WILLAMETTE INDUSTRIES, INC.

                                       and

                    CHASEMELLON SHAREHOLDER SERVICES, L.L.C.

                                  Rights Agent

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

                                RIGHTS AGREEMENT

                          Dated as of February 25, 2000
           -----------------------------------------------------------


<PAGE>

                                TABLE OF CONTENTS

Section                                                                     Page
-------                                                                     ----

Table of Defined Terms ....................................................  iii

 1   Certain Definitions ..................................................    1

 2   Appointment of Rights Agent ..........................................    4

 3   Issuance of Right Certificates .......................................    4

 4   Form of Right Certificates ...........................................    6

 5   Countersignature and Registration ....................................    6

 6   Transfer, Split Up, Combination and Exchange of Right Certificates;
     Mutilated, Destroyed, Lost or Stolen
     Right Certificates ...................................................    7

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

 8   Cancellation and Destruction of Right Certificates ...................    9

 9   Reservation and Availability of Capital Shares .......................   10

10   Preferred Shares Record Date .........................................   10

11   Adjustment of Purchase Price, Number of Shares or Number of Rights ...   11

12   Certificate of Adjusted Purchase Price or Number of Shares ...........   17

13   Consolidation, Merger, Statutory Plan of Exchange or Sale or
     Transfer of Assets or Earning Power ..................................   17

14   Fractional Rights and Fractional Shares ..............................   20

15   Rights of Action .....................................................   21

16   Agreement of Right Holders ...........................................   22

17   Right Holders and Right Certificate Holders Not Deemed
     Shareholders .........................................................   22

18   Concerning the Rights Agent ..........................................   23

                                       i
<PAGE>

19   Merger or Consolidation or Change of Name of Rights Agent ............   23

20   Duties of Rights Agent ...............................................   24

21   Change of Rights Agent ...............................................   26

22   Issuance of New Right Certificates ...................................   27

23   Redemption and Termination ...........................................   27

24   Exchange .............................................................   28

25   Notice of Certain Events .............................................   29

26   Notices ..............................................................   30

27   Supplements and Amendments ...........................................   30

28   Successors ...........................................................   31

29   Benefits of Agreement ................................................   31

30   Severability .........................................................   31

31   Determinations and Actions by the Board of Directors, etc ............   32

32   Governing Law ........................................................   31

33   Counterparts .........................................................   32

34   Descriptive Headings .................................................   32

Exhibit A -- Rights and Preferences of Series B Junior  Participating  Preferred
             Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of Rights


                                       ii
<PAGE>

                             TABLE OF DEFINED TERMS

Term Defined                                                      Section
------------                                                      -------

Acquiring Person                                                  1

Adjustment Shares                                                 11(a)(ii)

Affiliate                                                         1

Agreement                                                         Intro

Associate                                                         1

Beneficial Owner ; beneficially own                               1

Board of Directors                                                Intro

Business Day                                                      1

Close of Business                                                 1

Common Shares                                                     1

common stock equivalents                                          11(a)(iii)

Company (Willamette Industries, Inc. )                            Intro

Company (Following a Section 13 (a) event)                        13(a)

current per share market price of the Common Shares               11(d)(i)

current per share market price of the Preferred Shares            11(d)(ii)

Distribution Date                                                 3(a)

equivalent preferred shares                                       11(b)

Exchange Act                                                      1(b)

Exchange Date                                                     7(b)

Exchange Ratio                                                    24(a)

Final Expiration Date                                             7(b)

NASDAQ                                                            11(d)(i)


                                      iii
<PAGE>

Person                                                            1(g)

Plan (Employee Benefit Plan)                                      1(a)

Preferred Shares                                                  1(h)

Principal Party                                                   13(b)

Purchase Price                                                    11(a)(i)

Record Date                                                       Intro

Redemption Date                                                   7(b)

Redemption Price                                                  23(a)

Registered Common Shares                                          13(b)

Right                                                             Intro

Right Certificate                                                 3(a)

Rights Agent                                                      Intro

Sanctioned Tender Offer                                           1(j)

Section 11(a)(ii) event                                           11(a)(ii)

Section 13 event                                                  13(a)

Shares Acquisition Date                                           1(k)

Subsidiary                                                        1(l)

Trading Day                                                       11(d)(i)


                                       iv
<PAGE>

                                RIGHTS AGREEMENT

            This Rights  Agreement  (the  "Agreement")  dated as of February 25,
2000,  between  WILLAMETTE  INDUSTRIES,   INC.  ,  an  Oregon  corporation  (the
"Company"),  and CHASEMELLON SHAREHOLDER SERVICES,  L.L.C., a New Jersey limited
liability company (the "Rights Agent");

                                   WITNESSETH:

            WHEREAS,  on February 7, 1990, the Board of Directors of the Company
(the "Board of Directors")  authorized and declared a dividend  distribution  of
certain stock purchase rights to Company  shareholders of record at the Close of
Business (as defined) on February 26, 1990 pursuant to a Rights  Agreement dated
as of February  26,  1990,  between the  Company  and First  Interstate  Bank of
Oregon, N.A. (the "1990 Rights Agreement");

            WHEREAS, the 1990 Rights Agreement and rights issued thereunder
expired on February 25, 2000;

            WHEREAS, on November 11, 1999, the Board of Directors  determined it
desirable and in the best interest of the Company and its  shareholders  for the
Company to extend and modify the benefits  afforded by the 1990 Rights Agreement
by executing this Agreement;

            WHEREAS  the  Board of  Directors  has  authorized  and  declared  a
dividend  distribution  of one  right (a  "Right")  for each  Common  Share  (as
defined) of the  Company  outstanding  at the Close of Business on February  24,
2000 (the "Record  Date"),  upon the terms and subject to the conditions  herein
set forth;

            WHEREAS  each such Right shall  represent  the right to purchase one
one-hundredth of a share of Series B Junior Participating  Preferred Stock, $.50
par value,  of the Company which shall have the rights and preferences set forth
in attached Exhibit A; and

            WHEREAS the Board of Directors has further  authorized  the issuance
of one Right with  respect to each Common  Share that shall  become  outstanding
between  the  Record  Date  and  the  earliest  of the  Distribution  Date,  the
Redemption  Date and the Final  Expiration  Date (as such  terms are  defined in
Sections 3 and 7);

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

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

            (a)  "Acquiring  Person"  shall mean any Person (as  defined) who or
which,  together with all Affiliates and Associates (as defined) of such Person,
shall be the  Beneficial  Owner (as defined) of 15 percent or more of the Common
Shares of the Company then outstanding; subject to the exceptions stated in this
Section  1(a).  An  Acquiring  Person  shall not  include (i) the  Company,  any
Subsidiary of the Company,  any employee benefit plan ("Plan") of the Company or
of a  Subsidiary  of the Company,  or any Person  holding  Common  Shares for or

                                      -1-
<PAGE>

pursuant to the terms of any such Plan,  or (ii) any Person who  becomes  such a
Beneficial  Owner as the result of a Sanctioned  Tender  Offer.  No Person shall
become an Acquiring  Person as the result of an  acquisition of Common Shares by
the  Company  which,  by  reducing  the  number  of Common  Shares  outstanding,
increases the proportionate  number of Common Shares  beneficially owned by such
Person to 15 percent or more of the Common  Shares then  outstanding,  provided,
however,  that if a Person  shall become the  Beneficial  Owner of 15 percent or
more of the Common Shares then outstanding by reason of such share  acquisitions
by  the  Company  and  shall  thereafter  become  the  Beneficial  Owner  of any
additional  Common  Shares,  then such Person shall be deemed to be an Acquiring
Person unless upon the consummation of the acquisition of such additional Common
Shares  such  Person  does not own 15 percent or more of the Common  Shares then
outstanding.  If the Board of Directors  determines  in good faith that a Person
who would otherwise be an Acquiring Person became such inadvertently (including,
without  limitation,  because (A) such Person was unaware  that it  beneficially
owned a percentage of the Common Shares that would  otherwise  cause such Person
to be an  Acquiring  Person or (B) such  Person  was aware of the  extent of its
Beneficial  Ownership  of  Common  Shares  but had no  actual  knowledge  of the
consequences of such Beneficial  Ownership under this Agreement) and without any
intention of changing or influencing control of the Company,  and if such Person
as promptly as practicable divested or divests itself of Beneficial Ownership of
a sufficient  number of Common  Shares so that such Person would no longer be an
Acquiring  Person,  then such Person shall not be deemed to be or to have become
an  Acquiring  Person  by  reason  of the  acquisitions  to  which  the  Board's
determination applies, for any purposes of this Agreement.  For purposes of this
Section 1(a), in  determining  the percentage of the  outstanding  Common Shares
with  respect  to which a Person is the  Beneficial  Owner (A) all  shares as to
which such Person is deemed the Beneficial Owner shall be deemed outstanding and
(B) shares  which are subject to issuance  upon the  exercise or  conversion  of
outstanding  conversion  rights,  rights,  warrants and options other than those
referred to in (A) shall not be deemed  outstanding.  Any determination  made by
the Board of Directors as to whether any Person is or is not an Acquiring Person
shall be conclusive and binding upon all holders of Rights.

            (b) "Affiliate" and "Associate"  shall have the respective  meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations  under
the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  as in
effect on the date hereof.

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

                  (i) which such Person or any of such  Person's  Affiliates  or
      Associates  beneficially  owns,  directly or  indirectly,  for purposes of
      Section 13(d) of the Exchange Act and Regulation  13D-G thereunder (or any
      comparable or successor law or  regulation),  in each case as in effect on
      the date hereof; or

                  (ii) which 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 or the  fulfillment  of a
      condition or both) pursuant to any agreement, arrangement or understanding
      (other  than  customary  arrangements  with and between  underwriters  and
      selling  group  members  with  respect to a bona fide  public  offering of

                                      -2-
<PAGE>

      securities),  or upon the exercise of conversion rights,  exchange rights,
      rights  (other  than the  Rights),  warrants  or  options,  or  otherwise;
      provided,  however, that a Person shall not be deemed the Beneficial Owner
      of, or to beneficially  own,  securities  tendered pursuant to a tender or
      exchange offer made by or on behalf of such Person or any of such Person's
      Affiliates or Associates  until such tendered  securities are accepted for
      purchase or exchange;  or (B) the right to vote,  alone or in concert with
      others, pursuant to any agreement, arrangement or understanding; provided,
      however,  that a Person shall not be deemed the Beneficial Owner of, or to
      beneficially  own,  any security  under this clause (B) if the  agreement,
      arrangement or  understanding to vote such security (1) arises solely from
      a revocable proxy given to such Person or any of such Person's  Affiliates
      or Associates in response to a public proxy solicitation made pursuant to,
      and in  accordance  with,  the  applicable  rules and  regulations  of the
      Exchange Act and (2) is not also then reportable on Schedule 13D under the
      Exchange Act (or any comparable or successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
      any other Person (or any Affiliate or Associate of such other Person) with
      which such Person or any of such Person's Affiliates or Associates has any
      agreement, arrangement or understanding (other than customary arrangements
      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  (other  than voting  pursuant  to a  revocable  proxy as
      described  in the  proviso to Section  l(c)(ii)(B))  or  disposing  of any
      securities of the Company.

            (d) "Business Day" shall mean any day other than a Saturday,  Sunday
or a day on which the offices of the Rights Agent are scheduled to be closed.

            (e)   "Close of Business" on any given date shall mean 5 p. m.,
Washington, D.C. time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5 p. m., Washington, D.C. time, on the next
succeeding Business Day.

            (f)  "Common  Shares"  when used with  reference  to the Company (or
without express  reference to another Person) shall mean shares of Common Stock,
$.50 par  value,  of the  Company or any other  shares of  capital  stock of the
Company  into  which the Common  Shares are  reclassified  or  changed.  "Common
Shares" when used with reference to any Person other than the Company shall mean
shares of the common  stock of such Person (or other class of equity  securities
or equity  interests)  having power to control or direct the  management of such
Person or, if such Person is a Subsidiary of another Person, of the Person which
ultimately  controls  such  first-mentioned  Person  and  which has  issued  and
outstanding  such  common  stock (or such other  class of equity  securities  or
equity interests).

            (g)  "Person"  shall  mean  any   individual,   firm,   partnership,
corporation,  association,  group (as such term is used in Rule 13d-5  under the
Exchange  Act) or other  entity,  and shall  include any successor (by merger or
otherwise) of such entity.

            (h)  "Preferred  Shares"  shall  mean  shares  of  Series  B  Junior
Participating Preferred Stock, $.50 par value, of the Company.

                                      -3-
<PAGE>

            (i)  "Purchase  Price"  shall mean the price to be paid for each one
one-hundredth  of a Preferred  Share pursuant to the exercise of a Right,  which
price is, as of the date  hereof,  as set forth in Section  7(c).  The  Purchase
Price is subject to adjustment from time to time as set forth in Sections 11 and
13.

            (j) "Sanctioned  Tender Offer" shall mean a tender or exchange offer
for all outstanding Common Shares of the Company at a price and on terms which a
majority of the Board of Directors  determines to be fair to the shareholders of
the Company  (taking into account all factors that the Board of Directors  deems
relevant including, without limitation, prices that could reasonably be achieved
if the Company or its assets were sold on an orderly  basis  designed to realize
maximum  value) and  otherwise  in the best  interests  of the  Company  and its
shareholders  (other than the Person or any  Affiliate or  Associate  thereof on
whose  behalf  the  offer  is  being  made);   provided,   however,   that  such
determination  is made by the Board of Directors prior to the purchase of shares
under such tender or exchange offer.

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

            (l)  "Subsidiary"  shall mean,  with  reference  to any Person,  any
corporation  or other  entity  of  which  an  amount  of the  voting  securities
sufficient to elect at least a majority of the directors of such  corporation or
the members of the governing  body of such other entity,  as the case may be, is
beneficially  owned,  directly  or  indirectly,  by  such  Person  or  otherwise
controlled by such Person.

            Section 2.  Appointment of Rights Agent. The Company hereby appoints
the Rights  Agent to act as agent for the Company in  accordance  with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company  may from  time to time  appoint  such  co-Rights  Agents as it may deem
necessary or desirable.

            Section 3.  Issuance of Right Certificates.

            (a) Until the earlier of the Close of  Business  (i) on the 10th day
after the  Shares  Acquisition  Date or (ii) on the 10th  Business  Day (or such
later date as may be determined by the Board of Directors  prior to such time as
any Person becomes an Acquiring  Person) after the date of the  commencement  by
any Person (other than the Company,  any Subsidiary of the Company,  any Plan of
the Company or of any  Subsidiary of the Company,  or any entity  holding Common
Shares of the  Company  for or pursuant to the terms of any such Plan) of, or of
the first public  announcement  of the  intention of any Person  (other than the
Company,  any  Subsidiary  of the  Company,  any Plan of the  Company  or of any
Subsidiary of the Company,  or any entity  holding  Common Shares of the Company
for or pursuant to the terms of any such Plan) to commence, a tender or exchange
offer (other than a Sanctioned  Tender  Offer) the  consummation  of which would
result in any Person becoming the Beneficial  Owner of 15 percent or more of the
outstanding Common Shares of the Company, including any such date which is after
the date of this  Agreement and prior to the issuance of the Rights (the earlier
of such dates  described in clauses (i) and (ii) being herein referred to as the
"Distribution  Date"),

                                      -4-
<PAGE>

(x) the Rights will be evidenced by the  certificates  for Common  Shares of the
Company (which  certificates shall also be deemed to be Right  Certificates) or,
as the  case may be,  certificates  issued  subsequent  to the  Record  Date and
bearing the legend set forth in Section 3(c) (and,  in neither case, by separate
Right  Certificates)  and the  record  holders of such  certificates  for Common
Shares shall be the record holders of the Rights represented thereby and (y) the
Rights and the right to receive Right  Certificates  will be  transferable  only
simultaneously  with and  together  with the  transfer  of Common  Shares of the
Company.  Until the Distribution  Date (or the earlier of the Redemption Date or
the Final Expiration  Date), the surrender for transfer of such certificates for
Common  Shares shall also  constitute  the  surrender for transfer of the Rights
associated with the Common Shares  represented  thereby.  As soon as practicable
after the Distribution Date, after notification by the Company, the Rights Agent
will send, by first-class, 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  records  of the  Company,  a Right
Certificate, in substantially the form of Exhibit B hereto, evidencing one Right
for each Common Share so held. As of the  Distribution  Date, the Rights will be
evidenced  solely  by such  Right  Certificates  and may be  transferred  by the
transfer of the Right  Certificates  as permitted  hereby,  separately and apart
from any  transfer of one or more Common  Shares,  and the holders of such Right
Certificates  as listed in the records of the Company or any  transfer  agent or
registrar for the Rights shall be the record holders thereof.

            (b) The  Company  will make  available  a Summary  of the  Rights in
substantially  the form attached  hereto as Exhibit C (the "Summary of Rights"),
to each record  holder of Common  Shares of the Company who may so request  from
time to time.

            (c) Rights  shall be issued in  respect of all Common  Shares of the
Company  which are issued after the Record Date but prior to the earliest of the
Distribution  Date,  the  Redemption  Date,  the  Exchange  Date  or  the  Final
Expiration Date.  Certificates for such Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following legend:

      This  certificate also evidences and entitles the holder hereof to certain
      Rights as set forth in a Rights Agreement between  Willamette  Industries,
      Inc. (the "Company"),  and ChaseMellon  Shareholder Services,  L.L.C. (the
      "Rights Agent"),  dated as of February 25, 2000 (the "Rights  Agreement"),
      the terms of which are hereby  incorporated herein by reference and a copy
      of which is on file at the  principal  executive  offices of the  Company.
      Under certain  circumstances,  as set forth in the Rights Agreement,  such
      Rights will be  evidenced by separate  certificates  and will no longer be
      evidenced by this certificate. The Company will mail to the holder of this
      certificate a copy of the Rights Agreement without charge after receipt of
      a  written  request   therefor.   Under  certain   circumstances,   Rights
      beneficially  owned by an Acquiring  Person or any  Affiliate or Associate
      thereof  (as such  terms are  defined  in the  Rights  Agreement)  and any
      subsequent holder of such Rights may become null and void.

            (d)  Certificates  for  Common  Shares,  if any,  issued  after  the
Distribution  Date but prior to the earlier of the Redemption  Date or the Final
Expiration Date shall bear the following legend:

                                      -5-
<PAGE>

      This  certificate does not evidence any Right issued pursuant to the terms
      of a Rights Agreement between Willamette Industries, Inc., and ChaseMellon
      Shareholder Services, L.L.C., dated as of February 25, 2000.

            Section 4. Form of Right  Certificates.  The Right Certificates (and
the forms of election to purchase,  assignment and  certificate to be printed on
the reverse thereof), when, as and if issued, shall be substantially the same as
Exhibit B hereto and may have such marks of  identification  or designation  and
such legends,  summaries or endorsements printed thereon as the Company may deem
appropriate,  which do not affect the duties or  responsibilities  of the Rights
Agent, and as are not inconsistent with the provisions of this Agreement,  or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant  thereto or with any rule or  regulation of any stock  exchange on
which the  Common  Shares of the  Company or the Rights may from time to time be
listed,  or to conform to usage.  Subject  to the  provisions  of Section 11 and
Section 22 hereof, the Right Certificates,  whenever issued, which are issued in
respect of Common  Shares which were issued and  outstanding  as of the Close of
Business on the Distribution Date, shall be dated as of the Close of Business on
the  Distribution  Date, and on their face shall entitle the holders  thereof to
purchase such number of Preferred Shares (including  fractional shares which are
integral  multiples  of one  one-hundredth  of a share)  as  shall be set  forth
therein  at the  price  per one  one-hundredth  of a  Preferred  Share set forth
therein, but the amount and type of securities purchasable upon exercise of each
Right and the Purchase Price shall be subject to adjustment as provided herein.

            Section 5.  Countersignature and Registration.

            (a) The  Right  Certificates  shall be  executed  on  behalf  of the
Company by its Chairman of the Board, President,  or any Vice President,  either
manually or by facsimile signature,  and have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary, or an Assistant
Secretary, of the Company, either manually or by facsimile signature.  The Right
Certificates  shall be countersigned  manually or by facsimile  signature by the
Rights Agent and shall not be valid for any purpose unless so countersigned.  In
case  any  officer  of the  Company  who  shall  have  signed  any of the  Right
Certificates   shall   cease  to  be  such   officer  of  the   Company   before
countersignature  by the Rights  Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right  Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by  any  person  who,  at the  actual  date  of  the  execution  of  such  Right
Certificate,  shall  be a proper  officer  of the  Company  to sign  such  Right
Certificate,  although at the date of the  execution of this  Agreement any such
Person was not such an officer.

            (b) Following the Distribution  Date and receipt by the Rights Agent
of written notice and a list of record holders of Rights  referred to in Section
3(a) hereof,  the Rights Agent will keep or cause to be kept at its  shareholder
services office designated pursuant to Section 26 hereof, books for registration
and transfer of the Right Certificates  issued hereunder.  Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.

                                      -6-
<PAGE>

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

            (a) Subject to the provisions of Sections 7(f) and 14 hereof, at any
time after the Close of Business on the  Distribution  Date,  and at or prior to
the  Close of  Business  on the  earlier  of the  Redemption  Date or the  Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split  up,  combined  or  exchanged  for  another  Right  Certificate  or  Right
Certificates,  entitling  the  registered  holder to  purchase a like  number of
Preferred Shares as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase.  Any registered  holder  desiring to transfer,
split up, combine or exchange any Right  Certificate  shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred,  split up, combined or exchanged at the
office of the  Rights  Agent with the form of  assignment  on the  reverse  side
thereof (or with a written  instrument of transfer in form  satisfactory  to the
Company and the Rights Agent enclosed with such Right Certificate),  executed by
the registered  holder thereof or the holder's  attorney  authorized in writing,
and with such  signature  guaranteed.  Neither the Rights  Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate until the certificate set forth following
the form of assignment on the reverse side of such Right  Certificate shall have
been  completed and executed by the  registered  holder  thereof or the holder's
attorney  authorized  in writing,  and the Company shall have been provided such
additional  evidence  of  the  identity  of  the  Beneficial  Owner  (or  former
Beneficial  Owner) of the Rights  represented  by such Right  Certificate or the
Affiliates or Associates of such Beneficial Owner (or former  Beneficial  Owner)
as the Company or the Rights Agent shall request.  Upon receipt of such executed
form  of  assignment  and  certificate  and  of  such  additional  evidence,  if
requested, the Rights Agent shall countersign and deliver to the person entitled
thereto a Right  Certificate  or Right  Certificates,  as the case may be, as so
requested.  The Company may require payment of a sum sufficient to cover any tax
or  governmental  charge that may be imposed in  connection  with any  transfer,
split up, combination or exchange of Right Certificates.  The Rights Agent shall
not be required to process any transaction  unless and until it receives written
evidence that all taxes and governmental charges have been paid in full.

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

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


            (a) Until the Distribution Date, no Right may be exercised.

            (b) 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

                                      -7-
<PAGE>

Distribution  Date upon  surrender  of the Right  Certificate,  with the form of
election to purchase on the reverse  side thereof and  certificate  thereon duly
executed (with signatures duly guaranteed), to the Rights Agent at the office or
agency of the Rights Agent designated for such purpose, together with payment of
the  Purchase  Price with  respect to each Right  exercised,  at or prior to the
earliest  of (i) the  Close  of  Business  on  February  24,  2010  (the  "Final
Expiration  Date"),  (ii) the  consummation  of a  transaction  contemplated  by
Section 13(e),  (iii) the time at which such Rights are exchanged (the "Exchange
Date") as  provided  in  Section  24, or (iv) the time at which the  Rights  are
redeemed (the "Redemption Date") as provided in Section 23.

            (c) The  Purchase  Price for each one  one-hundredth  of a Preferred
Share pursuant to the exercise of a Right shall initially be $200.00,  and shall
be payable in lawful money of the United  States of America in  accordance  with
Section 7(d) hereof. The Purchase Price and the number of Preferred Shares to be
acquired upon  exercise of a Right shall be subject to  adjustment  from time to
time as provided in Sections 11 and 13.

            (d) Upon  receipt of a Right  Certificate  representing  exercisable
Rights,  with the form of election to purchase and form of  certificate  thereon
duly executed, accompanied by payment of the Purchase Price for the shares to be
purchased  and an amount  equal to any  applicable  tax or  governmental  charge
required to be paid by the holder of such Right  Certificate in accordance  with
Section 9 in cash, or by bank certified check or bank draft payable to the order
of the Company,  and such additional  evidence of the identity of the Beneficial
Owner (or  former  Beneficial  Owner) of the  Rights  represented  by such Right
Certificate  or  the  Affiliates  or  Associates  thereof  as  the  Company  may
reasonably  request,  the Rights Agent shall thereupon  promptly (i) requisition
from any transfer agent of the Preferred  Shares  certificates for the number of
Preferred Shares to be purchased and the Company hereby  irrevocably  authorizes
its  transfer  agent to comply with all such  requests,  and/or,  as provided in
Section  14,   requisition  from  the  depositary   agent  depositary   receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case  certificates for the Preferred  Shares  represented by
such  receipts  shall be  deposited by the  transfer  agent with the  depositary
agent) and the  Company  will  direct the  depositary  agent to comply with such
request, (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
14, (iii) promptly after receipt of such  certificates  or depositary  receipts,
cause the same to be delivered to or upon the order of the registered  holder of
such Right  Certificate,  registered in such name or names as may  designated by
such holder and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon  the  order  of the  registered  holder  of such  Right  Certificate.
Notwithstanding  the foregoing  provisions of this Section 7(d), the Company may
suspend the issuance of Preferred  Shares (or,  following  the  occurrence  of a
Section 11(a)(ii) event, Common Shares and/or other securities) upon exercise of
Rights  for a  reasonable  period,  not in excess of 90 days,  during  which the
Company seeks to register under the Securities Act of 1933, as amended,  and any
applicable  securities  law of  any  jurisdiction,  the  Preferred  Shares  (or,
following the  occurrence  of a Section  11(a)(ii)  event,  Common Shares and/or
other securities) to be issued pursuant to the Rights;  provided,  however, that
nothing  contained  in this  Section  7(d)  shall  relieve  the  Company  of its
obligations under Section 9(c).

            (e) In case the  registered  holder of any Right  Certificate  shall
exercise less than all the Rights  evidenced  thereby,  a new Right  Certificate
evidencing Rights equivalent to

                                      -8-
<PAGE>

the Rights  remaining  unexercised  shall be issued by the  Rights  Agent to the
registered  holder of such Right  Certificate or to the holder's duly authorized
assigns, subject to the provisions of Section 6 and Section 14.

            (f) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of any of the events  described in Sections  11(a)(ii) and 13(a),
any Rights  beneficially  owned by (i) an Acquiring  Person or any  Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person or of
any  Affiliate or Associate  of such  Acquiring  Person who becomes a transferee
after  the  Acquiring  Person  becomes  such  (other  than  a  transferee  in  a
transaction  described in Section 23(b)) or (iii) a transferee who acquired such
Rights from an  Acquiring  Person or an  Affiliate  or Associate of an Acquiring
Person prior to or  concurrently  with the Acquiring  Person  becoming such in a
transaction  which  the  Board  of  Directors  has  determined  to be part of an
arrangement  which has as a primary  purpose  or effect  the  avoidance  of this
Section 7(f), shall become null and void, and any holder of such Rights (whether
or not such holder is an  Acquiring  Person or an  Affiliate  or Associate of an
Acquiring  Person) shall  thereafter have no right to exercise such Rights under
any  provision of this  Agreement or  otherwise.  Any Right  Certificate  issued
pursuant to Section 3 that represents Rights  beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof and any Right Certificate issued at
any time upon the transfer of any Rights to an Acquiring Person or any Affiliate
or Associate  thereof or to any nominee of such Acquiring  Person,  Affiliate or
Associate,  and any Right  Certificate  issued pursuant to Sections 6 or 11 upon
transfer,  exchange,  replacement  or adjustment of any other Right  Certificate
referred to in this sentence,  shall or shall be deemed to contain the following
legend:

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

            The Company  shall  notify the Rights  Agent when this  Section 7(f)
applies and shall use all  reasonable  efforts to ensure that the  provisions of
this  Section  7(f) are  complied  with,  but neither the Company nor the Rights
Agent shall have any  liability to any holder of Rights or any other Person as a
result of the  Company's  failure to make any  determination  under this Section
7(f) with  respect  to an  Acquiring  Person or its  Affiliates,  Associates  or
transferees.

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

                                      -9-
<PAGE>

            Section 9.  Reservation and Availability of Capital Shares.

            (a) The  Company  covenants  and  agrees  that it will  cause  to be
reserved and kept available out of its authorized and unissued  Preferred Shares
(and, will use its best efforts, following the occurrence of a Section 11(a)(ii)
event,  to cause to be reserved and kept  available  out of its  authorized  and
unissued Common Shares and/or other securities),  the number of Preferred Shares
(and,  following the  occurrence  of a Section  11(a)(ii)  event,  the number of
Common Shares and/or other  securities)  as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.

            (b) So long as the Preferred  Shares (and,  following the occurrence
of a Section 11(a)(ii) event,  Common Shares and/or other  securities)  issuable
upon the exercise of Rights may be listed on any national  securities  exchange,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares issued or reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.

            (c) If  necessary  to permit the  issuance  of shares  and/or  other
securities  pursuant to the Rights,  the Company  will use its best efforts from
and after the time the Rights become  exercisable to register such shares and/or
other  securities  under  the  Securities  Act of  1933,  as  amended,  and  any
applicable U.S. state  securities laws and to keep such  registration  effective
until the Final Expiration Date.

            (d) The  Company  covenants  and  agrees  that it will take all such
action as may be necessary to ensure that all Preferred  Shares (and,  following
the  occurrence  of a  Section  11(a)(ii)  event,  Common  Shares  and/or  other
securities)  delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares or other securities  (subject to payment of the
Purchase  Price),  be duly and validly  authorized and issued and fully paid and
nonassessable.

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

            Section 10.  Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares (or Common Shares and/or other  securities,
as the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of

                                      -10-
<PAGE>

record of the Preferred Shares (or Common Shares and/or other securities, as the
case may be) represented  thereby on, and such  certificate  shall be dated, the
date  upon  which  the  Right  Certificate   evidencing  such  Rights  was  duly
surrendered  and payment of the  Purchase  Price (and any  applicable  taxes and
governmental  charges)  was made;  provided,  however,  that if the date of such
surrender and payment is a date upon which the transfer  books for the Preferred
Shares  (or  Common  Shares  and/or  other  securities,  as the case may be) 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 are open.

            Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights.  The  Purchase  Price,  the  number  and kind of shares  which may be
purchased  upon  exercise  of a Right and the number of Rights  outstanding  are
subject to adjustment from time to time as provided in this Section 11.

            (a) (i) In the event the Company shall at any time after the date of
      this  Agreement  and prior to the Close of Business on the earliest of the
      Redemption  Date,  the Exchange  Date,  or the Final  Expiration  Date (A)
      declare or pay any dividend on the Preferred  Shares  payable in Preferred
      Shares,  (B) subdivide the outstanding  Preferred Shares,  (C) combine the
      outstanding  Preferred Shares into a smaller number of Preferred Shares or
      (D) issue any shares of its  capital  stock in a  reclassification  of the
      Preferred Shares (including any such reclassification in connection with a
      consolidation  or  merger  in  which  the  Company  is the  continuing  or
      surviving corporation), then and in each such event, the Purchase Price in
      effect  at the  time  of the  record  date  for  such  dividend  or on the
      effective date of such subdivision,  combination or reclassification,  and
      the number and kind of Preferred  Shares or capital stock, as the case may
      be, issuable on such date, shall be  proportionately  adjusted so that the
      holder of any Right exercised after such time shall be entitled to receive
      the aggregate number and kind of Preferred Shares or capital stock, as the
      case may be, which, if such Right had been exercised  immediately prior to
      such date and at a time when the Right was  exercisable  and the  transfer
      books of the  Company  were open,  the  holder  would have owned upon such
      exercise  and  been  entitled  to  receive  by  virtue  of such  dividend,
      subdivision,  combination  or  reclassification.  If an event occurs which
      would require an adjustment  under both this Section  11(a)(i) and Section
      11(a)(ii),  the adjustment  provided for in this Section 11(a)(i) shall be
      in  addition  to,  and shall be made  prior to,  any  adjustment  required
      pursuant to Section 11(a)(ii).

                  (ii)  Subject  to Section  24, in the event  that any  Person,
      alone or together  with its  Affiliates  and  Associates,  shall become an
      Acquiring  Person  (except in a  transaction  to which the  provisions  of
      Section 13(a) hereof  apply),  then,  upon the occurrence of such event (a
      "Section  11(a)(ii)  event"),  proper provision shall be made so that each
      holder of a Right,  except as  provided  in  Section  7(f)  hereof,  shall
      thereafter have a right to receive for each Right,  upon exercise  thereof
      in  accordance  with  the  terms  of this  Agreement  and  payment  of the
      then-current  Purchase Price, in lieu of one  one-hundredth of a Preferred
      Share,  such  number of Common  Shares of the  Company as shall  equal the
      result obtained by multiplying the then-current Purchase Price by the then
      number of one  one-hundredths  of a Preferred  Share for which a Right was
      exercisable  immediately  prior  to  the  first  occurrence  of a  Section
      11(a)(ii)  event,  and dividing  that product by 50 percent of the current
      per share market price  (determined  pursuant to

                                      -11-
<PAGE>

      Section  11(d))  for Common  Shares on the date of such  first  occurrence
      (such number of shares being  hereinafter  referred to as the  "Adjustment
      Shares"),  provided that such provision  shall not be effective until such
      time as the Rights are no longer subject to redemption pursuant to Section
      23(a).

                  (iii) In lieu of  issuing  Common  Shares in  accordance  with
      Section 11(a)(ii),  the Company may, if the Board of Directors  determines
      that such  action is  necessary  or  appropriate  and not  contrary to the
      interest of holders of Rights, and, in the event that the number of Common
      Shares which are authorized by the Company's Articles of Incorporation but
      not  outstanding  or reserved for  issuance  for purposes  other than upon
      exercise of the Rights is not sufficient to permit the exercise in full of
      the Rights in accordance with Section  11(a)(ii),  the Company shall, with
      respect to each Right, make adequate  provision to substitute for all or a
      portion of the Adjustment  Shares upon payment of the applicable  Purchase
      Price (A) cash,  (B) other equity  securities  of the Company  (including,
      without limitation,  shares of preferred stock or units of preferred stock
      having the same value as Common  Shares (such shares or units of preferred
      stock, "common stock  equivalents")),  (C) debt securities of the Company,
      (D)  other  assets  or (E) any  combination  of the  foregoing,  having an
      aggregate value equal to the Adjustment  Shares for which  substitution is
      made. To the extent that the Company  determines that some action is to be
      taken  pursuant to this Section  11(a)(iii),  the Company  shall  provide,
      subject to Section 7(f) hereof,  that such action shall apply uniformly to
      all outstanding Rights.

            (b) In the event that the Company  shall at any time after the Close
of  Business  on the  Record  Date and  prior to the  Close of  Business  on the
earliest of the Redemption Date, the Exchange Date, or the Final Expiration Date
fix a record date prior to the Redemption  Date, the Exchange Date, or the Final
Expiration  Date for the issuance of rights,  options or warrants to all holders
of Preferred  Shares  entitling them (for a period  expiring  within 45 calendar
days after such record date) to subscribe for or purchase  Preferred  Shares (or
shares  having the same rights,  privileges  and  preferences  as the  Preferred
Shares ("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent  preferred  shares,  at a price per Preferred  Share or per
share of equivalent preferred share (or having an effective price per share on a
converted basis in the case of a security  convertible  into Preferred Shares or
equivalent preferred shares) less than the current per share market price of the
Preferred Shares (as determined in accordance with Section 11(d)) on such record
date,  then 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
Preferred  Shares  outstanding  on such record date plus the number of Preferred
Shares  which the  aggregate  offering  price of the total  number of  Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
price of the  convertible  securities so to be offered)  would  purchase at such
current  market  price,  and the  denominator  of which  shall be the  number of
Preferred  Shares  outstanding on such record date plus the number of additional
Preferred  Shares  and/or   equivalent   preferred  shares  to  be  offered  for
subscription  or purchase  (or into which the  convertible  securities  so to be
offered are initially convertible).  In case such subscription price may be paid
by  delivery of  consideration  part or all of which may be in a form other than
cash,  the value of such  consideration  shall be as determined in good faith by
the Board of Directors,  whose  determination  shall be set forth in a statement
filed  with the Rights  Agent and shall be

                                      -12-
<PAGE>

binding on the Rights  Agent and the  holders of the  Rights.  Preferred  Shares
owned by or held for the account of the Company shall not be deemed  outstanding
for  the  purpose  of any  such  computation.  Such  adjustment  shall  be  made
successively  whenever  such a record date is fixed;  and in the event that such
rights,  options or  warrants  are not so issued,  the  Purchase  Price shall be
adjusted to be the  Purchase  Price which would then be in effect if such record
date had not been fixed.

            (c) In the event that the Company  shall at any time after the Close
of  Business  on the  Record  Date and  prior to the  Close of  Business  on the
earliest of the Redemption Date, the Exchange Date, or the Final Expiration Date
fix a  record  date for the  making  of a  distribution  to all  holders  of the
Preferred  Shares  (including any such  distribution  made in connection  with a
consolidation  or merger in which the Company is the continuing  corporation) of
evidences  of  indebtedness  or  assets  (other  than a regular  quarterly  cash
dividend or a dividend  payable in Preferred  Shares) or subscription  rights or
warrants  (excluding those referred to in Section 11(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 current  per share  market  price per one
Preferred  Share (as determined in accordance with Section 11(d)) on such record
date,  less the fair market  value of the portion of the assets or  evidences of
indebtedness  so to be  distributed or of such  subscription  rights or warrants
applicable to one Preferred  Share,  and the  denominator of which shall be such
current per share market price per one Preferred Share.  Such adjustments  shall
be made successively whenever such a record date is fixed; and in the event that
such  distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase  Price which would then be in effect if such record date had not
been fixed.

            (d) (i) For the  purpose of any  computation  hereunder,  other than
      computations made pursuant to Section  11(a)(iii) hereof, 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 Common Share on each of the 20
      consecutive Trading Days (as such term is hereinafter defined) through and
      including  the  Trading Day  immediately  preceding  such date;  provided,
      however,  that in the event the  current  per  share  market  price of the
      Common Shares is determined  during a period following the announcement by
      the issuer of such Common Shares of (A) a dividend or distribution on such
      Common Shares payable in such Common Shares or securities convertible into
      such Common Shares or (B) any subdivision, combination or reclassification
      of such Common  Shares,  and prior to the  expiration  of 20 Trading  Days
      after the ex-dividend date for such dividend,  distribution,  subdivision,
      combination or reclassification,  then, and in each such case, the current
      market  price shall be  appropriately  adjusted to take into  account such
      event.  The  closing  price  for each  Trading  Day shall be the last sale
      price,  regular way, or, in case no such sale takes place on such day, the
      average of the closing bid and asked  prices,  regular way, in either case
      as reported in the principal  consolidated  transaction  reporting  system
      with respect to  securities  listed or admitted to trading on the New York
      Stock Exchange,  Inc., or, if the Common Shares are not listed or admitted
      to  trading on the New York  Stock  Exchange,  Inc.,  as  reported  in the
      principal  consolidated  transaction  reporting  system  with  respect  to
      securities listed on the principal national  securities  exchange on which
      the  Common  Shares are listed or  admitted  to trading  or, if the Common
      Shares are not listed or  admitted to trading on any  national  securities
      exchange,

                                      -13-
<PAGE>

      the last sale price  reported  by the  National  Market Tier of The Nasdaq
      Stock Market  ("NASDAQ")  or such other system then in use, or, if no last
      sale  price  is  reported  by  any  such   system,   the  average  of  the
      representative  closing  bid and asked  prices as quoted on NASDAQ or such
      other  system then in use,  or, if on any such date the Common  Shares are
      not quoted by any such  organization,  the  average of the closing bid and
      asked prices as furnished by a  professional  market maker making a market
      in the Common Shares selected by the Board of Directors. The term "Trading
      Day" shall mean a day on which the principal national  securities exchange
      on which the Common  Shares are listed or  admitted to trading is open for
      the  transaction  of business  or, if the Common  Shares are not listed or
      admitted to trading on any national  securities  exchange,  a day on which
      NASDAQ or such other system is open.

                  (ii)  For  the  purpose  of  any  computation  hereunder,  the
      "current  per  share  market  price"  of the  Preferred  Shares  shall  be
      determined  in the same  manner as set forth  above for  Common  Shares in
      clause (i) of this Section 11(d). If the current per share market price of
      the Preferred  Shares cannot be determined in the manner  provided  above,
      the  "current  per share market  price" of the  Preferred  Shares shall be
      conclusively deemed to be the current per share market price of the Common
      Shares (appropriately adjusted to reflect any stock split, stock dividend,
      subdivision,   combination,   reclassification   or  similar   transaction
      occurring after the date hereof) multiplied by one hundred.

            If neither the Common Shares nor the  Preferred  Shares are publicly
held or so listed or traded,  "current  per share  market  price" shall mean the
fair value per share as determined in good faith by the Board of Directors based
upon such  appraisals or valuation  reports of such  independent  experts as the
Board  of  Directors  shall  in  good  faith  determine  appropriate.  Any  such
determination  of "current  per share  market  price"  shall be  described  in a
statement filed with the Rights Agent.

            (e) No  adjustment  in the Purchase  Price shall be required  unless
such  adjustment  would require an increase or decrease of at least 1 percent in
the Purchase Price;  provided,  however, that any adjustments which by reason of
this  Section  11(e) are not  required  to be made shall be carried  forward and
taken into account in any subsequent  adjustment.  All  calculations  under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or  one-millionth of a Preferred Share as the case
may be.

            (f) If, as a result of an adjustment  made pursuant to Section 11(a)
or Section  13(a),  the holder of any Right  thereafter  exercised  shall become
entitled to receive any shares of capital stock other than Preferred Shares, 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 Preferred Shares
contained in this Section 11 and the  provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred 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  evidence the right to
purchase,  at the adjusted

                                      -14-
<PAGE>

Purchase  Price,  the  number  of  one   one-hundredths  of  a  Preferred  Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.

            (h) Unless the Company shall have exercised its election as provided
in Section 11(i) below,  upon each  adjustment of the Purchase Price as a result
of the  calculations  made in  Sections  11(b) and (c),  each Right  outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right  to  purchase,  at  the  adjusted  Purchase  Price,  that  number  of  one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a  Preferred  Shared  obtained  by (i)  multiplying  (x)  the  number  of one
one-hundredths of a Preferred Share covered by a Right immediately prior to such
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  instead  of making  any
adjustment in the number of Preferred Shares  purchasable upon the exercise of a
Right.  Each of the Rights  outstanding  after such  adjustment of the number of
Rights shall be exercisable for the number of one  one-hundredths of a Preferred
Share for which a Right was exercisable  immediately  prior to such  adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that  number of Rights  (calculated  to the  nearest one  ten-thousandth)
obtained by dividing  the  Purchase  Price in effect  immediately  prior to such
adjustment  of the Purchase  Price by the Purchase  Price in effect  immediately
after such  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  ten  days  after  the  date  of  the  public
announcement.  If Right  Certificates have been issued,  upon each adjustment of
the number of Rights  pursuant to this  Section  11(i),  the Company  shall,  as
promptly as  practicable,  cause to be distributed to holders of record of Right
Certificates  on such  record  date Right  Certificates  evidencing,  subject to
Section 14 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
evidencing  all the Rights to which such  holders  shall be entitled  after such
adjustment.  Right  Certificates so to be distributed shall be issued,  executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company,  the adjusted  Purchase  Price) and shall be  registered  in the
names  of the  holders  of  record  of Right  Certificates  on the  record  date
specified in the public announcement.

            (j)  Irrespective  of any adjustment or change in the Purchase Price
or the number of one  one-hundredths  of a  Preferred  Share  issuable  upon the
exercise of the Rights, as applicable,  the Right  Certificates  theretofore and
thereafter   issued  may  continue  to  express  the  Purchase   Price  per  one
one-hundredth of a Preferred Share and the number of shares which were expressed
in the initial Right Certificates issued hereunder.

                                      -15-
<PAGE>

            (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred  Shares  issuable upon exercise of the Rights,  the Company shall take
any  corporate  action  which may, in the advice or opinion of its  counsel,  be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one  one-hundredths of a Preferred Share at such adjusted Purchase
Price.

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

            (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such further  adjustments in the number of one
one-hundredths  of a Preferred  Share which may be acquired upon exercise of the
Rights,  and such  adjustments  in the  Purchase  Price,  in  addition  to those
adjustments expressly required by this Section 11, as and to the extent that the
Board of Directors  in good faith shall  determine to be advisable in order that
any (i)  consolidation  or  subdivision of the Preferred  Shares,  (ii) issuance
wholly for cash of any Preferred  Shares at less than the current  market price,
(iii) issuance wholly for cash of Preferred  Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares,  (iv) dividends
on  Preferred  Shares  payable in  Preferred  Shares or (v)  issuance of rights,
options or warrants referred to in Section 11(b),  hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such holders or shall
reduce the taxes payable by such holders.

            (n) The Company shall not, at any time after the  Distribution  Date
(i)  consolidate  with,  or merge with or into,  any other Person  (other than a
Subsidiary of the Company in a transaction  which  complies with Section  11(o),
(ii) consummate a statutory plan of exchange with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o), or
(iii) sell or transfer (or permit any  Subsidiary to sell or  transfer),  in one
transaction,  or a series of transactions,  assets or earning power  aggregating
more than 50  percent  of the assets or  earning  power of the  Company  and its
Subsidiaries  (taken as a whole) to any other Person or Persons  (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies  with  Section  11(o)),  if at the time of or  immediately  after  such
consolidation,  merger,  consummation  of a  statutory  plan of exchange or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would  substantially  diminish or otherwise eliminate
the  benefits  intended to be afforded by the Rights;  provided,  however,  this
Section  11(n) shall not affect the ability of any  Subsidiary of the Company to
consolidate  with,  merge with or into,  consummate a statutory plan of exchange
with, or sell or transfer  assets or earning  power to, any other  Subsidiary of
the Company.

                                      -16-
<PAGE>

            (o) After the  Distribution  Date, the Company shall not,  except as
permitted by Sections 23, 24 and 27, take (or permit any Subsidiary to take) any
action if at the time such  action is taken it is  reasonably  foreseeable  that
such action will  diminish  substantially  or otherwise  eliminate  the benefits
intended  to  be  afforded  by  the  Rights,  including,  without  limiting  the
generality of the foregoing,  any merger,  consolidation,  statutory exchange or
sale or transfer of assets or earning power.

            (p) Anything in this Agreement to the contrary  notwithstanding,  in
the event that the  Company  shall at any time after the date of this  Agreement
and  prior  to the  Distribution  Date  (i)  declare  or pay a  dividend  on the
outstanding  Common  Shares  payable  in  Common  Shares,   (ii)  subdivide  the
outstanding  Common Shares,  (iii) combine the outstanding  Common Shares into a
smaller  number of shares,  or (iv) issue any shares of its  capital  stock in a
reclassification  of  the  outstanding  Common  Shares,  the  number  of  Rights
associated  with each  Common  Share then  outstanding,  or issued or  delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the  number of Rights  thereafter  associated  with  each  Common  Share
following any such event (including other Common Shares issued after the date of
such event, but prior to the Distribution  Date) shall equal the result obtained
by  multiplying  the  number  of  Rights   associated  with  each  Common  Share
immediately  prior to such event by a fraction  the  numerator of which shall be
the  total  number  of  Common  Shares  outstanding  immediately  prior  to  the
occurrence of the event and the  denominator  of which shall be the total number
of Common Shares outstanding immediately following the occurrence of such event.

            Section  12.  Certificate  of Adjusted  Purchase  Price or Number of
Shares.  Whenever an  adjustment  is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate  setting forth such adjustment,
and a  brief  reasonably  detailed  statement  of the  facts,  computations  and
methodology of accounting giving rise to such adjustment, (b) promptly file with
the Rights Agent and with each transfer  agent for the Preferred  Shares and the
Common Shares a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right  Certificate (or, if prior to the  Distribution  Date, to
each holder of a certificate  representing Common Shares,  provided that no such
summary need be mailed to such holders with respect to adjustments made pursuant
to Section 11(p) prior to the  Distribution  Date) in accordance with Section 25
hereof.  Notwithstanding the foregoing  sentence,  the failure of the Company to
make such  certification or give such notice shall not affect the validity of or
the force or effect of the requirement for such adjustment. Any adjustment to be
made  pursuant to Sections  11 and 13 shall be  effective  as of the date of the
event giving rise to such adjustment.  The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained.

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

            (a) In the event  that,  directly or  indirectly,  after there is an
Acquiring  Person,  (i) the Company  shall  consolidate  with, or merge with and
into,  any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section  11(o)),  and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (ii) any Person (other
than a Subsidiary  of the Company in a transaction  which  complies with

                                      -17-
<PAGE>

Section 11(o)) shall  consolidate  with the Company,  or merge with and into the
Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such  consolidation or merger, all or part of the
Common Shares shall be changed into or exchanged  for stock or other  securities
of any other Person or cash or any other  property,  or (iii) any Person  (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o))  shall  acquire  all or a majority  of the Common  Shares of the  Company
pursuant  to a statutory  plan of  exchange,  or (iv) the Company  shall sell or
otherwise  transfer (or one or more of its Subsidiaries  shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating more
than  50  percent  of the  assets  or  earning  power  of the  Company  and  its
Subsidiaries  (taken as a whole) to any other Person or Persons  (other than the
Company or one or more of its wholly owned Subsidiaries) (any event described in
clauses  (i),  (ii),  (iii) or (iv) of this  Section  13(a)  being a "Section 13
event"), then, and in each such case, proper provision shall be made so that (A)
each  holder of a Right,  except as  provided  in  Section  7(f)  hereof,  shall
thereafter  have  the  right  to  receive,  upon  the  exercise  thereof  at the
then-current Purchase Price in accordance with the terms of this Agreement, such
number of validly  authorized and issued,  fully paid and  nonassessable  Common
Shares of the Principal Party (as hereinafter defined) which Common Shares shall
not be subject to any liens,  encumbrances,  rights of first  refusal,  transfer
restrictions or other adverse  claims,  as shall be equal to the result obtained
by  (1)  multiplying  the  then-current  Purchase  Price  by the  number  of one
one-hundredths   of  a  Preferred  Share  for  which  a  Right  was  exercisable
immediately  prior to the first  occurrence  of a  Section  13 event  (or,  if a
Section 11(a)(ii) event has occurred prior to the Section 13 event,  multiplying
the  number  of such  one  one-hundredths  of a  share  for  which  a Right  was
exercisable  immediately prior to the first occurrence of such Section 11(a)(ii)
event  by  the  Purchase  Price  in  effect  immediately  prior  to  such  first
occurrence),  and  dividing  that  product by (2) 50 percent of the  current per
share market price  (determined in accordance with Section  11(d)(i)  hereof) of
the Common Shares of such Principal  Party on the date of  consummation  of such
Section 13 event;  (B) such Principal Party shall  thereafter be liable for, and
shall  assume,  by  virtue  of such  consolidation,  merger,  statutory  plan of
exchange,  sale or  transfer,  all the  obligations  and  duties of the  Company
pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to
refer  to  such  Principal  Party,  it  being  specifically  intended  that  the
provisions of Section 11 hereof shall apply only to such  Principal  Party after
the first  occurrence of a Section 13 event; (D) such Principal Party shall take
such steps  (including,  but not limited  to, the  reservation  of a  sufficient
number of shares  of its  Common  Shares  in  accordance  with  Section 9 hereof
applicable  to the  reservation  of  capital  shares)  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;  and (E)
the provisions of Section  11(a)(ii) shall be of no further effect following the
first occurrence of any Section 13 event.

            (b)   "Principal Party" shall mean:

                  (i) in the case of any  transaction  described  in clause (i),
      (ii) or (iii) of Section  13(a),  (A) the Person that is the issuer of any
      securities  into which Common  Shares of the Company are converted in such
      merger or  consolidation or for which they are exchanged in such statutory
      plan of exchange, or, if there is more than one such issuer, the issuer of
      Common  Shares  that  has  the  highest  aggregate  current  market  price
      (determined in accordance with Section 11(d)) and (B) if no securities are
      so  issued,   the

                                      -18-
<PAGE>

      Person that is the other party to such merger,  consolidation or statutory
      plan of exchange,  or, if there is more than one such  Person,  the Person
      the Common Shares of which has the highest  aggregate current market price
      (determined in accordance with Section 11(d)); and

                  (ii) in the case of any  transaction  described in clause (iv)
      of Section  13(a),  the Person  that is the party  receiving  the  largest
      portion  of the  assets or  earning  power  transferred  pursuant  to such
      transaction  or  transactions,  or, if each Person that is a party to such
      transaction  or  transactions  receives  the same portion of the assets or
      earning power transferred  pursuant to such transaction or transactions or
      if the Person receiving the largest portion of the assets or earning power
      cannot be determined,  whichever Person the Common Shares of which has the
      highest  aggregate  current market price  (determined  in accordance  with
      Section 11(d));

provided,  however,  that in any such  case,  (A) if the  Common  Shares of such
Person  are not  securities  that at such  time  are and  continuously  over the
preceding  twelve-month  period  have been  registered  under  Section 12 of the
Exchange Act ("Registered Common Shares"),  or such Person is not a corporation,
and such Person is a direct or indirect  Subsidiary  of another  Person that has
Registered  Common  Shares  outstanding,  "Principal  Party" shall refer to such
other Person;  (B) if the Common Shares of such Person are not Registered Common
Shares  or such  Person  is not a  corporation,  and such  Person is a direct or
indirect Subsidiary of another Person but is not a direct or indirect Subsidiary
of another Person which has  Registered  Common Shares  outstanding,  "Principal
Party" shall refer to the ultimate parent entity of such first-mentioned Person;
(C) if the Common Shares of such Person are not Registered Common Shares or such
Person  is  not a  corporation,  and  such  Person  is  directly  or  indirectly
controlled  by more than one Person,  and one or more of such other  Persons has
Registered Common Shares outstanding, "Principal Party" shall refer to whichever
of such other Persons is the issuer of the  Registered  Common Shares having the
highest  aggregate  current market price  (determined in accordance with Section
11(d));  and (D) if the Common Shares of such Person are not  Registered  Common
Shares or such  Person is not a  corporation,  and such  Person is  directly  or
indirectly  controlled  by more than one Person,  and none of such other Persons
have  Registered  Common Shares  outstanding,  "Principal  Party" shall refer to
whichever  ultimate  parent  entity  is  the  corporation  having  the  greatest
shareholders'  equity or, if no such ultimate  parent  entity is a  corporation,
shall  refer to  whichever  ultimate  parent  entity is the  entity  having  the
greatest net assets.

            (c) The Company shall not consummate any such consolidation, merger,
statutory  plan of exchange,  sale or transfer  unless prior thereto the Company
and  Principal  Party shall have  executed  and  delivered to the Rights Agent a
supplemental  agreement  confirming  that (i) such Principal  Party shall,  upon
consummation of such consolidation,  merger,  statutory plan of exchange or sale
or transfer of assets or earning power, assume this Agreement in accordance with
Sections 13(a) and (b), (ii) all rights of first refusal or preemptive rights in
respect of the issuance of Common Shares of such  Principal  Party upon exercise
of  outstanding  Rights have been waived,  (iii) any provision of the authorized
securities  of  such  Principal  Party  or  of  its  charter,  bylaws  or  other
instruments  governing its corporate affairs which would obligate such Principal
Party to issue in connection with, or as a consequence of, the consummation of a
transaction  referred to in Section 13(a), Common Shares of such Principal Party
at less than the then-current  per share market price  (determined in accordance
with Section 11(d)(i)) or securities

                                      -19-
<PAGE>

exercisable  for, or  convertible  into,  such  Common  Shares at less than such
then-current  per  share  market  price  (other  than to the  holders  of Rights
pursuant  to this  Section  13) have  been  waived  or  canceled,  and (iv) such
transaction  shall not result in a default by such  Principal  Party  under this
Agreement and further  providing that, as soon as practicable  after the date of
any  consolidation,  merger,  statutory  plan of exchange or sale or transfer of
assets or earning power referred to in Section 13(a), such Principal Party will:

                  (A)  prepare  and  file a  registration  statement  under  the
      Securities  Act of 1933,  as amended,  with  respect to the Rights and the
      securities purchasable upon exercise of the Rights on an appropriate form,
      use its best  efforts  to cause  such  registration  statement  to  become
      effective  as soon as  practicable  after  such  filing  and use its  best
      efforts to cause such  registration  statement to remain effective (with a
      prospectus at all times meeting the  requirements of the Securities Act of
      1933,  as amended)  until the Final  Expiration  Date of the  Rights,  and
      similarly comply with applicable state securities laws;

                  (B) use its best  efforts to list (or continue the listing of)
      the Rights and the securities  purchasable  upon exercise of the Rights or
      to meet the eligibility  requirements for quotation of the Rights and such
      securities on NASDAQ or other system then in use; and

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

            In the  event  that at any time  after the  occurrence  of a Section
11(a)(ii)  event hereof some or all of the Rights shall not have been  exercised
at the time of a Section 13 event,  the Rights which have not  theretofore  been
exercised  shall  thereafter be exercisable  in the manner  described in Section
13(a)  (without  taking into  account any prior  adjustment  required by Section
1l(a)(ii)).

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

            (e)  Notwithstanding  anything in this  Agreement  to the  contrary,
Section  13 shall  not be  applicable  to a  transaction  described  in  Section
13(a)(i), (ii) or (iii) if: (i) such transaction is consummated with a Person or
Persons who  acquired  shares of Common Stock  pursuant to a  Sanctioned  Tender
Offer (or with a wholly owned  Subsidiary  of any such Person or Persons),  (ii)
the price per  Common  Share  offered in such  transaction  is not less than the
price per Common  Share paid to all holders of Common  Shares  whose shares were
purchased  pursuant  to such  Sanctioned  Tender  Offer,  and  (iii) the form of
consideration  being offered to the remaining  holders of Common Shares pursuant
to such  transaction is the same as the form of  consideration  paid pursuant to
such  Sanctioned  Tender  Offer.  Upon  consummation  of  any  such  transaction
contemplated by this Section 13(e), all Rights shall expire.

            Section 14.  Fractional Rights and Fractional Shares.

            (a) The Company  shall not be required to issue  fractions of Rights
or to distribute Right  Certificates  which evidence  fractional Rights (i. e. ,
Rights to acquire  less than

                                      -20-
<PAGE>

one  one-hundredth of a Preferred  Share). If the Company shall determine not to
issue such fractional  Rights,  there shall be paid to the registered holders of
the  Right  Certificates  with  regard to which  such  fractional  Rights  would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current  market value of a whole Right.  For the purposes of this Section 14(a),
the current  market  value of a whole  Right  shall be the closing  price of the
Rights  for  the  Trading  Day  immediately  prior  to the  date on  which  such
fractional Rights would have been otherwise issuable.  The closing price for any
Trading  Day shall be  determined  in the same manner as set forth in the second
sentence  of  Section  11(d)(i)  with  respect to the  closing  price for Common
Shares.

            (b)  The  Company  shall  not be  required  to  issue  fractions  of
Preferred  Shares  (other than  fractions  which are  integral  multiples of one
one-hundredth  of a  Preferred  Share)  upon  exercise  of  the  Rights,  or  to
distribute  certificates which evidence fractional  Preferred Shares (other than
fractions  which are  integral  multiples  of one  one-hundredth  of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one one-hundredth
of a  Preferred  Share may, at the  election of the  Company,  be  evidenced  by
depositary  receipts,  pursuant to an appropriate  agreement between the Company
and a depositary selected by it, provided that such agreement shall provide that
the holders of such  depositary  receipts shall have all the rights,  privileges
and preferences to which they are entitled as beneficial owners of the Preferred
Shares.  With  respect to  fractional  Preferred  Shares  that are not  integral
multiples of one  one-hundredth  of a Preferred  Share,  if the Company does not
issue  fractional  shares or depositary  receipts in lieu  thereof,  the Company
shall  pay to the  registered  holders  of Right  Certificates  at the time such
Rights  are  exercised  as herein  provided  an amount in cash equal to the same
fraction of the current market value of one  one-hundredth of a Preferred Share.
For  purposes  of  this  Section   14(b),   the  current  market  value  of  one
one-hundredth  of a Preferred  Share shall be one  one-hundredth  of the closing
price of a Preferred Share (as determined in the same manner as set forth in the
second sentence of Section 11(d)(i) with respect to the closing price for Common
Shares) for the Trading Day immediately prior to the date of such exercise.

            (c)  Following  the  occurrence  of a Section  11(a)(ii)  event or a
Section 13 event, the Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute  certificates which evidence
fractional Common Shares.  In lieu of fractional Common Shares,  the Company may
pay to the registered  holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current  market value of one Common Share.  For purposes of this Section  14(c),
the current  market value of one Common Share shall be the closing  price of one
Common Share (as determined pursuant to the second sentence of Section 11(d)(i))
for the Trading Day immediately prior to the date of such exercise.

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

            Section  15.  Rights of  Action.  All rights of action in respect of
this  Agreement,  excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective  registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or,

                                      -21-
<PAGE>

prior to the  Distribution  Date, of the Common Shares),  without the consent of
the Rights Agent or of the holder of any other Right  Certificate  (or, prior to
the Distribution Date, of the Common Shares), may in the holder's own behalf and
for the holder's own benefit,  enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of,  the  holder's  right  to  exercise  the  Rights  evidenced  by  such  Right
Certificate  in the  manner  provided  in  such  Right  Certificate  and in this
Agreement.  Without  limiting the  foregoing  or any  remedies  available to the
holders of Rights,  it is specifically  acknowledged  that the holders of Rights
would not have an adequate  remedy at law for any breach of this  Agreement  and
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.

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

            (a) prior to the Distribution Date, the Rights shall be evidenced by
the certificates for Common Shares  registered in the name of the holders of the
Common  Shares  (which  certificates  for Common  Shares  shall also  constitute
certificates for Rights) and each Right will be transferable  only in connection
with the transfer of the Common Shares;

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

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

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

            Section 17. Right Holders and Right  Certificate  Holders Not Deemed
Shareholders.  No holder,  as such, of any Right or Right  Certificate  shall be
entitled to vote,  receive  dividends or be deemed for any purpose the holder of
the number of one one-hundredths

                                      -22-
<PAGE>

of a Preferred  Share or any other  securities  of the Company  which may at any
time be issuable on the exercise of the Rights  represented  thereby,  nor shall
anything  contained  herein or in any Right  Certificate  be construed to confer
upon the holder of any Right or Right Certificate, as such, any of the rights of
a shareholder  of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof,  or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting  shareholders  (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.

            Section 18.  Concerning the Rights Agent.

            (a)  The  Company  agrees  to  pay to the  Rights  Agent  reasonable
compensation  for all services  rendered by it hereunder and, from time to time,
on demand of the Rights  Agent,  its  reasonable  expenses  and counsel fees and
other   disbursements   incurred  in  the  preparation,   delivery,   amendment,
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,  damage,  judgment,
fine, penalty,  claim,  demand,  settlement,  cost or expense,  incurred without
gross  negligence,  bad faith or  willful  misconduct  on the part of the Rights
Agent,  for anything done or omitted by the Rights Agent in connection  with the
execution,  acceptance and administration of this Agreement and the exercise and
performance hereunder of its duties,  including without limitation the costs and
expenses of defending  against any claim of liability.  The  indemnity  provided
herein shall  survive  termination  of this  Agreement and the  termination  and
expiration  of the Rights.  The costs and expenses  incurred in  enforcing  this
right of indemnification shall be paid by the Company.  Anything to the contrary
notwithstanding,  in no event  shall the  Rights  Agent be liable  for  special,
punitive,  indirect,  consequential  or  incidental  loss or  damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the possibility of such loss or damage. Any liability of the
Rights Agent under this  Agreement will be limited to the amount of fees paid by
the Company to the Rights Agent hereunder.

            (b) The Rights Agent shall be  authorized  and  protected  and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection  with its  acceptance and  administration  of this Agreement in
reliance upon any Right  Certificate or certificate for the Preferred  Shares or
Common Shares or for other  securities of the Company,  instrument of assignment
or  transfer,  power  of  attorney,  endorsement,   affidavit,  letter,  notice,
direction, consent, certificate,  statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged,  by the proper person or persons.  The Rights Agent shall be fully
protected  in  relying on any such  certificate  and on any  adjustment  therein
contained.  The  Rights  Agent  shall  not be  deemed to have any duty or notice
unless and until the Company has provided the Rights Agent with written notice.

            Section  19.  Merger  or  Consolidation  or Change of Name of Rights
Agent.

            (a) Any  corporation  (which  term  shall for the  purposes  of this
Agreement include a national banking association) 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

                                      -23-
<PAGE>

any merger or  consolidation  to which the Rights Agent or any successor  Rights
Agent shall be a party, or any corporation  succeeding to the corporate trust or
stock transfer business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement  without the execution
or  filing  of any paper or any  further  act on the part of any of the  parties
hereto,  provided that such  corporation  would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21.

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

            Section 20. Duties of Rights Agent.  The Rights Agent undertakes the
duties and  obligations  expressly  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  (who may be
legal counsel for the Company),  and the advice or opinion of such counsel shall
be full and complete  authorization  and  protection to the Rights Agent and the
Rights  Agent shall incur no  liability  for or in respect of any action  taken,
suffered  or omitted by it in good faith and in  accordance  with such advice or
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 (including,  without limitation,  the identity of
any Acquiring Person and the  determination of "current per share market price")
may be deemed to be conclusively  proved and established by a certificate signed
by any one of the Chairman of the Board, the President,  any Vice President, the
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the  Rights  Agent;  and such  certificate  shall be full  authorization  and
protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted 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 and
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  contained in this Agreement or in the Right
Certificates (except its countersignature  thereof) or be required to verify the
same, but all such  statements and recitals are and shall be deemed to have been
made by the Company only.

            (e) The  Rights  Agent  shall  not be under  any  responsibility  in
respect of the validity of this  Agreement or the execution and delivery  hereof
(except  the due  authorization,

                                      -24-
<PAGE>

execution and delivery hereof by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its countersignature thereof); nor
shall it be  responsible  for any  breach  by the  Company  of any  covenant  or
condition contained in this Agreement or in any Right Certificate;  nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights  becoming  null and void  pursuant  to  Section  7(f)) or any  adjustment
required under the provisions of Sections 11 or 13 (including the manner, method
or amount  thereof) or the  ascertaining  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 receipt by the Rights Agent of the
certificate  describing any such  adjustment as contemplated by Section 12); nor
shall it by any act hereunder be deemed to make any  representation  or warranty
as to the  authorization  or  reservation  of any Preferred  Shares to be issued
pursuant  to this  Agreement  or any  Right  Certificate  or as to  whether  any
Preferred Shares will, when issued, be validly authorized and issued, fully paid
and nonassessable.

            (f) The Company  agrees that it will perform,  execute,  acknowledge
and deliver or cause to be performed,  executed,  acknowledged and delivered all
such further and other acts,  instruments  and  assurances as may  reasonably be
required by the Rights Agent 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,  the  President,  any Vice  President,  the
Secretary, any Assistant Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions  in connection with its duties,  and
such  instructions  shall be final  authorization  and  protection to the Rights
Agent and the Rights  Agent  shall incur no  liability  for or in respect of any
action taken,  suffered or omitted to be taken by it in good faith in accordance
with written instructions of any such officer. The Rights Agent may conclusively
rely on the most recent written instructions given by any such officer.

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

            (i) The Rights  Agent may execute and  exercise any of the rights or
powers hereby vested in it or perform any duty hereunder  either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct,  absent gross negligence, bad faith or willful misconduct
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 or in the exercise of its rights  hereunder if
the Rights Agent shall have  reasonable  grounds

                                      -25-
<PAGE>

for believing that repayment of such funds or adequate  indemnification  against
such risk or liability is not reasonably assured to it.

            (k) If, with  respect to any Right  Certificate  surrendered  to the
Rights Agent for exercise or transfer, the certificate included with the form of
assignment  or form of election to purchase,  as the case may be, has either not
been  completed,  not signed or  indicates an  affirmative  response to clause 1
and/or 2 thereof,  the  Rights  Agent  shall not take any  further  action  with
respect to such requested exercise or transfer without first consulting with the
Company. If such certificate has been completed and signed, the Rights Agent may
assume  without  further  inquiry that the Right  Certificate  is not owned by a
person  described in Section 7(f) and shall not be charged with any knowledge to
the contrary.

            Section  21.  Change  of  Rights  Agent.  The  Rights  Agent  or any
successor  Rights Agent may resign and be discharged  from its duties under this
Agreement  upon 30 days  notice in  writing  mailed to the  Company  and to each
transfer  agent of the  Common  Shares and  Preferred  Shares by  registered  or
certified  mail,  and to the holders of the Right  Certificates  by  first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the  case  may be,  and to each  transfer  agent  of the  Common  Shares  and
Preferred  Shares 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 holder of a Right Certificate
(who  shall,  with such  notice,  submit such  holder's  Right  Certificate  for
inspection by the  Company),  then the Company shall become the Rights Agent and
the  registered  holder  of any  Right  Certificate  may  apply to any  court of
competent  jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent,  whether appointed by the Company or by such a court, shall be (a)
a Person organized and doing business under the laws of the United States or any
state,  in good  standing,  which 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 $100 million,  or (b) an
affiliate  of a  corporation  described  in clause (a) of this  sentence.  After
appointment,  the  successor  Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent  without  further  act or deed;  but the  predecessor  Rights  Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance,  conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment,  the  Company  shall  file  notice  thereof  in  writing  with  the
predecessor  Rights  Agent and each  transfer  agent of the  Common  Shares  and
Preferred Shares, 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 21,  however,  or any defect  therein,  shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor  Rights Agent,  as the case may be. 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  countersigned but not delivered,  any such
successor Rights Agent may adopt the  countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned;  and if at that time
any of the Right Certificates shall not have been

                                      -26-
<PAGE>

countersigned,   any  successor   Rights  Agent  may   countersign   such  Right
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the  successor  Rights Agent;  and in all such cases such Right  Certificates
shall  have  the full  force  provided  in the  Right  Certificates  and in this
Agreement.

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

            Section 23.  Redemption and Termination.

            (a) The  Company  may,  at its  option,  by  action  of the Board of
Directors  at any time prior to the Close of  Business on the earlier of (i) the
10th day  following  the Shares  Acquisition  Date or (ii) the Final  Expiration
Date,  redeem  all,  but not less than  all,  the then  outstanding  Rights at a
redemption  price of  $.0025  per  Right  as such  amount  may be  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or similar  transaction
occurring  after  the date  hereof  (such  redemption  price  being  hereinafter
referred to as the "Redemption Price").

            (b) In the  event  that if,  following  the  occurrence  of a Shares
Acquisition  Date and following the expiration of the right of redemption  under
Section  23(a),  but  prior to any  Section  13  event,  (i) a Person  who is an
Acquiring  Person  or an  Affiliate  or  Associate  of such  Person  shall  have
transferred  or  otherwise  disposed  of  a  number  of  Common  Shares  in  one
transaction, or a series of transactions (not directly or indirectly involving a
purchase by the Company or any of its Subsidiaries), which did not result in the
occurrence of a Section  11(a)(ii)  event or a Section 13 event,  such that such
Person is thereafter a Beneficial Owner of 10 percent or less of the outstanding
Common  Shares of the  Company,  (ii)  there are no other  Persons,  immediately
following  the  transfer or other  disposition  described in clause (i), who are
Acquiring  Persons,  and (iii) the  transfer or other  disposition  described in
clause (i) was other than pursuant to a transaction,  or series of transactions,
which  directly or indirectly  involved the Company or any of its  Subsidiaries;
then the right of redemption  provided in Section 23(a) shall be reinstated  and
thereafter  all  outstanding  Rights shall again be subject to the provisions of
this Section 23.

                                      -27-
<PAGE>

Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be  exercisable  while the Rights are subject to any right of  redemption by the
Company under this Agreement.

            (c) Immediately  upon the action of the Board of Directors  ordering
the redemption of the Rights,  or at such time and date  thereafter as the Board
of Directors may specify, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption  Price.  Promptly after
the action of the Board of Directors  ordering the redemption of the Rights, the
Company  shall  give  notice  of such  redemption  to the  holders  of the  then
outstanding  Rights by  mailing  such  notice to all such  holders at their last
addresses as they appear upon the  registry  books of the Rights Agent or, prior
to the  Distribution  Date, on the registry  books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption  will state the method by which the payment of the  Redemption  Price
will be made.  Neither the Company nor any of its  Affiliates or Associates  may
redeem,  acquire or purchase  for value any Rights in any manner other than that
specifically set forth in this Section 23, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.

            Section 24.  Exchange.

            (a) The  Company  may,  at its  option,  by  action  of the Board of
Directors,  at any time after any Person becomes an Acquiring  Person,  exchange
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  7(f)) for Common  Shares at an exchange  ratio of one Common  Share per
Right,  appropriately  adjusted to reflect any stock  split,  stock  dividend or
similar  transaction  occurring after the date hereof (such exchange ratio being
herein referred to as the "Exchange Ratio").  Notwithstanding the foregoing, the
Board of Directors  shall not be  empowered to effect such  exchange at any time
after any Person (other than the Company,  any  Subsidiary  of the Company,  any
Plan of the Company or of a  Subsidiary  of the Company,  or any Person  holding
Common Shares for or pursuant to the terms of any such Plan),  together with all
Affiliates  and Associates of such Person,  becomes the  Beneficial  Owner of 50
percent or more of the Common Shares then outstanding.

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

                                      -28-
<PAGE>

effected  pro rata based on the number of Rights  (other than Rights  which have
become void  pursuant to the  provisions  of Section  7(f)  hereof) held by each
holder of Rights.

            (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b)) for Common Shares  exchangeable for Rights, at
the  initial  rate of one  one-hundredth  of a  Preferred  Share (or  equivalent
preferred  share) for each Common Share,  as  appropriately  adjusted to reflect
adjustments in the voting rights of the Preferred  Shares  pursuant to the terms
thereof,  so that the  fraction of a Preferred  Share  delivered in lieu of each
Common Share shall have at least the same voting rights as one Common Share.

            (d) The Company  shall not be required to issue  fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional  shares, the Company shall pay to the registered holders
of the Right  Certificates  with regard to which such  fractional  shares  would
otherwise  be  issuable  an amount  in cash  equal to the same  fraction  of the
current  market value of a whole Common Share.  For the purposes of this Section
24(d), the current market value of a whole share shall be the closing price of a
Common  Share  determined  in the  manner set forth in the  second  sentence  of
Section  11(d)(i)  with respect to the closing  price for Common  Shares for the
Trading Day  immediately  prior to the date of action by the Board of  Directors
ordering the exchange.

            Section 25.  Notice of Certain Events.

            (a) In case  the  Company  shall  propose,  at any  time  after  the
Distribution  Date,  (i) to declare or pay any dividend  payable in stock of any
class to the holders of its Preferred  Shares or to make any other  distribution
to the holders of its  Preferred  Shares  (other than a regular  quarterly  cash
dividend),  or (ii) to offer to the  holders of its  Preferred  Shares  options,
rights or warrants to  subscribe  for or to purchase  any  additional  Preferred
Shares  or  shares  of stock of any  class or any  other  securities,  rights or
options, or (iii) to effect any  reclassification of its Preferred Shares (other
than a reclassification  involving only the subdivision of outstanding Preferred
Shares),  or (iv) to effect any  consolidation or merger into or with, to effect
any exchange of the Common Shares of the Company pursuant to a statutory plan of
exchange 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 percent  of the  assets or  earning  power of the
Company and its Subsidiaries  (taken as a whole) to, any other Person or Persons
(other than the Company and/or any of its  Subsidiaries  in a transaction  which
complies with Section 11(o)),  or (v) to effect the liquidation,  dissolution or
winding up of the Company,  then,  in each such case,  the Company shall give to
the Rights Agent and to each holder of a Right  Certificate,  in accordance with
Section 26, a notice of such  proposed  action,  which shall  specify the record
date for the  purposes  of such stock  dividend,  or  distribution  of rights or
warrants,  or the date on which such  reclassification,  consolidation,  merger,
statutory plan of exchange, sale, transfer, liquidation,  dissolution or winding
up is to take  place and the date of  participation  therein  by the  holders of
record of the Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action  covered by clause (i) or (ii) above
at least 20 days  prior  to the  record  date  for  determining  holders  of the
Preferred Shares 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

                                      -29-
<PAGE>

Preferred  Shares,  whichever  shall be the earlier.  The failure to give notice
required by this Section 25 or any defect  therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.

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

            Section 26. Notices. Notices or demands authorized by this Agreement
to be  given  or  made  by the  Rights  Agent  or by  the  holder  of any  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:

                  Willamette Industries, Inc.
                  1300 S. W.  Fifth Avenue, Suite 3800
                  Portland, Oregon 97201
                  Attention:  Corporate Secretary

Subject to the provisions of Section 21 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)  to the  principal  office of the Rights
Agent as follows:

                  ChaseMellon Shareholder Services, L.L.C.
                  520 Pike Street, Suite 1220
                  Seattle, Washington 98101
                  Attention:  Dennis Treibel

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

            Section 27.  Supplements and Amendments.

            (a) Prior to the Distribution Date, the Company may by action of the
Board of  Directors,  and the Rights  Agent  shall if the  Company  so  directs,
supplement  or amend any provision of this  Agreement in any manner  without the
approval of any holders of Common Shares.  From and after the Distribution Date,
the Company may by action of the Board of Directors,  and the Rights Agent shall
if  directed  by the  Company,  from  time to time,  supplement  or  amend  this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any  ambiguity,  (ii) to correct or supplement  any provision  contained
herein which may be

                                      -30-
<PAGE>

defective or inconsistent with any other provisions herein,  (iii) to shorten or
lengthen  any time  period  herein  or (iv) to change  or  supplement  any other
provisions,  hereunder  in any  manner  which  the Board of  Directors  may deem
necessary or desirable so long as the  interests of the holders of the Rights or
Right Certificates (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person) shall not be materially and adversely  affected thereby;
provided,  however,  this  Agreement  may  not be  supplemented  or  amended  to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period governing
redemption of the Rights if the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting,  enhancing
or  clarifying  the rights of,  and/or the  benefits  to, the  holders of Rights
(other than an  Acquiring  Person or any  Affiliate or Associate of an Acquiring
Person).  Anything to the contrary  notwithstanding,  the Rights Agent cannot be
required  to change or  increase  its duties and  obligations  hereunder  unless
expressly  consented to in writing by the Rights  Agent.  Upon the delivery of a
certificate  from an  appropriate  officer of the Company  which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27(a),  the Rights Agent shall execute such  supplement or amendment;  provided,
however,  that the Rights Agent may,  but shall not be obligated  to, enter into
any such  supplement  or  amendment  which  affects  its own  rights,  duties or
immunities under this Agreement.  Prior to the Distribution  Date, the interests
of the holders of Rights shall be deemed  coincident  with the  interests of the
holders of the Common Shares of the Company.

            (b) After the  Distribution  Date and  prior to the  earlier  of the
Redemption Date or the Final  Expiration  Date, the Company shall not effect any
amendment  to  the  provisions  of  the  Company's   Articles  of  Incorporation
respecting the Preferred  Shares which would materially and adversely affect the
preferences,  limitations and relative rights of the Preferred  Shares,  without
the prior approval of the holders of two-thirds or more of the then  outstanding
Rights.

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

            Section 29.  Benefits of 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 of the Company) any legal or equitable right,  remedy or
claim  under  this  Agreement;  but  this  Agreement  shall  be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right  Certificates  (and, prior to the Distribution Date, the Common Shares
of the Company).

            Section  30.  Severability.  If any  term,  provision,  covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors  determines  in its good faith  judgment  that  severing  the  invalid
language from this  Agreement  would  adversely  affect the purpose or effect of
this  Agreement,  the  right of  redemption  set  forth in  Section  23 shall be
reinstated  and

                                      -31-
<PAGE>

shall not expire until the Close of Business on the tenth day following the date
of such determination by the Board of Directors.

            Section 31.  Determinations  and Actions by the Board of  Directors,
etc. Except as otherwise  specifically  provided herein,  the Board of Directors
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
to the Company,  or as may be necessary  or advisable in the  administration  of
this  Agreement,  including,  without  limitation,  the  right  and power (a) to
interpret the  provisions of this  Agreement and (b) to make all  determinations
deemed necessary or advisable for the administration of this Agreement. All such
actions,  calculations,   interpretations  and  determinations  (including,  for
purposes of clause (ii) below,  all  omissions  with  respect to the  foregoing)
which  are done or made by the Board of  Directors  in good  faith  shall (i) be
final,  conclusive and binding on the Company,  the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board of Directors or
any member thereof to any liability to the holders of the Rights.

            Section 32. Governing Law. This Agreement and each Right Certificate
issued  hereunder  shall be deemed to be a  contract  made under the laws of the
state of Oregon and for all  purposes  shall be  governed  by and  construed  in
accordance  with the laws of such state  applicable  to contracts to be made and
performed entirely within such state.

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

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

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

                              WILLAMETTE INDUSTRIES, INC.

                              By: /s/ G. W. Hawley

                              Name:  G. W. Hawley

                              Title:  Executive   Vice   President   and   Chief
                                      Financial Officer


                              CHASEMELLON SHAREHOLDER SERVICES, L.L.C.

                              By:  /s/ Dennis Treibel

                              Name:  Dennis Treibel

                              Title:  Assistant Vice President


                                      -32-
<PAGE>
                                                                       Exhibit A

                            RIGHTS AND PREFERENCES OF
                  SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

            Section  1.  Designation  and  Amount.  There  shall be a series  of
Preferred Stock of the corporation which shall be designated as "Series B Junior
Participating Preferred Stock, $.50 par value" (the "Series B Preferred Stock"),
and the number of shares  constituting  such  series  shall be  1,500,000.  Such
number of shares may be increased or decreased by Articles of Amendment  adopted
by the Board of Directors without shareholder action; provided, however, that no
decrease  shall  reduce  the number of shares of Series B  Preferred  Stock to a
number less than the shares  outstanding plus the number of shares issuable upon
exercise  of  outstanding  rights,  options or warrants  or upon  conversion  of
outstanding securities issued by the corporation.

            Section 2.  Dividends and Distributions.

            (A) Subject to the prior and  superior  rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the Series
B Preferred  Stock with respect to dividends,  the holders of shares of Series B
Preferred  Stock,  in preference to the holders of shares of Common Stock,  $.50
par value  ("Common  Stock") of the  corporation  and of any other  junior stock
which may be outstanding, shall be entitled to receive, when, as and if declared
by the Board of Directors  out of funds legally  available for the purpose,  (i)
quarterly  dividends payable in cash on the last day of March,  June,  September
and  December  in each  year  (each  such  date  being  referred  to herein as a
"Quarterly  Dividend Payment Date"),  commencing on the first Quarterly Dividend
Payment  Date  after the first  issuance  of a share or  fraction  of a share of
Series B Preferred  Stock,  in an amount per share (rounded to the nearest cent)
equal to the  greater of (a) $1.00 per share  ($.01 per one  one-hundredth  of a
share),  or (b) subject to the provision for adjustment  hereinafter  set forth,
100 times the aggregate per share amount of all cash  dividends  declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or,
with  respect to the first  Quarterly  Dividend  Payment  Date,  since the first
issuance of any share or fraction  of a share of Series B Preferred  Stock,  and
(ii) subject to the provision for adjustment  hereinafter  set forth,  quarterly
distributions  (payable in kind) on each Quarterly  Dividend  Payment Date in an
amount  per  share  equal to 100  times the  aggregate  per share  amount of all
noncash  dividends  or other  distributions  (other  than a dividend  payable in
shares of Common  Stock or a  subdivision  of the  outstanding  shares of Common
Stock, by reclassification or otherwise), declared on the Common Stock since the
immediately  preceding  Quarterly  Dividend Payment Date, or with respect to the
first Quarterly  Dividend  Payment Date since the first issuance of any share or
fraction of a share of Series B Preferred  Stock.  In the event the  corporation
shall at any time after  February  25,  2000 (the  "Rights  Declaration  Date"),
declare or pay any dividend on Common Stock  payable in shares of Common  Stock,
or effect a subdivision  or  combination  or  consolidation  of the  outstanding
shares of Common  Stock (by  reclassification  or  otherwise)  into a greater or
lesser  number of shares of Common  Stock,  then in each such case the amount to
which holders of shares of Series B Preferred  Stock are entitled  under clauses
(i)(b) or (ii) of the preceding  sentence shall be adjusted by multiplying  such
amount by a fraction  the  numerator  of which is the number of shares of Common
Stock

                                      A-1
<PAGE>

outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

            (B) The corporation  shall declare a dividend or distribution on the
Series B  Preferred  Stock as  provided  in Section  2(A)  immediately  after it
declares a dividend or  distribution  on the Common Stock (other than a dividend
payable in shares of Common  Stock);  provided that, in the event no dividend or
distribution  shall have been  declared  on the Common  Stock  during the period
between any Quarterly  Dividend  Payment Date and the next subsequent  Quarterly
Dividend Payment Date, a dividend of $1.00 per share ($.01 per one one-hundredth
of a share) on the Series B Preferred Stock shall  nevertheless be payable,  out
of funds  legally  available  for such  purpose,  on such  subsequent  Quarterly
Dividend Payment Date.

            (C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series B Preferred  Stock,  unless
the date of issue of such  shares  is  prior to the  record  date for the  first
Quarterly  Dividend  Payment Date, in which case  dividends on such shares shall
begin to accrue  and be  cumulative  from the date of issue of such  shares,  or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series B Preferred
Stock  entitled  to  receive a  quarterly  dividend  and before  such  Quarterly
Dividend  Payment Date, in either of which events such dividends  shall begin to
accrue and be cumulative from such Quarterly  Dividend Payment Date. Accrued but
unpaid  dividends shall cumulate but shall not bear interest.  Dividends paid on
the shares of Series B Preferred  Stock in an amount less than the total  amount
of such  dividends  at the time  accrued  and  payable on such  shares  shall be
allocated pro rata on a  share-by-share  basis among all such shares at the time
outstanding.  The Board of Directors may fix a record date for the determination
of holders of shares of Series B Preferred  Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 30 days prior to the date fixed for the payment thereof.

            Section  3.  Voting  Rights.  The  holders  of  shares  of  Series B
Preferred Stock shall have the following voting rights:

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

                                      A-2
<PAGE>

            (B) Except as otherwise provided in the Articles of Incorporation or
in this amendment thereof or by law, the holders of shares of Series B Preferred
Stock and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of the shareholders of the corporation.

            (C) Except as otherwise provided in the Articles of Incorporation or
in this amendment  thereof or by law,  holders of Series B Preferred Stock shall
have no special voting rights and their consent shall not be required for taking
any corporate action.

            Section 4.  Certain Restrictions.

            (A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared,  on shares of Series B Preferred Stock  outstanding  shall have
been paid in full, the corporation shall not:

                  (i) declare or pay dividends on, make any other  distributions
      on any shares of stock  ranking  junior  (either as to  dividends  or upon
      liquidation, dissolution or winding up) to the Series B Preferred Stock;

                  (ii)   declare  or  pay   dividends   on  or  make  any  other
      distributions  on any shares of stock  ranking  on a parity  (either as to
      dividends or upon liquidation,  dissolution or winding up) with the Series
      B Preferred Stock, except dividends paid ratably on the Series B Preferred
      Stock and all such  parity  stock on which  dividends  are  payable  or in
      arrears in  proportion  to the total  amounts to which the  holders of all
      such shares are then entitled;

                  (iii)   redeem  or   purchase   or   otherwise   acquire   for
      consideration  shares of any stock ranking  junior (either as to dividends
      or upon  liquidation,  dissolution  or  winding  up)  with  the  Series  B
      Preferred  Stock,  provided that the  corporation  may at any time redeem,
      purchase or otherwise  acquire shares of any such junior stock in exchange
      for shares of any stock of the  corporation  ranking  junior (either as to
      dividends or upon dissolution,  liquidation or winding up) to the Series B
      Preferred Stock; or

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

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

                                      A-3
<PAGE>

            Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased  or otherwise  acquired by the  corporation  in any manner  whatsoever
shall be retired  and  canceled  promptly  after the  acquisition  thereof.  The
corporation  shall take all such action as is  necessary so that all such shares
shall  after  their  cancellation  become  authorized  but  unissued  shares  of
Preferred Stock,  without  designation as to series, and may be reissued as part
of a new  series of  Preferred  Stock to be  created by  Articles  of  Amendment
adopted by the Board of Directors  without  shareholder  action,  subject to the
conditions and restrictions on issuance set forth herein.

            Section  6.  Liquidation,   Dissolution  or  Winding  Up.  Upon  any
liquidation, dissolution or winding up of the corporation, no distribution shall
be made (A) to the  holders  of shares of stock  ranking  junior  (either  as to
dividends  or upon  liquidation,  dissolution  or  winding  up) to the  Series B
Preferred  Stock  unless,  prior  thereto,  the  holders  of  shares of Series B
Preferred  Stock shall have received the higher of (i) $1.00 per share ($.01 per
one  one-hundredth  of a share),  plus an amount  equal to  accrued  and  unpaid
dividends and  distributions  thereon,  whether or not declared,  to the date of
such payment,  or (ii) an aggregate  amount per share,  subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock;  nor shall any distribution
be made (B) to the holders of stock ranking on a parity  (either as to dividends
or upon  liquidation,  dissolution  or winding  up) with the Series B  Preferred
Stock, except distributions made ratably on the Series B Preferred Stock and all
other such parity stock in  proportion to the total amounts to which the holders
of all such shares are entitled upon such  liquidation,  dissolution  or winding
up. In the event the corporation shall at any time after the Rights  Declaration
Date  declare or pay any  dividend on Common  Stock  payable in shares of Common
Stock,  or  effect  a  subdivision  or  combination  or   consolidation  of  the
outstanding  shares of Common Stock (by  reclassification  or otherwise)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
aggregate  amount to which  holders  of shares of Series B  Preferred  Stock are
entitled  under clause  (A)(ii) of the preceding  sentence  shall be adjusted by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

            Section 7. Consolidation, Merger, etc. In case the corporation shall
enter into any consolidation,  merger, combination or other transaction in which
the shares of Common  Stock are  exchanged  for or changed  into other  stock or
securities,  cash and/or any other property,  or otherwise changed,  then in any
such  case the  shares  of Series B  Preferred  Stock  shall at the same time be
similarly  exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.  In the  event the  corporation  shall at any time  after the  Rights
Declaration  Date declare or pay any dividend on Common Stock  payable in shares
of Common Stock, or effect a subdivision or combination or  consolidation of the
outstanding  shares of Common Stock (by  reclassification  or otherwise)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
amount set forth in the  preceding  sentence  with  respect to the  exchange  or
change of shares of Series B Preferred  Stock  shall be adjusted by  multiplying
such  amount by a  fraction  the  numerator  of which is the number of shares of
Common Stock  outstanding  immediately  after such event and the  denominator of

                                      A-4
<PAGE>

which is the number of shares of Common Stock that were outstanding  immediately
prior to such event.

            Section 8. No  Redemption.  The shares of Series B  Preferred  Stock
shall not be redeemable.  Notwithstanding  the foregoing,  the  corporation  may
acquire shares of Series B Preferred Stock in any other manner permitted by law,
the Articles of Incorporation or this amendment thereof.

            Section  9. Rank.  Unless  otherwise  provided  in the  Articles  of
Incorporation  or an  amendment  thereof  relating  to a  subsequent  series  of
Preferred  Stock of the  corporation,  the Series B  Preferred  Stock shall rank
junior  to all  other  series  of the  corporation's  Preferred  Stock as to the
payment of dividends and the distribution of assets on liquidation,  dissolution
or winding up, and senior to the Common Stock of the corporation.

            Section 10.  Amendment.  The Articles of Incorporation  shall not be
amended  in any  manner  which  would  materially  alter or change  the  powers,
preferences  or special  rights of the Series B Preferred  Stock so as to affect
them  adversely  without  the  affirmative  vote of the  holders  of at  least a
majority  of  the  outstanding  shares  of  Series  B  Preferred  Stock,  voting
separately as a class.

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



                                      A-5
<PAGE>
                                                                       Exhibit B
                                                                       ---------


                           [Form of Right Certificate]

Certificate No. R                                                  ------ Rights

      NOT  EXERCISABLE  AFTER  FEBRUARY  24, 2010,  OR EARLIER IF REDEEMED.  THE
      RIGHTS  ARE  SUBJECT  TO  REDEMPTION  ON THE TERMS SET FORTH IN THE RIGHTS
      AGREEMENT.   UNDER   CERTAIN   CIRCUMSTANCES   (SPECIFIED  IN  THE  RIGHTS
      AGREEMENT),  RIGHTS  BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED
      IN THE  RIGHTS  AGREEMENT)  OR ANY  SUBSEQUENT  HOLDER OF SUCH  RIGHTS MAY
      BECOME NULL AND VOID.  [THE RIGHTS  REPRESENTED BY THIS RIGHT  CERTIFICATE
      ARE OR WERE BENEFICIALLY  OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
      PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH TERMS
      ARE DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS RIGHT CERTIFICATE
      AND THE RIGHTS  REPRESENTED  HEREBY MAY BECOME  VOID IN THE  CIRCUMSTANCES
      SPECIFIED IN THE RIGHTS AGREEMENT.](1)

                                Right Certificate

                           WILLAMETTE INDUSTRIES, INC.

            This certifies that --------------------,  or registered assigns, is
the  registered  owner of the  number of Rights set forth  above,  each of which
entitles the  registered  owner  thereof,  subject to the terms,  provisions and
conditions  of the Rights  Agreement  dated as of February 25, 2000 (the "Rights
Agreement"),  between  Willamette  Industries,  Inc., an Oregon corporation (the
"Company"),  and ChaseMellon Shareholder Services,  L.L.C., a New Jersey limited
liability  company (the "Rights Agent," which term shall include every successor
Rights Agent under the Rights  Agreement),  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 p.m. (Portland,  Oregon time) on February 24, 2010, at
the office or agency of the Rights Agent or its  successor  designated  for such
purpose,  one  one-hundredth  of a fully  paid  nonassessable  share of Series B
Junior  Participating  Preferred Stock, $.50 par value (the "Preferred Shares"),
of the Company,  at a purchase price initially of $200.00 per one  one-hundredth
of a Preferred Share (the "Purchase Price"),  upon presentation and surrender of
this  Right  Certificate  with the Form of  Election  to  Purchase  and  related
certificate  duly executed.  As provided in the Rights  Agreement,  the Purchase
Price and the  number  of  Preferred  Shares  which  may be  purchased  upon the
exercise  of the Rights  evidenced  by this  Right  Certificate  are  subject to
modification and adjustment upon the happening of certain events.


-------------------------
(1) That portion of the legend in brackets  shall be inserted only if applicable
and shall replace the preceding sentence.

                                      B-1
<PAGE>

            This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights  Agreement,  which terms,  covenants and restrictions
are hereby  incorporated herein by reference and made a part hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Right  Certificates.  Copies of
the  Rights  Agreement  are on file at the  principal  executive  offices of the
Company and are  available  from the Rights  Agent or the Company  upon  written
request.

            Upon the occurrence of certain  events  specified in Section 7(f) of
the Rights  Agreement,  if the Rights evidenced by this Right Certificate are or
were  beneficially  owned by an Acquiring Person or an Affiliate or Associate of
an  Acquiring  Person (as such terms are  defined in the Rights  Agreement)  or,
under  certain  circumstances,  a  transferee  of  any  such  Acquiring  Person,
Affiliate  or  Associate,  such Rights shall become null and void and any holder
thereof  (whether or not such holder is an  Acquiring  Person or an Affiliate or
Associate of an Acquiring  Person)  shall  thereafter  have no right to exercise
such Rights.

            In certain  circumstances  described  in the Rights  Agreement,  the
Rights  evidenced hereby may entitle the holder hereof to purchase capital stock
of an entity  other than the  Company or receive  cash or other  assets,  all as
prescribed in the Rights Agreement.

            This Right  Certificate,  with or without other Right  Certificates,
upon  surrender at the office or agency of the Rights Agent  designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date  evidencing  Rights equal to the aggregate  number of Rights
evidenced by the Right Certificate or Right  Certificates  surrendered.  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 Right Certificate may, but are not required to, be redeemed by
the  Company  at a  redemption  price of $.0025  per Right or  exchanged  by the
Company at the rate of one Common Share per Right.

            Fractional  Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby only in fractions which are integral  multiples
of one  one-hundredth  of a Preferred  Share  (which may, at the election of the
Company,  be  evidenced  by  depositary  receipts).  In lieu of the  issuance of
fractional  shares other than in integral  multiples of one  one-hundredth  of a
Preferred  Share,  a cash  payment  will  be  made  as  provided  in the  Rights
Agreement.

            No holder of this Right  Certificate  shall be  entitled  to vote or
receive  dividends  or be deemed for any  purpose  the  holder of the  Preferred
Shares  or of any  other  securities  of the  Company  which  may at any time be
issuable on the  exercise  hereof,  nor shall  anything  contained in the Rights
Agreement or herein be construed to confer upon the holder hereof,  as such, any
of the  rights  of a  shareholder  of the  Company  or any right to vote for the
election  of  directors  or upon any matter  submitted  to  shareholders  at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting  shareholders  (except

                                      B-2
<PAGE>

as  provided  in  the  Rights  Agreement),  or to  receive  dividends  or  other
subscription  rights, or otherwise,  until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights Agreement.

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

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

ATTEST:                                   WILLAMETTE INDUSTRIES, INC.


------------------------------            -----------------------------------
Secretary                                 President

Countersigned:

CHASEMELLON SHAREHOLDER SERVICES, L.L.C.


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

                                      B-3
<PAGE>

                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT

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

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

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

Dated: ------------------------

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

Signature Guaranteed:
                                   Certificate
                                   -----------

            The undersigned  hereby certifies by checking the appropriate  boxes
that:

            (1) this Right  Certificate  [ ] is [ ] is not being sold,  assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an  Affiliate  or  Associate  of any such  Acquiring  Person  (as such terms are
defined in the Rights Agreement); and

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

Dated: --------------------         ------------------------------------
                                    Signature

                                     NOTICE
                                     ------

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


                                      B-4
<PAGE>

              [Form of Reverse Side of Right Certificate-continued]

            The signatures in the foregoing  Assignment must be guaranteed by an
eligible  guarantor   institution  (banks,  stock  brokers,   savings  and  loan
institutions,  and credit  unions)  with  membership  in an  approved  signature
guarantee medallion program pursuant to SEC Rule 17Ad-15.

            In the event the certification set forth above is not completed, the
Company  may deem the  beneficial  owner of the Rights  evidenced  by this Right
Certificate to be an Acquiring  Person or an Affiliate or Associate  thereof (as
such  terms  are  defined  in the  Rights  Agreement)  and,  in the  case  of an
assignment,  may affix a legend to that effect on any Right Certificates  issued
in exchange for this Right Certificate.

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

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

To WILLAMETTE INDUSTRIES, INC.

            The   undersigned    hereby    irrevocably    elects   to   exercise
------------------- Rights represented by this Right Certificate to purchase the
Preferred  Shares  issuable  upon the exercise of such Rights and requests  that
certificates for such Preferred Shares be issued in the name of:

--------------------------------------------------------------------------------
      (Please print name and address)

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

Please insert social security or other identifying number:----------------------

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 print name and address)

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

Dated ----------------

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

Signature Guaranteed:


                                      B-5
<PAGE>

              [Form of Reverse Side of Right Certificate-continued]

                                   Certificate
                                   -----------

            The undersigned  hereby certifies by checking the appropriate  boxes
that:

            (1) the Rights  evidenced by this Right  Certificate [ ] are [ ] are
not  beneficially  owned by an Acquiring  Person or an Affiliate or an Associate
thereof (as such terms are defined in the Rights Agreement); and

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



Dated:  -------------------               --------------------------------------
                                          Signature

                                     NOTICE
                                     ------

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

            The signatures in the foregoing Form of Election to Purchase must be
guaranteed by an eligible guarantor  institution (banks, stock brokers,  savings
and loan  institutions,  and  credit  unions)  with  membership  in an  approved
signature guarantee medallion program pursuant to SEC Rule 17Ad-15.

            In the event the certification set forth above is not completed, the
Company  may deem the  beneficial  owner of the Rights  evidenced  by this Right
Certificate to be an Acquiring  Person or an Affiliate or Associate  thereof (as
such  terms  are  defined  in the  Rights  Agreement)  and,  in the  case  of an
assignment,  may affix a legend to that effect on any Right Certificates  issued
in exchange for this Right Certificate.


                                      B-6
<PAGE>
                                                                       Exhibit C
                                                                       ---------
                           WILLAMETTE INDUSTRIES, INC.
                  SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

            On  November  11,  1999,   the  Board  of  Directors  of  Willamette
Industries,  Inc. (the "Company") declared a dividend  distribution of one Right
for each outstanding share of common stock, $.50 par value (the "Common Stock"),
of the  Company  to the  shareholders  of  record at the  close of  business  on
February 24, 2000 (the "Record Date"). Each Right entitles the registered holder
to purchase  from the Company  one  one-hundredth  of a share of Series B Junior
Participating  Preferred Stock,  $.50 par value (the "Preferred  Shares"),  at a
price of $200.00 per share (the "Purchase  Price"),  subject to adjustment.  The
description and terms of the Rights are set forth in a Rights Agreement dated as
of  February  25,  2000  (the  "Rights  Agreement"),  between  the  Company  and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent").

            Initially,   the  Rights  will  be  attached  to  all  Common  Stock
certificates representing shares then outstanding,  and no separate certificates
evidencing  Rights (the "Right  Certificates")  will be  distributed.  Until the
earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (other than the Company,  its employee
benefit plans, or a person who acquires his shares in a Sanctioned  Tender Offer
as defined below) (an "Acquiring  Person"),  acquired,  or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding shares of Common
Stock and (ii) 10  business  days (or such  later date as may be  determined  by
action  of the  Board  of  Directors)  following  the  commencement  of (or  the
announcement  of an intention  to make) a tender offer or exchange  offer (other
than a Sanctioned  Tender Offer) the  consummation  of which would result in the
beneficial  ownership  by a person  or  group of 15% or more of the  outstanding
shares of Common Stock, the Rights will be evidenced, with respect to any of the
Common Stock  certificates  outstanding  as of the Record  Date,  by such Common
Stock  certificate.  The earlier of the dates  described in clauses (i) and (ii)
above is referred to as the "Distribution  Date." A "Sanctioned Tender Offer" is
a tender or exchange offer for all outstanding shares of Common Stock at a price
and on terms which a majority of the Board of  Directors  determines  to be fair
and in the best  interests of the Company and its  shareholders,  other than the
person making such offer and that person's affiliates and associates.

            The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred  with and only with the Common Stock.  As long as the
Rights are attached to the Common  Stock,  the Company will issue one Right with
each share of Common  Stock that  becomes  outstanding  so that all  outstanding
shares  will have  attached  Rights.  Until the  Distribution  Date (or  earlier
redemption or expiration of the Rights),  (i) Common Stock  certificates  issued
after the Record Date upon transfer or new issuance of Common Stock will contain
a  notation  incorporating  the  Rights  Agreement  by  reference  and  (ii) the
surrender  for transfer of any  certificates  evidencing  Common Stock will also
constitute  the  transfer  of  the  Rights  associated  with  the  Common  Stock
represented  by  such  certificate.   As  soon  as  practicable   following  the
Distribution Date, Right Certificates will be mailed to holders of record of the
Common  Stock as of the  close of  business  on the  Distribution  Date and such
separate Right Certificates alone will evidence the Rights.

                                      C-1
<PAGE>

            The Rights are not  exercisable  until the  Distribution  Date.  The
Rights will expire at the  earliest of (i) the close of business on February 24,
2010, (ii)  consummation of certain approved merger or exchange  transactions as
described  below,  and (iii)  redemption or exchange by the Company as described
below.

            In the event that any person  becomes an  Acquiring  Person,  proper
provision  shall be made so that each  holder  of a Right  (except  as  provided
below) will  thereafter  have the right to receive upon  exercise that number of
shares of Common  Stock of the  Company  having a market  value of two times the
exercise price of the Right.

            In the event that, at any time following the Distribution  Date, the
Company is acquired in a merger or other business  combination  transaction,  or
more than 50 percent of its assets or earning  power is sold,  proper  provision
shall be made so that each  holder of a Right  (except as  provided  below) will
thereafter  have the right to receive,  upon the  exercise  at the  then-current
exercise  price of the  Right,  that  number of  shares  of common  stock of the
acquiring or surviving  company  having a market value of two times the exercise
price of the Right.  The Rights will expire in connection with a merger or other
business  combination   transaction  following  a  Sanctioned  Tender  Offer  if
shareholders  are offered the same price and form of consideration in the merger
or other business combination  transaction as that paid in the Sanctioned Tender
Offer.

            Following  the  occurrence  of any of the  events  described  in the
preceding two  paragraphs,  any Rights that are or (under certain  circumstances
specified in the Rights  Agreement)  were,  beneficially  owned by any Acquiring
Person shall immediately become null and void.

            The Purchase  Price payable,  and the number of Preferred  Shares or
other securities or property  issuable,  upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution.

            No fractional  Preferred Shares other than fractions in multiples of
one one-hundredth of a share will be issued and, in lieu thereof,  an adjustment
in cash will be made based on the market  price of the  Preferred  Shares on the
last trading date prior to the date of exercise.

            At any time  prior to the  tenth  day  following  the  first  public
announcement of the existence of an Acquiring Person, the Company may redeem the
Rights  in  whole,  but not in  part,  at a  price  of  $.0025  per  Right  (the
"Redemption  Price").  Subject to certain  conditions,  the  Company's  right of
redemption  may be reinstated  after the  expiration  of the ten-day  redemption
period if each Acquiring  Person reduces its beneficial  ownership to 10 percent
or less of the outstanding  shares of Common Stock in a transaction or series of
transactions not involving the Company. Immediately upon the action of the Board
of  Directors  ordering the  redemption  of the Rights (or at such time and date
thereafter  as the Board of Directors  may  specify),  the right to exercise the
Rights  will  terminate  and the only right of the  holders of Rights will be to
receive the Redemption Price.

            At any time after a person becomes an Acquiring  Person and prior to
the  Acquisition  by  such  Acquiring  Person  of 50  percent  or  more  of  the
outstanding  shares of

                                      C-2
<PAGE>

Common   Stock,   the  Company  may  exchange  the  Rights  (other  than  Rights
beneficially  owned by such  Acquiring  Person which  became null and void),  in
whole or in part,  for Common Stock at the rate of one share per Right,  subject
to adjustment.

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

            The provisions of the Rights  Agreement may be amended in any manner
prior to the Distribution  Date. After the Distribution  Date, the provisions of
the Rights  Agreement may be amended in order to cure any  ambiguity,  defect or
inconsistency,  to make changes which do not  adversely  affect the interests of
holders of Rights  (excluding  the  interest  of any  Acquiring  Person),  or to
shorten  or  lengthen  any time  period  under the Rights  Agreement;  provided,
however,  that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.


                                      C-3