SECURITIES AND EXCHANGE COMMISSION

                   Washington, D.C. 20549


                         FORM 8-A/A
                       AMENDMENT NO. 2
                      (File No. 1-7259)


      FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
           PURSUANT TO SECTION 12(b) OR (g) OF THE
               SECURITIES EXCHANGE ACT OF 1934

                              


                   SOUTHWEST AIRLINES CO.
   (Exact name of registrant as specified in its charter)


              Texas                         74-1563240
(State  of Incorporation or organization)  (I.R.S.  Employer
Identification Number)


          P.O. Box 36611
          Dallas, Texas                    75235-1611
 (Address of principal executive offices)  (Zip code)


Securities to be registered pursuant to Section 12(b) of the
Act:

Title  of  each  class          Name  of  each exchange on which
to  be  so registered           each class  is  to  be registered

Common Share Rights             New York Stock Exchange


Securities to be registered pursuant to Section 12(g) of the Act: None

      The  purpose  of this amendment is to file  Exhibit  2
which was inadvertently omitted from Amendment No. 1.

Item 2.   Exhibits.

     1.   Amended and Restated Rights Agreement, dated as of
July  18,  1996,  between the Company and Continental  Stock
Transfer  &  Trust Company, as Rights Agent, specifying  the
terms  of  the  Rights, which includes  the  form  of  Right
Certificate as Exhibit A.

      2.   Form of Right Certificate (included as Exhibit  A
to  the  Rights Agreement (Exhibit 1 hereto)).  Pursuant  to
the Rights Agreement, printed Right Certificates will not be
delivered   until   as   soon  as  practicable   after   the
Distribution Date.
                          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.


                              SOUTHWEST AIRLINES CO.

                         
Date: August 12, 1996         By:  /s/ Gary C. Kelly
                                   Gary C. Kelly
                                   Vice President Finance
                                   and Chief Financial Officer
                                   (Principal Financial and
                                    Accounting Officer)



                        EXHIBIT INDEX


Exhibit No.

      1.Amended and Restated Rights Agreement, dated  as  of
July  18,  1996,  between the Company and Continental  Stock
Transfer  &  Trust Company, as Rights Agent, specifying  the
terms  of  the  Rights, which includes  the  form  of  Right
Certificate as Exhibit A.

2.Form  of Right Certificate (included as Exhibit A  to  the
Rights  Agreement  (Exhibit  1 hereto)).   Pursuant  to  the
Rights  Agreement, printed Right Certificates  will  not  be
delivered   until   as   soon  as  practicable   after   the
Distribution Date.



                    AMENDED AND RESTATED

                      RIGHTS AGREEMENT

                           between

                   SOUTHWEST AIRLINES CO.

                             and

         CONTINENTAL STOCK TRANSFER & TRUST COMPANY,

                       as rights agent     

                  Dated as of July 18, 1996


                                                      

                                                            
Section 1.  Certain Definitions                                   2

Section 2.  Appointment of Rights Agent                          10

Section 3.  Issue of Right Certificates                          10

Section 4.  Form of Right Certificates                           13

Section 5.  Execution, Authentication and Delivery               14

Section 6.  Registration, Registration of Transfer and
            Exchange                                             15

Section 7.  Mutilated, Destroyed, Lost and Stolen Right
            Certificates                                         17

Section 8.  Exercise of Rights; Purchase Price; Expiration
            Date of Rights                                       18

Section 9.  Cancellation and Destruction of Right
            Certificates                                         19

Section 10.  Reservation and Availability of Shares              20

Section 11.  Record Date                                         20

Section 12.  Adjustment of Purchase Price, Number of Shares
             or Number of Rights                                 21

Section 13.  Certificate of Adjusted Purchase Price or
             Number of Shares                                    29

Section 14.  Consolidation, Merger or Sale or Transfer of
             Assets or Earning Power                             30
 
Section 15.  Fractional Rights and Fractional Shares             32

Section 16.  Rights of Action                                    33

Section 17.  Agreement of Right Holders                          34

Section 18.  Right Certificate Holder Not Deemed a
             Stockholder                                         35

Section 19.  Concerning the Rights Agent                         36

Section 20.  Duties of Rights Agent                              36

Section 21.  Merger or Consolidation or Change of Name of
             Rights Agent                                        39

Section 22.  Change of Rights Agent                              40

Section 23.  Issuance of New Right Certificates                  41

Section 24.  Redemption                                          42

Section 25.  Mandatory Redemption and Exchange                   44

Section 26.  Notice of Certain Events                            45

Section 27.  Securities Laws Registrations                       46

Section 28.  Notices                                             47

Section 29.  Supplements and Amendments                          48

Section 30.  Successors                                          49

Section 31.  Benefits of this Agreement                          49

Section 32.  Severability                                        49

Section 33.  Governing Law                                       50

Section 34.  Counterparts                                        50

Section 35.  Table of Contents and Descriptive Headings          50



Exhibit A - Right Certificate

                    AMENDED AND RESTATED
                      RIGHTS AGREEMENT


     This Amended and Restated Rights Agreement, dated as of

July 18, 1996, is between Southwest Airlines Co., a Texas

corporation (the "Company"), and Continental Stock

Transfer & Trust Company, a trust company organized under

the laws of the State of New York, as Rights Agent.

     WHEREAS, on July 14, 1986, the Board of Directors of

the Company authorized and declared a dividend of one Right

with respect to each Common Share of the Company outstanding

on July 31, 1986, and further authorized and directed the

issuance of one Right with respect to each Common Share that

shall become outstanding between July 31, 1986 and the

earlier of the Distribution Date, the Redemption Date and

the Final Expiration Date;

     WHEREAS, the Company and the Rights Agent are parties

to that certain Rights Agreement, dated as of July 14, 1986,

as amended on December 1, 1990 (such Rights Agreement, as so

amended, being referred to as the "Original Rights

Agreement"), which Original Rights Agreement sets forth the

terms and conditions under which the Rights have been and

are to be distributed, including without limitation those

affecting the exercise thereof, the securities or other

property to be acquired thereby and the purchase price to be

paid therefor;

     WHEREAS, Section 28 of the Original Rights Agreement

permits the Company to supplement or amend the Original

Rights Agreement, without the approval of any holders of

Rights, for certain purposes, including extending the Final

Expiration Date;

     WHEREAS, pursuant to and in accordance with Section 28

of the Original Rights Agreement, the Board of Directors of

the Company has authorized various supplements and

amendments thereto, none of which adversely affect the

interests of the holders of the Rights, in order, among

other things, to extend the Final Expiration Date; and

     WHEREAS, the Company desires to evidence such

supplements and amendments, and the Company further desires

to set forth in a single document the Original Rights

Agreement, as supplemented and amended through the date

hereof, reflecting the initial Purchase Price and the

initial redemption price of the Rights, each as adjusted

through the date hereof;

     NOW, THEREFORE, in consideration of the premises and

the mutual agreements herein set forth, the parties hereto

agree as follows:

     Section 1.  Certain Definitions.  For purposes of this

Agreement, the following terms shall have the meanings

indicated:

          "Acquiring Person" shall mean any Person who or

     which, together with all Affiliates and Associates of

     such Person, shall be the Beneficial Owner of 15% or

     more of the Voting Shares of the Company then

     outstanding, but shall not include the Company, any

     Subsidiary of the Company, any employee benefit plan of

     the Company or of any Subsidiary of the Company or any

     trustee of or fiduciary with respect to any such plan

     when acting in such capacity.  Notwithstanding the

     foregoing, no Person shall become an "Acquiring Person"

     as the result of an acquisition of Voting Shares by the

     Company which, by reducing the number of shares

     outstanding, increases the proportionate number of

     shares beneficially owned by such Person to 15% or more

     of the Voting Shares of the Company then outstanding;

     provided, however, that, if a Person shall become the

     Beneficial Owner of 15% or more of the Voting Shares of

     the Company then outstanding by reason of share

     purchases by the Company and shall, after such share

     purchases by the Company and at a time when such Person

     is the Beneficial Owner of 15% or more of the Voting

     Shares of the Company then outstanding, become the

     Beneficial Owner of any additional percentage of the

     outstanding Voting Shares of the Company, then such

     Person shall be deemed to be an "Acquiring Person".

     Notwithstanding the foregoing, if the Board of

     Directors of the Company determines in good faith that

     a Person who would otherwise be an "Acquiring Person",

     as defined pursuant to the foregoing provisions of this

     paragraph (a), has become such inadvertently, and such

     Person divests as promptly as practicable a sufficient

     number of Common Shares so that such Person would no

     longer be an "Acquiring Person," as defined pursuant to

     the foregoing provisions of this paragraph (a), then

     such Person shall not be deemed to be an "Acquiring

     Person" for any purposes of this Agreement.

          "Agreement" shall mean this Amended and Restated

     Rights Agreement as hereafter amended from time to

     time.

          "Affiliate" and "Associate" shall have the

     respective meanings ascribed to such terms in

     Rule 12b-2 of the General Rules and Regulations under

     the Exchange Act as in effect on the date of this

     Agreement.

          A Person shall be deemed the "Beneficial Owner" of

     and shall be deemed to "own beneficially" any

     securities which (without duplication):

          (i)  such Person or any of such Person's

     Affiliates or Associates beneficially owns, directly or

     indirectly, within the meaning of either Section 13 or

     16 of the Exchange Act;

          (ii) such Person or any of such Person's

     Affiliates or Associates has (A) the right to acquire

     (whether such right is exercisable immediately or only

     after the passage of time) 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), or upon the exercise of

     conversion rights, exchange rights, rights (other than

     these Rights), warrants or options, or otherwise; or

     (B) the right to vote pursuant to any agreement,

     arrangement or understanding; or

          (iii)     are beneficially owned, directly or

     indirectly, by any other Person 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) for the purpose of

     acquiring, holding, voting or disposing of any

     securities of the Company; provided, however, that, for

     purposes of each clause of this definition, a Person

     shall not be deemed the Beneficial Owner of, or to own

     beneficially, 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; and provided, further, that, for purposes of

     each clause of this definition, a Person shall not be

     deemed the Beneficial Owner of, or to own beneficially,

     any security as a result of any agreement, arrangement

     or understanding to vote such security if such

     agreement, arrangement or understanding (1) arises

     solely from a revocable proxy or consent given to such

     Person in response to a public proxy or consent

     solicitation made pursuant to, and in accordance with,

     the applicable rules and regulations promulgated under

     the Exchange Act and (2) is not also then reportable on

     Schedule 13D under the Exchange Act (or any comparable

     or successor report).

          Notwithstanding anything in this definition to the

     contrary, the phrase "then outstanding", when used with

     reference to a Person's Beneficial Ownership of

     securities of the Company (or to the number of such

     securities "beneficially owned"), shall mean the number

     of such securities then issued and outstanding together

     with the number of such securities not then actually

     issued and outstanding which such Person would be

     deemed to own beneficially hereunder.

          "Business Day" shall mean any day other than a

     Saturday, Sunday or a day on which banking institutions

     in the State of Texas (or the state wherein the

     Corporate Trust Office is located) are authorized or

     obligated by law or executive order to close.

          "Close of Business" on any given date shall mean

     5:00 P.M., New York City time, on such date; provided,

     however, that if such date is not a Business Day it

     shall mean 5:00 P.M., New York City time, on the next

     succeeding Business Day.

          "Closing Price",  with respect to any security,

     shall mean the last sale price, regular way, on a

     specific Trading Day or, in case no such sale takes

     place on such Trading Day, the average of the closing

     bid and asked prices, regular way, in either case as

     reported in the principal consolidated transaction

     reporting system with respect to securities listed or

     admitted to trading on the New York Stock Exchange or,

     if such security is not then listed or admitted to

     trading on the New York Stock Exchange, as reported in

     the principal consolidated transaction reporting system

     with respect to securities listed on the principal

     national securities exchange on which such security is

     listed or admitted to trading or, if such security is

     not then listed or admitted to trading on any national

     securities exchange, the last quoted price or, if not

     so quoted, the average of the high bid and low asked

     prices in the over-the-counter market, as reported by

     the National Association of Securities Dealers, Inc.

     Automated Quotations System or such other system then

     in use, or, if on any such Trading Day such security is

     not quoted by any such organization, the average of the

     closing bid and asked prices as furnished by a

     professional market maker making a market in such

     security selected by the Board of Directors of the

     Company.  If such security is not publicly held or so

     listed or traded, "Closing Price" shall mean the fair

     value per unit of such security as determined in good

     faith by the Board of Directors of the Company, whose

     determination shall be described and the Closing Price

     set forth in a statement filed with the Rights Agent.

          "Common Shares" when used with reference to the

     Company shall mean shares of capital stock of the

     Company which have no preference over any other class

     of stock with respect to dividends or assets, which are

     not redeemable at the option of the Company and with

     respect to which no sinking, purchase or similar fund

     is provided and shall initially mean the shares of

     Common Stock, par value $1.00 each, of the Company.

     "Common Shares" when used with reference to any Person

     other than the Company shall, if used with reference to

     a corporation, mean the capital stock (or equity inter

     est) with the greatest voting power of such other

     Person or, if such other Person is a Subsidiary of

     another Person, the Person or Persons which ultimately

     control such first-mentioned Person and, if used with

     reference to any other Person, mean the equity interest

     in such Person (or, if the net worth determined in

     accordance with generally accepted accounting

     principles of another Person (other than an individual)

     which controls such first-mentioned Person is greater

     than such first-mentioned Person, then such other

     Person) with the greatest voting power or managerial

     power with respect to the business and affairs of such

     Person.

          "Company" shall mean Southwest Airlines Co., a

     Texas corporation, and its successors.

                    "Company Order" means a written request or

     order signed in the name of the Company by its Chairman

     of the Board, a Vice Chairman of the Board, its

     President or a Vice President, and by its Treasurer, an

     Assistant Treasurer, its Secretary or an Assistant

     Secretary, and delivered to the Rights Agent.

          "Corporate Trust Office" means the principal

     office of the Rights Agent at which it administers its

     corporate trust business, which, in the case of

     Continental Stock Transfer & Trust Company shall, until

     hereafter changed, be its office at 2 Broadway, New

     York, New York 10004.

          "Distribution Date" shall mean the earlier of (i)

     the Shares Acquisition Date or (ii) the date of

     commencement by any Person (other than the Company, any

     Subsidiary of the Company, any employee benefit plan of

     the Company or of any Subsidiary of the Company, or any

     trustee of or fiduciary with respect to any such plan

     when acting in such capacity) of, or the date of the

     first public announcement of the intent of any Person

     (other than the Company, any Subsidiary of the Company,

     any employee benefit plan of the Company or of any

     Subsidiary of the Company, or any trustee of or

     fiduciary with respect to any such plan when acting in

     such capacity) to commence, a tender or exchange offer

     the consummation of which would result in such Person

     becoming an Acquiring Person.

          "Exchange Act" shall mean the Securities Exchange

     Act of 1934, as amended, and any successor statute

     thereto.

          "Final Expiration Date" shall mean the later of

     the Close of Business on July 30, 2006 or the third

     anniversary of the Distribution Date.

          The terms "holder," "holder of record,"

     "registered holder" and "record holder" have the same

     meaning and, when used with respect to any Rights from

     and after the Distribution Date, mean the Person in

     whose name the Right is registered in the Rights

     Register.

     "Person" shall mean any individual, firm, corporation,

     partnership, limited partnership, limited liability

     company, trust or other entity, and shall include any

     successor (by merger or otherwise) of such entity.

          "Purchase Price" shall mean the initial price at

     which the holder of a Right may, subject to the terms

     and conditions of this Agreement, purchase one Common

     Share (which initial price is set forth in Section 8(b)

     hereof), as such price shall be adjusted pursuant to

     the terms of this Agreement.

          "Redemption Date" shall mean the time at which the

     Rights are optionally redeemed pursuant to Section 24

     hereof or the time at which all of the Rights are

     mandatorily redeemed and exchanged pursuant to Section

     25 hereof.

          "Redemption Price" shall have the meaning

     specified in Section 24(b) hereof.

          "Right" shall mean one common share purchase right

     which initially represents the right of the registered

     holder thereof to purchase one Common Share upon the

     terms and subject to the conditions herein set forth.

               "Right Certificate" shall mean a certificate, in

     substantially the form of Exhibit A attached to this

     Agreement, evidencing the Rights registered in the name

     of the holder thereof.

          "Rights Agent" shall mean Continental Stock

     Transfer & Trust Company, a trust company organized

     under the laws of the State of New York, and any succes

     sor thereto appointed in accordance with the terms

     hereof, in its capacity as agent for the Company and

     the holders of the Rights pursuant to this Agreement.

          "Rights Register" and "Rights Registrar" shall

     have the meanings specified in Section 6.

          "Shares Acquisition Date" shall mean the first

     date of public announcement (which for purposes of this

     definition shall include without limitation a report

     filed pursuant to Section 13(d) or Section 16(a) of the

     Exchange Act) by the Company or an Acquiring Person

     that an Acquiring Person has become such.

          "Subsidiary" of any Person shall mean any

     corporation or other entity of which a majority of the

     outstanding capital stock or other equity interests

     having ordinary voting power in the election of

     directors or similar officials is owned, directly or

     indirectly, by such Person.

          "Summary of Rights" shall mean a Summary of Rights

     to Purchase Common Shares in substantially the form

     attached as Exhibit B to the Original Rights Agreement.

          "Trading Day" shall mean a day on which the

     principal national securities exchange or the NASDAQ

     National Market on which any of the Voting Shares of

     the Company are listed or admitted to trading is open

     for the transaction of business or, if none of the

     Voting Shares of the Company is listed or admitted to

     trading on any national stock exchange or the NASDAQ

     National Market, a Business Day.

          "Voting Shares" shall mean (i) the Common Shares

     of the Company and (ii) any other shares of capital

     stock of the Company entitled to vote generally in the

     election of directors or entitled to vote together with

     the Common Shares in respect of any merger or

     consolidation of the Company, any sale of all or

     substantially all of the Company's assets or any

     liquidation, dissolution or winding up of the Company.

     Whenever any provision of this Agreement requires a

     determination of whether a number of Voting Shares

     comprising a specified percentage of such Voting Shares

     is, was or will be beneficially owned or has been

     voted, tendered, acquired, sold or otherwise disposed

     of or a determination of whether a Person has offered

     or proposed to acquire a number of Voting Shares

     comprising such specified percentage, the number of

     Voting Shares comprising such specified percentage of

     Voting Shares shall in every such case be deemed to be

     the number of Voting Shares comprising the specified

     percentage of all the Company's then outstanding Voting

     Shares.

          "Wholly-Owned Subsidiary" of a Person shall mean

     any corporation or other entity all the outstanding

     capital stock or other equity interests of which having

     ordinary voting power in the election of directors or

     similar officials (other than directors' qualifying

     shares or similar interests) are owned, directly or

     indirectly, by such Person.

     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 Shares of the Company) in

accordance with the terms and conditions hereof, and the

Rights Agent hereby accepts such appointment.  The Company

may from time to time appoint such co-Rights Agents as it

may deem necessary or desirable 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.  Issue of Right Certificates.  (a) From and

after July 31, 1986 until the Distribution Date, (i) out

standing Rights will be evidenced (subject to the provisions

of paragraph (b) of this Section 3) by the certificates for

outstanding Common Shares of the Company and not by separate

Right Certificates, and (ii) the right to receive Right

Certificates will be transferable only in connection with

the transfer of Common Shares of the Company.  As soon as

practicable after the Distribution Date, the Company (or, at

its request and expense, the Rights Agent) will send, by

first-class, insured, postage-prepaid mail, to each record

holder of Common Shares of the Company as of the Close of

Business on the Distribution Date, at the address of such

holder shown on the stock transfer records of the Company, a

Right Certificate evidencing one Right for each Common Share

so held.  From and after the Distribution Date, the Rights

will be evidenced solely by such Right Certificates.  The

Company will give the Rights Agent prior notice of the

Distribution Date.

          (b)  On July 31, 1986, or as soon thereafter as

practicable, the Company will send a copy of a Summary of

Rights, by first-class, postage-prepaid mail, to each record

holder of Common Shares of the Company as of the Close of

Business on July 31, 1986, at the address of such holder

shown on the stock transfer records of the Company.  With

respect to Common Shares outstanding on July 31, 1986, the

certificates evidencing such Common Shares shall, together

with copies of such Summary of Rights, thereafter also

evidence the outstanding Rights (as such Rights may be

amended or supplemented) distributed with respect thereto

until the earlier of the Distribution Date or the date of

surrender thereof to the Company's transfer agent for

registration of transfer or exchange of Common Shares.

Until the Distribution Date (or, if earlier, the Redemption

Date or Final Expiration Date), the surrender for

registration of transfer or exchange of any certificate for

Common Shares outstanding as of the Close of Business on

July 31, 1986, with or without a copy of the Summary of

Rights attached thereto, shall also constitute the surrender

for registration of transfer or exchange of the outstanding

Rights associated with the Common Shares represented

thereby.

          (c)  The Company agrees that, at any time after

July 31, 1986 and prior to the Distribution Date (or, if

earlier, the Redemption Date or Final Expiration Date) at

which it issues any of its Common Shares upon original issue

or out of treasury, it will concurrently distribute to the

holder of such Common Shares one Right for each such Common

Share, which Right shall be subject to the terms and

provisions of this Agreement and will evidence the right to

purchase the same number of Common Shares at the same

Purchase Price as the Rights then outstanding.

          (d)  Certificates for Common Shares issued after

July 31, 1986 but prior to the earliest of the Distribution

Date, the Redemption Date and the Final Expiration Date,

whether upon registration of transfer or exchange of Common

Shares outstanding on July 31, 1986 or upon original issue

or out of treasury thereafter, shall have impressed on,

printed on, written on or otherwise affixed to them the

following legend (or, in lieu thereof, the legend set forth

in Section 3(d) of the Original Rights Agreement):

          This certificate also evidences and entitles the
     holder hereof to certain Rights as set forth in an
     Amended and Restated Rights Agreement between Southwest
     Airlines Co. and Continental Stock Transfer & Trust
     Company, dated as of July 18, 1996 (the "Rights
     Agreement"), the terms of which are hereby incorporated
     herein by reference and copies of which are on file at
     the principal place of business and the registered
     office of Southwest Airlines Co. 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.
     Southwest Airlines Co. will mail to the holder of this
     certificate a copy of the Rights Agreement without
     charge after receipt of a written request therefor.  As
     described in the Rights Agreement, Rights issued to or
     acquired by any Acquiring Person or any Affiliate or
     Associate thereof (each as defined in the Rights
     Agreement) shall, under certain circumstances, become
     null and void.

With respect to certificates containing either such legend,

until the Distribution Date, outstanding Rights associated

with the Common Shares represented by such certificates

shall be evidenced by such certificates alone, and the

surrender of any such certificate for registration of

transfer or exchange of the Common Shares evidenced thereby

shall also constitute surrender for registration of transfer

or exchange of outstanding Rights (as such Rights may be

amended or supplemented) associated with the Common Shares

represented thereby.

     (e)  If the Company purchases or acquires any of its

Common Shares after July 31, 1986, but prior to the Distri

bution Date, any Rights associated with such Common Shares

shall be deemed cancelled and retired so that the Company

shall not be entitled to exercise any Rights associated with

the Common Shares which are no longer outstanding.

     Section 4.  Form of Right Certificates.  The Right

Certificates (and the forms of election to purchase Common

Shares (or other securities) and of assignment to be printed

on the reverse thereof) shall in form and substance be

substantially the same as Exhibit A hereto and may have such

marks of identification or designation and such legends,

summaries or endorsements printed thereon as the Company may

deem appropriate 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 regu

lation of any stock exchange on which the Rights may from

time to time be listed or as may be necessary to conform to

usage.  The Right Certificates shall be in a machine

printable format.  Subject to the provisions of Section 23

hereof, the Right Certificates, whenever issued, shall be

dated as of the date of authentication thereof, but, regard

less of any adjustments of the Purchase Price or the number

of Common Shares (or other securities) as to which a Right

is exercisable (whether pursuant to this Agreement or any

future amendments or supplements to this Agreement), or

both, occurring after July 18, 1996 and prior to the date of

such authentication, such Right Certificates may, on their

face, without invalidating or otherwise affecting any such

adjustment, expressly entitle the holders thereof to pur

chase such number of Common Shares at the Purchase Price per

one Common Share as to which a Right would be exercisable if

the Distribution Date were July 18, 1996; no adjustment of

the Purchase Price or the number of Common Shares (or other

securities) as to which a Right is exercisable, or both,

effected prior to or subsequent to the date of authenti

cation of any Right Certificate shall be invalidated or

otherwise affected by the fact that such adjustment is not

expressly reflected on the face or in the provisions of such

Right Certificate.

     Pending the preparation of definitive Right Certifi

cates, the Company may execute, and upon Company Order the

Rights Agent shall authenticate and send, by first-class,

insured, postage-prepaid mail, to each record holder of

Common Shares of the Company as of the Close of Business on

the Distribution Date, temporary Right Certificates which

are printed, lithographed, typewritten, mimeographed or

otherwise produced substantially of the tenor of the

definitive Right Certificates in lieu of which they are

issued and with such appropriate insertions, omissions,

substitutions and other variations as the officers executing

such Right Certificates may determine, as evidenced by their

execution of such Right Certificates.

     If temporary Right Certificates are issued, the Company

will cause definitive Right Certificates to be prepared

without unreasonable delay.  After the preparation of

definitive Right Certificates, the temporary Right Certifi

cates shall be exchangeable for definitive Right Certifi

cates, upon surrender of the temporary Right Certificates at

the Corporate Trust Office of the Rights Agent, without

charge to the holder.  Upon surrender for cancellation of

any one or more temporary Right Certificates, the Company

shall execute and the Rights Agent shall authenticate and

deliver in exchange therefor one or more definitive Right

Certificates, evidencing a like number of Rights.  Until so

exchanged, the temporary Right Certificates shall in all

respects be entitled to the same benefits under this Agree

ment as definitive Right Certificates.

     Section 5.  Execution, Authentication and Delivery.

The Right Certificates shall be executed on behalf of the

Company by its Chairman of the Board, a Vice Chairman of the

Board, its President or one of its Vice Presidents, attested

by its Secretary or one of its Assistant Secretaries.  The

signature of any of these officers on the Right Certificates

may be manual or facsimile.

     Right Certificates bearing the manual or facsimile

signatures of individuals who were at any time the proper

officers of the Company shall bind the Company, notwith

standing that such individuals or any of them have ceased to

hold such offices prior to the authentication and delivery

of such Right Certificates or did not hold such offices at

the date of authentication of such Right Certificates.

     At any time and from time to time after the execution

and delivery of this Agreement and prior to the Distribution

Date, the Company may deliver Right Certificates executed by

the Company to the Rights Agent for authentication, together

with a Company Order for the authentication and delivery of

such Right Certificates; and the Rights Agent in accordance

with such Company Order shall authenticate and deliver such

Right Certificates as in this Agreement provided and not

otherwise.

     No Right Certificate shall be entitled to any benefit

under this Agreement or be valid or obligatory for any

purpose unless there appears on such Right Certificate a

certificate of authentication substantially in the form

provided for herein executed by an authorized signatory of

the Rights Agent, which need not be the same authorized

signatory for all of the Right Certificates, by manual

signature, and such certificate upon any Right Certificate

shall be conclusive evidence, and the only evidence, that

such Right Certificate has been duly authenticated and

delivered hereunder.

     Section 6.  Registration, Registration of Transfer and

Exchange.  From and after the Distribution Date and prior to

the earlier of the Redemption Date and the Final Expiration

Date, the Company shall cause to be kept at the Corporate

Trust Office registry books (the "Rights Register") in

which, subject to such reasonable regulations as it may

prescribe, the Company shall provide for the registration of

Right Certificates and of transfers of Rights.  The Rights

Agent is hereby appointed the registrar and transfer agent

(the "Rights Registrar") for the purpose of registering

Right Certificates and transfers of Rights as herein

provided, and the Rights Agent agrees to maintain such

Rights Register in accordance with such regulations so long

as it continues to be designated as Rights Registrar

hereunder.

     Upon surrender to the Rights Agent for registration of

transfer of any Right Certificate, the Company shall exe

cute, and the Rights Agent shall authenticate and deliver,

in the name of the designated transferee or transferees, one

or more new Right Certificates evidencing a like number of

Rights.

     At the option of the holder, Right Certificates may be

exchanged for other Right Certificates upon surrender of the

Right Certificates to be exchanged to the Rights Agent.

Whenever any Right Certificates are so surrendered for

exchange, the Company shall execute, and the Rights Agent

shall authenticate and deliver, the Right Certificates which

the holder making the exchange is entitled to receive.

     All Right Certificates issued upon any registration of

transfer or exchange of Right Certificates shall be the

valid obligations of the Company, evidencing the same

Rights, and entitled to the same benefits under this Agree

ment, as the Right Certificates surrendered upon such

registration of transfer or exchange.

     Every Right Certificate presented or surrendered for

registration of transfer or exchange shall (if so required

by the Company or the Rights Agent) be duly endorsed, or

accompanied by a written instrument of transfer in form

satisfactory to the Company and the Rights Registrar duly

executed, by the holder thereof or his attorney duly author

ized in writing.

     No service charge shall be made for any registration of

transfer or exchange of Right Certificates, but the Company

may require payment by the holder of a sum sufficient to

cover any tax or other governmental charge that may be

imposed in connection with any registration of transfer or

exchange of Right Certificates, other than exchanges not

involving any transfer.

     The provisions of this Section 6 shall be subject to

the provisions of Section 15.

     Section 7.  Mutilated, Destroyed, Lost and Stolen Right

Certificates.  If any mutilated Right Certificate is surren

dered to the Rights Agent, the Company shall execute and the

Rights Agent shall authenticate and deliver in exchange

therefor a new Right Certificate of like tenor, for a like

number of Rights and bearing a registration number not con

temporaneously outstanding.

     If there shall be delivered to the Company and the

Rights Agent (i) evidence to their satisfaction of the

destruction, loss or theft of a Right Certificate and (ii)

such security or indemnity, if any, as may be required by

them to save each of them and any agent of either of them

harmless, then, in the absence of notice to the Company or

the Rights Agent that such Right Certificate has been

acquired by a bona fide purchaser, the Company shall execute

and upon its request the Rights Agent shall authenticate and

deliver, in lieu of any such destroyed, lost or stolen Right

Certificate, a new Right Certificate of like tenor, for a

like number of Rights and bearing a registration number not

contemporaneously outstanding.

     Upon the issuance of any new Right Certificate under

this Section, the Company may require the payment of a sum

sufficient to cover any tax or other governmental charge

that may be imposed in relation thereto and any other

expenses (including the fees and expenses of the Rights

Agent) connected therewith.

     Every new Right Certificate issued pursuant to this

Section in lieu of any destroyed, lost or stolen Right

Certificate shall constitute an additional contractual

obligation of the Company, whether or not the destroyed,

lost or stolen Right Certificate shall be at any time

enforceable by anyone, and shall be entitled to all the

benefits of this Agreement equally and proportionately with

any and all other Right Certificates duly issued hereunder.

     The provisions of this Section are exclusive and shall

preclude (to the extent lawful) all other rights and rem

edies with respect to the replacement or payment of muti

lated, destroyed, lost or stolen Right Certificates.

     Section 8.  Exercise of Rights; Purchase Price; Expira

tion Date of Rights.  (a) The registered holder of any Right

Certificate may exercise the Rights evidenced thereby

(except as otherwise provided herein) in whole or in part at

any time after the Distribution Date upon surrender of the

Right Certificate, with the form of election to purchase on

the reverse side thereof duly executed, to the Rights Agent

at its Corporate Trust Office, together with payment of the

Purchase Price for each Common Share (or other securities)

as to which the Rights are exercised, at or prior to the

earliest of (i) the Close of Business on the Final

Expiration Date, (ii) the time on the Redemption Date such

Rights are optionally redeemed as provided in Section 24

hereof or (iii) the time at which such Rights are

mandatorily redeemed and exchanged as provided in Section 25

hereof.

          (b)  The Purchase Price for each Common Share

pursuant to the exercise of a Right shall initially be

sixteen dollars and sixty-seven cents ($16.67), shall be

subject to adjustment from time to time as provided in

Sections 12 and 14 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 Right Certificate repre

senting exercisable Rights, with the form of election to

purchase duly executed, accompanied by payment of the

Purchase Price for the securities to be purchased and an

amount equal to any applicable transfer tax required to be

paid by the holder of such Right Certificate in accordance

with Section 10 in cash, or by certified check or cashier's

check payable to the order of the Company, the Rights Agent

shall thereupon promptly (i) requisition from any transfer

agent of the Common Shares (or other securities), or make

available, if the Rights Agent is such a transfer agent,

certificates for such number of Common Shares  (or other

securities) as are to be purchased and registered in such

name or names as may be designated by the registered holder

of such Right Certificate, and the Company hereby

irrevocably authorizes its transfer agent to comply with all

such requests, (ii) when appropriate, requisition from the

Company the amount of cash to be paid in lieu of issuance of

fractional shares in accordance with Section 15 hereof,

(iii) after receipt of such certificates registered in such

name or names as may be designated by such holder, cause the

same to be delivered to or upon the order of the registered

holder of such Right Certificate and (iv) when appropriate,

after receipt, deliver such cash to or upon the order of

such holder.

          (d)  If the registered holder of the Right Certif

icate shall exercise less than all the Rights evidenced

thereby, a new Right Certificate evidencing Rights equal to

the Rights remaining unexercised shall be issued by the

Rights Agent to the registered holder of such Right

Certificate or to his duly authorized assigns, subject to

the provisions of Section 15 hereof.

     Section 9.  Cancellation and Destruction of Right

Certificates.  All Right Certificates surrendered for the

purpose of exercise, transfer or exchange shall, if surren

dered to the Company or to any of its other agents, be

delivered to the Rights Agent for such purpose and for

cancellation or, if surrendered to the Rights Agent for such

purpose, shall be cancelled by it.  No Right Certificates

shall be authenticated in lieu of or in exchange for any

Right Certificates cancelled as provided in this Section

except as expressly permitted by any of the provisions of

this Agreement.  The Company shall deliver to the Rights

Agent for cancellation, and the Rights Agent shall so

cancel, any other Right Certificate purchased or acquired by

the Company.  The Rights Agent shall destroy all cancelled

Right Certificates and shall deliver a certificate of

destruction thereof to the Company, or shall, pursuant to a

Company Order, deliver all cancelled Right Certificates to

the Company.

     Section 10.  Reservation and Availability of Shares.

The Company covenants and agrees that it will cause to be

reserved and kept available out of its authorized and

unissued Common Shares or any Common Shares held in its

treasury, the number of Common Shares that will be

sufficient to permit the exercise in full of all outstanding

Rights.

     The Company covenants and agrees that it will take all

such action as may be necessary to ensure that all Common

Shares of the Company issued upon exercise of Rights shall

(subject to payment of the Purchase Price) be duly

authorized, validly issued, fully paid and nonassessable.

     The Company further covenants and agrees that it will

pay when due and payable any and all federal and state

transfer taxes and charges which may be payable in respect

of the issuance or delivery of the Right Certificates or of

any Common Shares of the Company upon the exercise of

Rights.  The Company shall not, however, be required (i) to

pay any transfer tax which may be payable in respect of any

transfer or delivery of Right Certificates to a Person other

than, or in respect of the issuance or delivery of certifi

cates for Common Shares of the Company in a name other than

that of, the registered holder of the Right Certificate

evidencing Rights surrendered for transfer or exercise or

(ii) to issue or deliver any certificates for Common Shares

of the Company upon the exercise of any Rights until any

such tax shall have been paid (any such tax being payable by

the holder of such Right Certificate at the time of surren

der thereof) or until it has been established to the

Company's satisfaction that no such tax is due.

     Section 11.  Record Date.  Each Person in whose name

any certificate for Common Shares of the Company is issued

upon the exercise of, or upon mandatory redemption and

exchange of, Rights shall for all purposes be deemed to have

become the holder of record of the Common Shares represented

thereby on, and such certificate shall be dated, (i) in the

case of the exercise of Rights, the date upon which the

Right Certificate evidencing such Rights was duly

surrendered and payment of the Purchase Price (and any

applicable transfer taxes) was made, or (ii) in the case of

the mandatory redemption and exchange of Rights, the date of

such mandatory redemption and exchange; provided, however,

that, if the date of such surrender and payment or mandatory

redemption and exchange is a date upon which the transfer

books of the Company for its Common Shares are closed, such

Person shall be deemed to have become the record holder of

such shares on, and such certificate shall be dated, the

next succeeding Business Day on which such transfer books of

the Company are open.

     Section 12.  Adjustment of Purchase Price, Number of

Shares or Number of Rights.  The Purchase Price, the number

and kind of shares of capital stock of the Company covered

by each Right and the number of Rights outstanding are

subject to adjustment from time to time as provided in this

Section 12.

          (a)  (i)  If the Company shall at any time after

the date of this Agreement (A) pay a dividend on the Common

Shares payable in Common Shares, (B) subdivide the

outstanding Common Shares, (C) combine the outstanding

Common Shares into a smaller number of Common Shares or (D)

issue any shares of its capital stock in a reclassification

of the Common Shares (including any such reclassification in

connection with a consolidation or merger in which the

Company is the continuing or surviving corporation), except

as otherwise provided in this Section 12(a), the Purchase

Price in effect at the time of the record date for such

dividend or of the effective date of such subdivision,

combination or reclassification, and the number and kind of

shares of capital stock issuable on such date, shall be

proportionately adjusted so that the holder of any Right

exercised thereafter shall be entitled to receive, upon

payment of the Purchase Price for the number of Common

Shares for which a Right was exercisable immediately prior

to such date, the aggregate number and kind of shares of

capital stock which, if such Right had been duly exercised

immediately prior to such date (and at a time when the

Common Shares transfer books of the Company were open), such

holder would have acquired upon such exercise and been

entitled to receive upon payment or effectuation of such

dividend, subdivision, combination or reclassification;

provided, however, that in no event shall the consideration

to be paid upon the exercise of one Right be less than the

aggregate par value of the shares of capital stock of the

Company issuable upon exercise of one Right.  If an event

occurs which would require an adjustment under both

Section 12(a)(i) and Section 12(a)(ii), the adjustment

provided for in this Section 12(a)(i) shall be in addition

to, and shall be made prior to, any adjustment required

pursuant to Section 12(a)(ii).

          (ii)  Subject to action of the Board of Directors

of the Company pursuant to Section 25 of this Agreement, if

any Person shall become an Acquiring Person prior to the

Final Expiration Date, each holder of a Right shall

thereafter have a right to receive, upon exercise thereof at

a price equal to the then current Purchase Price multiplied

by the number of Common Shares for which a Right is then

exercisable, in accordance with the terms of this Agreement,

such number of Common Shares of the Company as shall equal

the result obtained by (x) multiplying the then current

Purchase Price by the number of Common Shares for which a

Right is then exercisable and dividing that product by (y)

50% of the then current per share market price of the

Company's Common Shares (determined pursuant to Section

12(d)) on the date such Person became an Acquiring Person.

If any Person shall become an Acquiring Person and the

Rights shall then be outstanding, the Company shall not take

any action which would eliminate or diminish the benefits

intended to be afforded by the Rights.

     Notwithstanding any other provision of this Agreement,

from and after the time any Person shall become an Acquiring

Person, any Rights that are or were acquired or beneficially

owned by any such Acquiring Person (or any Associate or

Affiliate of such Acquiring Person) shall be null and void

and any holder of such Rights shall thereafter have no right

to exercise such Rights under any provision of this

Agreement.  No Right Certificate shall be issued pursuant to

this Agreement that represents Rights beneficially owned by

an Acquiring Person whose Rights would be null and void

pursuant to the preceding sentence or by any Associate or

Affiliate thereof; no Right Certificate shall be issued at

any time upon the transfer of any Rights to an Acquiring

Person whose Rights would be null and void pursuant to the

preceding sentence or to any Associate or Affiliate thereof

or to any nominee (acting in its capacity as such) of such

Acquiring Person, Associate or Affiliate; and any Right

Certificate delivered to the Rights Agent for transfer to an

Acquiring Person whose Rights would be null and void

pursuant to the preceding sentence or to any Associate or

Affiliate thereof or to any nominee (acting in its capacity

as such) of such Acquiring Person, Associate or Affiliate

shall be cancelled.

     (iii)  If on or after the Distribution Date there shall

not be sufficient Common Shares issued but not outstanding,

or authorized but unissued, to permit the exercise in full

of all outstanding Rights in accordance with the foregoing

subparagraph (ii), the Company agrees to take all such

action as is within its power, including without limitation

appropriate action by its Board of Directors, as may be

necessary to amend the Company's articles of incorporation

to authorize additional Common Shares for issuance upon

exercise of the Rights.

     (b)  If the Company shall fix a record date for the

issuance of rights, options or warrants to all holders of

Common Shares entitling them (for a period expiring within

45 calendar days after such record date) to subscribe for or

purchase Common Shares or securities convertible into or

exchangeable for Common Shares at a price per Common Share

(together with any additional consideration required upon

conversion or exchange in the case of a security convertible

into or exchangeable for Common Shares), less than the

current per share market price of the Common Shares

(determined pursuant to Section 12(d)) on such record date,

the Purchase Price to be in effect after such record date

shall be determined by multiplying the Purchase Price in

effect immediately prior to such record date by a fraction,

the numerator of which shall be the number of Common Shares

outstanding on such record date plus the number of Common

Shares which the aggregate offering price of the total

number of Common Shares so to be offered (together with the

aggregate of any additional consideration required upon

conversion or exchange in the case of any convertible or

exchangeable securities so to be offered) would purchase at

such current per share market price and the denominator of

which shall be the number of Common Shares outstanding on

such record date plus the number of additional Common Shares

to be offered for subscription or purchase (or into or for

which the convertible or exchangeable securities so to be

offered are initially convertible or exchangeable);

provided, however, that in no event shall the consideration

to be paid upon the exercise of one Right be less than the

aggregate par value of the shares of capital stock of the

Company issuable upon exercise of one Right.  In case all or

part of such subscription or purchase price may be paid in a

form other than cash, the value of such consideration shall

be as determined in good faith by the Board of Directors of

the Company, whose determination shall be described in a

statement filed with the Rights Agent.  Common Shares owned

by or held for the account of the Company or any of its

Subsidiaries shall not be deemed outstanding for the purpose

of any computation described in this Section 12(b).  The

adjustment described in this Section 12(b) shall be made

successively whenever such a record date is fixed; and, if

none of such rights, options or warrants is so issued, the

Purchase Price shall be adjusted to be the Purchase Price

which would then be in effect if such record date had not

been fixed.

     (c)  If the Company shall fix a record date for the

making of a distribution to all holders of the Common Shares

(including any such distribution made in connection with a

consolidation or merger in which the Company is the

continuing or surviving corporation) of evidences of indebt

edness or assets (other than a regular quarterly cash

dividend or a dividend payable in Common Shares) or

subscription rights or warrants (excluding those referred to

in Section 12(b)), 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 then

current per share market price of the Common Shares

(determined pursuant to Section 12(d)) on such record date,

less the fair market value (as determined in good faith by

the Board of Directors of the Company, whose determination

shall be described in a statement filed with the Rights

Agent) of the portion of the assets or evidences of

indebtedness so to be distributed or of such subscription

rights or warrants applicable to one Common Share and the

denominator of which shall be such current per share market

price of the Common Shares; provided, however, that in no

event shall the consideration to be paid upon the exercise

of one Right be less than the aggregate par value of the

shares of capital stock of the Company to be issued upon the

exercise of one Right.  Such adjustments shall be made

successively whenever such a record date is fixed; and, if

such distribution is not so made, the Purchase Price shall

again be adjusted to be the Purchase Price which would then

be in effect if such record date had not been fixed.

     (d)  For the purpose of any computation hereunder, the

"current per share market price" of the Common Shares on any

date shall be deemed to be the average of the daily Closing

Prices per share of such Common Shares for the 30

consecutive Trading Days immediately prior to such date;

provided, however, that, if the issuer of such Common Shares

shall announce (A) a dividend or distribution on such Common

Shares payable in such Common Shares or securities convert

ible into such Common Shares or (B) any subdivision, combi

nation or reclassification of such Common Shares, and the

ex-dividend date for such dividend or distribution, or the

record date for such subdivision, combination or reclassifi

cation, shall occur during such period of 30 Trading Days,

then, and in each such case, the current per share market

price of the Common Shares shall be appropriately adjusted

to reflect the current market price per Common Share equiva

lent.

     (e)  No adjustment in the Purchase Price shall be

required unless such adjustment would require an increase or

decrease of at least 1% in the Purchase Price; provided;

however, that any adjustments which by reason of this

Section 12(e) are not required to be made shall be carried

forward and taken into account in any subsequent adjustment.

All calculations under this Section 12 shall be made to the

nearest cent or to the nearest one ten-thousandth of a

Common Share or of any other share or security, as the case

may be, and references herein to the "number of Common

Shares" (or similar phrases) shall be construed to include

fractions of one Common Share.  Notwithstanding the first

sentence of this Section 12(e), any adjustment required by

this Section 12 shall be made no later than the earlier of

(i) three years from the date of the transaction which

requires such adjustment or (ii) the thirtieth day preceding

the Final Expiration Date.

     (f)  If as a result of an adjustment made pursuant to

Section 12(a), the holder of any Right thereafter exercised

shall become entitled to receive any shares of capital stock

of the Company other than Common Shares, thereafter the

number of such other shares so receivable upon exercise of

any Right shall be subject to adjustment from time to time

in a manner and on terms as nearly equivalent as practicable

to the provisions with respect to the shares contained in

this Section 12, and the provisions of this Agreement,

including without limitation Sections 8, 10, 11 and 14, with

respect to the Common Shares shall apply on like terms to

any such other shares.

     (g)  All Rights originally issued by the Company

subsequent to any adjustment made to the Purchase Price

hereunder shall, whether or not the Right Certificate

evidencing such Rights reflects such adjusted Purchase

Price, evidence the right to purchase, at the adjusted

Purchase Price, the number of Common Shares purchasable from

time to time hereunder upon exercise of the Rights, all

subject to further adjustment as provided herein.

     (h)  Unless the Company shall have exercised its

election as provided in Section 12(i), upon each adjustment

of the Purchase Price pursuant to Section 12(b) or 12(c),

each Right outstanding immediately prior to the making of

such adjustment shall thereafter evidence the right to

purchase, at the adjusted Purchase Price per one Common

Share, that number of Common Shares obtained by (i) multi

plying (x) the number of shares covered by a Right

immediately prior to this adjustment by (y) the Purchase

Price in effect immediately prior to such adjustment of the

Purchase Price and (ii) dividing the product so obtained by

the Purchase Price in effect immediately after such

adjustment of the Purchase Price.

     (i)  The Company may elect on or after the date of any

adjustment of the Purchase Price to adjust the number of

Rights outstanding in lieu of any adjustment in the number

of Common Shares purchasable upon the exercise of a Right.

Each Right outstanding after such adjustment of the number

of Rights shall be exercisable for the number of Common

Shares for which a Right was exercisable immediately prior

to such adjustment of the Purchase Price.  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 ten-thousandth) obtained by dividing the

Purchase Price in effect immediately prior to adjustment of

the Purchase Price by the Purchase Price in effect immedi

ately 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 Right Certificates have been issued, shall be at

least 10 days later than the date of the public announce

ment.  Until such record date, however, any adjustment in

the number of Common Shares for which a Right shall be

exercisable made as required by this Agreement shall remain

in effect.  If Right Certificates have been issued, upon

each adjustment of the number of Rights pursuant to this

Section 12(i), the Company shall, as promptly as practi

cable, cause to be distributed to holders of record of Right

Certificates on such record date Right Certificates evidenc

ing, subject to Section 15 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 Right Certificates held by such holders

prior to the date of adjustment, and upon surrender thereof,

if required by the Company, new Right Certificates evidenc

ing all the Rights to which such holders shall be entitled

after such adjustment.  Right Certificates so to be distri

buted shall be issued, executed and authenticated in the

manner provided for herein and shall be registered in the

names of the holders of record of Right 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 Common Shares issuable upon

the exercise of the Rights, the Right Certificates

theretofore and thereafter issued may continue to express

the Purchase Price and the number of Common Shares which

were expressed in the initial Right Certificates issued

hereunder.

     (k)  Before taking any action that would cause an

adjustment reducing the Purchase Price below the amount of

consideration per Common Share determined by the Board of

Directors of the Company to be capital, or below the par

value, if any, per Common Share issuable upon exercise of

the Rights, the Company agrees  to take such corporate

action as is within its power, including without limitation

appropriate action by its Board of Directors, and which is,

in the opinion of its counsel, necessary in order that the

Company may validly and legally issue fully paid and

nonassessable Common Shares at such adjusted Purchase Price.

     (l)  In any case in which this Section 12 shall require

that an adjustment in the Purchase Price be made effective

as of a record date for a specified event, the Company may

elect to defer until the occurrence of such event the

issuance to the holder of any Right exercised after such

record date of the Common Shares or other capital stock or

securities of the Company, if any, issuable upon such

exercise over and above the Common Shares or 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 securities upon the occurrence of

the event requiring such adjustment.

     (m)  Anything in this Section 12 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 12, as and to

the extent that it in its sole discretion shall determine to

be advisable in order that any combination or subdivision of

the Common Shares, issuance wholly for cash of any of the

Common Shares at less than the current per share market

price, issuance wholly for cash of Common Shares or

securities which by their terms are convertible into or

exchangeable for Common Shares, dividends on Common Shares

payable in Common Shares or issuance of rights, options or

warrants referred to in subsection (b) of this Section 12,

hereafter effected by the Company to holders of its Common

Shares shall not be taxable to such shareholders.

     Section 13.  Certificate of Adjusted Purchase Price or

Number of Shares.  Whenever an adjustment is made as pro

vided in Section 12 or 14 hereof, the Company shall (i)

promptly prepare a certificate setting forth such adjust

ment, and a brief statement of the facts accounting for such

adjustment, (ii) promptly file with the Rights Agent and

with each transfer agent for the Common Shares of the

Company a copy of such certificate and (iii) mail a brief

summary thereof to each holder of record of a Right Certifi

cate in accordance with Section 28 hereof.

     Section 14.  Consolidation, Merger or Sale or Transfer

of Assets or Earning Power.  If, directly or indirectly, (a)

the Company shall consolidate with, or merge with and into,

any other Person, (b) any Person shall merge with and into

the Company and the Company shall be the continuing or

surviving corporation of such merger and, in connection with

any such merger, all or part of the Common Shares of the

Company shall be changed into or exchanged for stock or

other securities of any other Person (or the Company) or

cash or any other property, or (c) the Company shall sell or

otherwise transfer (or one or more of its Subsidiaries shall

sell or otherwise transfer), in one or a series of two or

more transactions, assets of the Company or its Subsidiaries

which constitute more than 50% of the assets or which

produce more than 50% of the earning power of the Company

and its Subsidiaries (taken as a whole) to any Person or any

Affiliate or Associate of such Person other than the Company

or one or more of its Wholly-Owned Subsidiaries, then, and

in each such case, the Company agrees that, as a condition

to engaging in any such transaction, it will make or cause

to be made proper provision so that (i) each holder of a

Right (except as otherwise provided herein) shall thereafter

have the right to receive, upon the exercise thereof in

accordance with the terms of this Agreement, such number of

Common Shares of such other Person (including the Company as

successor thereto or as the surviving corporation) or, if

such other Person is a Subsidiary of another Person, of the

Person or Persons (other than individuals) which ultimately

control such first-mentioned Person, as shall be equal to

the result obtained by (X) multiplying the then current

Purchase Price by the number of Common Shares for which a

Right is then exercisable (without taking into account any

adjustment previously made pursuant to Section 12(a)(ii))

and dividing that product by (Y) 50% of the current per

share market price of the Common Shares of such other Person

(determined pursuant to Section 12(d)) on the date of

consummation of such consolidation, merger, sale or

transfer; (ii) the issuer of such Common Shares shall

thereafter be liable for, and shall assume, by virtue of

such consolidation, merger, sale or transfer, all the

obligations and duties of the Company pursuant to this

Agreement; (iii) the term "Company", as used herein, shall

thereafter be deemed to refer to such issuer; and (iv) such

issuer shall take such steps (including without limitation

the reservation of a sufficient number of shares of its

Common Shares in accordance with Section 10) in connection

with such consummation as may be necessary to assure that

the provisions hereof shall thereafter be applicable, as

nearly as reasonably may be, in relation to its Common

Shares thereafter deliverable upon the exercise of the

Rights.  The Company shall not enter into any transaction of

the kind referred to in this Section 14 if at the time of

such transaction there are outstanding any rights, warrants,

instruments or securities or any agreement or arrangements

which, as a result of the consummation of such transaction,

would substantially diminish or otherwise eliminate the

benefits intended to be afforded by the Rights.  The Company

shall not consummate any such consolidation, merger, sale or

transfer unless prior thereto the Company and such issuer

shall have executed and delivered to the Rights Agent an

agreement supplemental to this Agreement complying with the

provisions of this Section 14.  The provisions of this

Section 14 shall similarly apply to successive mergers or

consolidations or sales or other transfers.  For the pur

poses of this Section 14, 50% of the assets of the Company

and its Subsidiaries shall be determined by reference to the

book value of such assets as set forth in the most recent

consolidated balance sheet of the Company and its

Subsidiaries (which need not be audited) and 50% of the

earning power of the Company and its Subsidiaries shall be

determined by reference to the mathematical average of the

operating income resulting from the continuing operations of

the Company and its Subsidiaries for the two most recent

full fiscal years as set forth in the consolidated and

consolidating financial statements of the Company and its

Subsidiaries for such years; provided, however, that, if the

Company has, during such period, engaged in one or more

transactions to which purchase accounting is applicable,

such determination shall be made by reference to the pro

forma operating income of the Company and its Subsidiaries

giving effect to such transactions as if they had occurred

at the commencement of such two-year period. For purposes of

this Section 14 and Section 26, a share exchange of the type

permitted by Part Five of the Texas Business Corporation Act

shall be deemed to be a merger.

     Section 15.  Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue or distribute

Right Certificates which evidence fractional Rights.  If, on

the Distribution Date or thereafter, as a result of any

adjustment effected pursuant to Section 12(i) or otherwise

hereunder, a Person would otherwise be entitled to receive a

Right Certificate evidencing a fractional Right, the Company

shall, in lieu thereof, pay or cause to be paid to such

Person an amount in cash equal to the same fraction of the

current market value of a whole Right.  For the purpose of

this Section 15(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.

     (b)  The Company shall not be required to issue frac

tions of Common Shares upon exercise of the Rights or to

distribute certificates or scrip which evidence fractional

Common Shares.  If, on the Distribution Date or thereafter,

as a result of any adjustment effected hereunder in the

number of Common Shares as to which a Right has become

exercisable, a Person would otherwise be entitled to receive

a fractional Common Share, the Company shall, in lieu

thereof, pay to such Person at the time such Right is

exercised as herein provided an amount in cash equal to the

same fraction of the current market value of one Common

Share.  For purposes of this Section 15(b), the current

market value of a Common Share shall be the Closing Price of

a Common Share for the Trading Day immediately prior to the

date of such exercise.

     (c)  Should any adjustment contemplated by Sec

tion 12(a)(ii) or any mandatory redemption and exchange

contemplated by Section 25 occur, the Company shall not be

required to issue fractions of Common Shares upon exercise

of the Rights or to distribute certificates or scrip which

evidence fractional Common Shares.  If after any such

adjustment or mandatory redemption and exchange, a Person

would otherwise be entitled to receive a fractional Common

Share of the Company upon exercise of any Right or upon

mandatory redemption and exchange as contemplated by Section

25, the Company shall, in lieu thereof, pay to such Person

at the time such Right is exercised as herein provided or

upon such mandatory redemption and exchange an amount in

cash equal to the same fraction of the current market value

of one Common Share.  For purposes of this Section 15(c),

the current market value of a Common Share shall be the

Closing Price of a Common Share for the Trading Day immedi

ately prior to the date of such exercise or the date of such

mandatory redemption and exchange.

     (d)  The holder of a Right by the acceptance thereof

expressly waives his right to receive any fractional Rights

or any fractional shares upon exercise or mandatory

redemption and exchange of a Right (except as provided

above).

     Section 16.  Rights of Action.  (a) All rights of

action in respect of the obligations and duties owed to the

holders of the Rights under this Agreement are vested in the

registered holders of the Rights; and, without the consent

of the Rights Agent or of the holder of any other Rights,

any registered holder of any Rights may, in his own behalf

and for his own benefit, enforce, and may institute and

maintain any suit, action or proceeding, judicial or other

wise, against the Company to enforce, or otherwise to act in

respect of, such holder's right to exercise such Rights in

the manner provided in the Right Certificate evidencing such

Rights and in this Agreement.  Without limiting the forego

ing 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 will be entitled to specific performance

of the obligations under, and injunctive relief against

actual or threatened violations of, the obligations of any

Person subject to this Agreement.

     (b)  Except as otherwise provided in the final

paragraph of Section 7 hereof, no right or remedy herein

conferred upon or reserved to the registered holder of

Rights is intended to be exclusive of any other right or

remedy, and every right and remedy shall, to the extent

permitted by law, be cumulative and in addition to every

other right and remedy given hereunder or now or hereafter

existing at law or in equity or otherwise.  The assertion or

employment of any right or remedy, whether hereunder or

otherwise, shall not prevent the concurrent assertion or

employment of any other appropriate right or remedy.

     (c)  No delay or omission of any registered holder of

Rights to exercise any right or remedy accruing hereunder

shall impair any such right or remedy or constitute a waiver

of any default hereunder or an acquiescence therein.  Every

right and remedy given hereunder or by law to such holders

may be exercised from time to time, and as often as may be

deemed expedient, by such holders.

     Section 17.  Agreement of Right Holders.  Every holder

of a Right, by accepting the same, consents and agrees with

the Company and the Rights Agent and with every other holder

of a Right that:

          (a)  prior to the Distribution Date, the Rights

     will be transferable only in connection with the

     transfer of the Common Shares of the Company;

          (b)   after the Distribution Date, the Right

     Certificates will be transferable only on the Rights

     Register if surrendered at the Corporate Trust Office

     duly endorsed or accompanied by a proper instrument of

     transfer; and

          (c)  the Company and the Rights Agent may deem and

     treat the person in whose name the Right Certificate

     (or, prior to the Distribution Date, the associated

     Common Shares certificate) is registered as the

     absolute owner thereof and of the Rights evidenced

     thereby (notwithstanding any notations of ownership or

     writing on the Right Certificates or the associated

     Common Shares certificate made by anyone other than the

     Company or the Rights Agent) for all purposes, and

     neither the Company nor the Rights Agent shall be

     affected by any notice to the contrary.

     Section 18.  Right Certificate Holder Not Deemed a

Stockholder.  No holder, as such, of any Right (whether or

not then evidenced by a Right Certificate) shall be entitled

to vote, receive dividends or be deemed for any purpose the

holder of Common Shares of the Company or any other

securities of the Company which may at any time be issuable

on the exercise (or mandatory redemption and exchange) of

the Rights represented thereby, nor shall anything contained

herein or in any Right Certificate be construed to confer

upon any such holder, as such, any of the rights of a

stockholder of the Company, including without limitation any

right to vote for the election of directors or upon any

matter submitted to stockholders at any meeting thereof, to

give or withhold consent to any corporate action, to receive

notice of meetings or other actions affecting stockholders

(except as provided in Section 26) or to receive dividends

or subscription rights, until the Right or Rights evidenced

by such Right Certificate shall have been exercised (or

mandatorily redeemed and exchanged) in accordance with the

provisions hereof.

     Section 19.  Concerning the Rights Agent.  The Company

agrees to pay to the Rights Agent reasonable compensation

for all services rendered by it hereunder and, from time to

time, on demand of the Rights Agent, its reasonable expenses

and counsel fees and expenses 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 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.

     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 Right Certificate or

certificate for Common Shares of the Company or other

securities of the Company, Company Order, 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 executed by the proper person or persons

and, where necessary, verified or acknowledged, or otherwise

upon the advice of its counsel as set forth in Section 20

hereof.

     The provisions of this Section 19 shall survive the

expiration of the Rights and the termination of 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 Right Certificates, by

their acceptance thereof, shall be bound:

     (a)  The Rights Agent may consult with legal counsel of

its selection (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 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 any one of the Chairman of the Board,

any Vice Chairman of the Board, the President, any Vice

President, the Treasurer, any Assistant Treasurer, the

Secretary or any Assistant Secretary of the Company and

delivered to the Rights Agent; and 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 to the

Company or any other Person only for its own 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 con

tained in this Agreement or in the Right Certificates

(except its authentication thereof) or be required to verify

the same, but all such statements and recitals are and shall

be deemed to have been made by the Company only.

     (e)  The Rights Agent shall not have any responsibility

with respect to the validity of this Agreement or the

execution and delivery hereof (except the due execution

hereof by the Rights Agent) or with respect to the validity

or execution of any Right Certificate (except its authentica

tion thereof); nor shall it be responsible for any breach by

the Company of any covenant or condition contained in this

Agreement or in any Right Certificate; nor shall it be

responsible for any change in the exercisability of the

Rights (including the Rights becoming void pursuant to

Section 12(a)(ii) hereof) or any adjustment in the terms of

the Rights (including the manner, method or amount thereof)

provided for in Sections 3, 12, 14, 24 and 25, or the

ascertainment of the existence of facts that would require

any such change or adjustment (except with respect to the

exercise of Rights evidenced by Right Certificates after

actual notice that such change or adjustment is required);

nor shall it by any act hereunder be deemed to make any

representation or warranty as to the authorization or

reservation of any Common Shares to be issued pursuant to

this Agreement or any Right Certificate or as to whether any

Common Shares will, when issued, be duly authorized, validly

issued, fully paid and nonassessable; nor shall the Rights

Agent be responsible for the legality of the terms hereof in

its capacity as an administrative agent.

     (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 any one of the Chairman of the

Board, any Vice Chairman of the Board, the President, any

Vice President, the Treasurer, any Assistant Treasurer, the

Secretary or any Assistant Secretary of the Company, and to

apply to such officers for advice or instructions in

connection with its duties, and it shall not be liable for

any action taken or suffered to be taken by it in good faith

in accordance with instructions of any such officer.

     (h)  The Rights Agent and any shareholder, director,

officer or employee of the Rights Agent may buy, sell or

deal in any of the Rights or other securities of the Company

or become pecuniarily interested in any transaction in which

the Company may be interested, or contract with or lend

money to the Company or otherwise act as fully and freely as

though it were not Rights Agent under this Agreement.

Nothing herein shall preclude the Rights Agent from acting

in any other capacity for the Company.

     (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 of the Company

resulting from any such act, default, neglect or misconduct

provided 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 any of its

rights or powers, if it shall have reasonable grounds for

believing that repayment of such funds or adequate

indemnification against such risk or liability is not

reasonably assured to it.

     Section 21.  Merger or Consolidation or Change of Name

of Rights Agent.  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 that such

corporation would be eligible for appointment as a successor

Rights Agent under the provisions of Section 22.  If at the

time such successor Rights Agent shall succeed to the agency

created by this Agreement any of the Right Certificates

shall have been authenticated but not delivered, any such

successor Rights Agent may adopt the authentication of the

predecessor Rights Agent and deliver such Right Certificates

so authenticated, and, if at that time any of the Right

Certificates shall not have been authenticated, any succes

sor Rights Agent may authenticate such Right Certificates

either in the name of the predecessor Rights Agent or in the

name of the successor Rights Agent; and in all such cases

such Right Certificates shall have the full force provided

in the Right Certificates and in this Agreement.

     If at any time the name of the Rights Agent shall be

changed and at such time any of the Right Certificates shall

have been authenticated but not delivered, the Rights Agent

may adopt the authentication under its prior name and

deliver Right Certificates so authenticated; and, in case at

that time any of the Right Certificates shall not have been

authenticated, the Rights Agent may authenticate such Right

Certificates either in its prior name or in its changed

name; and in all such cases such Right Certificates shall

have the full force provided in the Right Certificates and

in this Agreement.

     Section 22.  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 to the Company.  The Company may remove the Rights

Agent or any successor Rights Agent upon 30 days' notice in

writing, mailed to the Rights Agent or successor Rights

Agent, as the case may be, and to each transfer agent for

the Common Shares of the Company by registered or certified

mail, and to the holders of the Right Certificates by

first-class mail.  If the Rights Agent shall resign or be

removed or shall otherwise become incapable of acting, the

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 registered holder of a Right Certificate (or, prior

to the Distribution Date, of Common Shares), then the Rights

Agent or any registered holder of a Right Certificate (or,

prior to the Distribution Date, of Common Shares) may apply

to any court of competent jurisdiction for the appointment

of a new Rights Agent.  Any successor Rights Agent, whether

appointed by the Company or by such a court, shall be a

corporation organized and doing business under the laws of

the United States or of any state of the United States,

which is authorized under such laws to exercise corporate

trust powers and is subject to supervision or examination by

federal or state authority and which has at the time of its

appointment as Rights Agent a combined capital and surplus

of at least $500 million.  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 for the

Common Shares of the Company, and mail a notice thereof in

writing to the registered holders of the Right Certificates.

Failure to give any notice provided for in this Section 22,

however, or any defect therein, shall not affect the

legality or validity of the resignation or removal of the

Rights Agent or the appointment of the successor Rights

Agent, as the case may be.

     Section 23.  Issuance of New Right Certificates.

Notwithstanding any of the provisions of this Agreement or

of the Rights to the contrary, the Company may, at its

option, issue new Right Certificates evidencing Rights in

such form as may be approved by its Board of Directors to

reflect any adjustment or change in the Purchase Price per

share and the number or kind or class of shares or other

securities purchasable under the Right Certificates made in

accordance with the provisions of this Agreement.

     Section 24.  Redemption.  (a) The Rights may be

redeemed by action of the Board of Directors of the Company

pursuant to paragraph (b) of this Section 24, or may be

redeemed and exchanged by action of the Board of Directors

of the Company pursuant to Section 25 herein, but shall not

be redeemed in any other manner.

     (b)  The Board of Directors of the Company may, at its

option, at any time prior to the Shares Acquisition Date

redeem all but not less than all the then outstanding Rights

at a redemption price of one and eleven hundredths of one

cent ($0.0111) per Right then outstanding, appropriately

adjusted to reflect any adjustment in the number of Rights

outstanding pursuant to Section 12(i) herein (such

redemption price being hereinafter referred to as the

"Redemption Price"); provided, however, that, if, subsequent

to such time, the beneficial ownership of Voting Shares of

the Company by such Acquiring Person shall be reduced below

10% of the outstanding Voting Shares of the Company as a

result of a transaction or series of transactions not

involving the Company, any Subsidiary of the Company, any

employee benefit plan of the Company or any of its

Subsidiaries or any trustee of or fiduciary with respect to

any such plan when acting in such capacity, then the Board

of Directors of the Company may, again, at its option, at

any time prior to the next Shares Acquisition Date redeem

all but not less than all of the then outstanding Rights at

the Redemption Price.  Any such redemption of the Rights by

the Board of Directors may be made effective at such time,

on such basis and with such conditions as the Board of

Directors in its sole discretion may establish.

     (c)  The right of the registered holders of Right

Certificates to exercise the Rights evidenced thereby or, if

the Distribution Date has not theretofore occurred, the

inchoate right of the registered holders of Rights to

exercise the same shall, without notice to such holders or

to the Rights Agent and without further action, terminate

and be of no further force or effect effective as of the

time of adoption by the Board of Directors of the Company of

a resolution authorizing and directing the redemption of the

Rights pursuant to paragraph (b) of this Section 24 (or,

alternatively, if the Board of Directors qualified such

action as to time, basis or conditions, then at such time,

on such basis and with such conditions as the Board of

Directors may have established pursuant to such paragraph

(b)); thereafter, the only right of the holders of Rights

shall be to receive the Redemption Price.  The Company shall

promptly give public notice of any redemption resolution

pursuant to paragraph (b) of this Section 24; provided,

however, that the failure to give, or any defect in, any

such notice shall not affect the validity of such

redemption.  Within 10 days after the adoption of any

redemption resolution pursuant to paragraph (b) of this

Section 24, the Company shall give notice of such redemption

to the holders of the then outstanding Rights by mailing

such notice to all such holders at their last addresses as

they appear upon the Rights Register or, prior to the

Distribution Date, on the registry books of the transfer

agents for the Common Shares.  Any notice which is mailed in

the manner herein provided shall be deemed given, whether or

not the holder receives the notice.  Each such notice of

redemption shall state the method by which the payment of

the Redemption Price will be made.

     (d)  Neither the Company nor any of its Affiliates or

Associates may acquire (other than, in the case of such

Affiliates and Associates, in their capacity as holders of

Common Shares of the Company), redeem or purchase for value

any Rights at any time in any manner other than as specif

ically set forth in this Section 24 or in Section 25 herein,

and other than in connection with the purchase of Common

Shares prior to the Distribution Date.

     Section 25.  Mandatory Redemption and Exchange.  (a)

The Board of Directors of the Company may, at its option, at

any time after any Person becomes an Acquiring Person, issue

Common Shares of the Company in mandatory redemption of, and

in exchange for, all or part of the then outstanding and

exercisable Rights (which shall not include Rights that have

become null and void pursuant to the provisions of Section

12(a)(ii) hereof) at an exchange ratio of one Common Share

for each Right, appropriately adjusted to reflect any stock

split, stock dividend or similar transaction occurring after

the date hereof.  Notwithstanding the foregoing, the Board

of Directors shall not be empowered to effect such

redemption and exchange at any time after any Person (other

than the Company, any Subsidiary of the Company, any

employee benefit plan of the Company or of any such

Subsidiary, or any trustee of or fiduciary with respect to

any such plan when acting in such capacity), together with

all Affiliates and Associates of such Person, becomes the

Beneficial Owner of 50% or more of the Voting Shares then

outstanding.

     (b)  Immediately upon the action of the Board of

Directors of the Company ordering the mandatory redemption

and exchange of any Rights pursuant to subsection (a) of

this Section 25 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 such number of Common Shares as

is provided in paragraph (a) of this Section 25.  The

Company shall promptly give public notice of any such

redemption and exchange; provided, however, that the failure

to give, or any defect in, such notice shall not affect the

validity of such redemption and exchange.  The Company

promptly shall mail a notice of any such redemption and

exchange to all the holders of such Rights at their last

addresses as they appear upon the registry books of the

Rights Agent.  Any notice which is mailed in the manner

herein provided shall be deemed given, whether or not the

holder receives the notice.  Each such notice of mandatory

redemption and exchange shall state the method by which the

redemption and exchange of the Common Shares for Rights will

be effected and, in the event of any partial redemption and

exchange, the number of Rights which will be redeemed and

exchanged.  Any partial redemption and exchange shall be

effected pro rata based on the number of Rights (other than

Rights which have become null and void pursuant to the

provisions of Section 12(a)(ii) hereof) held by each holder

of Rights.

     Section 26.  Notice of Certain Events.  If the Company

shall, on or after the Distribution Date, propose (a) to pay

any dividend or other distribution payable in stock of any

class of the Company or any Subsidiary of the Company to the

holders of its Common Shares, (b) to distribute to the

holders of its Common Shares rights, options or warrants to

subscribe for or to purchase any additional Common Shares or

shares of stock of any class or any other securities, rights

or options, (c) to make any other distribution to the

holders of its Common Shares (other than a regular quarterly

cash dividend), (d) to effect any reclassification of its

Common Shares (other than a reclassification involving only

the subdivision of outstanding Common Shares), (e) to effect

any consolidation or merger into or with, or to effect any

sale or other transfer (or to permit one or more of its

Subsidiaries to effect any sale or other transfer), in one

or more transactions, of more than 50% of the assets or

earning power of the Company and its Subsidiaries (de

termined as provided in Section 14 herein) to, any other

Person (other than the Company or a Wholly-Owned Subsidiary

or Wholly-Owned Subsidiaries), (f) to effect the

liquidation, dissolution or winding up of the Company or (g)

if the Rights have theretofore become exercisable with

respect to Common Shares pursuant to Section 12(a)(ii)

herein, to declare or pay any dividend or other distribution

on the Common Shares payable in Common Shares or in stock of

any other class of the Company or any Subsidiary of the

Company or to effect a subdivision or combination of the

Common Shares (by reclassification or otherwise than by

payment of dividends in Common Shares) then, in each such

case, the Company shall give to each holder of a Right

Certificate, in accordance with Section 28 hereof, notice of

such proposed action, which shall specify the date of

authorization by the Board of Directors of the Company of,

and record date for, such stock dividend or such

distribution of rights, options or warrants or the date on

which such reclassification, consolidation, merger, sale,

transfer, liquidation, dissolution, winding up, subdivision

or combination is to take place and the date of partic

ipation therein by the holders of the Common Shares of the

Company, if any such date is to be fixed.  Such notice shall

be so given in the case of any action covered by clause (a),

(b), (c) or (g) above at least 20 days prior to the record

date for determining holders of the Common Shares of the

Company 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 Common Shares of the Company,

whichever shall be the earlier.

     If any of the events set forth in Section 12(a)(ii) of

this Agreement shall occur, then, in any such case, the

Company shall as soon as practicable thereafter give to each

holder of a Right Certificate, in accordance with Section 28

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 12(a)(ii) hereof.

     The Company agrees to give the Rights Agent prompt

written notice of any event or ownership known to the

Company which would prohibit the exercise or transfer of the

Right Certificates.  Further, the Company shall give to the

Trustee a copy of each notice that it may give to any holder

hereunder, no later than the time the Company gives such

notice to such holder.

     Section 27.  Securities Laws Registrations.  To the

extent legally required, the Company agrees that it will

prepare and file, no later than the Distribution Date, and

will use its best efforts to cause to be declared effective,

a registration statement under the Securities Act of 1933,

as amended, registering the offering, sale and delivery of

the Common Shares issuable upon exercise of the Rights, and

the Company will, thereafter, use its best efforts to

maintain such registration statement (or another)

continuously in effect so long as any Rights remain

outstanding and exercisable with respect to Common Shares.

Should the Rights become exercisable with respect to

securities of the Company or one of its Subsidiaries other

than Common Shares, the Company agrees that it will, to the

extent legally required, promptly thereafter prepare and

file, or cause to be prepared and filed, and will use its

best efforts to cause to be declared effective, a registra

tion statement under such Act registering the offering, sale

and delivery of such other securities and the Company will,

thereafter, use its best efforts to maintain such registra

tion statement (or another) continuously in effect so long

as any outstanding Rights are exercisable with respect to

such securities.  The Company further agrees to use its best

efforts, from and after the Distribution Date, to qualify or

register for sale the Common Shares or other securities of

the Company or one of its Subsidiaries issuable upon

exercise of the Rights under the securities or "blue sky"

laws (to the extent legally required thereunder) of all

jurisdictions in which registered holders of Right

Certificates reside determined by reference to the Rights

Register.

     Section 28.  Notices.  Notices or demands authorized by

this Agreement to be given or made by the Rights Agent or by

the holder of any Right Certificate to or on the Company

shall be sufficiently given or made if sent by first-class

mail, postage prepaid, addressed (until another address is

filed in writing with the Rights Agent) as follows:

                    Southwest Airlines Co.
                    P.O. Box 36611
                    Dallas, Texas  75235-1611
                    Attention:  General Counsel

Subject to the provisions of Section 22 hereof, any notice

or demand authorized by this Agreement to be given or made

by the Company or by the holder of any Right Certificate to

or on the Rights Agent shall be sufficiently given or made

if sent by first-class mail, postage prepaid, addressed

(until another address is filed in writing with the Company)

as follows:

                    Continental Stock Transfer & Trust Company
                    2 Broadway
                    New York, New York  10004
                    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 Right Certificate shall be sufficiently given or made if

sent by first-class mail, postage prepaid, addressed to such

holder at the address of such holder as shown on the Rights

Register or, prior to the Distribution Date, on the stock

transfer records for the Common Shares of the Company.

     Section 29.  Supplements and Amendments.  The Company

may from time to time supplement or amend this Agreement

(which supplement or amendment shall be evidenced by a

writing signed by the Company and the Rights Agent) without

the approval of any holders of Rights (whether or not

evidenced by Right Certificates) in order to cure any

ambiguity, to correct or supplement any provision contained

herein which may be defective or inconsistent with any other

provisions herein, to make any other provisions in regard to

matters or questions arising hereunder, or to add, delete,

modify or otherwise amend any provision, which the Company

may deem necessary or desirable, including without

limitation extending the Final Expiration Date and, provided

that at the time of such amendment or supplement the

Distribution Date has not occurred, the period during which

the Rights may be redeemed; provided, however, that, from

and after such time as any Person becomes an Acquiring

Person, any such amendment or supplement shall not

materially and adversely affect the interests of the holders

of the Rights.  Without limiting the foregoing, the Board of

Directors of the Company may by resolution adopted at any

time prior to such time as any Person becomes an Acquiring

Person amend this Agreement to lower the thresholds set

forth in the definitions of Acquiring Person and

Distribution Date herein from 15% to a percentage not less

than the greater of (i) the sum of .001% and the largest

percentage of the outstanding Voting Shares then known to

the Company to be beneficially owned by any Person (other

than the Company, any Subsidiary of the Company, any

employee benefit plan of the Company or of any Subsidiary of

the Company, or any trustee of or fiduciary with respect to

any such plan when acting in such capacity), and (ii) 10%.

Upon the delivery of a certificate from any officer of the

Company specified in Section 20(b) stating that a proposed

supplement or amendment complies with the terms of this

Section, the Rights Agent shall execute such supplement or

amendment.  Notwithstanding any other provision hereof, the

Rights Agent's consent must be obtained regarding any

amendment or supplement pursuant to this Section 29 which

alters the Rights Agent's rights or duties.

     Section 30.  Successors.  All the covenants and provi

sions 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 31.  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 Right Certificates (and, prior to the

Distribution Date, the Common Shares) any legal or equitable

right, remedy or claim under this Agreement; but this

Agreement shall be for the sole and exclusive benefit of the

Company, the Rights Agent and the registered holders of the

Rights (and, prior to the Distribution Date, the Common

Shares).

     Section 32.  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, provi

sions, covenants and restrictions of this Agreement shall

remain in full force and effect and shall in no way be

affected, impaired or invalidated.

     Section 33.  Governing Law.  This Agreement and each

Right Certificate issued hereunder shall be deemed to be a

contract made under the laws of the State of Texas and for

all purposes shall be governed by and construed in

accordance with the laws of such State applicable to con

tracts to be made and performed entirely within such State;

provided, however, that the rights and obligations of the

Rights Agent shall be governed by and construed in

accordance with the laws of the State of New York.

     Section 34.  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 consti

tute but one and the same instrument.

     Section 35.  Table of Contents and Descriptive

Headings.  The Table of Contents and the descriptive head

ings 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.

     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.

                                   SOUTHWEST AIRLINES CO.
Attest:


                              
By  /s/Colleen C. Barrett         By /s/Herbert D. Kelleher
       Colleen C. Barrett               Herbert D. Kelleher
       Secretary                        Chairman of the Board, President
                                        and Chief Executive Officer




                                   CONTINENTAL STOCK TRANSFER &
                                       TRUST COMPANY
                                   As Rights Agent
Attest:

                                             

By        /s/William F. Seegraber                By /s/Steven G. Nelson





                                           EXHIBIT A
               [Form of Right Certificate]

Certificate No. R-  _____ Rights


          NOT  EXERCISABLE AFTER JULY 30, 2006  OR
          EARLIER   IF   REDEMPTION  OR   EXCHANGE
          OCCURS.   THE  RIGHTS  ARE  SUBJECT   TO
          REDEMPTION  AT $.0111 PER RIGHT  AND  TO
          EXCHANGE ON THE TERMS SET FORTH  IN  THE
          RIGHTS    AGREEMENT.    UNDER    CERTAIN
          CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
          BY  ACQUIRING  PERSONS  (AS  DEFINED  IN
          SECTION  1  OF THE RIGHTS AGREEMENT)  OR
          ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
          BECOME NULL AND VOID.

                      Right Certificate

                   SOUTHWEST AIRLINES CO.


      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  Amended  and  Restated Rights Agreement,  dated  as  of
July  18,  1996 (the "Rights Agreement"), between  Southwest
Airlines  Co.,  a  Texas corporation  (the  "Company"),  and
Continental  Stock  Transfer & Trust  Company  (the  "Rights
Agent"), to purchase from the Company at any time after  the
Distribution  Date (as such term is defined  in  the  Rights
Agreement)  and prior to 5:00 p.m., New York City  time,  on
July  30, 2006, at the Corporate Trust Office of the  Rights
Agent  (or at the office of its successor as Rights  Agent),
one fully paid non-assessable share of the Common Stock (the
"Common  Shares")  of the Company, at a  purchase  price  of
$16.67  per  Common  Share  (the  "Purchase  Price"),   upon
presentation  and  surrender of this Right Certificate  with
the  Form of Election to Purchase duly executed.  The number
of  Rights  evidenced  by this Right  Certificate  (and  the
number of Common Shares 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  July  18,
1996,  based  on  the Common Shares as constituted  at  such
date.   As  provided in the Rights Agreement,  the  Purchase
Price and the number of Common Shares which may be purchased
upon  the  exercise of the Rights evidenced  by  this  Right
Certificate are subject to modification and adjustment  upon
that happening of certain events.

      This Right Certificate is subject to all of the terms,
provisions  and  conditions of the Rights  Agreement,  which
terms,  provisions  and conditions are  hereby  incorporated
herein  by  reference and made a part hereof  and  to  which
Rights  Agreement  reference  is  hereby  made  for  a  full
description   of   the   rights,  limitations   of   rights,
obligations, duties and immunities hereunder of  the  Rights
Agent,   the   Company  and  the  holders   of   the   Right
Certificates.  Copies of the Rights Agreement are on file at
the principal place of business and the registered office of
the  Company  and the Corporate Trust Office of  the  Rights
Agent.

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

      Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed  by
the  Company  at a redemption price of $.0111 per  Right  or
(ii) may be exchanged by the Company in whole or in part for
Common Shares.

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

      No  holder of this Right Certificate shall be entitled
to  vote  or receive dividends or be deemed for any  purpose
the  holder  of the Common Shares or of any other securities
of  the  Company  which may at any time be issuable  on  the
exercise hereof, nor shall anything contained in the  Rights
Agreement  or herein be construed to confer upon the  holder
hereof, as such, any of the rights of a stockholder  of  the
Company, including without limitation, any right to vote for
the  election  of directors or upon any matter submitted  to
stockholders  at  any meeting thereof, to give  or  withhold
consent  to  any  corporate action,  to  receive  notice  of
meetings or other actions affecting stockholders (except  as
provided  in the Rights Agreement), or to receive  dividends
or  subscription rights, until the Right or Rights evidenced
by  this  Right  Certificate shall have  been  exercised  as
provided in the Rights Agreement.

      This  Right Certificate shall not be entitled  to  any
benefit under the Rights Agreement or be valid or obligatory
for any purpose until it shall have been authenticated by an
authorized signatory of the Rights Agent.

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

Dated as of ___________________, ____.


ATTEST:                       SOUTHWEST AIRLINES CO.

     [SEAL]

     By:
          Secretary                President


Authentication:

This  is  one of the Right Certificates referred to  in  the
within-mentioned Rights Agreement.


CONTINENTAL STOCK TRANSFER &
    TRUST COMPANY, as Rights Agent


By:
     Authorized Signatory
         [Form of Reverse Side of Right Certificate]

                     FORM OF ASSIGNMENT

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


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

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

Dated as of ___________________, ____.


                                             Signature

Signature Guaranteed:

      Signatures  must  be guaranteed  by  a  bank,  broker,
dealer,  savings  institution or other eligible  institution
participating  in  a signature guarantee  medallion  program
recognized by the Securities Transfer Association, Inc.
____________________________________________________________
__________________

          [To be executed if statement is correct]

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


                                             Signature
____________________________________________________________
__________________

  [Form of Reverse Side of Right Certificate -- continued]

                FORM OF ELECTION TO PURCHASE
            (To be executed if holder desires to
               exercise the Right Certificate)

TO SOUTHWEST AIRLINES CO.:

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

Please insert social security
or other identifying number:




               (Please print name and address)



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

Please insert social security
or other identifying number:




               (Please print name and address)



Dated as of ___________________, ____.


                                             Signature
  [Form of Reverse Side of Right Certificate -- continued]

Signature Guaranteed:

      Signatures  must  be guaranteed  by  a  bank,  broker,
dealer,  savings  institution or other eligible  institution
participating  in  a signature guarantee  medallion  program
recognized by the Securities Transfer Association, Inc.
- -  - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

          [To be executed if statement is correct]

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


                                             Signature

- -  - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                           NOTICE


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

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