also
subject to  adjustment  in the event of a stock  split of the Common  Stock or a
stock  dividend on the Common  Stock  payable in Common  Stock or  subdivisions,
consolidations  or  combinations  of Common Stock  occurring,  in any such case,
prior to the Distribution Date.

                                       4


     Preferred  Stock  purchasable  upon  exercise  of the  Rights  will  not be
redeemable.  Each  share  of  Preferred  Stock  will be  entitled  to a  minimum
preferential  quarterly  dividend payment of $100 per share and will be entitled
to an aggregate  dividend of 100,000  times the  dividend  declared per share of
Common Stock.  In the event of  liquidation,  the holders of the Preferred Stock
will be entitled to a minimum preferential liquidating payment of $100 per share
and will be entitled to an aggregate  payment of 100,000  times the payment made
per share of Common  Stock.  Each share of  Preferred  Stock  will have  100,000
votes,  voting  together  with the Common  Stock.  Finally,  in the event of any
merger,  consolidation or other  transaction in which Common Stock is changed or
exchanged,  each share of  Preferred  Stock will be entitled to receive  100,000
times the amount received per share of Common Stock.  These rights are protected
by customary antidilution provisions.

     Because of the nature of the Preferred  Stock's  dividend,  liquidation and
voting rights, the value of one  one-hundred-thousandth  of a share of Preferred
Stock  purchasable  upon exercise of each Right should  approximate the value of
one share of Common Stock.

     At any time until the Stock  Acquisition  Date,  the Company may redeem the
Rights in whole,  but not in part, at a price of $.01 per Right (payable in cash
or stock) (the "Redemption Price").  Immediately upon the action of the Board of
Directors  ordering  redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.

     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.  While the distribution of the Rights will not
be taxable to stockholders or to the Company,  stockholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquiring company as set forth above.

     Prior to the  Distribution  Date,  the terms of the Rights  are  subject to
amendment  by the Board of  Directors  without the consent of the holders of the
Rights.  After the  Distribution  Date,  only  limited  terms of the  Rights are
subject to amendment by the Board.

     As long as the Rights are attached to the Common Stock,  one Right (as such
number may be adjusted pursuant to the provisions of the Rights Agreement) shall
be deemed to be delivered  for each share of Common Stock issued or delivered by
the  Company,  except  that  following  the  Distribution  Date and prior to the
expiration or redemption of the Rights,  the Company (a) shall issue Rights only
in respect of shares of common stock  issued upon the exercise of stock  options
or under any employee plan or arrangement,  or upon the exercise,  conversion or
exchange of securities issued before the Distribution Date and (b) may otherwise
issue Rights when it issues Common Stock only if the Board of Directors deems it
to be necessary or  appropriate;  provided  that no Rights will be issued if the
Company is advised by counsel that such issuance would create a significant risk
of material  adverse tax  consequences  to the Company or the  recipient  of the
Rights.

                                       5

     The Rights  have  certain  anti-takeover  effects.  The  Rights  will cause
substantial  dilution to a person or group that  attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights, however, should not affect any prospective offeror willing to make a
Permitted  Offer.  The  Rights  should  not  interfere  with any merger or other
business combination approved by the Board of Directors of the Company since the
Board  of  Directors  may,  at its  option,  at any time  prior to the  close of
business on the earlier of (i) the Stock  Acquisition Date or (ii) September 29,
2015,  and in certain other  circumstances,  redeem all but not less than all of
the then outstanding Rights at the Redemption Price.

     The Rights Agreement contains a so-called "TIDE" provision,  which requires
that a  shareholder  rights  plan  committee  of the Board of  Directors  of the
Company shall review (not less than once every three years) whether  maintaining
the Rights Agreement continues to be in the best interest of the stockholders.

     Item 1.02. Termination of a Material Definitive Agreement.

     The  information  set forth in Item 1.01  above  with  respect  to the 2001
Rights Agreement is incorporated herein by reference in its entirety.

     Item 9.01. Financial Statements and Exhibits.

     Exhibit  3.1 - Form  of   Certificate  of  Amendment  of  Certificate  of
                    Designation of the Series B Junior  Participating  Preferred
                    Stock of Thermo Electron Corporation.

     Exhibit 4.1 - Rights  Agreement,  dated as of September  15,  2005,  by and
                   between  Thermo  Electron  Corporation  and  American  Stock
                   Transfer & Trust Company, as Rights Agent, which includes as
                   Exhibit  A,  the  Terms of  Series  B  Junior  Participating
                   Preferred  Stock,  and as  Exhibit  B,  the  Form of  Rights
                   Certificate.

     Exhibit 4.2 - Amendment  No.  2 to  the  Rights  Agreement,  dated  as of
                   September   15,  2005,  by  and  between   Thermo   Electron
                   Corporation and American Stock Transfer & Trust Company.



                                       6


                                    SIGNATURE

     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.


                                        THERMO ELECTRON CORPORATION



Date:    September 16, 2005             By:      /s/ Seth H. Hoogasian
                                           ---------------------------------
                                        Name:    Seth H. Hoogasian
                                        Title:   Vice President, General Counsel
                                                        and Secretary






                                       7



                                  EXHIBIT INDEX


   Exhibit No.              Description

    3.1             Certificate  of Amendment of  Certificate  of Designation of
                    the Series B Junior Participating  Preferred Stock of Thermo
                    Electron Corporation.

    4.1             Rights  Agreement,  dated as of September  15, 2005,  by and
                    between  Thermo  Electron  Corporation  and  American  Stock
                    Transfer & Trust Company, as Rights Agent, which includes as
                    Exhibit  A,  the  Terms of  Series  B  Junior  Participating
                    Preferred  Stock,  and as  Exhibit  B,  the  Form of  Rights
                    Certificate.

    4.2             Amendment  No.  2 to  the  Rights  Agreement,  dated  as  of
                    September   15,  2005,  by  and  between   Thermo   Electron
                    Corporation and American Stock Transfer & Trust Company.


                                                                     Exhibit 3.1


                            CERTIFICATE OF AMENDMENT
                                       OF
                           CERTIFICATE OF DESIGNATION
                                       OF
                  SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                           THERMO ELECTRON CORPORATION


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


THERMO  ELECTRON  CORPORATION,  a corporation  organized and existing  under the
General Corporation Law of the State of Delaware (the "Corporation"),

DOES HEREBY CERTIFY:

     WHEREAS, at a meeting duly called and held on January 19, 1996, 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, the Board of
Directors  created a series of Preferred  Stock,  $100 par value (the "Preferred
Stock"), of the Corporation and stated the designation and number of shares, and
fixed the relative rights, preferences and limitations thereof as set forth in a
certificate of designation of Series B Junior Participating Preferred Stock (the
"Series B Preferred  Stock")  filed with the  Secretary of State of the State of
Delaware on January 24, 1996 (the "Certificate of Designation");

     WHEREAS, no shares of Series B Preferred Stock have, as of the date of this
Certificate, been issued;

     WHEREAS, pursuant to authority conferred upon the Board of Directors by the
Amended  and  Restated   Certificate  of  Incorporation,   as  amended,  of  the
Corporation,  and  pursuant  to the  provisions  of Section  151 of the  General
Corporate  Laws of the State of Delaware (the "DGCL"),  said Board of Directors,
at a meeting duly held on September 15, 2005, adopted a resolution providing for
the  amendment  and  restatement  of  the  Certificate  of  Designation,   which
resolution is as follows:

     RESOLVED:  That the Authorized Officers of the Company be, and each of them
hereby is,  authorized  in the name and on behalf of the  Company to execute and
file with the  Secretary  of State of the State of  Delaware  a  Certificate  of
Amendment of Certificate  of Designation  pursuant to Section 151(g) of the DGCL
setting forth amended and restated  resolutions,  which  resolutions  are hereby
adopted,  and any other  documents  that any of such  officers  deem  necessary,
desirable or  appropriate,  such that the  designation of the Series B Preferred
Stock and amount thereof, and


                                       2


the voting powers,  preferences and relative  participating,  optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions  thereof,  shall be as set forth in the Terms of Series B Junior
Participating  Preferred Stock attached as Exhibit A to the  Shareholder  Rights
Agreement.

     Said Exhibit A reads as follows:

     Section 1.  Designation  and  Amount.  The shares of such  series  shall be
designated  as "Series B Junior  Participating  Preferred  Stock" (the "Series B
Preferred  Stock") and the number of shares  constituting the Series B Preferred
Stock shall be Forty Thousand  (40,000).  Such number of shares may be increased
or decreased by  resolution  of the Board prior to issuance;  provided,  that no
decrease  shall  reduce  the number of shares of Series B  Preferred  Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved  for  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 B 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 similar stock) ranking prior and superior to the
     Series B Preferred  Stock with respect to dividends,  the holders of shares
     of Series B Preferred  Stock, in preference to the holders of Common Stock,
     par value $1.00 per share (the "Common Stock"), of the Corporation,  and of
     any other  junior  stock,  shall be entitled to  receive,  when,  as and if
     declared by the Board out of funds of the Corporation legally available for
     the payment of dividends,  quarterly dividends payable in cash on March 31,
     June 30,  September  30 and  December 31 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 B Preferred  Stock, in an amount per
     share (rounded to the nearest cent) equal to the greater of (a) $100 or (b)
     subject to the  provision for  adjustment  hereinafter  set forth,  100,000
     times the  aggregate  per share amount of all cash  dividends,  and 100,000
     times the  aggregate  per share  amount  (payable in kind) of all  non-cash
     dividends or other  distributions,  other than a dividend payable in shares
     of Common Stock or a subdivision of the outstanding  shares of Common Stock
     (by reclassification or otherwise),  declared on the Common Stock 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 B 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,
     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 B
     Preferred Stock were entitled  immediately prior to such event under clause
     (b) of 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


                                       3


     denominator  of which is the  number of shares  of Common  Stock  that were
     outstanding  immediately  prior to such event. In the event the Corporation
     shall at any time  declare or pay any  dividend  on the Series B  Preferred
     Stock  payable  in  shares  of  Series  B  Preferred  Stock,  or  effect  a
     subdivision,  combination or  consolidation  of the  outstanding  shares of
     Series B Preferred Stock (by  reclassification or otherwise than by payment
     of a  dividend  in shares of Series B  Preferred  Stock)  into a greater or
     lesser number of shares of Series B Preferred Stock, then in each such case
     the  amount to which  holders  of shares of Series B  Preferred  Stock were
     entitled  immediately  prior to such  event  under  clause (b) of the first
     sentence of this Section 2(A) shall be adjusted by multiplying  such amount
     by a fraction,  the  numerator of which is the number of shares of Series B
     Preferred Stock that were outstanding  immediately  prior to such event and
     the  denominator  of which is the  number of  shares of Series B  Preferred
     Stock outstanding immediately after such event.

          (B) The  Corporation  shall declare a dividend or  distribution on the
     Series B  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) and the
     Corporation  shall  pay  such  dividend  or  distribution  on the  Series B
     Preferred Stock before the dividend or distribution  declared on the Common
     Stock is paid or set apart;  provided  that,  in the event no  dividend  or
     distribution shall have been declared on the Common Stock during the period
     between  any  Quarterly  Dividend  Payment  Date  and the  next  subsequent
     Quarterly Dividend Payment Date, a dividend of $100 per share on the Series
     B  Preferred  Stock  shall  nevertheless  be  payable  on  such  subsequent
     Quarterly Dividend Payment Date.

          (C) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series B 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 B Preferred Stock entitled to
     receive a quarterly  dividend and before such  Quarterly  Dividend  Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly  Dividend  Payment Date.  Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series B
     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 B 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 B Preferred Stock
shall have the following voting rights:

                                       4


          (A) Subject to the provision  for  adjustment  hereinafter  set forth,
     each share of Series B Preferred  Stock shall entitle the holder thereof to
     100,000 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,  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 B 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. In the event the Corporation shall at any
     time declare or pay any dividend on the Series B Preferred Stock payable in
     shares of Series B Preferred Stock, or effect a subdivision, combination or
     consolidation  of the  outstanding  shares of Series B Preferred  Stock (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Series B  Preferred  Stock)  into a greater  or lesser  number of shares of
     Series B  Preferred  Stock,  then in each such case the number of votes per
     share to which holders of shares of Series B Preferred  Stock were entitled
     immediately  prior to such event  shall be  adjusted  by  multiplying  such
     amount by a  fraction,  the  numerator  of which is the number of shares of
     Series B Preferred Stock that were  outstanding  immediately  prior to such
     event  and the  denominator  of which is the  number  of shares of Series B
     Preferred Stock outstanding immediately after such event.

     (B) Except as otherwise  provided herein, the holders of shares of Series B
     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.

          (C) (i) If at any time dividends on any Series B Preferred Stock shall
     be in arrears in an amount equal to six quarterly  dividends  thereon,  the
     holders of the Series B Preferred  Stock,  voting as a separate series from
     all other series of Preferred Stock and classes of capital stock,  shall be
     entitled to elect two  members of the Board in  addition  to any  Directors
     elected  by any  other  series,  class or  classes  of  securities  and the
     authorized  number of  Directors  will  automatically  be increased by two.
     Promptly  thereafter,  the Board of Directors of this Corporation shall, as
     soon as may be  practicable,  call a special meeting of holders of Series B
     Preferred  Stock for the purpose of electing  such  members of the Board of
     Directors.  Said special  meeting shall in any event be held within 45 days
     of the occurrence of such arrearage.

                                       5


               (ii)  During any period  when the  holders of Series B  Preferred
          Stock,  voting as a separate series,  shall be entitled and shall have
          exercised  their right to elect two  Directors,  then, and during such
          time as such  right  continues,  (a) the  then  authorized  number  of
          Directors  shall be  increased  by two,  and the  holders  of Series B
          Preferred  Stock,  voting as a separate  series,  shall be entitled to
          elect the  additional  Directors  so provided  for,  and (b) each such
          additional Director shall not be a member of any existing class of the
          Board of Directors,  but shall serve until the next annual  meeting of
          stockholders  for the  election  of  Directors,  or  until  his or her
          successor  shall be  elected  and shall  qualify,  or until his or her
          right to hold such office  terminates  pursuant to the  provisions  of
          this Section 3(C).

               (iii) A  Director  elected  pursuant  to the terms  hereof may be
          removed  with or without  cause by the  holders of Series B  Preferred
          Stock entitled to vote in an election of such Director.

               (iv)  If,  during  any  interval   between  annual   meetings  of
          stockholders  for the election of  Directors  and while the holders of
          Series B Preferred  Stock  shall be  entitled to elect two  Directors,
          there is no such Director in office by reason of resignation, death or
          removal,  then,  promptly  thereafter,  the Board shall call a special
          meeting of the holders of Series B Preferred  Stock for the purpose of
          filling such vacancy and such vacancy  shall be filled at such special
          meeting.  Such  special  meeting  shall in any event be held within 45
          days of the occurrence of such vacancy.

               (v) At  such  time  as the  arrearage  is  fully  cured,  and all
          dividends  accumulated  and unpaid on any shares of Series B Preferred
          Stock  outstanding  are paid, and, in addition  thereto,  at least one
          regular  dividend has been paid  subsequent to curing such  arrearage,
          the term of office of any  Director  elected  pursuant to this Section
          3(C), or his or her successor,  shall automatically terminate, and the
          authorized  number of Directors shall  automatically  decrease by two,
          the rights of the  holders  of the  shares of the  Series B  Preferred
          Stock to vote as provided in this Section 3(C) shall cease, subject to
          renewal from time to time upon the same terms and conditions,  and the
          holders of shares of the Series B Preferred  Stock shall have only the
          limited voting rights elsewhere herein set forth.

               (D) Except as set forth herein, or as otherwise  provided by law,
     holders of Series B 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.

                                       6


     Section 4. Certain Restrictions.

               (A)  Whenever   quarterly   dividends   or  other   dividends  or
     distributions  payable  on the  Series B  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 B
     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 B  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 B
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series  B
          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;

               (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 B  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 (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series B Preferred Stock; or

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

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

     Section  5.  Reacquired  Shares.  Any  shares of Series B  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled 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

                                       7


any other Certificate of Designation creating a series of Preferred Stock or any
similar stock or as otherwise required by law.

     Section 6. Liquidation, Dissolution or Winding Up.

               (A)  Upon  any  liquidation,  dissolution  or  winding  up of the
     Corporation,  no distribution shall be made (1) to the holders of shares of
     stock  ranking  junior  (either  as  to  dividends  or  upon   liquidation,
     dissolution  or winding up) to the Series B Preferred  Stock unless,  prior
     thereto,  the  holders  of shares of Series B  Preferred  Stock  shall have
     received  $100 per  share,  plus an  amount  equal to  accrued  and  unpaid
     dividends and distributions  thereon,  whether or not declared, to the date
     of such payment,  provided that the holders of shares of Series B Preferred
     Stock shall be entitled to receive an aggregate  amount per share,  subject
     to the provision for  adjustment  hereinafter  set forth,  equal to 100,000
     times the aggregate amount to be distributed per share to holders of shares
     of Common  Stock,  or (2) to the  holders  of shares of stock  ranking on a
     parity (either as to dividends or upon liquidation,  dissolution or winding
     up) with the Series B Preferred Stock, except distributions made ratably on
     the Series B Preferred Stock and all such parity stock in proportion to the
     total  amounts to which the  holders of all such shares are  entitled  upon
     such liquidation, dissolution or winding up.

               (B)  Neither  the   consolidation,   merger  or  other   business
     combination of the Corporation  with or into any other  corporation nor the
     sale,  lease,  exchange or  conveyance  of all or any part of the property,
     assets or business of the Corporation  shall be deemed to be a liquidation,
     dissolution or winding up of the  Corporation  for purposes of this Section
     6.

               (C) 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,  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  B  Preferred  Stock  were  entitled
     immediately  prior  to such  event  under  the  proviso  in  clause  (1) of
     paragraph  (A) of this  Section 6 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. In the event the Corporation shall at any
     time declare or pay any dividend on the Series B Preferred Stock payable in
     shares of Series B Preferred Stock, or effect a subdivision, combination or
     consolidation  of the  outstanding  shares of Series B Preferred  Stock (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Series B  Preferred  Stock)  into a greater  or lesser  number of shares of
     Series B Preferred  Stock,  then in each such case the aggregate  amount to
     which  holders  of  shares  of  Series  B  Preferred  Stock  were  entitled
     immediately  prior  to such  event  under  the  proviso  in  clause  (1) of
     paragraph  (A) of this  Section 6 shall be  adjusted  by  multiplying  such
     amount by a  fraction,  the  numerator  of which is the number of shares of
     Series B Preferred Stock that were  outstanding  immediately  prior to such
     event  and the

                                       8


     denominator  of which is the number of shares of Series B  Preferred  Stock
     outstanding immediately after such event.

     Section 7.  Consolidation,  Merger,  etc.  Notwithstanding  anything to the
contrary  contained  herein,  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 B
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 100,000 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 or pay any  dividend on the Common Stock
payable  in shares of Common  Stock,  or effect a  subdivision,  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 B 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. In the event the  Corporation  shall at any time declare or
pay any dividend on the Series B Preferred  Stock  payable in shares of Series B
Preferred  Stock, or effect a subdivision,  combination or  consolidation of the
outstanding shares of Series B Preferred Stock (by reclassification or otherwise
than by payment  of a dividend  in shares of Series B  Preferred  Stock)  into a
greater or lesser  number of shares of Series B  Preferred  Stock,  then in each
such case the  amount  set forth in the first  sentence  of this  Section 7 with
respect to the exchange or change of shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Series B Preferred Stock that were  outstanding  immediately
prior to such  event  and the  denominator  of which is the  number of shares of
Series B Preferred Stock outstanding immediately after such event.

     Section 8. No Redemption.  The shares of Series B Preferred Stock shall not
be redeemable.


     Section 9. Rank. The Series B Preferred  Stock shall rank,  with respect to
the payment of dividends and the distribution of assets, junior to all series of
any  other  class of the  Preferred  Stock  issued  either  before  or after the
issuance  of the Series B Preferred  Stock,  unless the terms of any such series
shall provide otherwise.

     Section 10. Amendment. The Certificate of Incorporation, as amended, of the
Corporation  shall not be amended in any manner that would  materially  alter or
change the powers, preferences or special rights of the Series B 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 B Preferred Stock,  voting
together as a single class.

                                       9


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




     IN WITNESS  WHEREOF,  said  Corporation  has caused this  Certificate to be
signed by Seth H. Hoogasian, its Vice President,  General Counsel and Secretary,
this 16th day of September, 2005.



                                                /s/ Seth H. Hoogasian
                                                --------------------------------
                                                Seth H. Hoogasian
                                                Vice President, General Counsel
                                                        and Secretary




                                                                     Exhibit 4.1

                                RIGHTS AGREEMENT


                         dated as of September 15, 2005

                                 by and between


                           THERMO ELECTRON CORPORATION


                                       and


                     AMERICAN STOCK TRANSFER & TRUST COMPANY
                                 as Rights Agent







     RIGHTS AGREEMENT, dated as of September 15, 2005 (the "Agreement"), between
Thermo  Electron  Corporation,  a  Delaware  corporation  (the  "Company"),  and
American Stock Transfer & Trust Company, a New York corporation, as Rights Agent
(the "Rights Agent").

                               W I T N E S S E T H

     WHEREAS,  the Board of Directors of the Company  (the  "Board")  desires to
provide  shareholders  of the Company with the  opportunity  to benefit from the
long-term  prospects and value of the Company and to ensure that shareholders of
the  Company  receive  fair and equal  treatment  in the  event of any  proposed
takeover of the Company; and

     WHEREAS,  on January 19, 1996, the Board authorized and declared a dividend
distribution  of one  Right  for each  share of  Common  Stock  (as  hereinafter
defined) of the Company outstanding at the close of business on January 29, 1996
(the "1996 Record  Date"),  and authorized the issuance of one Right (subject to
adjustment  in  accordance  with the terms of the Rights  Agreement  dated as of
October 29, 2001  between  the  Company and the Rights  Agent (the "2001  Rights
Agreement"))  for each share of Common Stock of the Company  issued  between the
1996 Record Date  (whether  originally  issued or delivered  from the  Company's
treasury) and the earlier of the  Distribution  Date or the Expiration  Date (as
such  terms are  defined in the 2001  Rights  Agreement),  each Right  initially
representing  the right to purchase  one  ten-thousandth  of a share of Series B
Junior  Participating  Preferred Stock of the Company upon the terms and subject
to the conditions set forth in the 2001 Rights Agreement; and

     WHEREAS, on September 15, 2005, the Board of determined it desirable and in
the best interests of the Company and its shareholders for the Company to extend
the  benefits  afforded  by the 2001  Rights  Agreement  and to  implement  such
extension by executing this Agreement; and

     WHEREAS, on September 15, 2005 the Board authorized and declared a dividend
distribution  of one Right (as such term is hereinafter  defined) for each share
of Common Stock  outstanding as of September 29, 2005 (the "Record  Date"),  and
authorized  the  issuance  of one  Right for each  share of Common  Stock of the
Company  issued  (whether or not  originally  issued or sold from the  Company's
treasury,  except  in the case of  treasury  shares  having  associated  Rights)
between  the  Record  Date  and  the  earlier  of the  Distribution  Date or the
Expiration  Date (as such terms are hereinafter  defined),  each Right initially
representing  the right to  purchase  one  one-hundred-thousandth  of a share of
Series B Junior Participating  Preferred Stock of the Company upon the terms and
subject to the conditions hereinafter set forth (the "Rights"); and

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

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

     (a)  "Acquiring  Person" shall mean any Person who or which,  together with
all Affiliates and Associates of such Person,  shall be the Beneficial  Owner of
15% or more of the  shares  of  Common  Stock  then  outstanding,  but shall not
include (i) the Company, (ii) any Subsidiary of the Company,  (iii) any employee
benefit plan or compensation  arrangement of the




Company or of any  Subsidiary  of the  Company,  or (iv) any  Person  organized,
appointed or established by the Company for or pursuant to the terms of any such
plan or arrangement (the Persons described in clauses (i) through (iv) above are
hereinafter referred to as "Exempt Persons");  provided,  however, that the term
"Acquiring  Person"  shall not include  any  Grandfathered  Person,  unless such
Grandfathered  Person becomes the Beneficial Owner of a percentage of the shares
of Common  Stock  then  outstanding  equal to or  exceeding  such  Grandfathered
Person's Grandfathered Percentage.  Notwithstanding the foregoing, (x) no Person
shall become an  "Acquiring  Person" as the result of an  acquisition  of Common
Stock by the  Company  that,  by  reducing  the  number of  shares  outstanding,
increases the proportionate  number of shares  beneficially owned by such Person
to 15% (or in the case of a Grandfathered  Person, the Grandfathered  Percentage
applicable to such  Grandfathered  Person) or more of the shares of Common Stock
of the Company  then  outstanding;  provided,  however,  that if a Person  shall
become the Beneficial  Owner of 15% (or in the case of a  Grandfathered  Person,
the Grandfathered Percentage applicable to such Grandfathered Person) or more of
the shares of Common Stock of the Company then  outstanding  as the result of an
acquisition of Common Stock by the Company and shall,  following  written notice
from, or public disclosure by the Company of such share purchases by the Company
become the Beneficial Owner of any additional Common Stock of the Company (other
than pursuant to a stock split, stock dividend or similar transaction) and shall
then  beneficially  own  15%  (or in the  case of a  Grandfathered  Person,  the
Grandfathered Percentage applicable to such Grandfathered Person) or more of the
shares of Common Stock then outstanding,  then such Person shall be deemed to be
an  "Acquiring  Person"  and (y) if the Board  determines  in good  faith that a
Person who would otherwise be an "Acquiring  Person," as defined pursuant to the
foregoing  provisions of this paragraph (a), has become such inadvertently,  and
such Person divests as promptly as practicable (or within such period of time as
the Board  determines is  reasonable)  of  Beneficial  Ownership of a sufficient
number  of shares of  Common  Stock so that  such  Person  would no longer be an
"Acquiring  Person," as defined  pursuant to the  foregoing  provisions  of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring  Person"
for any  purposes of this  Agreement  unless and until such  Person  shall again
become an "Acquiring Person."

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

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

     (d) "Affiliate" and "Associate" shall 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;  provided, however, that no Person who is a director
or officer of the Company  shall be deemed an  Affiliate  or an Associate of any
other  director  or  officer  of the  Company  solely  as a result of his or her
position as director or officer of the Company.

     (e) 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,  owns or has the right to acquire  (whether or not
     such right is exercisable  immediately or only after the passage of time or
     upon  satisfaction  of any


                                       2


     conditions or both) pursuant to any agreement, arrangement or understanding
     (other than customary  agreements with and between underwriters and selling
     group members with respect to a bona fide public  offering of  securities),
     whether or not in  writing,  or upon the  exercise  of  conversion  rights,
     exchange  rights,  other rights,  warrants or options,  or otherwise (other
     than the Rights); 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 or on behalf of such Person
     or any of such  Person's  Affiliates  or  Associates  until  such  tendered
     securities  are  accepted  for  purchase  or  exchange,  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(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 of the
     General Rules and Regulations  under the Exchange Act, or any comparable or
     successor  rule),  including  pursuant  to any  agreement,  arrangement  or
     understanding   (other   than   customary   agreements   with  and  between
     underwriters  and selling  group members with respect to a bona fide public
     offering of securities), whether or not in writing; 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  or  consent   given  in  response  to  a  public  proxy  or  consent
     solicitation  made  pursuant  to a written  proxy or  consent  solicitation
     statement  filed with the Securities and Exchange  Commission in accordance
     with the applicable  provisions of the General Rules and Regulations  under
     the Exchange Act, and (B) is not 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  (other than customary  agreements  with and
     between  underwriters and selling group members with respect to a bona fide
     public offering of securities)  whether or not in writing,  for the purpose
     of acquiring,  holding,  voting  (except  pursuant to a revocable  proxy or
     consent as described in the proviso to subparagraph  (ii) of this paragraph
     (e)) or disposing of any voting securities of the Company.

provided,  however,  that (1) no Person engaged in business as an underwriter of
securities  shall be deemed  the  Beneficial  Owner of any  securities  acquired
through such Person's  participation  as an  underwriter in good faith in a firm
commitment  underwriting  until the expiration of forty (40) days after the date
of such  acquisition,  and (2) no Person who is a director  or an officer of the
Company  shall be deemed,  as a result of his or her  position  as  director  or
officer of the

                                       3



Company,  the  Beneficial  Owner  of any  securities  of the  Company  that  are
Beneficially Owned by any other director or officer of the Company.

     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)(l)(i) of the General Rules
and Regulations under the Exchange Act.

     (f) "Board"  shall have the meaning set forth in the WHEREAS  clause at the
beginning of this Agreement.

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

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

     (i) "Common  Stock" shall mean the common  stock,  $1.00 par value,  of the
Company, 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.

     (j) "Common stock  equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (k)  "Company"  shall  have  the  meaning  set  forth  in the  introductory
paragraph hereof.

     (l)  "Current  market  price"  shall have the  meaning set forth in Section
11(d)(i) hereof.

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

     (n)  "Distribution  Date" shall have the meaning set forth in Section  3(a)
hereof.

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

     (p) "Exchange Act" shall have the meaning set forth in Section 1(c) hereof.

     (q)  "Exchange  Ratio"  shall have the meaning  set forth in Section  24(a)
hereof.

                                       4


     (r)  "Expiration  Date" shall have the  meaning  set forth in Section  7(a)
hereof.

     (s) "Final  Expiration  Date" shall mean the close of business on the tenth
anniversary of the Record Date.

     (t)   "Grandfathered   Percentage"   shall  mean,   with   respect  to  any
Grandfathered  Person,  the percentage of the outstanding shares of Common Stock
of the Company that such Grandfathered Person,  together with all Affiliates and
Associates  of  such   Grandfathered   Person,   Beneficially  Owns  as  of  the
Grandfathered  Time, plus an additional 1/2%;  provided,  however,  that, in the
event any Grandfathered Person shall sell, transfer, or otherwise dispose of any
outstanding shares of Common Stock of the Company after the Grandfathered  Time,
the  Grandfathered  Percentage  shall,  subsequent  to such  sale,  transfer  or
disposition,  mean, with respect to such Grandfathered Person, the lesser of (i)
the  Grandfathered  Percentage  as in  effect  immediately  prior to such  sale,
transfer or disposition  or (ii) the percentage of outstanding  shares of Common
Stock  of  the  Company  that  such  Grandfathered   Person   Beneficially  Owns
immediately  following such sale,  transfer or  disposition,  plus an additional
1/2%.

     (u)  "Grandfathered  Person"  shall mean any Person who or which,  together
with all Affiliates and Associates of such Person,  is, as of the  Grandfathered
Time, the  Beneficial  Owner of 15% or more of the shares of Common Stock of the
Company then outstanding.  Notwithstanding  anything to the contrary provided in
this  Agreement,  any  Grandfathered  Person  who after the  Grandfathered  Time
becomes the  Beneficial  Owner of less than 15% of the shares of Common Stock of
the Company then outstanding shall cease to be a Grandfathered  Person and shall
be subject to all of the  provisions of this Agreement in the same manner as any
Person who is not and was not a Grandfathered Person.

     (v) "Grandfathered Time" shall mean 12:30 p.m., Boston, Massachusetts time,
on September 16, 2005.

     (w)  "Permitted  Offer" shall mean a tender offer or an exchange  offer for
all outstanding shares of Common Stock at a price and on terms determined, prior
to the  consummation  of such  tender  offer or  exchange  offer,  by  directors
constituting  at least 75% of all of the members of the Board,  after  receiving
advice from a nationally  recognized  investment  banking  firm  selected by the
Board,  to be (a) at a price that is fair to  stockholders  (taking into account
all factors  that such  members of the Board deem  relevant  including,  without
limitation,  prices  that could  reasonably  be  achieved  if the Company or its
assets were sold on an orderly basis designed to realize  maximum value) and (b)
otherwise in the best interests of the Company and its stockholders.

     (x) "Person" shall mean any  individual,  firm,  corporation,  partnership,
trust, association, limited liability company or other entity.

     (y)  "Preferred  Stock" shall mean shares of Series B Junior  Participating
Preferred  Stock,  $100  par  value,  of  the  Company  having  the  rights  and
preferences  set forth in the Terms of Series B Junior  Participating  Preferred
Stock  attached  hereto as  Exhibit A, and,  to the  extent  that there is not a
sufficient  number of shares of Series B Junior  Participating  Preferred  Stock
authorized to permit the full exercise of the Rights, any other series


                                       5


of Preferred Stock,  $100 par value, of the Company  designated for such purpose
containing  terms  substantially  similar  to the  terms of the  Series B Junior
Participating Preferred Stock.

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

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

     (bb) "Record  Date" shall have the meaning set forth in the WHEREAS  clause
at the beginning of this Agreement.

     (cc)  "Redemption  Date" shall have the  meaning set forth in Section  7(a)
hereof.

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

     (ee) "Rights" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.

     (ff) "Rights  Agent"  shall have the meaning set forth in the  introductory
paragraph hereof.

     (gg) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.

     (hh) "Section  11(a)(ii)  Event" shall mean an  acquisition of Common Stock
described in the first sentence of Section 11(a)(ii) hereof.

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

     (jj) "Section 13 Event" shall mean any event  described in clauses (x), (y)
or (z) of Section 13(a) hereof.

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

     (ll)  "Stock  Acquisition  Date"  shall  mean the date of the first  public
announcement  (which,  for purposes of this definition,  shall include,  without
limitation,  the issuance of a press  release or filing of a  publicly-available
report or other  document  with the  Securities  and Exchange  Commission or any
other  governmental  agency by the  Company,  acting  pursuant  to a  resolution
adopted by the Board,  or by an Acquiring  Person) that an Acquiring  Person has
become  such;  provided,  however,  that,  if such Person is deemed not to be an
Acquiring  Person  pursuant  to clause  (y) of  Section  1(a)  hereof,  no Stock
Acquisition Date shall be deemed to have occurred.

     (mm) "Subsidiary" shall mean, with reference to any Person, any corporation
or other entity of which an amount of voting  securities  sufficient to elect at
least a majority of the

                                       6



directors  (or  comparable   body)  of  such  corporation  or  other  entity  is
beneficially  owned,  directly  or  indirectly,  by such  Person,  or  otherwise
controlled by such Person.

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

     (oo)  "Trading  Day" shall have the meaning  set forth in Section  11(d)(i)
hereof.

     (pp)  "Triggering  Event"  shall mean any  Section  11(a)(ii)  Event or any
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 and conditions
hereof,  and the Rights Agent hereby accepts such  appointment.  The Company may
from time to time  appoint  such  Co-Rights  Agents as it may deem  necessary or
desirable  upon ten (10) days' prior  written  notice to the Rights  Agent.  The
Rights  Agent shall have no duty to  supervise,  and shall in no event be liable
for, the acts or omissions of any such co-Rights Agent.

     Section 3. Issuance of Rights.

     (a) Until the earlier of (i) the close of  business  on the tenth  Business
Day after the Stock  Acquisition  Date (or, if the tenth  Business Day after the
Stock  Acquisition  Date occurs before the Record Date, the close of business on
the Record  Date),  or (ii) the close of business on the tenth  Business Day (or
such later date as may be  determined by the Board) after the date that a tender
or exchange offer by any Person (other than an Exempt Person) is first published
or sent or given  within the meaning of Rule  14d-4(a) of the General  Rules and
Regulations  under the Exchange Act, if upon consummation  thereof,  such Person
could  become  the  Beneficial  Owner of 15% (or in the case of a  Grandfathered
Person, the Grandfathered Percentage applicable to such Grandfathered Person) or
more of the shares of Common Stock then  outstanding,  in either  instance other
than  pursuant to a Permitted  Offer (the  earlier of (i) and (ii) being  herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced 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 (y) the Rights
will be  transferable  only in  connection  with the transfer of the  underlying
shares of  Common  Stock  (including  a  transfer  to the  Company).  As soon as
practicable  after  the  Distribution  Date,  the  Rights  Agent  will  send  by
first-class,  insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the  Distribution  Date,  at the address of
such  holder  shown  on  the  records  of  the  Company,   one  or  more  rights
certificates,  in  substantially  the  form of  Exhibit  B hereto  (the  "Rights
Certificates"),  evidencing  one Right for each  share of Common  Stock so held,
subject to adjustment as provided  herein.  With respect to certificates for the
Common Stock  outstanding as of the close of business on 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. In addition, in connection with the
issuance or sale



                                       7


of shares of  Common  Stock  following  the  Distribution  Date and prior to the
redemption or expiration of the Rights,  the Company (i) shall,  with respect to
shares of  Common  Stock so issued or sold  pursuant  to the  exercise  of stock
options or under any employee benefit plan or arrangement, or upon the exercise,
conversion or exchange of  securities  granted or issued by the Company prior to
the  Distribution  Date, and (ii) may, in any other case, if deemed necessary or
appropriate by the Board, issue Rights Certificates representing the appropriate
number of Rights in connection  with such issuance or sale;  provided,  however,
that (x) 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 (y) 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.  In the event
that an  adjustment  in the number of Rights per share of Common  Stock has been
made pursuant to Sections 11(i) or 11(p) hereof,  at the time of distribution of
the Rights  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. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.

     (b) Rights  shall be issued  (i) in  respect of all shares of Common  Stock
that are issued (either as an original issuance or from the Company's  treasury)
after the Record Date but prior to the earlier of the  Distribution  Date or the
Expiration  Date and (ii) 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 (x) with respect to shares of Common Stock so issued or
sold  pursuant to the exercise of stock  options or under any  employee  benefit
plan or arrangement, or upon the exercise, conversion or exchange of securities,
granted or issued by the  Company  prior to the  Distribution  Date and (y) with
respect to shares of Common Stock so issued or sold in any other case, if deemed
necessary or appropriate by the Board.  Certificates representing such shares of
Common Stock (including,  without limitation,  certificates issued upon transfer
or exchange of Common Stock) shall also be deemed to be certificates for Rights,
and shall bear the following legend:

               This certificate also evidences and entitles the holder hereof to
               certain  Rights  as set  forth in the  Rights  Agreement  between
               Thermo  Electron  Corporation  (the "Company") and American Stock
               Transfer & Trust Company (the "Rights  Agent") as such  Agreement
               may be amended  from time to time (the "Rights  Agreement"),  the
               terms of which are hereby  incorporated herein by reference and a
               copy of which is on file at the principal offices of the Company.
               Under  certain   circumstances,   as  set  forth  in  the  Rights
               Agreement, such Rights will be evidenced by separate certificates
               and will no longer be evidenced by this certificate.  The Company
               will mail to the holder of this  Certificate a copy of the Rights
               Agreement,  as in effect on the date of mailing,  without  charge
               promptly  after  receipt  of a written  request  therefor.  Under
               certain  circumstances set forth in the Rights Agreement,  Rights
               issued  to, or held by,  any  Person  who is,  was or  becomes an


                                       8



               Acquiring  Person or any Affiliate or Associate  thereof (as such
               terms are  defined in the Rights  Agreement),  whether  currently
               held by or on behalf of such Person or by any subsequent  holder,
               may become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
earlier of (i) the  Distribution  Date and (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.  Notwithstanding
this Section 3(b), the omission of a legend shall not affect the  enforceability
of any part of this Rights Agreement or the rights of any holder of the Rights.

     (c) Until the earlier of the Distribution Date and the Expiration Date, 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.  In the event  that the  Company
purchases or acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such shares of Common Stock
shall be deemed  cancelled and retired so that the Company shall not be entitled
to exercise  any Rights  associated  with the shares of Common Stock that are no
longer outstanding.

     Section 4. Form of Rights Certificates.

     (a) The  Rights  Certificates  (and the  forms  of  election  to  purchase,
certification and assignment to be printed on the reverse thereof) shall each be
substantially  in the form set forth in Exhibit B hereto and may have such marks
of  identification  or designation  and such legends,  summaries or endorsements
printed thereon as the Company may deem  appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
applicable law or with any rule or regulation made pursuant  thereto or with any
rule or regulation of any stock exchange or over-the-counter market on which the
Rights may from time to time be listed,  or to conform to usage.  Subject to the
provisions of Sections 7, 11 and 22 hereof,  the Rights  Certificates,  whenever
distributed,  shall  entitle the holders  thereof to purchase such number of one
one-hundred-thousandths  of a share of  Preferred  Stock  as shall be set  forth
therein  at  the  price  set  forth  therein  (such   exercise   price  per  one
one-hundred-thousandth  of a share,  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, Section 11(i) or
Section 22 hereof that represents 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 such  Acquiring  Person  has any
continuing agreement,  arrangement or understanding  (whether or not




                                       9


in  writing)  regarding  the  transferred  Rights,  the  shares of Common  Stock
associated  with such Rights or the Company or (B) a transfer that the Board has
determined is part of a plan,  arrangement or  understanding  (whether or not in
writing)  that has as a primary  purpose or effect  avoidance  of  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.

The  provisions  of Section 7(e) hereof  shall be  operative  whether or not the
foregoing legend is contained on any such Rights Certificate.

     Section 5. Countersignature and Registration.

     (a) The Rights  Certificates  shall be executed on behalf of the Company by
its Chairman of the Board,  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.  In case any officer of the
Company who shall have signed any of the Rights  Certificates  shall cease to be
such  officer of the Company  before  countersignature  by the Rights  Agent and
issuance and delivery by the Company,  such Rights  Certificates,  nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though  the  person  who  signed  such  Rights
Certificates  had not ceased to be such officer of the  Company;  and any Rights
Certificates  may be signed on behalf of the  Company by any person  who, at the
actual  date of the  execution  of such  Rights  Certificate,  shall be a proper
officer of the Company to sign such Rights Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

     (b) Following the  Distribution  Date, the Rights Agent shall keep or cause
to be kept, at its office  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,  the
Rights Certificate number and the date of each of the Rights Certificates.

                                       10


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

     (a) Subject to the provisions of Section 4(b),  Section 7(e) and Section 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  (other than Rights  Certificates  representing Rights that have
become void pursuant to Section 7(e) hereof or that have been exchanged pursuant
to Section 24 hereof) may be  transferred,  split up,  combined or exchanged for
another Rights  Certificate or Certificates,  entitling the registered holder to
purchase a like number of one  one-hundred-thousandths  of a share of  Preferred
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be, including any such securities,  cash or assets
following  a  Section  13  Event)  as the  Rights  Certificate  or  Certificates
surrendered  then  entitled  such  holder  (or  former  holder  in the case of a
transfer) to purchase at the same Purchase Price. 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,  with the form of assignment  and  certificate
appropriately  executed,  at the office of the Rights Agent  designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action  whatsoever with respect to the transfer of any such  surrendered  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 Section  4(b),  Section  7(e) and  Section 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  by the  registered  holder  of a  Right  Certificate  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  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   including,   without   limitation,   the   restrictions   on
exercisability  set forth in Section  9(c),  Section  11(a)(iii)  and Section 23
hereof)  in  whole or in part at any  time  after  the  Distribution  Date  upon
surrender of the Rights  Certificate,  with the form of election to purchase and
the  certificate on the reverse side thereof duly executed,  to the Rights Agent
at the office of the Rights Agent

                                       11


designated  for such purpose,  together  with payment of the aggregate  Purchase
Price with respect to the total number of one one-hundred-thousandths of a share
of Preferred Stock (or other shares,  securities,  cash or other assets,  as the
case may be) as to which such  surrendered  Rights are then  exercisable,  at or
prior to the earliest of (i) the Final  Expiration  Date, (ii) the time at which
the Rights expire as provided in Section  13(d) hereof,  (iii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the "Redemption Date")
and (iv) the time at which such Rights are  exchanged  as provided in Section 24
hereof (the earliest of (i),  (ii),  (iii) and (iv) being herein  referred to as
the "Expiration Date").

     (b) The Purchase  Price for each one  one-hundred-thousandth  of a share of
Preferred  Stock pursuant to the exercise of a Right shall initially be $200 and
shall be subject to adjustment  from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful  money of the United  States of America
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 one  one-hundred-thousandth  of a share of  Preferred  Stock (or other
shares,  securities,  cash or other assets,  as the case may be) to be purchased
and an amount  equal to any  applicable  transfer  tax,  the Rights Agent shall,
subject to Section 20(k) and Section 14(b)  hereof,  thereupon  promptly (i) (A)
requisition  from any transfer  agent of the shares of Preferred  Stock (or make
available,  if  the  Rights  Agent  is  the  transfer  agent  for  such  shares)
certificates for the total number of one  one-hundred-thousandths  of a share of
Preferred  Stock to be purchased and the Company hereby  authorizes its transfer
agent to comply with such requests,  or (B) if the Company shall have elected to
deposit the total number of shares of Preferred  Stock issuable upon exercise of
the Rights  hereunder with a depositary  agent,  requisition from the depositary
agent    depositary     receipts     representing    such    number    of    one
one-hundred-thousandths of a share of Preferred Stock as are to be purchased (in
which case  certificates  for the shares of Preferred Stock  represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby  directs the  depositary  agent to comply with such requests,
(ii) requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional  shares in accordance with Section 14 hereof,  (iii) after receipt
of such certificates or depositary  receipts,  cause the same to be delivered to
or  upon  the  order  of the  registered  holder  of  such  Rights  Certificate,
registered in such name or names as may be  designated by such holder,  and (iv)
after  receipt  thereof,  deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate.  The payment of the Purchase Price
(as such  amount may be reduced  pursuant to Section  11(a)(iii)  hereof) may be
made in cash or by certified  bank check or money order  payable to the order of
the  Company.  In the  event  that the  Company  is  obligated  to  issue  other
securities  (including Common Stock) of the Company,  pay cash and/or distribute
other  property  pursuant to Section  11(a)  hereof,  the Company shall 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) In case the registered holder of any Rights  Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate  evidencing
Rights  equivalent to the Rights  remaining  unexercised  shall be issued by the
Rights Agent and  delivered to, or upon the order of, the  registered  holder of
such Rights  Certificate,  registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.

                                       12


     (e)  Notwithstanding  anything in this Agreement to the contrary,  from and
after the first occurrence of a Section 11(a)(ii) Event or Section 13 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  (whether or not in writing) regarding the transferred Rights, the
shares of Common  Stock  associated  with such  Rights or the  Company  or (B) a
transfer  that  the  Board  has  determined  is part of a plan,  arrangement  or
understanding  (whether  or not in  writing)  that has as a primary  purpose  or
effect  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 any  provision of this  Agreement or
otherwise.  No Rights  Certificate shall be issued at any time upon the transfer
of any Rights to an Acquiring  Person whose Rights would be void pursuant to the
preceding  sentence or any  Associate or Affiliate  thereof or to any nominee of
such  Acquiring  Person,  Associate  or  Affiliate;  and any Rights  Certificate
delivered to the Rights  Agent for transfer to an Acquiring  Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled. The Company
shall use all  reasonable  efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied  with,  but shall have no liability to
any holder of Rights  Certificates or other Person as a result of its failure to
make any  determinations  with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.

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

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

                                       13


     Section 9. Reservation and Availability of Capital Stock.

     (a) The Company  covenants and agrees that it will cause to be reserved and
kept  available out of its  authorized  and unissued  shares of Preferred  Stock
(and,  following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and,  following the occurrence of a Triggering Event, Common Stock and/or other
securities)  that, as provided in this Agreement  including  Section  11(a)(iii)
hereof,  will be  sufficient  to permit the exercise in full of all  outstanding
Rights.

     (b) So long as the shares of Preferred Stock (and, following the occurrence
of a Section 11(a)(ii) Event, Common Stock and/or other securities) issuable and
deliverable  upon the  exercise  of the  Rights  may be listed  on any  national
securities  exchange or automated  quotation  system,  the Company shall use its
best  efforts  to  cause,  from  and  after  such  time  as  the  Rights  become
exercisable, all shares reserved for such issuance to be so listed 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  occurrence  of a Section
11(a)(ii) Event on which the  consideration  to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case  may be, 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,  (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, and (iv) obtain such regulatory
approvals as may be necessary for it to issue  securities  purchasable  upon the
exercise  of the  Rights.  The  Company  will also  take  such  action as may be
appropriate  under, or to ensure  compliance  with, the securities or "blue sky"
laws of the various states in connection with the  exercisability of the Rights.
The Company may temporarily  suspend, for a period of time not to exceed 90 days
after the date set forth in clause  (i) of the first  sentence  of this  Section
9(c),  the  exercisability  of the  Rights  in order to  prepare  and file  such
registration  statement and permit it to become effective or to obtain any other
required  regulatory  approval  in  connection  with the  exercisability  of the
Rights. Upon any such suspension,  the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public  announcement  at such time as the  suspension  is no longer in
effect.  Notwithstanding  any provision of this  Agreement to the contrary,  the
Rights  shall  not be  exercisable  in any  jurisdiction  unless  the  requisite
registration or qualification in such  jurisdiction  shall have been effected or
obtained.

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

                                       14


     (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 shares of  Preferred  Stock (or Common Stock and/or other
securities,  as the case may be) upon the exercise of Rights.  The Company shall
not,  however,  be required  (i) to pay any  transfer tax that may be payable in
respect of any  transfer or delivery of Rights  Certificates  to a Person  other
than, or the issuance or delivery of a number of one  one-hundred-thousandths of
a share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) in respect of a name  other than that of, the  registered  holder of the
Rights  Certificate  evidencing Rights surrendered for exercise or (ii) to issue
or deliver  any  certificates  for shares of  Preferred  Stock (or Common  Stock
and/or  other  securities,  as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time  of  surrender)  or  until  it  has  been   established  to  the  Company's
satisfaction that no such tax is due.

     Section 10.  Preferred  Stock  Record  Date.  Each Person in whose name any
certificate  for  shares  of  Preferred  Stock (or  Common  Stock  and/or  other
securities,  as the case may be) is issued upon the exercise of Rights shall for
all  purposes be deemed to have  become the holder of record of such  fractional
shares of Preferred Stock (or Common Stock and/or other securities,  as the case
may be) represented  thereby on, and such  certificate  shall be dated, the date
upon which the Rights  Certificate  evidencing such Rights was duly  surrendered
with the forms of election and  certification  duly  executed and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided,  however,
that if the  date  of such  surrender  and  payment  is a date  upon  which  the
Preferred  Stock (or Common Stock and/or other  securities,  as the case may be)
transfer  books of the Company are closed,  such Person  shall be deemed to have
become the record holder of such shares  (fractional  or otherwise) on, and such
certificate  shall be  dated,  the next  succeeding  Business  Day on which  the
Preferred  Stock (or Common Stock and/or other  securities,  as the case may be)
transfer books of the Company are open; and further provided,  however,  that if
delivery  of shares of  Preferred  Stock or such  other  securities  is  delayed
pursuant to Section 9(c),  such Person shall be deemed to have become the record
holder of such shares of Preferred Stock or such other securities only when such
shares or such other securities first become deliverable.  Prior to the exercise
of the Rights evidenced thereby,  the holder of a Rights  Certificate,  as such,
shall not be entitled to any rights of a stockholder of the Company with respect
to  securities  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) In the event the  Company  shall at any time after the date of
     this  Agreement  (A) declare a dividend on the  Preferred  Stock payable in
     shares of Preferred Stock,  (B) subdivide the outstanding  Preferred Stock,
     (C)  combine  the  outstanding



                                       15


     Preferred Stock into a smaller number of shares, or (D) issue any shares of
     its capital stock in a  reclassification  of the Preferred Stock (including
     any such  reclassification  in connection with a consolidation or merger in
     which the Company is the  continuing or surviving  corporation),  except as
     otherwise  provided in this  Section  11(a) and Section  7(e)  hereof,  the
     Purchase  Price in effect at the time of the record date for such  dividend
     or  of  the   effective   time  of   such   subdivision,   combination   or
     reclassification,  and the number and kind of shares of Preferred  Stock or
     capital  stock,  as the  case  may be,  issuable  on such  date,  shall  be
     proportionately  adjusted so that the holder of any Right  exercised  after
     such time shall be entitled to receive,  upon payment of the Purchase Price
     then in effect,  the aggregate number and kind of shares of Preferred Stock
     or  capital  stock,  as the  case  may be,  that,  if such  Right  had been
     exercised  immediately  prior to such date and at a time when the Preferred
     Stock  transfer  books of the Company  were open,  he would have owned upon
     such  exercise  and been  entitled  to receive by virtue of such  dividend,
     subdivision, combination or reclassification. If an event occurs that would
     require  an  adjustment  under  both  this  Section  11(a)(i)  and  Section
     11(a)(ii)  hereof,  the  adjustment  provided for in this Section  11(a)(i)
     shall be in  addition  to,  and  shall be made  prior  to,  any  adjustment
     required pursuant to Section 11(a)(ii) hereof.

          (ii)  Subject to Section 24 of this  Agreement,  in the event that any
     Person,  alone or together with its  Affiliates or  Associates,  becomes an
     Acquiring Person (other than pursuant to a Permitted Offer), then, promptly
     following the first  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 (subject to
     the last  sentence of Section  23(a)),  upon  exercise  thereof at the then
     current  Purchase Price in accordance with the terms of this Agreement,  in
     lieu of a number  of one  one-hundred-thousandths  of a share of  Preferred
     Stock, such number of shares of Common Stock of the Company that equals the
     result obtained by (x)  multiplying the then current  Purchase Price by the
     then number of one  one-hundred-thousandths  of a share of Preferred  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) In the event that the number of shares of Common  Stock that are
     authorized  by  the  Company's   Certificate  of   Incorporation   but  not
     outstanding  or reserved for issuance for purposes other than upon exercise
     of the Rights are 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 has deemed to have the same
     value as shares of Common Stock (such shares of  preferred  stock,  "common
     stock equivalents")), Preferred  Stock  into a smaller  number of
     shares, or (D) issue any shares of its capital

                                       16


     Preferred Stock into a smaller number of shares, or (D) issue any shares of
     its  capital  foregoing,  having an  aggregate  value  equal to the Current
     Value,  where such aggregate  value has been  determined by the Board after
     receiving  the advice of a nationally  recognized  investment  banking firm
     selected by the Board;  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  shall
     determine in good faith that it is likely that sufficient additional shares
     of Common Stock could be  authorized  for issuance upon exercise in full of
     the Rights, the 30 day period set forth above may be extended to the extent
     necessary,  but not more than 90 days after the 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) In case the Company shall fix a record date for the issuance of rights,
options  or  warrants  to all  holders  of  Preferred  Stock  entitling  them to
subscribe for or purchase (for a period  expiring  within 45 calendar days after
such record date) Preferred Stock (or shares having the same rights,  privileges
and preferences as the shares of Preferred Stock ("equivalent preferred stock"))
or securities  convertible into Preferred Stock or equivalent preferred stock at
a price per share of Preferred Stock or per share of equivalent  preferred stock
(or  having a  conversion  price  per  share,  if a  security  convertible  into
Preferred  Stock or  equivalent  preferred  stock) less than the current  market
price (as  determined  pursuant to Section  11(d) hereof) per share of Preferred
Stock on such record date,  the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such  record date by a fraction,  the  numerator  of which shall be the
number of shares of Preferred  Stock  outstanding on such record date,  plus the
number of shares of Preferred  Stock that the  aggregate  offering  price of the
total number of shares of Preferred Stock and/or  equivalent  preferred stock so
to be offered (and/or the aggregate initial  conversion price of the convertible
securities so to be offered) would  purchase at such current  market price,  and
the  denominator  of

                                       17


which  shall be the  number of shares of  Preferred  Stock  outstanding  on such
record date,  plus the number of  additional  shares of  Preferred  Stock and/or
equivalent  preferred stock to be offered for  subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such  subscription  price may be paid by delivery of consideration  part or
all of which may be in a form other than cash,  the value of such  consideration
shall be as determined in good faith by the Board, whose  determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.  Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights,  options or warrants  are not so issued,  the
Purchase  Price shall be adjusted to be the Purchase Price that would then be in
effect if such record date had not been fixed.

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

     (d)  (i)  For  the  purpose  of  any  computation  hereunder,   other  than
     computations  made  pursuant to Section  11(a)(iii)  hereof,  the  "current
     market  price" per share of Common  Stock 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 such  term is  hereinafter  defined)
     immediately  prior to such date,  and for  purposes  of  computations  made
     pursuant to Section 11(a)(iii) hereof, the "current market price" per share
     of Common  Stock on any date shall be deemed to be the average of the daily
     closing prices per share of such Common Stock for the ten (10)  consecutive
     Trading Days immediately  following such date; provided,  however,  that in
     the event that 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 ten (10) Trading Day period,
     as set  forth

                                       18



     above, after the ex-dividend date for such dividend or distribution, or the
     record date for such subdivision,  combination or reclassification  occurs,
     then, and in each such case,  the "current  market price" shall be properly
     adjusted to take into account ex-dividend or post record date 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  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
     price or, if not so quoted,  the  average of the high bid and the low asked
     prices in the  over-the-counter  market,  as reported  by The Nasdaq  Stock
     Market,  Inc.  ("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. All references in this Section to closing prices, last quoted
     prices or other stock  prices mean prices  during  regular  trading  hours,
     without giving effect to any  after-hours or extended hours trading.  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 shall be as determined in good faith
     by the Board, whose  determination  shall be described in a statement filed
     with the Rights Agent and shall be conclusive  for all  purposes.  The term
     "Trading  Day" shall mean a day on which Nasdaq or any 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 Nasdaq or 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,
     whose determination shall be described in a statement filed with the Rights
     Agent and shall be conclusive for all purposes.

          (ii) For the purpose of any computation hereunder, the "current market
     price" per share of Preferred  Stock shall be determined in the same manner
     as set forth above for the Common Stock in clause (i) of this Section 11(d)
     (other than the last  sentence  thereof).  If the current  market price per
     share of Preferred  Stock cannot be determined in the manner provided above
     or if the  Preferred  Stock is not  publicly  held or listed or traded in a
     manner  described in clause (i) of this Section 11(d),  the "current market
     price" per share of Preferred Stock shall be  conclusively  deemed to be an
     amount equal to 100,000 (as such number may be  appropriately  adjusted for
     such events as stock splits,  stock  dividends and  recapitalizations  with
     respect to the Common  Stock  occurring  after the date of this  Agreement)
     multiplied by the current  market price per share of the Common  Stock.  If
     neither the Common  Stock nor the  Preferred  Stock is publicly  held or so
     listed or traded,  "current  market price" per share of the Preferred Stock
     shall  mean the fair  value per share as  determined  in good  faith by the
     Board, which determination shall be described in a statement filed with the
     Rights Agent and shall be conclusive for all purposes.  For all purposes of
     this Agreement, the "current market price" of one one-hundred-thousandth of
     a share of Preferred  Stock shall be equal to the "current market price" of
     one share of Preferred Stock divided by 100,000.

                                       19


          (iii) For the purpose of any computation  hereunder,  unless otherwise
     expressly  provided herein,  in the case of property other than securities,
     the value thereof shall be determined  reasonably  and in good faith by the
     Board  of the  Company;  provided,  however,  that  if at the  time of such
     determination  there is an Acquiring Person,  the value of such property on
     such date shall be determined by a nationally recognized investment banking
     firm  selected by the Board of the Company,  which  determination  shall be
     described  in a statement  filed with the Rights Agent and shall be binding
     upon the Rights Agent and the holders of the Rights.

     (e) Anything herein to the contrary  notwithstanding,  no adjustment in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase  or  decrease  of at least  one  percent  (1%) in the  Purchase  Price;
provided, however, that any adjustments that by reason of this Section 11(e) are
not  required to be made shall be carried  forward and taken into account in any
subsequent  adjustment.  All calculations under this Section 11 shall be made to
the nearest  cent or to the nearest  hundred-millionth  of a share of  Preferred
Stock,  or millionth of a share of Common Stock or other  security,  as the case
may  be,  or  to  such  other   figure  as  the  Board  may  deem   appropriate.
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  11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter  exercised shall become
entitled to receive any securities  other than Preferred  Stock,  thereafter the
number of such other securities so receivable upon exercise of any Right and the
Purchase  Price thereof  shall be subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect to the Preferred Stock contained in Sections 11(a),  (b), (c), (e), (g),
(h), (i),  (j), (k) and (m), and the  provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any such
other securities;  provided,  however,  that the Company shall not be liable for
its  inability to reserve and keep  available  for issuance upon exercise of the
Rights pursuant to Section  11(a)(ii) a number of shares of Common Stock greater
than the number then  authorized by the Company's  Certificate of  Incorporation
but not outstanding or reserved for other purposes.

     (g)  All  Rights  originally  issued  by  the  Company  subsequent  to  any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase,    at   the   adjusted    Purchase   Price,    the   number   of   one
one-hundred-thousandths  of a share of Preferred  Stock (or other  securities or
amount of cash or other property or combination  thereof)  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   one
one-hundred-thousandths of a share of Preferred Stock (calculated to the nearest
hundred-millionth)  as the Board  determines  is  appropriate  to  preserve  the
economic value of the Rights,  including by way of example, that number obtained
by (i) multiplying (x) the number of

                                       20


one  one-hundred-thousandths of a share of Preferred Stock for which a Right may
be exercised 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 shares of Preferred Stock  purchasable upon the exercise of a Right. Each
of the Rights  outstanding after the adjustment in the number of Rights shall be
exercisable  for  the  number  of  one  one-hundred-thousandths  of a  share  of
Preferred  Stock  for which a Right was  exercisable  immediately  prior to such
adjustment.  Each Right held of record prior to such adjustment of the number of
Rights  shall  become  that  number of Rights  (calculated  to the  nearest  one
millionth)  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 ten (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 Preferred  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  par  value,  if  any,  of the  number  of one
one-hundred-thousandths  of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action that may, in the opinion
of its  counsel,  be necessary in order that the Company may validly and legally
issue such number of shares of fully paid and  nonassessable  Preferred 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


                                       21



after such record date the number of one  one-hundred-thousandths  of a share of
Preferred  Stock and other capital  stock or securities of the Company,  if any,
issuable   upon   such   exercise   over   and   above   the   number   of   one
one-hundred-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company,  if any,  issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment;  provided,  however, that
the  Company  shall  deliver  to such  holder a due  bill or  other  appropriate
instrument  evidencing  such holder's  right to receive such  additional  shares
(fractional  or  otherwise)  or  securities  upon the  occurrence  of the  event
requiring such adjustment.

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

     (n) The Company  covenants  and agrees that it shall not, at any time after
the Distribution  Date and so long as the Rights have not been redeemed pursuant
to  Section 23 hereof,  (i)  consolidate  with any other  Person  (other  than a
Subsidiary of the Company in a transaction that complies with the proviso at the
end of this  sentence),  (ii) merge with or into any other Person  (other than a
Subsidiary of the Company in a transaction that complies with the proviso at the
end of this  sentence),  or (iii) 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  the  proviso  at the  end of this
sentence), if (x) at the time of or immediately after such consolidation, merger
or sale there are any charter or bylaw  provisions  or 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  stockholders  of  the  Person  who
constitutes,  or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution  of Rights  previously  owned by
such Person or any of its Affiliates or  Associates;  provided,  however,  that,
subject to the following  sentence and Section  11(o),  this Section 11(n) shall
not affect the ability of any Subsidiary of the Company to consolidate  with, or
merge with or into,  or sell or transfer  assets or earning  power to, any other
Subsidiary of the Company.  The Company shall not consummate any  consolidation,
merger,  sale or transfer  described  in clause (i),  (ii) or (iii) of the prior
sentence  unless  prior  thereto the Company  and such other  Person  shall have
executed and delivered to the Rights Agent a supplemental  agreement  evidencing
compliance with this Section 11(n).

     (o) The Company covenants and agrees that, after the Distribution  Date, it
will not,  except as permitted  by Section 23,  Section 24 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time


                                       22


such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.

     (p)  Anything in this  Agreement to the  contrary  notwithstanding,  in the
event that the Company  shall at any time after the Record Date and prior to the
Distribution  Date (i) declare or pay any dividend on the outstanding  shares of
Common Stock payable in shares of Common Stock,  (ii) subdivide the  outstanding
shares of Common Stock, or (iii) combine 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 thereafter  associated with each share of Common Stock following any such
event  shall  equal the  result  obtained  by  multiplying  the number of Rights
associated with each share of Common Stock  immediately prior to such event by a
fraction,  the  numerator of which shall be the number of shares of Common Stock
outstanding   immediately  prior  to  the  occurrence  of  such  event  and  the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately following the occurrence of such event.

     (q) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under  Section  11(a)(ii) to the extent so exercised  and neither
such exercise nor any exchange of Rights  pursuant to Section 24 shall otherwise
affect the rights of holders of Right  Certificates under this Rights Agreement,
including  rights to purchase  securities  of the  Principal  Party  following a
Section 13 Event which has  occurred or may  thereafter  occur,  as set forth in
Section 13 hereof. Upon exercise of a Right Certificate under Section 11(a)(ii),
the Rights  Agent shall  return such Right  Certificate  duly marked to indicate
that such exercise has occurred.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever an  adjustment  is made as provided in Section 11 or Section 13 hereof,
the  Company  shall  promptly  (a)  prepare a  certificate  setting  forth  such
adjustment and a brief  statement of the facts  accounting for such  adjustment,
(b) file with the Rights Agent,  and with each transfer  agent for the Preferred
Stock and the Common  Stock,  a copy of such  certificate,  and (c) mail a brief
summary  thereof to each  holder of a Rights  Certificate  (or,  if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock) in  accordance  with  Section 26 hereof.  The Rights Agent shall be fully
protected  in  relying on any such  certificate  and on any  adjustment  therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.

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

     (a) In the event that,  at any time after a Person has become an  Acquiring
Person,  (x) the Company shall  consolidate  with,  or merge with and into,  any
other  Person  (other than a  Subsidiary  of the Company in a  transaction  that
complies with Section 11(n) 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(n) 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

                                       23


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 complies with Section 11(n)  hereof),  then, and in each such case
and 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  tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter  defined),  which  shall not be subject to any liens,  encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of one
one-hundred-thousandths  of a share  of  Preferred  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 one  one-hundred-thousandths of
a share  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 (2)  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 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, subject to clause (v) below, 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) the  provisions  of  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 is the party receiving the
     greatest  portion of the assets or earning  power  transferred  pursuant to
     such transaction or transactions;

                                       24


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

     (c) The Company shall not consummate any 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;

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

The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.

     (d) Notwithstanding anything in this Agreement to the contrary,  Section 13
shall not be applicable to a transaction  described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
(or a wholly owned subsidiary of any such Person or Persons) who acquired shares
of Common  Stock  pursuant  to a  Permitted  Offer,  (ii) the price per share of
Common  Stock paid in such  transaction  is not less than the price per share of
Common  Stock paid to all holders of shares of Common  Stock  whose  shares were
purchased  pursuant to such Permitted Offer, and (iii) the form of consideration
paid in such

                                       25


transaction  is the  same as the form of  consideration  paid  pursuant  to such
Permitted Offer. Upon consummation of any such transaction  contemplated by this
Section 13(d), all Rights hereunder shall expire.

     (e) In case the  Principal  Party  which is to be a party to a  transaction
referred  to in  this  Section  13 has a  provision  in  any  of its  authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its affairs, which provision would have the effect of (i) causing such
Principal  Party to issue  (other  than to  holders of Rights  pursuant  to this
Section 13), in connection  with, or as a consequence of, the  consummation of a
transaction  referred  to in this  Section  13,  shares of common  stock of such
Principal Party at less than the then current market value (determined  pursuant
to Section 11(d)) or securities  exercisable  for, or convertible  into,  common
stock of such Principal  Party at less than such current  market value,  or (ii)
providing for any special payment,  tax or similar provisions in connection with
the  issuance  of the  common  stock of such  Principal  Party  pursuant  to the
provisions  of this  Section  13,  then,  in such event,  the Company  shall not
consummate  any such  transaction  unless  prior  thereto  the  Company and such
Principal  Party  shall  have  executed  and  delivered  to the  Rights  Agent a
supplemental  agreement  providing  that  the  provision  in  question  of  such
Principal  Party  shall  have  been  canceled,  waived or  amended,  or that the
authorized  securities shall be redeemed,  so that the applicable provision will
have no effect in connection  with, or as a consequence of, the  consummation of
the proposed transaction.

     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(i) or (p) hereof, or to
distribute Rights  Certificates that evidence fractional Rights. In lieu of such
fractional  Rights,  there shall be paid to the registered holders of the Rights
Certificates  with regard to which such  fractional  Rights  would  otherwise be
issuable,  an amount in cash equal to the same  fraction of the  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  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 the 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.  All references in this Section to closing  prices,  last
quoted prices or other stock prices means prices during  regular  trading hours,
without giving effect to any  after-hours  or extended hours trading.  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  shall be
used,  which  determination  shall be  described  in a statement  filed with the
Rights Agent and shall be conclusive for all purposes.

                                       26


     (b) The  Company  shall not be  required  to issue  fractions  of shares of
Preferred  Stock  (other  than  fractions  that are  integral  multiples  of one
one-hundred-thousandth  of a share of  Preferred  Stock)  upon  exercise  of the
Rights  or  to  distribute  certificates  that  evidence  fractional  shares  of
Preferred  Stock  (other  than  fractions  that are  integral  multiples  of one
one-hundred-thousandth  of a share of  Preferred  Stock).  Fractional  shares of
Preferred Stock in integral multiples of one  one-hundred-thousandth  of a share
of  Preferred  Stock may,  at the  election  of the  Company,  be  evidenced  by
depositary receipts; provided, however, that holders of such depositary receipts
shall have all of the designations and the powers,  preferences and rights,  and
the  qualifications,  limitations and restrictions to which they are entitled as
beneficial  owners  of  the  shares  of  Preferred  Stock  represented  by  such
depositary receipts. In lieu of fractional shares of Preferred Stock (other than
fractions that are integral multiples of one  one-hundred-thousandth  of a share
of Preferred Stock),  the Company shall 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
one-hundred-thousandth  of a share of  Preferred  Stock.  For  purposes  of this
Section 14(b), the current market value of one one-hundred-thousandth of a share
of Preferred Stock shall be one one-hundred-thousandth of the closing price of a
share of Preferred Stock (as determined  pursuant to Section  11(d)(ii)  hereof)
for the Trading Day immediately prior to the date of such exercise.

     (c) Following the occurrence of a Triggering  Event,  the Company shall not
be required to issue  fractions of shares of Common  Stock upon  exercise of the
Rights or to distribute  certificates that evidence  fractional shares of Common
Stock.  In lieu of fractional  shares of Common Stock,  the Company shall 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 price of one (1) share of Common Stock (as determined pursuant to
Section  11(d)(i)  hereof) for the Trading Day immediately  prior to the date of
such exercise.

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

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

                                       27


     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 office 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
duly completed and fully executed;

     (c) subject to Section 6(a) and Section  7(f)  hereof,  the Company and the
Rights  Agent may deem and treat the person in whose  name a Rights  Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered  as the absolute  owner thereof and of the Rights  evidenced  thereby
(notwithstanding   any   notations   of  ownership  or  writing  on  the  Rights
Certificates  or the associated  Common Stock  certificate  made by anyone other
than the Company or the Rights Agent) for all purposes  whatsoever,  and neither
the Company nor the Rights Agent, subject to the penultimate sentence of Section
7(e) hereof, shall be required to 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 prevent
the  issuance  of any such  order,  decree or ruling and to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.

     Section 17. Rights Certificate Holder Not Deemed a Stockholder.  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  one
one-hundred-thousandths of a share of Preferred 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 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 Section 25 hereof), or to receive dividends or subscription  rights,
or  otherwise,  until the Right or Rights  evidenced by such Rights  Certificate
shall have been exercised in accordance with the provisions hereof.

                                       28


     Section 18. Concerning the Rights Agent.

     (a) The  Company  agrees to pay to the Rights  Agent such  compensation  as
shall be agreed to in writing  between the Company and the Rights  Agent 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 or expense, incurred without gross negligence,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement,  including  the costs and expenses of defending  against any claim of
liability in the premises.

     (b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration  of this  Agreement in reliance  upon any Rights  Certificate  or
certificate for Common Stock or for other securities of the Company,  instrument
of assignment or transfer, power of attorney,  endorsement,  affidavit,  letter,
notice, direction, consent,  certificate,  statement, or other paper or document
believed by it 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 20 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  business of the Rights Agent or any  successor  Rights  Agent,
shall be the  successor  to the Rights  Agent under this  Agreement  without the
execution  or filing of any paper or any  further  act on the part of any of the
parties hereto;  provided,  however, that such corporation would be eligible for
appointment  as a  successor  Rights  Agent under the  provisions  of Section 21
hereof.  In case at the time such  successor  Rights Agent shall  succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned  but not delivered,  any such successor Rights Agent may adopt the
countersignature   of  a  predecessor  Rights  Agent  and  deliver  such  Rights
Certificates  so  countersigned;  and in  case at that  time  any of the  Rights
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the  successor  Rights  Agent;  and in all such  cases  such  Rights
Certificates  shall have the full force provided in the Rights  Certificates and
in this Agreement.

     (b) In case at any time the name of the Rights  Agent  shall be changed and
at such time any of the Rights  Certificates  shall have been  countersigned but
not delivered,  the Rights Agent may adopt the countersignature  under its prior
name and deliver Rights Certificates so countersigned;  and in case at that time
any of the Rights  Certificates  shall not have been  countersigned,  the Rights
Agent may countersign  such Rights  Certificates  either in its prior name

                                       29


or in its changed  name;  and in all such cases such Rights  Certificates  shall
have the full force provided in the Rights Certificates and in this Agreement.

     Section 20. Duties of Rights Agent.  The Rights Agent undertakes the duties
and  obligations  imposed  by  this  Agreement  upon  the  following  terms  and
conditions,  by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

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

     (b)  Whenever in the  performance  of its duties under this  Agreement  the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action  hereunder,  such fact or matter (unless
other  evidence in respect  thereof be herein  specifically  prescribed)  may be
deemed to be conclusively  proved and established by a certificate signed by the
Chairman of the Board,  the President,  any Vice President,  the Treasurer,  any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full  authorization
to the Rights  Agent for any action  taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

     (c) The  Rights  Agent  shall be  liable  hereunder  only for its own gross
negligence, bad faith or willful misconduct.

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

     (e) The Rights  Agent shall not be under any  responsibility  in respect of
the validity of this Agreement or the execution and delivery  hereof (except the
due  execution  hereof by the Rights  Agent) or in respect  of the  validity  or
execution of any Rights Certificate (except its countersignature  thereof);  nor
shall it be  responsible  for any  breach  by the  Company  of any  covenant  or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible  for any adjustment  required under the provisions of Section 11,
Section 13 or Section 24 hereof or responsible for the manner,  method or amount
of any such adjustment or the  ascertaining of the existence of facts that would
require  any such  adjustment  (except  with  respect to the  exercise of Rights
evidenced by Rights  Certificates after receipt of a certificate  describing any
such  adjustment,  delivered  pursuant to Section  12);  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 Preferred Stock to
be issued pursuant to this Agreement or any Rights  Certificate or as to whether
any shares of Common Stock or Preferred Stock will,  when so issued,  be validly
authorized and issued, fully paid and nonassessable.

                                       30


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

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from the
Chairman of the Board,  the President,  any Vice President,  the Secretary,  any
Assistant  Secretary,  the Treasurer or any Assistant  Treasurer of the Company,
and to apply to such officers for advice or  instructions in connection with its
duties,  and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance  with  instructions  of any such officer.  Any
application by the Rights Agent for written  instructions  from the Company may,
at the option of the Rights Agent,  set forth in writing any action  proposed to
be  taken  or  omitted  by the  Rights  Agent  with  respect  to its  duties  or
obligations  under this Rights Agreement and the date on and/or after which such
action  shall be taken or omitted  and the Rights  Agent shall not be liable for
any action taken or omitted in accordance  with a proposal  included in any such
application on or after the date specified therein (which date shall not be less
than five Business Days after the date any such officer  actually  receives such
application,  unless  any such  officer  shall have  consented  in writing to an
earlier  date) unless,  prior to taking or omitting any such action,  the Rights
Agent  has  received  written  instructions  in  response  to  such  application
specifying the action to be taken or omitted.

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

     (i) The Rights  Agent may execute and  exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its  attorneys  or  agents,  and the Rights  Agent  shall not be  answerable  or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct;  provided,  however, reasonable care was exercised in the
selection and continued employment thereof.

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

     (k) If, with respect to any Rights  Certificate  surrendered  to the Rights
Agent  for  exercise  or  transfer,  the  certificate  attached  to the  form of
assignment  or form of  election to  purchase,  as the case may be, has not been
completed,  the Company and the Rights Agent will deem the  beneficial  owner of
the rights evidenced by such Rights  Certificate to be an Acquiring

                                       31


Person or an Affiliate or Associate  thereof and such  assignment or election to
purchase will not be honored.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon 30 days'  notice in writing  mailed to the  Company,  and to each  transfer
agent of the Common Stock and Preferred  Stock, by registered or certified mail,
and to the holders of the Rights  Certificates  by first-class  mail;  provided,
however,  that in the event the transfer  agency  relationship in effect between
the Company and the Rights Agent with respect to the Common Stock of the Company
terminates,  the Rights Agent will be deemed to have resigned  automatically  on
the effective date of such termination.  The Company may remove the Rights Agent
or any successor Rights Agent with or without cause, effective immediately or on
a specified  date,  by written  notice  mailed to the Rights  Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred  Stock, by registered or certified mail, and to the holders of the
Rights Certificates by any means reasonably  determined by the Company to inform
such holders of such removal  (including without  limitation,  by including such
information in one or more of the Company's  reports to  shareholders or reports
or filings with the  Securities  and Exchange  Commission).  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 a period of 30 days after giving notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the 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) a  corporation  organized  and  doing
business  under the laws of the  United  States  (or of any state of the  United
States)  in good  standing,  which is  authorized  under  such laws to  exercise
corporate  trust or stock  transfer  powers  and is subject  to  supervision  or
examination  by  federal  or state  authority  and  which has at the time of its
appointment  as  Rights  Agent  a  combined  capital  and  surplus  of at  least
$10,000,000 or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers,  rights,  duties and  responsibilities as if it had been originally
named as Rights Agent without  further act or deed; but the  predecessor  Rights
Agent shall deliver and transfer to the  successor  Rights Agent any property at
the time held by it  hereunder,  and execute and deliver any further  assurance,
conveyance,  act or deed necessary for the purpose. Not later than the effective
date of any such  appointment,  the Company shall file notice thereof in writing
with the  predecessor  Rights Agent and each transfer  agent of the Common Stock
and  the  Preferred  Stock,  and  give  notice  to  the  holders  of  the  Right
Certificates  by any means  reasonably  determined by the Company to inform such
holders of such appointment  (including  without  limitation,  by including such
information in one or more of the Company's  reports to  shareholders or reports
or filings with the  Securities  and Exchange  Commission).  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.

                                       32


     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 the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other  securities or property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement.

     Section 23. Redemption.

     (a) The Board of Directors  of the Company may, at its option,  at any time
prior to the  earlier  of (i) the  Stock  Acquisition  Date  (or,  if the  Stock
Acquisition  Date shall have  occurred  prior to the Record  Date,  the close of
business  on the  tenth  day  following  the  Record  Date),  or (ii) the  Final
Expiration Date, redeem all but not less than all 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") and the Company may, at its option,  pay
the  Redemption  Price  either in shares of Common  Stock (based on the "current
market price," as defined in Section  11(d)(i)  hereof,  of the shares of Common
Stock at the time of  redemption)  or cash or any  other  form of  consideration
deemed  appropriate  by the  Board.  Immediately  upon the  action  of the Board
ordering the  redemption of the Rights,  evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice, the
right to exercise the Rights shall  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  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 that is mailed in the manner
herein  provided shall be deemed given,  whether or not the holder  receives the
notice.  Each  such  notice of  redemption  will  state the  method by which the
payment of the Redemption Price will be made.

     (b) In the event of a  redemption  of the  Rights in  accordance  with this
Agreement, the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press  release  announcing  the manner of
redemption  of the Rights in  accordance  with this  Agreement  and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last  addresses  as they appear on the  registry  books of the Rights  Agent or,
prior to the  Distribution  Date, on the registry books of the Transfer Agent of
the  Common  Stock,  and upon such  action,  all  outstanding  Rights  and Right
Certificates shall be null and void without any further action by the Company.

     (c) The Board shall  establish a  Shareholder  Rights Plan  Committee  that
shall review this Agreement in order to consider whether the maintenance of this
Agreement  continues  to be in  the  best  interests  of  the  Company  and  its
stockholders.  The committee shall conduct such review periodically when, as and
in such manner as the committee  deems  appropriate,  after giving due regard to
all relevant  circumstances;  provided,  however,  that the committee shall take
such action at least once every three years.  Following  each such  review,  the
committee will report its conclusions to the Board, including any recommendation
in light thereof as to whether

                                       33


this  Agreement  should be  modified,  terminated  or the Rights  redeemed.  The
committee is authorized  to retain such legal  counsel,  financial  advisors and
other  advisors  as the  committee  deems  appropriate  in order to  assist  the
committee in carrying out its foregoing  responsibilities  under this Agreement.
The  committee  shall  consist of  directors  who are  eligible  to serve on the
committee in accordance with the Company's bylaws.

     Section 24. Exchange.

     (a) The Board may,  at its  option,  at any time after a Section  11(a)(ii)
Event,  exchange  all or part of the then  outstanding  and  exercisable  Rights
(which (i) shall not  include  Rights  that have  become  void  pursuant  to the
provisions of Section 7(e) hereof, and (ii) shall include,  without  limitation,
any Rights issued after the Distribution  Date) 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  shall  not be
empowered  to effect such  exchange at any time after any Person  (other than an
Exempt  Person),  together with all  Affiliates  and  Associates of such Person,
becomes the  Beneficial  Owner of 50% or more of the shares of Common Stock then
outstanding.

     (b)  Immediately  upon the action of the Board ordering the exchange of any
Rights  pursuant to subsection  (a) of this Section 24,  evidence of which shall
have been  filed with the Rights  Agent,  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 that is mailed in the manner herein  provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange  shall state the method by which the exchange of shares of Common Stock
for Rights will be  effected  and,  in the event of any  partial  exchange,  the
number of Rights that will be exchanged.  Any partial exchange shall be effected
pro rata based on the number of Rights  (other than Rights that have become void
pursuant  to the  provisions  of Section  7(e)  hereof)  held by each  holder of
Rights.

     (c) In any  exchange  pursuant  to this  Section  24, the  Company,  at its
option, may substitute  Preferred Stock (or equivalent  preferred stock, as such
term is defined in Section 11(b) hereof) for shares of Common Stock exchangeable
for Rights,  at the  initial  rate of one  one-hundred-thousandth  of a share of
Preferred Stock (or equivalent  preferred stock) for each share of Common Stock,
as  appropriately  adjusted to reflect  adjustments  in the voting rights of the
Preferred  Stock  pursuant to Section 3(A) of the  Certificate  of  Designations
attached hereto as Exhibit A, so that the fraction of a share of Preferred Stock
(or equivalent  preferred stock) delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.

                                       34


     (d) In the event that there shall not be sufficient  shares of Common Stock
or Preferred  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 take all such  action as may be  necessary  to  authorize
additional  shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.

     (e) The  Company  shall not be  required  to issue  fractions  of shares of
Common Stock or to distribute  certificates  that evidence  fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock,  there shall be
paid to the registered  holders of the Right  Certificates  with regard to which
such fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current  market value of a whole share of
Common Stock.  For the purposes of this subsection (e), the current market value
of a whole share of Common Stock shall be the closing  price per share of Common
Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately  prior to the date of exchange  pursuant to this
Section 24.

     Section 25. Notice of Certain Events.

     (a) In case the Company shall propose,  at any time after the  Distribution
Date,  (i) to pay any  dividend  payable in stock of any class to the holders of
Preferred  Stock or to make any other  distribution  to the holders of Preferred
Stock (other than a regular  periodic  cash dividend out of earnings or retained
earnings of the  Company),  or (ii) to offer to the holders of  Preferred  Stock
rights or warrants to  subscribe  for or to purchase  any  additional  shares of
Preferred Stock or shares of stock of any class or any other securities,  rights
or  options,  or (iii) to effect any  reclassification  of its  Preferred  Stock
(other than a  reclassification  involving  only the  subdivision of outstanding
shares of Preferred  Stock),  or (iv) to effect any consolidation or merger into
or  with  any  other  Person  (other  than  a  Subsidiary  of the  Company  in a
transaction  that complies with Section 11(n) 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 complies 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 Preferred Stock,
if any such date is to be fixed,  and such notice  shall be so given in the case
of any action  covered by clause (i) or (ii) above at least 20 days prior to the
record  date for  determining  holders  of the  shares  of  Preferred  Stock for
purposes of such action,  and in the case of any such other action,  at least 20
days  prior to the date of the  taking  of such  proposed  action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.

     (b) In case a 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


                                       35


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  Preferred  Stock  shall be  deemed
thereafter  to  refer  also  to  Common  Stock  and/or,  if  appropriate,  other
securities;  provided  that the failure to give such notice shall not affect the
validity of such consent.

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

                           Thermo Electron Corporation
                           81 Wyman Street
                           Waltham, Massachusetts 02451
                           Attention:  Corporate Secretary

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

                           American Stock Transfer & Trust Company
                           59 Maiden Lane
                           New York, NY 10038
                           Attention:  Corporate Trust Department

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

     Section 27. Supplements and Amendments.  For so long as the Rights are then
redeemable, the Company may, in its sole and absolute discretion, and the Rights
Agent shall,  if the Company so directs,  supplement  or amend any  provision of
this Agreement in any respect without the approval of any holders of the Rights.
At any time when the  Rights  are no longer  redeemable,  the  Company  may,  by
approval  of at least 75% of the  members  of the Board,  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 which may be defective or
inconsistent with any other provisions herein,  provided that no such supplement
or amendment  shall  adversely  affect the interests of the holders of Rights as
such  (other  than an  Acquiring  Person  or an  Affiliate  or  Associate  of an
Acquiring Person), or (iii) to change or supplement the provisions hereof in any
manner  which  the Board of  Directors  of the  Company  may deem  necessary  or
desirable and

                                       36



which  shall  not  adversely  affect  the  interests  of the  holders  of  Right
Certificates (other than an Acquiring Person or any Affiliate or Associate of an
Acquiring  Person).  Upon the  delivery  of a  certificate  from an  appropriate
officer of the Company that states that the proposed  supplement or amendment is
in compliance  with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment.  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.  Actions by the Board,  etc. The Board shall have the exclusive
power and authority to administer  this Agreement and to exercise all rights and
powers  specifically  granted  to  the  Board  or to the  Company,  or as may be
necessary or  advisable  in the  administration  of this  Agreement,  including,
without limitation,  the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations and computations deemed necessary or
advisable for the administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend this  Agreement).  All such actions,
calculations,  interpretations  and determinations  (including,  for purposes of
clause (y) below,  all omissions with respect to the foregoing) that are done or
made by the Board 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 to any liability to the holders of the Rights.

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

     Section 31. Severability.  If any term, provision,  covenant or restriction
of this  Agreement  is  held  by a court  of  competent  jurisdiction  or  other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and  restrictions  of this Agreement shall remain in full
force and  effect  and shall in no way be  affected,  impaired  or  invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith  judgment  that  severing the invalid,  void or  unenforceable
language from this  Agreement  would  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.

     Section  32.  Governing  Law.  This  Agreement,  each Right and each Rights
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the State of  Delaware

                                       37



and for all purposes  shall be governed by and construed in accordance  with the
laws of Delaware  applicable  to  contracts  made and to be  performed  entirely
within Delaware. The courts of the State of Delaware and of the United States of
America  located in the State of Delaware  (the  "Delaware  Courts")  shall have
exclusive  jurisdiction  over any litigation  arising out of or relating to this
Agreement and the transactions contemplated hereby, and any Person commencing or
otherwise  involved  in any such  litigation  shall waive any  objection  to the
laying of venue of such litigation in the Delaware Courts and shall not plead or
claim in any  Delaware  Court  that such  litigation  brought  therein  has been
brought in an inconvenient forum.

     Section 33.  Counterparts.  This Agreement may be executed in any number of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

     Section  34.  Descriptive  Headings.  Descriptive  headings  of the several
Sections of this  Agreement  are  inserted  for  convenience  only and shall not
control or affect the meaning or construction of any of the provisions hereof.


                                       38


     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:                                 THERMO ELECTRON CORPORATION



By:     /s/ John A. Piccione            By:     /s/ Seth H. Hoogasian
   --------------------------------         -----------------------------------
Name:   John A. Piccione                Name:   Seth H. Hoogasian
Title:  Assistant Secretary             Title:  Vice President, General Counsel
                                                and Secretary


Attest:                                 AMERICAN STOCK TRANSFER & TRUST COMPANY


By:     /s/ Susan Silber                By:     /s/ Paula Caroppoli
   --------------------------------         -----------------------------------
Name:   Susan Silber                    Name:   Paula Caroppoli
Title:  Assistant Secretary             Title:  Assistant Secretary


                                                                       EXHIBIT A

                                      TERMS

                                       OF

                SERIES B JUNIOR PARTICIPATING PREFERRED STOCK OF

                           THERMO ELECTRON CORPORATION


     Section 1.  Designation  and  Amount.  The shares of such  series  shall be
designated  as "Series B Junior  Participating  Preferred  Stock" (the "Series B
Preferred  Stock") and the number of shares  constituting the Series B Preferred
Stock shall be Forty Thousand  (40,000).  Such number of shares may be increased
or decreased by  resolution  of the Board prior to issuance;  provided,  that no
decrease  shall  reduce  the number of shares of Series B  Preferred  Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved  for  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 B 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 similar stock) ranking prior and superior to the Series
B Preferred  Stock with respect to dividends,  the holders of shares of Series B
Preferred  Stock, in preference to the holders of Common Stock,  par value $1.00
per share (the  "Common  Stock"),  of the  Corporation,  and of any other junior
stock,  shall be entitled to receive,  when, as and if declared by the Board out
of funds of the  Corporation  legally  available  for the payment of  dividends,
quarterly  dividends  payable  in cash on March 31,  June 30,  September  30 and
December  31 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 B Preferred  Stock,  in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $100 or (b) subject to the provision for  adjustment
hereinafter set forth,  100,000 times the aggregate per share amount of all cash
dividends, and 100,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions,  other than a dividend payable in
shares of Common  Stock or a  subdivision  of the  outstanding  shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock 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 B 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, 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 B Preferred Stock were entitled immediately prior to such event
under clause (b) of 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

                                      A-1



denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding  immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series B Preferred  Stock payable
in shares of Series B Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  B  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
B  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series B
Preferred Stock, then in each such case the amount to which holders of shares of
Series B Preferred  Stock were  entitled  immediately  prior to such event under
clause (b) of the first  sentence  of this  Section  2(A) shall be  adjusted  by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares of Series B Preferred Stock that were  outstanding  immediately  prior to
such  event  and the  denominator  of which is the  number of shares of Series B
Preferred Stock outstanding immediately after such event.

     (B) The Corporation  shall declare a dividend or distribution on the Series
B 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) and the Corporation  shall pay such
dividend or  distribution on the Series B Preferred Stock before the dividend or
distribution  declared on the Common Stock is paid or set apart;  provided that,
in the event no dividend or distribution  shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent  Quarterly Dividend Payment Date, a dividend of $100 per share on the
Series B  Preferred  Stock  shall  nevertheless  be payable  on such  subsequent
Quarterly Dividend Payment Date.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series B  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 B Preferred  Stock entitled to receive a quarterly  dividend
and before such Quarterly  Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative  from such Quarterly  Dividend
Payment Date.  Accrued but unpaid  dividends shall not bear interest.  Dividends
paid on the shares of Series B 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 B 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 B Preferred Stock
shall have the following voting rights:

     (A) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series B Preferred  Stock shall  entitle the holder  thereof to 100,000
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-2



a subdivision,  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 B 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. In the event the Corporation shall
at any time declare or pay any dividend on the Series B Preferred  Stock payable
in shares of Series B Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  B  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
B  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series B
Preferred  Stock,  then in each such case the number of votes per share to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event  shall be  adjusted by  multiplying  such  amount by a fraction,  the
numerator of which is the number of shares of Series B Preferred Stock that were
outstanding  immediately prior to such event and the denominator of which is the
number of shares of Series B Preferred Stock outstanding  immediately after such
event.

     (B) Except as otherwise  provided herein, the holders of shares of Series B
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.

     (C) (i) If at any time  dividends on any Series B Preferred  Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, the holders of
the Series B Preferred Stock,  voting as a separate series from all other series
of Preferred Stock and classes of capital stock,  shall be entitled to elect two
members of the Board in addition to any  Directors  elected by any other series,
class or classes of  securities  and the  authorized  number of  Directors  will
automatically be increased by two. Promptly  thereafter,  the Board of Directors
of this Corporation shall, as soon as may be practicable, call a special meeting
of holders of Series B Preferred  Stock for the purpose of electing such members
of the  Board of  Directors.  Said  special  meeting  shall in any event be held
within 45 days of the occurrence of such arrearage.

          (ii) During any period  when the holders of Series B Preferred  Stock,
voting as a separate  series,  shall be entitled and shall have exercised  their
right  to  elect  two  Directors,  then,  and  during  such  time as such  right
continues,  (a) the then  authorized  number of Directors  shall be increased by
two, and the holders of Series B Preferred  Stock,  voting as a separate series,
shall be entitled to elect the  additional  Directors  so provided  for, and (b)
each such additional Director shall not be a member of any existing class of the
Board  of  Directors,   but  shall  serve  until  the  next  annual  meeting  of
stockholders for the election of Directors,  or until his or her successor shall
be  elected  and shall  qualify,  or until his or her right to hold such  office
terminates pursuant to the provisions of this Section 3(C).

                                       A-3


          (iii) A Director  elected  pursuant to the terms hereof may be removed
with or without  cause by the  holders of Series B Preferred  Stock  entitled to
vote in an election of such Director.

          (iv) If, during any interval  between annual  meetings of stockholders
for the election of Directors and while the holders of Series B Preferred  Stock
shall be entitled to elect two Directors, there is no such Director in office by
reason of resignation,  death or removal,  then, promptly thereafter,  the Board
shall call a special  meeting of the holders of Series B Preferred Stock for the
purpose of filling such vacancy and such vacancy shall be filled at such special
meeting.  Such special  meeting shall in any event be held within 45 days of the
occurrence of such vacancy.

          (v) At such time as the  arrearage is fully cured,  and all  dividends
accumulated and unpaid on any shares of Series B Preferred Stock outstanding are
paid,  and, in addition  thereto,  at least one regular  dividend  has been paid
subsequent to curing such arrearage,  the term of office of any Director elected
pursuant to this Section  3(C),  or his or her  successor,  shall  automatically
terminate,  and the authorized number of Directors shall automatically  decrease
by two, the rights of the holders of the shares of the Series B Preferred  Stock
to vote as provided in this Section  3(C) shall  cease,  subject to renewal from
time to time upon the same terms and  conditions,  and the  holders of shares of
the Series B Preferred Stock shall have only the limited voting rights elsewhere
herein set forth.

     (D) Except as set forth herein, or as otherwise provided by law, holders of
Series B 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 B 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 B 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 B 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 B Preferred Stock,
     except  dividends paid ratably on the Series B 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;

          (iii) redeem or purchase or otherwise acquire for consideration shares
     of any stock ranking  junior  (either as to dividends or upon  liquidation,
     dissolution or

                                       A-4


     winding up) to the Series B 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 (either as to dividends or upon dissolution,  liquidation or winding
     up) to the Series B Preferred Stock; or

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

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

     Section  5.  Reacquired  Shares.  Any  shares of Series B  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled 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
any other Certificate of Designation creating a series of Preferred Stock or any
similar stock or as otherwise required by law.

     Section 6. Liquidation, Dissolution or Winding Up.

     (A) Upon any liquidation,  dissolution or winding up of the Corporation, no
distribution  shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon  liquidation,  dissolution or winding up) to the
Series B Preferred Stock unless,  prior thereto, the holders of shares of Series
B Preferred  Stock shall have received  $100 per share,  plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such  payment,  provided  that the  holders of shares of Series B
Preferred  Stock  shall be entitled  to receive an  aggregate  amount per share,
subject to the provision for adjustment  hereinafter set forth, equal to 100,000
times the aggregate  amount to be distributed  per share to holders of shares of
Common  Stock,  or (2) to the  holders  of shares of stock  ranking  on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred  Stock,  except  distributions  made  ratably on the Series B
Preferred  Stock and all such parity stock in proportion to the total amounts to
which the  holders  of all such  shares  are  entitled  upon  such  liquidation,
dissolution or winding up.

     (B) Neither the consolidation,  merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease,  exchange or
conveyance  of all or any  part  of the  property,  assets  or  business  of the
Corporation  shall be deemed to be a  liquidation,  dissolution or winding up of
the Corporation for purposes of this Section 6.

                                       A-5


     (C) 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,  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 B
Preferred Stock were entitled  immediately prior to such event under the proviso
in  clause  (1) of  paragraph  (A) of  this  Section  6  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. In the event the Corporation shall
at any time declare or pay any dividend on the Series B Preferred  Stock payable
in shares of Series B Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  B  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
B  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series B
Preferred Stock, then in each such case the aggregate amount to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event
under the  proviso in clause  (1) of  paragraph  (A) of this  Section 6 shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Series B Preferred Stock that were  outstanding  immediately
prior to such  event  and the  denominator  of which is the  number of shares of
Series B Preferred Stock outstanding immediately after such event.

     Section 7.  Consolidation,  Merger,  etc.  Notwithstanding  anything to the
contrary  contained  herein,  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 B
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 100,000 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 or pay any  dividend on the Common Stock
payable  in shares of Common  Stock,  or effect a  subdivision,  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 B 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. In the event the  Corporation  shall at any time declare or
pay any dividend on the Series B Preferred  Stock  payable in shares of Series B
Preferred  Stock, or effect a subdivision,  combination or  consolidation of the
outstanding shares of Series B Preferred Stock (by reclassification or otherwise
than by payment  of a dividend  in shares of Series B  Preferred  Stock)  into a
greater or lesser  number of shares of Series B  Preferred  Stock,  then in each
such case the  amount  set forth in the first  sentence  of this  Section 7 with
respect to the exchange or change of shares of Series B Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Series B Preferred Stock that were  outstanding  immediately

                                       A-6


prior to such  event  and the  denominator  of which is the  number of shares of
Series B Preferred Stock outstanding immediately after such event.

     Section 8. No Redemption.  The shares of Series B Preferred Stock shall not
be redeemable.

     Section 9. Rank. The Series B Preferred  Stock shall rank,  with respect to
the payment of dividends and the distribution of assets, junior to all series of
any  other  class of the  Preferred  Stock  issued  either  before  or after the
issuance  of the Series B Preferred  Stock,  unless the terms of any such series
shall provide otherwise.

     Section 10. Amendment. The Certificate of Incorporation, as amended, of the
Corporation  shall not be amended in any manner that would  materially  alter or
change the powers, preferences or special rights of the Series B 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 B Preferred Stock,  voting
together as a single class.

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



                                      A-7


                                                                       EXHIBIT B

                          [Form of Rights Certificate]


Certificate No. R-                                                 ______ Rights

         NOT EXERCISABLE AFTER SEPTEMBER 29, 2015 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [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.]*

                               Rights Certificate

                           THERMO ELECTRON CORPORATION


     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 September 15, 2005 (as amended,  the "Rights  Agreement"),  between Thermo
Electron Corporation, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust  Company (the  "Rights  Agent"),  to purchase  from the Company
after the  Distribution  Date (as such term is defined on the Rights  Agreement)
and at any time prior to 5:00 P.M.  (Boston  time) on September  29, 2015 at the
office of the Rights Agent  designated  for such purpose,  or its  successors as
Rights Agent, one  one-hundred-thousandth  of a fully paid, non-assessable share
of Series B Junior Participating  Preferred Stock (the "Preferred Stock") of the
Company,  $100 par value per share, at a purchase price of $____ in cash per one
one-hundred-thousandth  of a share (the "Purchase Price"), upon presentation and
surrender of this Rights  Certificate  with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate  (and  the  number  of one  one-hundred-thousandths  of a  share  of
Preferred  Stock 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
the close of business on September  15, 2005,  based on the  Preferred  Stock as
constituted  at such  date.  Capitalized  terms used  herein  and not  otherwise
defined  herein  shall have the  meanings  ascribed  to such terms in the Rights
Agreement.

- --------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.

                                       B-1


     Upon the occurrence of a Section  11(a)(ii)  Event, if the Rights evidenced
by this Rights  Certificate are beneficially owned by (i) an Acquiring Person or
an  Affiliate  or  Associate  of any such  Acquiring  Person  (as such terms are
defined  in the  Rights  Agreement),  (ii) a  transferee  of any such  Acquiring
Person,  Associate or Affiliate  who becomes a  transferee  after the  Acquiring
Person  becomes  an  Acquiring  Person,  or (iii)  under  certain  circumstances
specified in the Rights  Agreement,  a transferee of a person who,  concurrently
with or after such  transfer,  became an  Acquiring  Person,  or an Affiliate or
Associate of an Acquiring Person,  such Rights shall become null and void and no
holder  hereof  shall have any right with  respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.

     As provided in the Rights Agreement,  the Purchase Price and the number and
kind of shares of  Preferred  Stock or other  securities  which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the occurrence of certain events,  including
Section 11(a)(ii) Events.

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

     This Rights Certificate,  with or without other Rights  Certificates,  upon
surrender at the office of the Rights Agent  designated  for such purpose,  with
the Form of  Election  and  Certificate  set  forth  on the  reverse  side  duly
executed, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-hundred-thousandths of a share of Preferred Stock as
the  Rights  evidenced  by  the  Rights   Certificate  or  Rights   Certificates
surrendered  shall  have  entitled  such  holder  to  purchase.  If this  Rights
Certificate  shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights  Certificates for the
number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  may be redeemed by the Company at its option at a  redemption
price  of $.01  per  Right at any time  prior  to the  earlier  of the  close of
business on (i) the Stock Acquisition Date, and (ii) the Final Expiration Date.

     Subject to the provisions of the Rights Agreement,  the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all or part of the
Rights evidenced by this Certificate for shares of the Company's Common Stock or
for Preferred  Stock (or shares of a class or series of the Company's  preferred
stock  having the same  rights,  privileges  and  preferences  as the  Preferred
Stock).

     No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights  evidenced  hereby (other than fractions  which are integral
multiples of one  one-hundred-

                                       B-2


thousandth  of a share of  Preferred  Stock,  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 Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock  or of any  other  securities  of the  Company  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  Rights
Certificate shall have been exercised as provided in the Rights Agreement.

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

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

Dated as of _______________, _____

ATTEST:                                 THERMO ELECTRON CORPORATION


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


COUNTERSIGNED:                          AMERICAN STOCK TRANSFER & TRUST COMPANY



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


                                      B-3



                          FORM OF ELECTION TO PURCHASE

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


To:      American Stock Transfer & Trust Company

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

     Please   insert    social    security   or   other    identifying    number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                         (Please print name and address)

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

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

     Please     insert     social     security ---------------------------------
or     other      identifying number
- --------------------------------------------------------------------------------
                        (Please print name and address)

Dated:

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

Signature Guaranteed:


                                      B-4



                                   Certificate


     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: ______________, __

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

Signature Guaranteed:
                                     NOTICE

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


                                      B-5



                  [Form of Reverse Side of Rights Certificate]


                               FORM OF ASSIGNMENT

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


     FOR  VALUE  RECEIVED   ------------------------------------ hereby  sells,
assigns and transfers unto -----------------------------------------------------
                         (Please print name and address)

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

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

Dated: __________________, ____


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

Signature Guaranteed:



                                   Certificate

     The undersigned  hereby  certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).

Dated: ___________, ____

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

Signature Guaranteed:


                                      B-6


                                                                     Exhibit 4.2
                           THERMO ELECTRON CORPORATION

                       Amendment No. 2 to Rights Agreement


     THIS  AMENDMENT  NO. 2,  executed as of September  15, 2005, is made to the
RIGHTS AGREEMENT, dated as of October 29, 2001 (the "Agreement"), between Thermo
Electron Corporation, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York banking  corporation,  as Rights Agent (the
"Rights Agent").

     In  accordance  with the  provisions  of Section 27 of the  Agreement,  the
Agreement is hereby amended as follows:

     1. Section 1(s) of the  Agreement is amended by deleting  such Section 1(s)
in its entirety and substituting therefor the following:

     "(s) "Final  Expiration Date" shall mean the close of business on September
15, 2005."

     2. This Amendment may be executed in any number of counterparts and each of
such  counterparts  shall for all purposes be deemed to be an original,  and all
such counterparts shall together constitute but one and the same instrument.

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

                                        THERMO ELECTRON CORPORATION



Attest: /s/ John A. Piccione            By:     /s/ Seth H. Hoogasian
        _________________________               _________________________
Name:   John A. Piccione                Name:   Seth H. Hoogasian
Title:  Assistant Secretary             Title:  Vice President, General Counsel
                                                and Secretary


                                        AMERICAN STOCK TRANSFER & TRUST COMPANY



Attest:  /s/ Susan Sibler               By:     /s/ Paula Caroppoli
        _________________________               _________________________
Name:   Susan Sibler                    Name:   Paula Caroppoli
Title:  Assistant Secretary             Title:  Vice President